APHC010342022024 IN THE HIGH COURT OF ANDHRA AT AMARAVATI (Special Original Jurisdiction) TUESDAY,THE FIFTEENTH DAY OF JULY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU WRIT PETITION MQ: 17377 pp PRADESH NIMMAGADDA Between: M/s. SVL Rice Store, Rep. by its Managing S/o. Pura Chandra Rao, , Besides Satya Sai Baba Temple District. Partner Bezawada Bharadwaj aged 35 years Sy. No. 270. Shop No. 3 and 4 Mangamuru Road. Ongole, Prakasam ...PETITIONER AND State Bank of India, Rep. by its Assistant Recovery Branch, D.No. General Manager, Stressed Assets Upstairs of KFC, 54-20-1B/3/U6, 3rd Floor, Suryaprakash Square Gurunanak Nagar Road Vijayawada. ...RESPONDENT Petition under Article 226 of the Constitution Circumstances stated i of India praying that in the in the affidavit filed therewith, the High Court may be or direction more particularly one in the nature declaring the orders passed by the respondent cancelling compromise vide orders pleased to issue any writ, order of Writ of Mandamus SARBA/JA/YMRA/2024-25 Date: of Article 14 of the Constitution of in 22.07.2024 is illegal, arbitrary and violation India and to consequently set aside the same. lA NO: 1 OF 2024 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 suspend the orders passed by the respondent in SARBA/JAA'MRA/2024-25 Date: 22.07.2024 pending disposal of the writ petition. Counsel for the Petitioner: SRI V. V. SATISH Counsel for the Respondent: SRI S. SATYANARAYANA MOORTHY The Court made the following order: 1 NV,J W.P.No.17377 of 2024 APHC010342022024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3329] TUESDAY,THE FIFTEENTH DAY OF.JULY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 17377/2024 Between: 1.M/S. SVL RICE STORE,, REP. BY ITS MANAGING PARTNER BEZfWADA BHARADWAJ S/0. PURA CHANDRA RAO, AGED ‘35 YEARS SY. NO. 270, SHOP NO. 3 AND 4, BESIDES SATYA SAI BABA TEMPLE, MANGAMURU ROAD, ONGOLE, PRAKASAM DISTRICT. ...PETITIONER AND 1.STATE BANK OF INDIA, Rep. by its Assistant General Manager, Stressed Assets Recovery Branch, D.No. 54-20-1B/3/U6, 3rd Floor, Upstairs of KFC, .Suryaprakash Square Gurunanak Nagar Road, Vijayawada. ...RESPONDENT Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may. be pleased tomay be pleased to issue any writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the orders passed by the respondent cancelling' compromise vide orders in SARB/VJA/YMRA/2024-25 Date- 22.07.2024 is illegal, arbitrary and violation of Article 14 of the Constitution of India and to consequently set aside the same and to pass lA NO: 1 OF 2024 2 NV,J W.P.No.l7377of 2024 in Circumstances stated the affidavit filed in support of the petition, the High Court may be oleased may be pleased to suspend the orders passed by the respondent pemiorn 22.07.2024 pending disposal of the Counsel for the Petitioner: 1.VVSATISH Counsel for the Respondent: 1.S SATYANARAYANA MOORTHY-08025/AP/4713/1999 The Court made the following: in writ 3 NV,J W.P.No.17377 of 2024 THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 17377 OF 2024 ORDER: 1. Petitioner is the principal borrower to the loans obtained from the respondent State Bank of India, on account of the failure on the part of the petitioner to repay the loan in accordance with the terms and conditions settled, the account of the petitioner was declared as Non-Performing asset (N.P.A). Consequently, proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002 (for short, ‘SARFAESI Act’) were initiated for taking possession of the properties, which were mortgaged/secured assets with the respondent bank and to conduct sale by way of auction of the said properties for recovery of dues. While so, the respondent bank formulated a scheme for O.T.S. Based upon the proposal by the petitioner for One Time Settlement (for short O.T.S.’), it appears that the State Bank of India vide communication dated 17.01.2024 responded positively and laid down the terms and conditions of the said O.T.S. 2. According to the terms and conditions, the petitioner has to pay upfront amount of Rs.24.00 Lakhs which was paid and the same was appropriated to the petitioner’s loan account. The balance amount of rs. 136.00 Lakhs to be paid as per the schedule as under; 4 NV,J W.P.No.l7377of2024 Rs. 16.00 Lakhs to be paid on or before 17.02.2024 Rs.24.00 Lakhs to be paid on or before 17.03.2024 Rs.40.00 Lakhs to be paid on or before 17.05.2024 Rs.56.00 Lakhs to be paid on or before 17.07.2024 Condition (c) of the terms and conditions contained in the letter dated 17.01.2024 reads as follows: 3. If the entire compromise amount is not paid within 3 months, interest at minimum year MCLR for the balance compromise amount paid after 3 months shall be charged from 30‘^ day from the date of this letter.” one 4. According to Condition (c) of the terms and conditions, if the entire compromise amount is not paid within 3 months, interest at minimum one year MCLR for the balance compromise amount paid after 3 months shall be charged from the 30* day. The petitioner's claim that, contrary to the terms and conditions agreed between the parties and recorded in the O.T.S dated any prior notice to the petitioner, of communication dated 17.01.2024, the respondent bank, without cancelled the agreed terms of O.T.S. by virtue 22.07.2024. 