Andhra Pradesh High Court - Amravati
Tummapudi Naga Venkata Jagan Mohan Rao, vs The State Bank Of India, on 28 June, 2022
Author: C.Praveen Kumar
Bench: C.Praveen Kumar
THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR
AND
THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO
W.P. No. 1621 of 2022
ORDER:(Per Hon'ble Sri Justice C.Praveen Kumar)
1) Heard Sri. Madhava Rao Nalluri, learned Counsel appearing for the Petitioner and Sri. S. Satyanarayana Moorthy, learned Standing Counsel appearing for the Respondent Bank.
2) The present Writ Petition is filed seeking issuance of Writ of Mandamus to declare the action of the Second Respondent in issuing Sale Notice, dated 31.05.2021, and conducting E-Auction on 08.07.2021 for recovery of the secured asset of the First Respondent, for recovery of an amount of Rs.2,44,00,000/- under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ['SARFAESI Act'], contrary to Section 55 of the Transfer of Property Act, 1882 ['T.P. Act'], as illegal, improper and incorrect.
3) As seen from the record, the Second Respondent Bank herein published E-Auction Sale Notice on 31.05.2021 in New Indian Express newspaper proposing to conduct E-Auction in respect of land admeasuring Acres 2.09 Cents along with R.C.C. building [Godown] and G.I. sheet roofed rice mill along 2 with machinery situated at Door No. 7-85, Kollur Road, Pedaravuru, Tenali, Guntur District.
4) Pursuant to the paper publication, an auction was conducted on 08.07.2021 and the Petitioner, who participated in the said auction, became the highest bidder for the above secured asset. The Petitioner is said to have paid the entire auction amount i.e., Rs. 2,45,30,000/- in three installments. The Petitioner was informed about getting the property registered by Second Respondent in his favor. As such, on 13.08.2021, the Petitioner and Second Respondent went to the Office of the Sub-Registrar, Tenali, to present the Sale Certificate for registration. When asked about the value of the stamp duty to be paid, the Sub-Registrar, Tenali, informed that the property required to be registered has to be verified by the Officer authorized for the assessment of the value of the said property as the value mentioned on the Sale Certificate is not acceptable.
5) Initially, the Petitioner and the Second Respondent informed the Sub-Registrar that they are not prepared to pay the stamp duty on the basic value and since the property was purchased by way of public auction conducted by bank, there cannot be any secrecy in the value of the property. The Sub- Registrar took time to verify. A week thereafter, the Petitioner 3 went to Sub-Registrar, Tenali, who informed that the Petitioner has to pay stamp duty on the basic value only. The Petitioner informed the Second Respondent about the same and also informed that he has to mobilize some more amounts for getting the Sale Certificate registered in his favor and, as such, sought 10 days time. According to the Petitioner, the Second Respondent informed that as and when the amount is ready, he will come and get the property registered, but for some reason or other the matter was getting delayed.
6) While things stood thus, one Paladugu Prasada Rao, who is the brother of the debtor, filed O.S. No. 403 of 2021 before the Principal Junior Civil Judge Court, Tenali, with an application [I.A. No. 609 of 2021] seeking interim injunction. The Court allowed the I.A. No. 609 of 2021 and directed the Second Respondent herein not to deliver the E-Auction schedule property to the Petitioner till the rights of Sri. Paladugu Prasada Rao, are adjudicated by the Court to an extent of Ac.0.15 Cents situated in Sy. No. 394/1 and 394/2 of Pedaravuru Village. On coming to know about the same, the Petitioner approached the Second Respondent Bank and requested them to either register the property or return the amount paid by him with interest. Inaction on the part of Second Respondent, lead to filing of the present Writ Petition. 4
7) As there was a dispute with regard to person in possession of the property, this Court by its Order, dated 19.04.2022, directed the Legal Services Authority, Tenali, to visit the site and send a report as to the person or authority in possession of the property. Pursuant thereto, a report was submitted by the Secretary, Mandal Legal Services Authority, Tenali, which discloses that the Bank has taken possession of the property.
8) Be that as it may, the Counter filed by the Second Respondent would show that, on 08.07.2021, the auction was conducted and on 10.08.2021, the Petitioner paid the entire sale consideration and the Sale Certificate was issued to the Petitioner. On 10.08.2021, the Second Respondent Bank claims to have handed over possession of the subject property to the Petitioner and the Petitioner is said to have issued an acknowledgment stating that he has no complaints over the movable or immovable asset handed over to him. On 15.09.2021, an injunction order came to be passed by the Civil Court, which is much later to the auction and after handing over of possession to the Petitioner.
