Canara Bank, SME Kukatpally Branch, Hyderabad V. The Income Tax Officer, Suryapet, Telangana and The Sub Registrar, SRO- Balanagar, Hyderabad and The Sub Registrar, SRO- Kukatpally, Hyderabad and M/s Sri Venkateshwara Rice Industries Pvt Ltd

WP/33739/2022

AI Insights

The case involves Canara Bank, which filed a writ petition under Article 226 of the Constitution of India, seeking to lift the orders of attachment on certain properties by the Income Tax Department, which were hindering the auction process for recovering dues from M/s Sri Venkateshwara Rice Industries Pvt Ltd, a borrower that defaulted on a loan. The properties in question were provisionally attached under Section 281-B of the Income Tax Act, 1961. The court considered the submissions and counter-affidavit, which stated that no current attachment orders were in effect for the properties 'A' and 'B'. The court directed the bank to seek redress through the Sub-Registrar's office.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 685191 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 01-08-2023
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: J V PRASAD
• Assessee Lawyers: DISHIT BHATTACHARJEE
• Keywords: Non-performing asset; Provisional attachment; Security interest; Symbolic Possession; Writ of Mandamus
• Section: 34(2); 281-B

Judgement Text

"[ 3386 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Originat Jurisdiction) TUESDAY, THE FIRST DAY OF AUGUST TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION NO: 33739 OF 2022 CANARA BANK, SME Kukatpally Branch,Hyderabad Presently account transferred to ARMB Hyderabad,Ground Floor, Circle Office Building,Beside Rail Nilyam, Secunderabad-500026, Represented by its AGNI, H B Chandrika. Between: AND 1. 3. 4. ) ...PETITIONER The lncome Tax Officer, Suryapet, Telangana - 508213. The Sub Registrar, SRO- Balanagar, Hyderabad 500039 The Sub Registrar, SRO- Kukatpally, Hyderabad-so1o72 M/s Sri Venkateshwara Rice lndustries Pvt Ltd, H.No.21-55/1 , Madhavarayanigudem, Kodad Road, Huzur Nagar, Telangana - 508204 ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate Writ, Order or a Direction, more particularly one in the nature of Writ of Mandamus, directing the Respondent No. 1 to lift the orders of atlachment on the following properties expeditiously All that the vacant land admeasuring 2950 Sq yrds out of Ac.6-10 Guntas forming part and parcel of Survey No.,7, Situated at Hasmathpet Village, Balanagar Mandal, Rangareddy District, Hyderabad, Telangana, standing in the pame of Sri Soma Kiran kumar as per Sale Deed No 14012014 situated within the jurisdiction of Sub Registrar Office Kukatpally. All that the vacant land admeasuring 2950 Sq yrds out of Ac.6- 10 Guntas forming part and parcel of Survey No., 7, Situated at Hasmathpet Village, Balanagar lr,4andal, Rangareddy District, Hyderabad, Telangana-50001 1, standing in the name of Sri Padamatinti Prasad as per sale Deed No 14112014 situated within the jurisdiction of Sub Registrar Office Kukatpally. 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 direct the Respondent No.2 and 3 i.e.. SRO - Balanagar and SRO - Kukatpally to register the properties as given below . All that the vacant land admeasuring 2950 Sq yrds out of Ac.6-10 Guntas forming part and parcel of Survey No., 7, Situated at Hasmathpet Village. Balanagar Mandal, Rangareddy District, Hyderabad, Telangana, standing in the name of Sri Soma Kiran kumar as per sale Deed No 140/2014 situated within the jurisdiction of sub Registrar office Kukatpally. . All that the vacant land admeasuring, 2950 Sq yrds out of