IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
(Special Original Jurisdiction)
FRIDAY .THE TWENTY NINETH DAY OF NOVEMBER
TWO THOUSAND AND TWENTY FOUR
PRESENT
HONOURABLE THE CHIEF JUSTICE SRI DHIRAJ SINGH THAKUR
AND
THE HONOURABLE SRI JUSTICE NINALA JAYASURYA
WRIT PETITION NO: 24942 OF 2022
Between:
Mrs. Satyavathi Alla, W/o. Brahmananda Rao, Aged about 75 years,
Occ. Housewife, Rio. D.No.23-12-8/15, T1, Srinivasa Towers,
Sajjapuram, Tanuku, West Godavari District, Andhra. Pradesh
...Petitioner
AND
1. The Karnataka Bank Ltd., Represented by its Authorized Officer
Tanuku Branch, West Godavari District.
2. Gudivada Venkateswarao, S/o. Venkata Lingam, Aged
about 50 years,
Rio. 5-119, Near Saibaba Temple, Peravali Village, Peravali Mandal,
West Godavari District.
3. Veeramallu Nagaraju, S/o. Gangaraju, Aged about 35 years, C/o. Nani
Medical and General Stores, Eletipadu, Iragavaram Mandal,
West
Godavari District.
4. Sati Sailaja Rani, W/o. Veerendra Reddy, Aged about 45 years. Flat
No.206, Sneha Towers, Ikya Nagar, Tanuku, West Godavari District.
5. kurella Krishna Prasad, K S/o. Venkata Subba Rao, Aged about 40
years, D.No.34-18-2, Near Little Paradise School, Bommala Veedhi
Tanuku, West Godavari District.
6. M/s. Maharaja Constructions, Rep. by its Partners, D.No.22-4-5, F.f-4,
Park Road, Sri Flarshita Towers, Sajjapuram, Tanuku, West Godavari
District.
7. Mrs. Sudha Rani Alla, W/o. AVRG Raja, Aged about 50 years, Occ.
Business, D.No.22-4-5, F.f-4, Park Road, Sri Harshita Towers,
Sajjapuram, Tanuku, West Godavari District.
8. Mr. Venkata Rama Gangadhara Raja Alla, S/o. Brahmananda Rao,
Aged about 52 years,occ-Business d.no.23-12-8/15,T1, Srinivasa
Towers,Sajjapuram, Tanuku,West Godavari district.
...Respondents
Petition under Article 226 of the Constitution of India praying that in the
circumstances stated in the affidavit filed therewith, the High Court may be
pleased to issue a Writ of Mandamus and thereby direct the 1st respondent
not to confirm the Sale, issue Sale Certificate and execute any register
be amongst 2"^^ to 5 th
documents in favour of the highest bidder who will
respondents and consequently declare the auction notice dt.19.01.2021 as
null and void and even cancel the said auction.
lA NO: 1 OF 2024
Between:
1. Gudivada Venkateswarao, S/o. Venkata Lingam, Aged about 50 years,
Rio. 5-119, Near Saibaba Temple, Peravali Village, Peravali Mandal,
West Godavari District.
....Petitioner/Respondent. No.2
AND
1. Mrs. Satyavathi Alla, W/o. Brahmananda Rao, Aged about 75 years,
Occ. Housewife, Rio. D.No.23-12-8/15, T1, Srinivasa Towers,
Sajjapuram, Tanuku, West Godavari District, Andhra. Pradesh
Respondent/ Writ Petitioner
2. The Karnataka Bank Ltd., Rep. by its Authorized Officer, Tanuku
Branch, West Godavari District
3. Veeramallu Nagaraju, S/o. Gangaraju, Aged about 35 years, C/o. Nani
Medical and General Stores, Eletipadu, Iragavaram Mandal, West
Godavari District.
4. Sati Sailaja Rani, W/o. Veerendra Reddy, Aged about 45 years. Flat
No.206, Sneha Towers, Ikya Nagar, Tanuku, West Godavari District.
5. Kurella Krishna Prasad, K S/o. Venkata Subba Rao, Aged about 40
years, D.No.34-18-2, Near Little Paradise School, Bommala Veedhi,
Tanuku, West Godavari District.
6. M/s. Maharaja Constructions, Rep. by its Partners,
D.No.22-4-5, F.f-4,
Park Road, Sri Harshita Towers, Sajjapuram, Tanuku, West Godavari
District.
