M/s. Lakshmi Venkateswara Hatcheries V. Union Bank of India, represented by its Chief Manager,

WP/6472/2009

AI Insights

The case involves M/s. Lakshmi Venkateswara Hatcheries and its managing partner, Sri Jonna Chandra Shekar, who filed a Writ Petition against the Union Bank of India and another respondent, challenging the auction of agricultural lands in Rapur Village, Nellore District. The petitioner argued that the auction was arbitrary, illegal, and violated principles of natural justice. The bank had initiated the auction following the petitioner's failure to settle under a One Time Settlement scheme for loans taken. The court dismissed the petition, citing procedural non-compliance by the petitioner and the ongoing proceedings at the Debts Recovery Tribunal.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 686890 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 10-07-2009
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Rules, Recovery of Debts Due to Banks and Financial Institutions Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: K V JANARDHAN RAO
• Keywords: Agricultural lands; Auction; Debt Recovery Tribunal; One time settlement; Recovery Officer; Writ of Mandamus
• Section: 25; 29; 61

Judgement Text

" IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TENTH DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 6472 of 2009 Between: 1 M/s. Lakshmi Venkateswara Hatcheries represented by its Managing Partner Sri. Jonna Chandra Shekar, Kappala Daruvu Village, Muthukur Mandal, Nellore. 2 J.Chandra Shekar S/o.late Venkayya Flat No. 308, SRK Towers, Ameerpet, Hyderabad. ..... PETITIONER(S) AND 1 Union Bank of India, represented by its Chief Manager, Main Branch, Nellore. 2 A.Venkateswara Reddy S/o.Not known R/o. Vedayapalem, Nellore. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue a Writ, order or direction more particularly in the nature of Writ of Mandamus, declaring the action of the 1st respondent in conducting the auction of the agricultural lands with the help of the Recovery Office at Rapur Village, Nellore totally admeasuring Ac.6.56 1/2 Cents as arbitrary, illegal, unlawful and contrary to law and violative of principles of natural justice and consequentially to set-aside the same and may pass such other order or orders. Counsel for the Petitioner:MR.K.V.JANARDHAN RAO Counsel for the Respondent No.: . The Court made the following : ORDER: (Per Sri Justice GHULAM MOHAMMED) This Writ Petition has been filed seeking Writ of Mandamus declaring the action of the first respondent- Union Bank of India in conducting the auction of the agricultural lands admeasuring Ac. 6.56 ½ cents at Rapur Village, Nellore District with the help of the Recovery Officer as arbitrary and illegal and consequently set aside the same. Brief facts of the case are that the petitioner is the borrower, who purchased machinery from Andhra Pradesh State Financial Corporation (APSFC) and for working capital he approached the first respondent-Bank in the month of August, 1996-and initially credit facilities were provided and after seeing the turnover they had increased cash credit limits to Rs. 7,50,000/- and Rs. 4,00,000/- towards over draft facility. The petitioner firm approached the first respondent-bank expressing its inability to continue the business and requested to repay the amount under One Time Settlement scheme but no orders are passed on the OTS proposal. It is stated that the petitioner had given the agricultural properties as collateral securities and taking advantage of his helplessness, the first respondent-Bank instead of considering his application under OTS scheme has been pressurizing him for sale of the agricultural properties situated at Rapur Village, Nellore District. It is also stated that the Recovery Officer of the first respondent-Bank initiated proceedings by issuing proclamation of sale in order to put to sale the agricultural land of an extent of Ac. 4.67 cents in S.No. 493/2, 493/3, 492 of Rapur Village and Ac. 1.89 ½ cents in S.No. 480/5, 480/7, 480/9, 480/13 etc of Rapur Village and the agricultural land of an extent of Ac. 13.20 cents in S.No. 620, 633/B, 420-4B, 142-2, 165, 140-2A situated at Talamanchi Village, Kondavalur Mandal, Nellore District intimating that the auction would be held on 5.3.2009 at the Bank premises and the said notice was issued on 14.2.2009 which is within the mandatory period of 30 days. It is further submitted that as the auction proceedings are exfacie illegal and contrary to the provisions of law and also contrary to the rules framed to conduct the auction to recover the amount in execution proceedings, the petitioner filed an application before the Recovery Officer, Debt Recovery Tribunal, Visakhapatnam under Rule 61 of Income Tax Rules read with Section 25 to 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, seeking for setting aside the sale of Item No. 1 and 2 of the Schedule Properties. It is submitted that the learned Recovery Officer by his proceedings dated 20.3.2009 returned the said application in R.P.No. 199/2003 in O.A.No. 901/2002 by insisting to deposit the amount as required under Rule 61 of Income Tax Rules to entertain the application filed by him. Feeling aggrieved by the same, the present Writ Petition has been filed. In the counter, at paragraph five, it is stated that the petitioner has submitted an application seeking to consider for One Time Settlement and after examination of the same, the officials prima facie found that the said application cannot be considered as per the norms of the Bank and suitable reply was be given to the petitioner in that respect. It is also submitted that the petitioner filed an application in R.P.No. 199/03 in O.A.No. 901 of 2002 on 13.3.2009 for setting aside the sale. The said application was returned by the Debts Recovery Tribunal for compliance i.e. for depositing of the amount as required under Rule 61 of the Income Tax Rules r/w Section 25 to 29 of the Recovery of Debts Due to Banks and Financial Institutions Act. It is stated that the petitioner instead of complying with the requirement straight away approached this Court. It is further stated that after giving opportunity to the petitioner in respect of the two properties i.e., the Schedule I and II properties auction was already conducted and in respect of the Schedule III property auction was postponed as no bidder came forward to purchase the said property. As seen from the material made available on record, the petitioner approached the Debts Recovery Tribunal by filing an application in R.P.No. 199 of 2003 in O.A.No. 901 of 2002 on 13.3.2009. Hence, this Writ Petition is misconceived inasmuch as the application filed by the petitioner under Rule 61 of the Income Tax Rules r/w Sections 25 to 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, is pending before the Debts Recovery Tribunal and the said application was returned by the Debts Recovery Tribunal for compliance i.e., depositing the amount as required under Rule 61 of the Act. Hence, the Writ Petition is misconceived and the same is liable to be dismissed. Accordingly, the Writ Petition is dismissed. However, in so far as the ‘One Time Settlement’ Scheme is concerned, it is open for the petitioner to pursue the same with the Bank. There shall be no order as to costs. _____________________________ GHULAM MOHAMMED, J ______________________________ VILAS V. AFZULPURKAR, J Dt. 10.07.2009 KA ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1. 2 CD copies "