C.V.R. Rajendran, v. The State Of Telengana Rep. By Its Secretary

t 32ee I

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY NINTH DAY OF DECEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE E.V. VENUGOPAL WRIT PETITION NO:24471 OF 2014 Between:

1. C.V.R. Rajendran, s/o. Sri.K.C.Veerappan, Chairman and Managing Director, Andhra Bank Bhavan, Saifabad, Hyderabad aged Hea about 59 years, occ d Office, 5-9-1 'l , Paftabhi

2. Ch. Ram Prasad, sio Sri.Veera Raghava Rao aged about 60 years occ Retired General Manager (Recovery) Andhra Bank, Head Office, 5-9-1 1 , Pattabhi Bhavan, Saifabad, Hyderabad

3. K-V. Subbaiah, sio Sri. Subbaiah aged about 58 yeafti occ Zonal Manager Andhra Bank, 168 Lingamchetty Street, Chennai

4. The Authorised Officer Zonal Office, Andhra Bank Besant Nagar Branch Chennai

5. N. Sravan Kumar, sio Sri. Jesudas aged about 52 years occ Chief Manager Andhra Bank, Santosh Nagar Branch, Hyderabad ...PETITIONERS AND The State of Telangana Rep. by its Secretary, Home Department Secretariat' Hyderabad The Station House Officer Police Station Saifabad, Hyderabad Dr. Raju l. B s/o Raju l. B, aged about 51 years H.No.35, Ravi Colony, Street No. 4, Mahendra Hills Secunderabad S. Jaganmohan Rao, s/o Ramaiah aged about Q1 years occ Govt. Service r/o Flat No.301 , 10-3-74115 Daftus Mansion, East Maredpally Teachers Colony, Secunderabad - 500026

5. E. Bhaskar Rao, s/o Late Sri. E. Venkteswarulu aged about 70 years occ Retired Service r/o Plot No.244, Road No.4 TMC, Mahendra Hills East Maredpally, Secunderabad - 500026 ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewitfr, the High Court may be

pleased to issue a writ, order or direction more particularly a writ in the nature of Mandamus declaring the prosecution in F1R.No.66212014 before the 2nd Respondent as illegal, arbitrary abuse of due process of law and violative of Article 14 and 19 ('l ) (g) of constitution of lndia and sec. 32 of Securitization and Reconstruction of Financial Assets and Enforcement of Security lnterest Act, 2002.

l.A. NO: 1 OF 2014(WPMP. NO: 30650 oF 20141 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 fu(her proceedings in FlR.No-662/2O14 belore the 2nd respondent. l.A. NO: 1OF 2015(WVMP. NO: 2758 0F 20151 Petition under section 1 51 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 26-08-2014 passed in the above w.P. No. 24471 of 2O14.

counserf orthePetition".'?5JSf,ff iRi,i^ft =rfl?"ds.3outrset Counsel for the Respondents No.1&2: SRl. SAI RAM FOR ASST GP FOR HOME Counsel for the Respondents No.3to5 : SRI V.V.RAMANA The Court made the following: ORDER

l THE HON'BLE SRI JUSTICE E.V.VENUGOPAL WRIT PETITION No.24471OF. 2Ol4 ORDER:

This Writ Petition is hled by the petitioners under Article 226 of the Constitution o[ India seeking issuance of Writ of Mandamus declaring the prosecLltion in IrlR No.662 of 2014 belore the 2nd respondent as illegal, arbitrary, abuse of due process of law and violative of Articles 14 and t9(t)(g) of the Constitution of India and Section 32 of Securitisation and Reconstruction of Financial Assets and Enlorcemcnt of Security Interest Act, 2OO2 (for short 'SARFAtrSI Act"). 2.

Heard Sri Narender Reddy, learned Senior Counsel appearing for Sri M. Srikanth Rcddy, learned counsel for the petitioners, Sri Sairam, Iearned Assistant Government Pleader representing learned Government Pleader for Home and Sri W Ramana, learned counscl lor the respondent Nos.3 to 5. Perused the record. 3.