7. Mrs. Sudha Rani Alla, W/o. AVRG Raja, Aged about
50 years, Occ..
D.No.22-4-5, F.f-4, Park Road, Sri Harshita Towers, Sajjapuram,
Tanuku, West Godavari District.
8. Mr. Venkata Rama Gangadhara Raja Alla, S/o. Brahmananda
Rao
Aged about 52 years,occ-Business d.no.23-12-8/15,11,
Srinivasa
Towers,Sajjapuram, Tanuku,West Godavari district.
...Respondents/Respondents
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 vacate the interim orders dated 10-08-2022
passed in lA No. 1
of 2022 in WP no. 24942 of 2022 in respect of Item
No. 7 of the subject
sale notification.
lA NO: 2 OF 2022
Between:
Veeramallu Nagaraju, S/o. Gangaraju, Aged about 35
years, C/o. Nani
Medical and General Stores, Eletipadu, Iragavaram Mandal,
West Godavari
District.
....Petitioner/Respondent.
AND
1. Mrs. Satyavathi Alla, W/o. Brahmananda Rao, Aged
about.95 years,
Occ. Housewife, Rio. D.No.23-12-8/15, T1
Srinivasa Towers,
Sajjapuram, Tanuku, West Godavari District, Andhra.
Pradesh
Respondent/ Writ Petitioner
2. The Karnataka Bank Ltd., Represented by its Authorized
Officer
Tanuku Branch, West Godavari District.
3. Gudivada Venkateswarao, S/o. Venkata Lingam, Aged
about 50 years
Rio. 5-119, Near Saibaba Temple, Peravali Village,
Peravali Mandal
West Godavari District.
4. Sati Sailaja Rani, W/o. Veerendra Reddy, Aged about 45 years. Flat
No.206, Sneha Towers, Ikya Nagar, Tanuku, West Godavari District.
5. kurella Krishna Prasad, K S/o. Venkata Subba Rao, Aged about 40
years, D.No.34-18-2, Near Little Paradise School, Bommala Veedhi,
Tanuku, West Godavari District.
6. M/s. Maharaja Constructions, Rep. by its Partners, D.No.22-4-5, F.f-4,
Park Road, Sri Harshita Towers, Sajjapuram, Tanuku, West Godavari
District.
7. Mrs. Sudha Rani Alla, W/o. AVRG Raja, Aged about 50 years, Occ..
D.No.22-4-5, F.f-4, Park Road, Sri Harshita Towers, Sajjapuram,
Tanuku, West Godavari District.
8. Mr. Venkata Rama Gangadhara Raja Alla, S/o. Brahmananda Rao
Aged about 52 years,occ-Business d.no.23-12-8/15,T1 Srinivasa
Towers,Sajjapuram, Tanuku,West Godavari district.
...Respondents
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 vacate the interim orders dated 10.08.2022 passed in I.A. No. 1
of 2022 in WP No. 24942 of 2022 in respect of item no.6 of subject sale
notification.
lA NO: 1 OF 2023
Between:
The Karnataka Bank Ltd., Represented by its Authorized
Officer
Tanuku Branch, West Godavari District.
Petitioner
AND
1. Mrs. Satyavathi Alla, W/o. Brahmananda Rao, Aged
about.95 years
Occ. Housewife, Rio. D.No.23-12-8/15, T1
Srinivasa Towers,
Sajjapuram, Tanuku, West Godavari District, Andhra.
Pradesh
2. Gudivada Venkateswarao, S/o. Venkata Lingam, Aged
about 50 years
Rio. 5-119, Near Saibaba Temple, Peravali Village,
Peravali Mandal,
West Godavari District.
3. Veeramallu Nagaraju, S/o. Gangaraju, Aged about
35 years, C/o. Nani
Medical and General Stores, Eletipadu, Iragavaram Mandal,
West
Godavari District.
4. Sati Sailaja Rani, W/o. Veerendra Reddy, Aged about
45 years. Flat
No.206, Sneha Towers, Ikya Nagar, Tanuku, West Godavari
District.
5. kurella Krishna Prasad, K S/o. Venkata Subba Rao,
Aged about 40
years, D.No.34-18-2, Near Little Paradise School, Bommala
Veedhi
Tanuku, West Godavari District.
6. M/s. Maharaja Constructions, Rep. by its Partners,
D.No.22-4-5, F.f-4
Park Road, Sri Harshita Towers, Sajjapuram, Tanuku,
West Godavari
District.
