Hepta Trading Company vs Telangana State Financial

The case of the petitioner is that the original owner of the subject property, namely Late Chintala Rangaiah, father of respondent No. 2, was running

the stone crushing unit under the name and style of M/s. Vijaya Laxmi Stone Crusher; that during his life time, the petitioner had entered into Lease

Agreement with late Chintala Rangaiah on 18.04.2018 with a tenure of lease of subject property along with machinery till 07.05.2023; and that the

petitioner has been running the crusher unit over the subject property by duly paying monthly rents. However, on 23.09.2019, the Telangana State

Financial Corporation Limited, the respondent No. 1 herein, had seized part of the subject property on the ground that the father of respondent No. 2

had mortgaged the subject property in favour of respondent No. 1 for the loan obtained by him and subsequently, for realisation of the loan amount, the

said property was put on for sale by way of auction notice dated 13.12.2019. Subsequently, the original owner died in the month of June, 2020. Now,

the grievance of the petitioner is that even though the tenure of the Lease Agreement, dated 18.04.2018 entered with the original owner is valid till

07.05.2023, due to the seizure of the property by the respondent No. 1, his stone crushing business is severely affected.

The learned Standing Counsel, appearing on behalf of respondent No. 1, has stated that originally the subject property, along with machinery, was

mortgaged by its original owner, the father of respondent No. 2 herein, for the loan obtained by him. Subsequently, since there was default on the part

of the Mortgagor, the respondent No. 1, by invoking the provisions under Section 29 of the State Financial Corporations Act, 1951, has taken

possession of the subject property on 23.09.2019 and brought the subject property for sale in public auction for realisation of the loan amount. It is

stated that subsequently, the respondent No. 2, the son of the Mortgagor, had approached the respondent No. 1; settled the loan amount under OTS

proposed by respondent No. 1 for an amount of Rs. 1,19,60,702/-; the property was unsealed; and the respondent No. 2 was put in possession of the

subject property. There is no privity of contract between the petitioner and the respondent No. 1. It is submitted that the agreement, basing on which,

the petitioner is claiming leasehold rights over the subject property is an unregistered one and if at all the petitioner is having any grievance, his remedy

is to approach the civil court against the respondent No. 2, but not against the respondent No. 1 and therefore, the learned Standing Counsel prays to

dismiss the writ petition.

Having regard to the fact that the petitioner herein is only a leaseholder of the subject premises by virtue of an unregistered lease deed entered into by

the father of the respondent No. 2, in case the petitioner wants to protect his possession in respect of the subject property, his remedy is to approach

the civil court as against respondent No. 2, but he cannot question the rights of the respondent No.1/Mortgagee with whom the property, along with

the machinery, was mortgaged by the original owner much earlier to the petitioner's alleged lease agreement. The petitioner cannot have any objection

to the mode or manner in which the respondent No.1 wants to settle the amounts due to respondent No.1 by respondent No.2; the respondent No.1

cannot be compelled to conduct the public auction of the property for recovery of the amounts due to respondent No.1. If the respondents No.1 wants

to settle the issue by extending One Time Settlement to respondent No.2, it is between respondent No.1 and respondent No.2 and not for the petitioner

to raise any objection over the grant of One Time Settlement to respondent No.2 by respondent No.1. In view of the fact that respondent No.2 has

already paid the amounts due to the respondent No.1 and he has been put in possession of the property in question, this Court does not warrant any

interference under Article 226 of the Constitution of India.

Accordingly, the writ petition is dismissed. However, the petitioner is granted liberty to approach the civil court in case he has any grievance against

respondent No. 2 either for recovery of loss, if any, or for protection of his possession in respect of the subject property.

The miscellaneous petitions pending, if any, shall stand closed. There shall be no order as to costs.