Andhra Bank, Besant Nagar Branch sanctioned term loan facility of Rs.10,O0,O0O/- Lakhs on 22.1I-2010 to a proprietary concern viz.M/s.Sai Source Consultancy Service, represented by its Proprietor Mr.KH Madhusudhan Rao on the equitable mortgage of property bearing Plot No.218, admeasuring 372.22 Sq.Yards in Sy.Nos. 121/3 and l2l/4, situated at Annavarappaclu, Ongole Municipal Area, Ongole Town, Prakasham District by depositing title deeds dated 30.O7.2O03 bearing \ \

r ) Pagc 2 of l(l document No.2998 ol 2003 of the sa-1d propers by Smt.Alluri Leelavati, W /o.Late Subba Rao and to tha-r effect a Men:ora.ndum of Deposit of Title Deeds was executed and registered on 22.11.2C1O with the ofhce of SubRegistrar, Ongole, Prakasham District vide document bearing No.16043 of 2OlO. The said mortgage ryas accepted aftcr obtaining legal opinion and valuation report from the bank's panel valuer and legal adviser. Due to default committed by the borrower, the said account has become non-perforrning asset as on 04.07.2012 with an outstanding due of Rs.12,01,5O9/- and the bank has initiated recovery proceedings nnder SARFAESI Act, by following due procedure. The 3.d respondent participated in the auction dated 3O.O8.2O 13 and became successful bidder quoting an amount ol Rs.

9,05,O00/- anci obtained sale certilicate dated 16.09.2O13. Later, the 3.d respondent cleliberately evaded the sale t-ransaction and sent legal notices stating that the property was not traceablc and demanded for return of the sale consideration. The authorized ofhcer of the bank gave reply stating that the property is very much identifiable and expressed the banks willingness to register the said property and further stated that sale certihcate cannot be cancelled and sale consideration cannot be refunded.

4.

It is contended on behalf of the pei.itioners that the 3.d respondent along with respondent Nos.4 and 5 made complainl dated 2A.O5.2014 before the learned I Additional Chief Metropolitan v:, tI

:----=-v Patre 3 of l0 Magistrate, City Criminal Courts at Nampally, Hyderabad against the petitioners for the offence punishable under Sections 1208, 4O9,42O, 467 and 505 IPC with a view to harass the petitioners and also to tarnish the image of the bank. Further, the learned Judge of the trial C'ourt, without examining the matter in detail, referred the same to the 2nd respondent for investigation and report as per order dated 05.08.2014. Accordingly, the 2"d respondent registered FIR No.662 of 20 14 against the petitioners. When the matter was got published in the newspapers by the 3.d respondent with a view to defame the petitioners as well as the bank off-rcials, then only the petitioners came to know about registration of FIR.

lt is the further averment of the petition that the authorized officer of Andhra Bank in exercise of powers conferred under the provisions of the SARFAESI Act, 2OO2, proceeded to recover the loan amount bonafidely by issuing notice under Section 13 of the said Act. All the procedural aspects were strictly followed before putting the property for auction and that the property in question is very much identihable. Section 32 of the said Act prohibits prosecution of the petitioners or the bank ofhcials for the action taken by them for recovery of debt.

It is further averred in the petition that registration oi FIR of 2Ol4 is nothing but arbitrary, illegal and in violation of No.662 ia, 19 1(g) of the Constitution of India and also in violation of Art\""

Paqe J oi l0 Section 32 of the said Act. Furthcr, the complainl does not disclose any of the offenses much less the olfences alleged to have been committed by the petifioners. Further, as per orders in WP No.7637 of 2Ol0 this Courl held that launching of criminai proceedings in the matter of recovery of loan amount is nothing but harassment of the officers concerned. In support of their contentions, learned counsel lor the petitioners relied upon tl-re decisions rendered in Priyanka Srivastava and another Vs. State of Uttar Pradesh and othersl and order dated 23.06.2016 passed in Writ Petition No.4O413 of 2O15 of this Court. 6.