7. Mrs. Sudha Rani Alla, W/o. AVRG Raja, Aged about
50 years, Occ..
D.No.22-4-5, F.f-4, Park Road, Sri Harshita Towers,
Sajjapuram,
Tanuku, West Godavari District.
8. Mr. Venkata Rama Gangadhara Raja Alla, S/o. Brahmananda
Rao,
Aged about 52 years,occ-Business d.no.23-12-8/15,T1,
Srinivasa
Towers,Sajjapuram, Tanuku,West Godavari district.
....Petitioner/Respondent.
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 vacate the interim orders date 10.08.2022 passed in I.A No. 1 of
2022 in WP No.24942 of 2022 in respect of item no.6 of subject sale
notification.
lA NO: 1 OF 2022
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 all further proceedings pursuant to e-auction dt.19.01.2021
including in confirmation of the Sale, issuance of Sale Certificate and not to
execute any register documents in favour of the highest bidder who will be
amongst 2nd to 5th respondents, pending disposal of the Writ Petition.
Counsel for the Petitioner: SRI E VV S RAVI KUMAR
Counsel for the Respondents No. 6, 7 & 8: SRI MANGENA SREE RAMA
RAO
Counsel for the Respondents No. 2: SRI N.S.S. KRISHNA REDDY
Counsel for the Respondents: SRI BALAJI MEDAMALLI
Counsel for the Respondents No. : SRI. SRAVAN KUMAR MANNAVA
The Court made the following: ORDER
f
APHC010402182022
IN THE HIGH COURT OF ANDHRA PRADESH Bench
Sr.No:-^0
AT AMARAVATI
[3443]
WRIT PETITION NO: 24942 of 2022
Satyavathi Alla
...Petitioner
Vs.
The Karnataka Bank Ltd. and others
...Respondents
**********
Advocate for Petitioner
Mr. P. Rajasekhar appeared vice
Mr. E. V. V. S. Ravi Kumar
Advocate for Respondents
Mr. Sravan Kumar Mannava
Mr. Mangena Sree Rama Rao
Mr. N.S.S. Krishna Reddy
Mr. Balaji Medamalli
CORAM :THE CHIEF JUSTICE DHIRAJ SINGH THAKUR
SRI JUSTICE NINALA JAYASURYA
DATE :
Per DHIRAJ SINGH THAKUR. CJ:
The present petition has been filed by the petitioner
who
was a
guarantor to respondent Nos.6 to 8 for a loan which
was obtained from the
Karnataka Bank. The loan having been declared an NPA,
proceedings were
initiated by the Bank under the provisions of the SARFAESI
Act, 2002, in
regard to various properties which were the secured
assets mortgaged with
the Bank which also included properties listed as item
Nos.VI & VII in the
schedule of the properties annexed to the auction notice.
The auction notice
was issued for auctioning the properties belonging
to the petitioner on
I 19.01.2021 and auction was conducted on 15.03.2021.
2
f
HCJ & NJSJ
W.P.No.24942 of 2022
2. In the auction conducted by the Karnataka Bank/respondent
No.1
herein, respondent No.2 was declared as a successful
bidder in regard to
property at item No.VII in the schedule for a total amount of Rs.50,35,000/-
and respondent No.3 was declared as a successful bidder for property at item
No.VI in the schedule for an amount of Rs.93,00,000/-.
3. The terms and conditions of the auction notice more particularly
clause 8 inter alia envisaged as under:
“8) The successful bidder shall deposit 25% of the bid amount
(including EMD on the same day of the sale or within 24 hours, being
knocked down in his favour and balance 75% of the bid amount within 15
days from the date of sale by RTGS/NEFT/fund transfer credit of account
number 7733500200003701, Karnataka Bank Ltd, Tanaku, Branch IFSC
code: KARB0000773 or by DD/Pay Order favouring Karnataka Bank Ltd.,
A/c - "M/s.Maharaja Constructions", Payable at Hyderabad. EMD of
unsuccessful bidders will be returned. ”
4. The amounts reflecting 25% of the bid were deposited by
respondent No.2 & 3 on 18.03.2021 and 17.03.2021 respectively and the sale
was confirmed in their favour on 18.03.2021 and 17.03.2021 respectively.