Ac.6-10 Guntas forming part and parcel of Survey No., 7, Situated at Hasmathpet village, Balanagar lvlandal, Rangareddy District, Hyderabad, Telangana-500011, standing in the name of sri Padamatinti Prasadas per Sale Deed No 14112014 situated within the jurisdiction of sub Registrar office Kukatpally, as an when the auction is conducted by the Bank. Counsel for the Petitioner :SRl DISHIT BHATTACHARJEE Counsel for the Respondent No.1 : SRI J.V.PRASAD (SC FOR INCOME TAX) Counsel for the Respondent No.3 : GP FOR STAMPS AND REGISTRATION Counsel for the Respondents : The Court made the following: ORDER HONOURABLE SRI JUSTICE P. SAM KOSHY AND HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION No.33739 of 2o22 ORDER: (per Hon'ble Sri Jrrsfice l.cuimi Narayana Alishettg) This writ petil\"ion is filed by the pe titioner-Bank to direct respondent No. I to Iilt the orders of attachment in respect of vacarrl land, admeasuring 2950 square yards out of Acs.6. 1O guntas lorming part and parcel of Sy.No.7 situated at Hasmathper village, Balanagerr Mandal, Ranga Reddy district, l.lydcrabad. standing in thc' name of Sri Soma Kiran Kumar as pcr Sale l)eed no- 1,lOl2OI4 and lhe vacant [and, adrneasuring '2950 squarc- ,ards out of Acs.6.10 guntas forming part and parcel oi Sy.No.7 ol ttre samc village, standing irr the name of Sri Padamatinti Prasad as per Sale deed no.l47l2Ol4 situated r.r,irhin the jurisdiction of Sub-Registrar Office, Kukatpally. 2. Brief facts narrated in rhe writ petition are that petitioner is a Bank and it had extendcd credit facilities to a tune ol' I?s.7O,00,O0,000 / - ro the respondent no.4 i.e.. M/s.Sri Venkateshwara Ricc Indrislric-s Private Limitecl on 21.i2.2013. The loan is secu reC b.1. r'ay oi ,-:harge of three properties situatcci at Hasmathpet villagr:, Balanagar Mandal, Ranga Reddy district, {n ---- 2 Hvderabad. Horvevcr, lhc rcspondent No.4 defaulted in repayment of the loan amount and the loan account was classified as Non-Performing Asset (NPA) on 29.06.2O18. The petitioner-Bank has initiated measures under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, Demand Notice dated 2OO2 (for short, Act, 2002') and issued 12.07 .2018 under Section 34(2) of the Act,2OO2 for enforcement of security interest 3. The petitioner bank had taken symbolic possession of the properties and paper publication of the possession notice was also issued on 25.10.2018 in Sakshi and Indian Express Newspapers. After scrwing the redemption notice .on the borrowcrs / guaran tors on 10.12.2O18, auctions were conducted for sale of secured assets on 27.O2.2O19, 13.O3.2O2O, 30 .o7 .2020 , 1.9 .1.2.2020, 30.0 I .202 1 , 30 .7 r .2021 and 22.O3.2022, however, the same were failed for want of bidders. 4. The petitioner-bank {rled Original Application vide O.A.No. 174 /2019 before the Debts Recovery Tribunal (DRT) for recovery of an amount of Rs.8O13.85 lakhs and the same was decreed on 31.O8.2019 for Rs.6950.49 lakhs and Recovery Certificate u,as issuecl. Thereafter, respondcnt no.4 challenged the proceedings initiatecl by thc petitioner-Bank vide S.A.No.512 3 of 20 18 before the Debts Recovery Tribunal and the same is pending for consideration. 5. Meanwhile, the petitioner-bank came to know that the properties 'A' and 'B' are included in prohibited list of properties in the website o[ Registration and Stamps Department in view of Income Tax provisional attachment under Section 281-B of the Income Tax Act, 1961, passed by the 1\"t respondent. 