Learned senior counsel on behalf of the petitioners wouid contend that the matter is civil in nature . He further contended that the petitioners have expressed their unconditionai willingness to register the property as per the auction proceedings but the 3'd respondent is not coming forward to complete the sale transaction for which, the petitioners cannot be made Iiable. Lcarned senior counsel further contended that in view of Section 17 oi the Act the remedy available to the unofficial respondents, if they have any grievance, is to file an application under section 17 before DRT against the measures taken by the bank within 45 days from the date of the section 13 (2) notice issued by the bank. But the 3'd respondent without resorting to such exercise, has maliciously, adopted the arm twist methods like initiation of ' (201 5) 6 Suprcnle Cour t Cases 187

.t ,/ Pace 5 of I0 criminal proceedings only to defame [he petitioners and the image of the bank, which is nothing but illegal and abuse of process of law. He further contended that since the property is situated in the State of Andhra Pradesh and due to bifurcation of the composite State of Andhra Pradesh, the 3.d respondent, who is unwilling to purchase such property, only to evade performance of his part of obligation in pursuance of thc public auction and to exert pressure on the petitioners to prevent them from performing their duties, has resorted to initiate criminal proceedings. He further contended that the petitioners have performed their duties strictly adhering to the rules and they cannot be forced to lace criminal proceedings for the delay tactics played by the 3.a respondent. He further contended that in view of Section 32 of SARFAESI Act, learned Judge of the trial Court ought not to have taken cognizance cf the offences against the petitioners. Thus stating, he requested to quash the impugned criminal proceedings against the pel-itioners.

7.

On the other hand, learned counsel for the respondent Nos.3 to 5 vehemently opposed the present writ petition contending [hat the petitioners and the bank ofhcials conspired together and tried to cheaL the respondent No.3 due to which, the future of the 3'd respondent has stuck in limbo since he has been roaming around the Courts for want of justice. Further, it is also an admitted fact that the 3rd

Pagc 6 of l0 respondent, being the successful bidder in tl-re auction, had deposited huge sums in the bank with a fond hope rl-rat the property would be rcgistered in his favour but the petitioners, without showing/ identifying the property with correct boundarics in accordance with the guidelines prescribed under Survey and Boundaries Act, with a view to evade registration of the property in his favour, subjected the 3'd respondent to huge hnancial loss, trauma and mental agony. Due to the inaction on the part of the petitioners in showing the property rvith correct boundaries to the 3'd respondent, the registration of property could not be effected.

Learned counsel for the unofhcial respondents further submitted that since the petitioners did not register the property in favour of the 3rd respondent or return the money deposited by him in furtherance of auction proceedings. he left with no other option except to knock the doors of the criminal Court seeking fair investigation into the matter. He further contended that unless and until criminal law is being allowed to be pressed into service the truth will not come out. It is further contended on behalf of the 3'd respondent that under these circumstances, to meet the ends of justice, the learned Judge of the trial Court has rightly ordered the 2nd respondent to register crime and hence, there is no illegality in the said action and requested to dismiss the present writ petition.

-7 Page 7 of l0 the applicable interest, he has no objection for quashing the criminal proceedings impugned ir-r this writ petition against the petitioners. 8.

Learned Assistant Government pleader representing learned Government Pleader for Home would submit that unless and until the fair trial is being conducted the truth will not come out and interference of this Court at this premature stage is not warranted. 9.

