K.Raghava Reddy, v. The State Bank Of India, Rep By Its Authorised Officer,

THE HON'BLE SRI JUSTICE NOOTY RAMAMOHANA RAO AND THE HON'BLE DR. JUSTICE B. SIVA SANKARA RAO WRIT PETITION No. 8847 OF 2016 O R D E R : (per Hon'ble Sri Justice Nooty Ramamohana Rao) The petitioners herein sought for a writ of mandamus for declaring the action of the 1st respondent State Bank of India in not receiving the payments offered by them towards their Housing Loan Account No. 31066912295, as illegal.

Heard Ms. Kalyani, learned counsel for the petitioners at considerable length.

We are at a loss to believe that the respondent State Bank of India or any of its responsible officers would have declined to receive payments towards a loan account by the borrowers. We do not wish to proceed any further after observing the two demand drafts, drawn in a sum of Rs. 2 lacs each, shown to us by Ms. Kalyani. We leave that at that stage.

There is no dispute on the factual count. The father of petitioners 1 and 3 has availed a housing loan facility from the respondent bank and consequently, he answers the description of a 'borrower'. However, the said principal borrower expired untimely on 26.10.2011 in a road accident. That is how the petitioners make a statement that they are struggling to make their business go on. In the process, default was committed in the matter of repayment, rendering the account a 'non-performing asset'. Since the respondent bank answers the description of 'bank', as defined in Section 2(1)(c) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and Section 13 of the Act has authorized the said bank to take measures for securitization of the loan, the demand notice drawn as on 03.11.2015 was served on the petitioners herein, as they are the legal representatives of the

deceased borrower bringing to their notice that there was an outstanding liability of a little more than Rs. 44.4 lacs as on 02.11.2015 and hence, demanded repayment of the same. Since the petitioners have not paid any amount thereafter, securitization measures under sub-section (4) of Section 13 of the Act have already been initiated by putting the secured asset to sale by auction on 21.03.2016 at 11.30 A.M.

In view of the un-controverted facts before us and in view of the fact that the petitioners answer the description of 'borrower' and also 'default' has been committed by them in the matter of repayment of the loan, all we need to do is to provide an opportunity to the petitioners to save their secured asset from going for sale by e-auction method. Hence, we dispose of this Writ Petition after hearing Sri Venkateswarlu Sanisetty, learned Standing Counsel, who was on caveat on behalf of the 1st respondent bank, in the following manner: The 1st respondent bank may go on with the proposed sale of the secured asset by e-auction method, but however, it may not confirm the sale till 04.07.2016, subject to the following conditions: 1) The petitioners shall deposit a sum of not less than Rs. 8 lacs to the credit of the loan account on or before 30.03.2016.

2) A further sum of Rs. 8 lacs on or before 30.04.2016 and a further sum of Rs. 8 lacs on or before 31.05.2016 should be paid in one or more than one installment.

3) However, the entire outstanding liability, together with the incidental expenses incurred by the bank for undertaking securitization measures, shall be liquidated by 30.06.2016.

4) Should the petitioners commit any default in

making any of the aforementioned payments, the 1st respondent bank would be at perfect liberty to proceed further by confirming the auction in favour of the best bidder, receive the balance 75% of the bid amount, execute a sale certificate, register it and deliver vacant possession of the secured asset to the best bidder.

There shall be no order as to costs.

Consequently, the miscellaneous applications, if any shall also stand disposed of.

----------------------------------------- NOOTY RAMAMOHANA RAO, J ---------------------------------------- DR. B. SIVA SANKARA RAO, J 18th March 2016 ksld