6. During the hearing, learned counsel for the petitioner submitted that attachment of properties by lhe Income Tax Department is causing hindrance and the Bank is not able to succeed in the auction for sale of mortgaged properties, as the properties are shown under thc prohibited list of properties. He further submitted that multiple attempts made by the petitioner-bank to auction the properties have failed for want of bidciers. The learned counsel finally submits that it is necessary to lift the attachment of the Income Tax Department to enable the petitioner-bank to enforce its security interest and that the sale certificate can be registered in favour of the successful bidders. 7. Respondent No.1 filed counter affidavit stating that property 'B' was provisionally attached by respondent No. 1 by passrng an order under Section 28lB of the Income Tax Act, / 4 1961 vicle rcference No.PAN: AJlPP5692G, dated 03.12.2O1s and the said provisionzrl attachmcnt order ceased to havc effcct from O2.06.20 16 and therefore, there is no attachment by the Departmcnt. In paragraph 7 of the counter-affidavit, it is categorically stated that no provisional attachment under Section 28 1B(1) of the lncome Tax Act, 1961 is in force in respect of property 'B' since 18.04.20L7 and that no order lor attachm ent of propertl, 'A' has been passed . 8. Kr:eping in vicw of the factual background, the averments made in the coun ter-a ffidav it iiled by the respondent no.1 and submissions made by the respective counsels, the Writ Petition is disposed of with the follorving directions: (i) Petitioner-bank is directed to approach the respondent no.2 i.e., Sub-Registrar, SRO, Balanagar, Hyderabad, for redressal of its grievance by way of rcpresentation / application within a period o1- l5 days from the date of receipt of copy of this order. (ii) On submission of such representation/ application by the petitioner-bank, the respondent no.2 shall consider and take appropriate decision thereon, in accordance with 1aw within, a period o{ 30 days thereafter by duly considering the averments made in the counter-aliidavit filed by the respondent no.1 that no provisional attachmcnl under Section 2818 (1) ol the Income 5 Tax Act, 1961 is in force in respcct ol the property ,B,i.e., the vacant land admeasuring 2950 square yards out of Acs.6. 10 guntas forming part and parcel of Sy.No.7, situated at Hasmathpet village, Balanagar Mandal, Ranga Reddy district, Hyderabad,, standing in the name of Sri padamatinti prasad covered by the Sale deed no. 141/2014; and no order has been passed for attachment of property ,A, i.e., the vacant land admeasuring 2950 square yards out of Acs.6. 1O guntas forming part and parcel of Sy. No.7 of the same village, standing in the name o[ Sri Soma Kiran Kumar covered by Sale deed no.l4o/2074. There shall be no order as to costs. 9 Miscellaneous applicarions, pending it any, shall stand SD/- K. VENKAIAH ASSISTANT R GISTRAR //TRUE COPYII SECTI OFFI k)23 To, closed 1 2 J 4 E 6 7 Jfe !c91e Tax Officer, Suryapet, Telangana _ 508213. lle lup Registrar, SRO- Batanagar, Hyd-erabad 500039 r ne sub.Registrar, SRO- Kukatpally, Hyderabad_500072 Mis sn venkateshwara Rice lndustries, pvt Ltd, H.No.21_55/1, Madhavarayanigudem, Kodad Ro^ad, 1q1qrnrgii, fLlangana - soB2O4. one CC to SRI DtSHtT BHATTACHARIEE AiiroiateioFudl ----- \" 9n.99 to sRt J.v.PRASAD, (sc FqR tNcorviEiAx). toFtjci Two ccs to the Gp for stampd and negistratiJns, Ai!r, corrt fo'r the state of Telangana at Hyderabad. IOiJT] v -\"- -! I ..,' Two CD Copies. K P 8. BS GJ fnq. I HIGH COURT DATED:01 10812023 ORDER WP.No.33739 of 2022 DISPOSING OF THE WRIT PETITION WITHOUT COSTS 8a^Ul ,;f STArg o 1 .i: c 2 s [uczm rii_ - f, U r '.y.1' i.l rstC*' "