IMPORTANT POINT
The main legal point established in the judgment is the priority of secured creditors over government dues, as per Section 31B of the Recovery of Debt and Bankruptcy Act, 1993, and Section 26E of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

ORDER :

1. The instant writ petition is filed by the petitioner seeking following relief:

“......to issue an appropriate writ, order or direction, more particularly, on in the nature of writ of mandamus declaring the action of the respondents in not refunding the security deposit amount of Rs. 3,28,41,795/- as illegal, arbitrary, un-constitutional, violate of principles of natural justice and to direct the respondents to refund the security deposit amount, which was deposited before this Court along with interest to the petitioner.”

2. The brief facts as narrated in the writ petition are that petitioner is a partnership firm and it had purchased land admeasuring Acs. 21.538 guntas in Sy. Nos. 863 to 870 (part), plot Nos. 49 to 54 and part of 48 and 55, situated in Industrial Development Area, Phase-IV, Patancheru, Medak District, Telangana, in an auction conducted by the 4th respondent. Earlier, the said land was purchased by the 3rd respondent from Andhra Pradesh Industrial Infrastructure Corporation Limited, vide registered sale deed bearing document No. 417/2002, dated 19.01.2002.

3. The 3rd respondent obtained certain loan facilities from Andhra Bank and the same is secured by way of charge of the above property. The 3rd respondent defaulted in repayment of the loan amount and therefore, the loan account was classified as Non-Performing Asset (NPA). The Andhra Bank therefore, initiated measures under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘Act 2002’) against the 3rd respondent. Subsequently, Andhra Bank executed an Assignment Agreement dated 30.03.2017 assigning the loan account, debt in favour of 4th respondent.

4. After assignment, the 4th respondent auctioned the property, wherein the petitioner was declared as successful bidder, however, the sale certificate could not be registered by the concerned Sub-Registrar since the property was under attachment by the Income Tax Department. Aggrieved by the measures initiated under the Act, 2002, the 3rd respondent challenged the same by way of Securitization Application vide S.A. No. 491 of 2017 (old No. 45 of 2015) before the Debts Recovery Tribunal, Hyderabad.

5. It is the further case of the petitioner that the mortgaged property was under attachment by the Commercial Tax Department as some taxes were due from the 3rd respondent to Commercial Taxes Department. At the request of the 2nd respondent i.e. Commercial Tax Department, the subject property was included in list of prohibited properties.

6. Aggrieved by non-registration of property, the petitioner earlier filed W.P. No. 39499 of 2018 and this Court, by an order dated 04.12.2018 in I.A. No. 1 of 2018 directed the 4th respondent to deposit a sum of Rs. 3,28,41,795/- with the Registrar-Judicial, within a period of three weeks. Upon such deposit being made, the Registrar-Judicial shall invest the same in a cumulative fixed deposit with the State Bank of India, High Court Branch. Consequent on such deposit being made, the Joint Sub-Registrar shall register the Sale Certificate in favour of the petitioner. Accordingly, sum of Rs. 3,28,41,795/- was deposited by the petitioner on behalf of the 4th respondent and Sale Certificate dated 26.07.2018 was registered vide Document No. 2675/2019 in favour of the petitioner and physical possession was also delivered to the petitioner.

7. It is further case of the petitioner that the secured creditor i.e. 4th respondent, the borrower i.e. 3rd respondent and the petitioner has settled the matter out of the Court and the same was confirmed by this Court in the common order dated 10.11.2022 in W.P. No. 845 of 2020 and batch. The Government of Telangana has announced a One Time Settlement (OTS) Scheme and has agreed to settle the amount due from 3rd respondent for a sum of Rs. 1,65,05,945/- and the said amount was paid by the 3rd respondent and no amount is due to the 2nd respondent. Thereafter, petitioner made an applica