Insofar as the balance 75% of the bid amount is concerned, the same was
deposited by respondent No.3 on 31.03.2021 and respondent No.2 on
14.06.2021, which is stated to be as per the agreement with the respondent
Bank and the sale certificate was issued on 07.04.2021
in favour of
respondent No.3.
5. It is in the backdrop of the aforementioned facts that the petitioner
challenges the action of the Bank in confirming the
sale in favour of
3
f
\ Ha & NJSJ
W.P.No.24942 of 2022
respondent Nos.2 & 3 primarily on the ground that no rights could have been
transferred to the said auction purchasers in view
of the fact that the
mandatory provisions of Rule 9(3) of the Rules, 2002,
were violated.
6. It was urged that since the auction was conducted on
15.03.2021,
the 25% of the bid amount had to be deposited on the
same day and in any
case by the next working day which happened to be 16.03.2021.
The
respondent Nos.2 & 3 having deposited the said amounts
beyond the date
permitted as per the spirit of Rule 9(3) of the Rules,
2002, on 18.03.2021 and
17.03.2021 respectively, the sales could not have been
confirmed in regard to
the properties in question.
7. For facility of reference. Rule 9(3) of the Rules,
2002, envisages
as under:
“9(3) - On every sale of immovable property, the purchaser
shall
immediately, i.e. on the same day or not later than
next working day, as
the case may be, pay a deposit of twenty five percent
of the amount of the
sale price, which is inclusive of earnest money deposited,
if any, to the
authorized officer conducting the sale and in default
of such deposit, the
property shall be sold again. ”
8. The stand of the respondent Bank is that even when
the auction
notice envisaged that the amount reflecting 25% of
the bid be deposited within
the prescribed time, yet it would have been impossible
for the auction
purchasers to comply with clause 8 of the auction notice
or for that matter
Rule 9(3) of the Rules, 2002, inasmuch as there was
a call for a two-day strike
on 15.03.2021 and 16.03.2021 by the officers and workmen
of the Bank.
4
(
Ha & NJSJ
W.P.No.24942 of 2022
9. The respondent Bank has placed on record an additional affidavit
along with a notice expressing regret for the inconvenience which would be
caused to the valued customers on account of such a
strike. The notice further
informed the workmen and staff who were to remain absent on those days
and participated in the strike that they would not be entitled to any salary for
those days and further that the said action would be without prejudice to the
right of the Bank’s management to take disciplinary action wherever
warranted. The respondent Bank also appears to have informed the Assistant
Labour Commissioner (Central) with regard to the strike in the prescribed
form.
10. The stand of the auction purchasers on the other hand was that
the petitioner ought to have resorted to the alternate remedy by filing an
Securitization Application before the Debt Recovery Tribunal in terms of
Section 17 of the SARFAESI Act, 2002, and that the exercise of extraordinary
jurisdiction under Article 226 of the Constitution of India was not warranted. It
was also urged that even when the sale was conducted on 15.03.2021 and
the bid amount was deposited by 17.03.2021/18.03.2021, the present petition
has been preferred as late as in the month of August, 2022, almost after about
one and a half years (17 months).
11. It was also urged that the petitioner being a guarantor of the
principal borrowers who are the son and daughter in law of the petitioner and
were living under one roof had the knowledge about the auction, issuance of
5
Ha & NJSJ
W.P.No.24942 of 2022
sale certificate in favour of the respondent No.3 and also had the knowledge
that an S.A. had been preferred by respondent No.6
before the DRT, kept
quiet, and had not taken any steps to individually
challenge the proceedings
initiated under the SARFAESI Act, 2002, and thus must
be deemed to have
waived her right under the SARFAESI Act, 2002, before
the DRT and
therefore must thus be deemed to have waived her right
to challenge the
same before the Court. It was also urged that this
petition was required to be
dismissed on the ground of delay and laches.
12. The stand of the petitioner as is also reflected from
the averments
made in the writ petition is that the 6**^ respondent
had filed a Securitization
Application bearing S.A. No.143 of 2021 before the DRT, Visakhapatnam, but
the same was not followed in an effective manner by
respondent Nos.6 to 8,
resulting in the auction of the property, which was
mortgaged with the
respondent Bank, and further that after the petitioner
came to know about the
sale certificate having been issued in favour of respondent
No.3, the present
petition was filed.
13. We have heard learned counsel for the parties and gone
through
the records.