9) The averments in the Counter show that the allegation that the Second Respondent Bank has not informed about litigation/encumbrance over the subject property is incorrect, 5 for the reason that the alleged encumbrance took place subsequent to auction.
10) As regards Section 55 of the T.P. Act, is concerned, it is stated that the Petitioner was informed about the stamp duty to be paid by the Petitioner and that it is not the duty of the Respondent Bank to pay that amount as demanded by the Sub-Registrar. The averments in the counter further indicate that the provisions of the SARFAESI Act, override other Laws and, as such, the Order passed by Civil Court, in any way does not come in the way of registering the property.
11) Insofar as pendency of civil case is concerned, it is pleaded that the request in the said suit is for cancelling the auction conducted by the Second Respondent Bank, which is not maintainable in view of Section 34 of the SARFAESI Act and, as such, the Second Respondent Bank has taken steps to file an application to reject the plaint. It is further stated that, injunction order is passed after issuing Sale Certificate and the litigation created by the third parties cannot make the Second Respondent Bank liable for its consequences. The averments in the Counter clearly indicate that the Second Respondent Bank is ready to register the Sale Certificate if directed by the Court. It is further stated in the Counter that 6 it is difficult to return the amount already deposited by the Petitioner as it is already adjusted towards loan amount.
12) In reply, the learned Counsel for the Petitioner submits that the Scheme of the Act demonstrates that the 'Secured Creditor' shall deliver possession to the purchaser free from encumbrance known to the secured creditor. It is pleaded that the injunction granted was in respect of Ac.0.15 Cents of land and it is the responsibility of the Bank while granting loan to the secured creditor to verify the title of the said extent of land.
13) Sri. Madhava Rao Nalluri, learned Counsel appearing for the Petitioner, submits that the Petitioner is willing to pay the amount required for registration of the document. He further submits that as Ac.0.15 Cents of land is in dispute vide order passed in I.A. No. 609 of 2021 in O.S. No. 403 of 2021, the Petitioner herein should be given protection till clear title is obtained by the Respondent Bank.
14) Sri. S. Satyanarayana Moorthy, learned Standing Counsel appearing for the Respondent Bank, submits that in view of auction conducted by the Bank in respect of the subject property, the Bank is ready and willing to register the property and also put the Petitioner in possession. He further submits that Ac.0.15 Cents of the land is also in possession 7 of Respondent Bank. He further pleads that, a person who has no right over the property has filed the Suit and that should not come in a way of putting the Petitioner in possession of the property. Since appropriate steps are taken in the said Court, till such time, pleads necessary protection be given to the Petitioner.
15) Insofar as Ac.0.15 Cents of land is concerned, Sri. S. Satyanarayana Moorthy, learned Standing Counsel appearing for the Respondent Bank, reiterates that, even the said land is in their possession and that they will put the Petitioner in possession. He further submits that, appropriate Orders will be obtained from the Civil Court at the earliest.
16) In view of the statement made by Sri. S. Satyanarayana Moorthy, learned Standing Counsel appearing for the Respondent Bank, that they are willing to register the property, which is subject matter of Sale Certificate and as the Petitioner is ready to pay the registration charges and other miscellaneous expenditure to be incurred at the time of registration, it may not be necessary for us to go into other legal issues raised.
17) Having regard to the above, there shall be direction to the Respondent Bank herein to register the property, in respect of which Sale Certificate is issued, in favor of the 8 Petitioner subject to the Petitioner depositing/paying the stamp duty and other charges. The Petitioner shall also be put in possession of the property as early as possible preferably within a period of 10 days from today. Further, the Petitioner is at liberty to seek protection from Police in case of any interference to his property. The Respondent Bank shall also take all necessary steps in protecting the interest of the Petitioner over the property in dispute.
18) With the above direction, the Writ Petition is disposed of. No order as to costs.
19) Consequently, miscellaneous petitions, if any, pending shall stand closed.
_______________________________ JUSTICE C. PRAVEEN KUMAR ________________________________________ JUSTICE TARLADA RAJASEKHAR RAO Date: 28.06.2022 Note:
Issue C.c. by 29.06.2022 B/o. S.M...9
THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO W.P. No. 1621 of 2022 Date: 28.06.2022 S.M...