Andhra Pradesh High Court - Amravati
M/S Sri Lakshmi Balaji Rice Mill vs Union Bank Of India on 21 April, 2020
Author: U.Durga Prasad Rao
Bench: U.Durga Prasad Rao
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THE HONOURABLE
SRI
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WRIT pETtTtON NO; 8198
Between: OF 2O2O
y6tril'-'"1[?:ts,rt,fl'&' *'t" Mill' Prasathi Nagar, Netaturu Virage, Gudur Mandar
1
2 CnunOuru nighi'"Hamaiah,,S/o.Chalamaiah,
Occ. Managing partner. M/s
Rice Mil, R/o o N" i_+zEtr'd, il;L,y"
illi"E Bli"iSlaji Nasar, Gudur, SpsR
AND petitioner
1 union Bank of rndia. Reo by its.Authorised officer,
D.No. 16r273.opo. TVS
Katyan sadhan, Near siptasiiai"a's;,'iffii'i;i,"r,[]t",.;,
District
's-pih"r(Erbi", "
2 The Branch Manager, Union Bank of India, D.No. 16/273,
sadhan, Near saplagirilooge,irunr Ri"ilr.i"ll"i,'3psnOpp, TVS Kalvan
[i.irr","-oiii"i'
Respondents
Petition under Article 226 of the constitution of lndia praying that in the
circumstances stated in the affidavit filed therewith, the High courr mJy 6e pteaseo
to
issue any writ, order or direction more particularly one in the nature of writ of mandamus
declaring the action of the respondents in proposing to conduct the auction of the
property i.e. all parts and parcel of vacant residential site having extent of site 33.33
ankanams or 266.66 Sq.Yards located at Sy.No.B09 and g10 situated at sanathnagar,
East Gudur, sPSR Nellore District in the name of Mrs.ch.Vijayamma without folloviing
the procedure contemplated under Rule 8(6) and Rule 9(1) of the security lnterest
(Enforcement) Rules, 2002 on22.4.2020 as illegat, arbitrary, malafide and in violation of
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security
lnterest Act, 2002 and The Security lnterest (Enforcement) Rules, 2002 and
consequently set aside the auction notice dated 13.3.2020 which was published in news
papers on 20.3.2020 indicating the proposed auction on 22.4.2020.
lA NO: 1 OF 2020
Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased to stay the
auction scheduled to be conducted on 22.4.2Q20 by the respondents herein in
pursuance of auction notification dated 12.3.2020 which was published in the news
papers on 20.3.2020 issued by the 1st respondent pending disposal of the writ petition.,
pending disposal of WP 8198 of 2020, on the file of the High Court.
The petition coming on for hearing, upon perusing the Petition and the affidavit
filed in support thereof and upon hearing the arguments of Sri C. Subodh, Advocate for
the Petltioner, Advocate for the Respondent(s) and the Court made the following.
ORDER
Heard learned counsel for the petitioners, Sri C. Subodh. He challenges the sale notice, dated 20.03.2020 on the main plank of argument that the respondents,/bank issued notice, dated 12.03.2020 under Section 13 (8) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the 'SARFAESI Act') intimating to the petitioners that an amount of Rs.3,25,24,104.60 paise was due and the sameshallbepaidbythepetitionersonorbefore20.o4.2020,iesttheauctionnoticestrallbe on 20'03 2020 for auctioning the mortgaged published in Eenadu and lndian Express properties.HisfurtherSubmissionisthatwithoutwaitingtill2o.o4.2o2otoenablethe I respondenVbank published the sale notice' dated petitioners to pay the amount' the taking us through the date of auction as 22 04 '2020' Learned counsel
2|.O1.2[2|,fixing as per the Amendment Act 44 of 2016 w'e f' SARF'AESI Act (amended Section 13 (8) of the has to aforesaid amended provision' the debtor 01.09.2016), would submit that as per the tenderthesecuredcreditortheamoulltsdueatanytimebeforethedateofpublicationof tendel from public or private the notice for public auction-or inviting the quotations or transfer by way of lease, assignment oI sale of secured assets.
In that view, he treaty for would further submit, if once the sale notice is published, the opponunity for the debtor to pay the amounts will be foreclosed. In the instant case, leamed counsel sffenuously argued, by virtue of the respondents' act of publishing the notice on 20.03.2020, in Eenadu Telugu Daily newspaper, the opporhmity for the petitioners/debtors to pay the amount is foreclosed by virtue of amended provision of Section 13 (8) of the SARFAESI Act. He also relied upon the judgment of a Division Bench of High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in W.P.No.8155 of 2018 to contend that in similar circumstances. by virtue of issuing the sale notice, when the petitioner's right to deposit the amount within 30 days was lost, such publication ol notice was held to be in violation of statutory mandate. He thus, prayed to stay the auction sale, dated 22.04.2020.
Heard and perused the record.
we are of the considered view that the point raised by leamed counsel for the petitioners needs a detailed hearing after the respondents put up their appearance. It is to be heard whether Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002 obligates creditor ro give 30 days notice to borrower to enable him to pay the outstanding dues or it obligates the creditor to simply put the borrower in advance notice of 30 days about the auction going to be conducted after the said period. As stated supra, this regal aspect needs a detailed hearing.
Hence, petitioners shall take notice on respondents and lile proof.
However, having regard to the above submission of the learned counser for the petitioners and arso his other submission to the effect that in view of the prevailing covlD _ 19 pandemic. it wilr be difficult ror the petitioners to approach the respondents/bank for having any sort of negotiations, we deem it apposite to pass the interim order. Accordingly, whire permi*ing the respondents/bank to proceed with the proposed auction, however the respondent/bank is directed not to confirm the auction petitioners depositing 20%o ofthe amounr mentioned,r;:'.:1ff::H:;:r:ri;
within three weeks from the
date of this order, failing
which this order shall
cancelled_ be deemed to be
Post after three rveeks
-4,-
SD/- I(.
TAI'rt RAO
ASSISTAI.Il' REGTSTIIAR
,TRUE COPY//
For ASSIST GISTRAR
To
1. The Authorised Officer, Union Bank of lndia, D.No. 16/273, Opp, TVS Kalyan Sadhan, Near Saptagiri Lodge, Trunk Road, Nellore, SPSR Nelore District
2. The Branch Manager, Union Bank of lndia, D.No. 16/273, Opp, TVS Kalyan Sadhan, Near Saptagiri Lodge, Trunk Road, Nellore, SPSR Nellore Diskict (1&2byRPAD)
3. One CC to SRl. C SUBODH, Advocate [OPUC]
4. One spare copy TVR HIGH COURT I UDPRJ & DVSSJ DATED:2110412020 ORDER WP.No.8198 of 2020 POST AF'TER THREB WEEKS .t n J IPB