In Priyanka Srivastava (lst suprat the Hon,ble Supreme Court held at paragraph No.33 as under:

"32. Protection of qction to.ken in qood fdith.- No suit, prosecution or other legal proceedings shall lie against any secured creditor or any of his ofhcers or manager exercising any of the rights of the secured creditor or borrower lor anything done or omitted to be done in good faith under this Act. "

10. Having regard to the submissions made by learned counsel from all the corners and as seen from the record, this matter is pending for quite a long time making the parties to roam around the Courts. Further, it is an undisputed fact that inspite of depositing money in the bank by the 3.d respondent in pursuance of the auction, the property was not registered in his favour due to the difficulty in its identification. In order to get his grievance redressed, the 3.d respondent has to approach a competent civil Court and file a suit for specilic performance of the contract/ sale certihcate, but he cannot initiate criminal \

Page 8 of l0 prosecution against the petitioners. Since it is also the case of the petitioners that the authorized officer o[ the bank addressed a letter to Lhe 3.d respondent that they are ready to identify the property and regisler the same in the name of 3'd respondent, the 3.d respondenL oulht to have taken further steps thereon. But without resorting to such course of action and pursue his remedies available under law, the 3.d respondent set the criminal law into motion. In such circumstances, the present writ petition deserves to be allowed by quashing the impugned proceedings.

I 1. Though the action of 3.d respondenl in initiating criminal proceedings against the petitioners is found to be not correct, it is a fact to be taken into consideration that he became scapegoat by depositing huge sums into the bank in pursuance of the auction proceedings and suffered mental agony and trauma for all these years due to nonregistration of property in his favour. lt is also an admitted fact that the bank ofhcials expressed their willingness to identify the property and got it register in his favour after conducting survey.

72. In UNITECK Limited Vs. Telangana State Industrial Infrastructure Corporation (Civil Appeal No.317 of 2027 decided on 17.O2.2O2ll, wherein the Hon'ble Supreme Court held that exercise of writ jurisdiction under Article 226 of the Constitution of India in a

Page 9 of I0 contractual matter is not ruled out particularly in the present case where rhere is absolutell, no dispute in regard to the basic facts.

13. Further, in view of the principle enunciated by the Hon,ble Supreme court in priyanka srivastava case (1sr supra) since parriament in its wisdom has made a provision under section 32 of the SARFAESI Act to protect the secured creditors or any of its officers, the present \ proceedings against the petitioners herein, who are accused Nos. 1 to 5 \ I \ in the impugned FIR, are liable to be quashed.

74. In that view of the matter and in view of the categorical submission made by the learned counsel for the 3d respondent that if the bank authorities refund the amounr deposited by him he has no objection for quashing the criminal proceedings, and also in view of the principle enunciated by the Hon,ble Supreme Court tn the cases cited supra, to meet the ends ofjustice and to put a quietus to the litigation, 3'd respondent is directed to approach the bank authorities for refund of the money deposited by him and the bank authorities, upon determination of such application, shall refund the amount deposited by the 3'd respondent in pursuance of the auction proceedings together with interest at 6ok per annum from thc date of deposit till realization within three months from the date of receipt of such application.

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15. With the above observations, this u'rit petition is allowed u,ithout costs quashing the proceedings against the petitioners herein, who are accused Nos. I to 5 in FIR No.662 of 2Ol4 on the file of the Station House Off-rcer, Police Station, Sailabad, Hyderabad' Miscellaneous applications, if any, pending shall stand clcsed I ^"?3ii"?st?Jltxil //rRUE CoPY/'

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SECTION OFFICER To, 1.

The Secretary, Home Department Secretariat' Hyderabad' State of Telanoana.

iilr'sirii"" House Officer Police Station Saifabad, Hyderabad o"i,bdii, Snt rrll.SntXerurn REDDY, Advo-cat^e- [oPUC] on; aa to sRl V.V.RAMANA, Advocate. [oPU-c] - i;; "ct;6''bii -ioR HOrvie. Hign crjurt foi the state of relansana at 2.

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Hyderabad. [OUTI Two CD Copies.

BSK GJP ?nc,.

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HIGH COURT DATED:2911212023 rG:

T S A e t{ { zo -5 o r.) 2 3 ,jAl'l 202[ -rt * * OEspatc

ORDER

WP.No.24471 of 2014 ALLOWING THE WRIT PETITION WITHOUT COSTS l,UL tz-\ r t"'^'