5. Learned counsel for the petitioner would submit that, there was no reason for the respondent bank to go back from the O.T.S, since it is an open ended agreement, more so, the said delayed payment beyond three months from the date to the borrower, the borrower has to agreement also envisages that for any of conveying of sanction pay the remaining dues along with 5 NVJ W.P.No.17377 of 2024 interest leviable at the rate of one year MCLR for the balance compromise amount to be payable till the date of final payment. It was urged that, since the terms of the O.T.S also envisaged or visualized the delayed payment, hence no cancellation of the O.T.S was justified and that too, without hearing the petitioner. What was urged by learned counsel for the petitioner was that, once the account of the petitioner was declared ass N.P.A and proceedings were already initiated under the SARFAESI Act, yet, on account of the fact that the parties had entered into an agreement of O.T.S., after the declaration of the accounts as N.P.A, the same would attract the principles of novation of contract and therefore, the bank was obliged to adopt the procedure, yet again and first, had to declare the account of the petitioner as N.P.A and then proceed afresh by invoking the provisions of the SARFAESI Act. 6. On the other hand. Learned counsel for the respondent Bank states and relies upon the judgments of the Hon’ble Apex Court, which have clearly held that the Constitutional Courts, while exercising powers under Article 226 of the Constitution of India, should not interfere in matters which are otherwise governed under the provisions of the SARFAESI Act, inasmuch as there is an equal efficacious alternate remedy and Forum provided under the said Act. In United Bank of India vs. Satyawati Tondon\ the Hon’ble Apex 7. Court held as follows; (2010) 8 see 110 NV,J W.P.No.17377 of 2024 55. It is 3 matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies and the SARFAESI Act and under the DRT Act exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial dues. We hope and trust that i exercise their discretion i institutions to recover their in future the High Courts will in such matters with greater caution care and circumspection. 8. In Celir LLP Court held as follows; vs. Bafna Motors (Mumbai) (P) Ltd^ the Hon’ble Apex 101. More than a decade back, this Court had expressed serious concern despite its repealed pronouncements in regard 0 the High Courts ignoring the availability of statutory remedies under the RDBFI Act and the SARFAESI jurisdiction under Article 226 of the Constitution decision of this Court in Satyawati Tondon, it High Courts have under Article 226 i RDBFI Act and the SARFAESI Act. Act and exercise of J. Even after, the appears that the continued to exercise its writ jurisdiction ignoring the statutory remedies under the 9. Considering the ratio of the judgments laid down in the aforementioned cases, the petitioner is relegated to avail the available under law. However, including the issue with appropriate remedy which is considering the nature of the controversy as has been urged by regard to novation of contract ' (2024) 2 see 1 7 NV,J W.P.No.17377 of 2024 the learned counsel for the petitioner, this Court deems it appropriate that the auction proceedings be deferred for a period of three (3) weeks with a view to enable the petitioner to approach appropriate Forum and to go into the issues which were agitated before this Court. With the above direction, writ petition is disposed of. No costs. 10. Consequently, Miscellaneous Petitions, if any, pending in this Writ 11. Petition shall stand closed. Sd/- SRINIVAS ASSISTANT REGISTRAR //TRUE COPY// CTION OFFICER To, -1 The Assistant General Manager, State Bank of India, Stressed Assets Recovery Branch, D.No. 54-20-1B/3/U6, 3rd Floor, Upstairs of KFC, SuryapraKash Square, Gurunanak Nagar Road, Vijayawada. 2. One CC to Sri V. V. Satish, Advocate [OPUC] 3. One CC to Sri S. Satyanarayana Moorthy, Advocate [OPUC] 4. Two CD Copies ssb HIGH COURT DATED: 15/07/2025 ORDER WP No. 17377 OF 2024 19 AUG 2025 )g V'sCjjfTtntSectiojixV^ DISPOSING OF THE W.P. WITHOUT COSTS