14. There is no doubt that there was an alternate remedy
available to
the petitioner by approaching the DRT in terms of Section
17 of the
SARFAESI Act, 2002. It has time and again been reiterated
that the Fligh
Courts ought not to ordinarily entertain the petition
under Article 226 of the
6
HO & NJSJ
W.P.No.24942 of 2022
Constitution of India if there was available to an aggrieved person an equally
efficacious alternate remedy.
In United Bank of India v. Satyawati Tondon\ the Apex
15. Court
held:
"45. It is true that the rule of exhaustion of alternative remedy
is a rule of discretion and not one of compulsion, but it is difficult to
fathom any reason why the High Court should entertain a petition
filed under Article 226 of the Constitution and pass interim order
ignoring the fact that the petitioner can avail effective alternative
remedy by filing application, appeal, revision, etc. and the particular
legislation contains a detailed mechanism for redressal of his
grievance.
*iticicic
55. It is a matter of serious concern that despite repeated
pronouncement of this Court, the High Courts continue to ignore the
availability of statutory remedies under the DRT Act and the
SARFAESI Act and exercise jurisdiction under Article 226 for passing
orders which have serious adverse impact on the right of banks and
other financial institutions to recover their dues. We hope and trust
that in future the High Courts will exercise their discretion in such
matters with greater caution, care and circumspection. ”
16. The Apex Court in Radha Kristian Industries Vs. State of
Himachal Pradesh^ on a conspectus of various judgments
with regard to
exercise of the extraordinary writ jurisdiction under Article 226 of the
Constitution of India in cases where there was available an alternate remedy
which is equally efficacious, carved out the following principles:
^ (2010) 8 see 110
^(2021) 6 see 771
7
HCJ & NJSJ
W.P.No.24942 of 2022
'27.3. Exceptions to the rule of alternate remedy arise
where:
(a) the writ petition has been filed for the enforcement of a
fundamental right protected by Part III of the Constitution;
(b) there has been
a violation of the principles of natural justice; (c) the order or proceedings
are wholly without jurisdiction; or (d) the vires of a legislation is challenged. ”
17. The principles of law which had been laid down in the
case of
Satyawati Tondon in regard to exercise of writ jurisdiction
under Article 226
of the Constitution of India by the High Courts in
regard to provisions of the
SARFAESI Act, 2002, are concerned, were reiterated
in Celir LLP Vs. Bafna
Motors^ thus:
“97. This Court has time and again, reminded the High
Courts that
they should not entertain petition under Article 226
of the Constitution if
an effective remedy is available to the aggrieved person
under the
provisions of the Sarfaesi Act.
* * ★
101. More than a decade back, this Court had expressed
serious
concern despite its repeated pronouncements in regard
to the High
Courts ignoring the availability of statutory remedies
under the Rdbfi Act
and the Sarfaesi Act and exercise of jurisdiction under
Article 226 of the
Constitution. Even after, the decision of this Court
in SatyawatiTondon, it
appears that the High Courts have continued to exercise
its writ
jurisdiction under Article 226 ignoring the statutory
remedies under the
Rdbfi Act and the Sarfaesi Act. ”
18. Testing the facts of the present case on the touchstone
of the law
as discussed hereinabove, since learned counsel for
the petitioner has failed
^ (2024) 2 see 1
8
Ha & NJSJ
W.P.No.24942 of 2022
to satisfy us as to how the present case falls under any of the exceptions
carved out in the case of Radha Krishan Industries, we see no merit in the
present petition, which is accordingly dismissed. No
costs.
Consequently, connected miscellaneous petitions, if any, shall stand
closed.
SD/- M. SRINIVAS
ASSISTANTREGISTRAR
//TRUE COPY//
ft^(
SEC
OFFICER
To,
1. One CC to SRI. E VV S RAVI KUMAR Advocate [OPUC]
2. One CC to SRI. SRI. N.S.S. KRISHNA REDDY Advocate [OPUC]
3. One CC to SRI. BALAJI MEDAMALLI Advocate [OPUC]
4. One CC to SRI. MANGENA SREE RAMA RAO Advocate [OPUC]
5. One CC to SRI. SRAVAN KUMAR MANNAVA Advocate [OPUC]
6. Three CD Copies
MSST
HIGH COURT
DATED:29/11/2024
ORDER
WP.No.24942 of 2022
I 0 5 DEC 202^ ^
Current Section . ^
DISMISSING THE WRIT PETITION WITHOUT COSTS