Simhadri Raju Educational Society & Others vs Branch Manager

A.V. Sesha Sai, J

Heard.

The sale notice dated 28.04.2022 issued by the respondent-bank under the provisions of Rule 8(6) of the Securitisation and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’), proposing to hold auction on 17.06.2022 for the subject property is under challenge in the present Writ Petition.

According to the learned counsel for the petitioners, the 1st petitioner is an Educational Society and is running a school for poor and needy students and the 1st petitioner availed loan on 12.01.2015 from the respondent-bank. It is further submitted that petitioner Nos.1 and 3 have mortgaged the subject properties in favour of the respondent-bank vide document No.913 of 2015. In view of the alleged default committed by the petitioners in payment of the borrowed amount within the time, the bank authorities pressed into service the provisions of the Act and in furtherance of the same, the impugned sale notice came to be issued by the respondent-bank under Rule 8(6) of the Act, proposing to hold auction on 17.06.2022.

According to the learned counsel for the petitioners the very declaration of the subject account as N.P.A is illegal, arbitrary and contrary to the provisions of the Act. It is further stated by the learned counsel that the upset price fixed by the respondent-bank is also very low and not in accordance with market value. It is also submitted by the learned counsel that though there is an alternative remedy available to the petitioner under the provisions of Section 17 of the Act, as the Presiding Officer is on leave till 20.06.2022, the petitioners herein are compelled to approach this Court by invoking article 226 of the Constitution of India. As per the impugned notice dated 28.04.2022, public auction is scheduled to be held on 17.06.2022.

Having regard to the nature of controversy and the submissions made by the learned counsel for the petitioners and keeping in view the provisions of Section 17 of the Act, this Court deems it appropriate to dispose of the Writ Petition with a liberty to the petitioners to avail alternative remedy available to them under Section 17 of the Act by filing appropriate application before the Tribunal, questioning the impugned proceedings within a period of two (2) weeks from today. It is also made clear that the auction proposed to be held on 17.06.2022 may go on. However, the same shall not be finalised for a period of three (3) weeks from today. It is further made clear that if the petitioners fail to avail the aforementioned alternative remedy, within the time stipulated supra, this order will not enure to the benefit of the petitioners and it is open for the respondents to proceed in accordance with law.

With the above observations, the Writ Petition is disposed of. There shall be no order as to costs.

As a Sequel, miscellaneous applications pending for consideration, if any, shall stand closed. No costs.