APHC010005922021 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3233] WEDNESDAY, THE SIXTH DAY OF AUGUST TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE B KRISHNA MOHAN WRIT PETITION NO: 469/2021 Between: 1. UGGUMUDI VENKATAKRISHNA REDDY, FATHER NAME RAMANA REDDY OCC BUSINESS, R/O. KAPU STREET, CHENNURU VILLAGE AND POST, GUDUR MANDAL, SPSR NELLORE DISTRICT. ...PETITIONER AND 1. THE STATE OF ANDHRA PRADESH, REP. BY PRINCIPAL SECRETARY, REVENUE DEPARTMENT, A.P. SECRETARIAT, VELAGAPUDI, GUNTUR DISTRICT 2. THE DISTRICT COLLECTOR, SPSR NELLORE DISTRICT AT NELLORE. 3. THE TAHSILDAR, GUDURMANDAL, SPSR NELLORE DISTRICT. 4. INDUKURU JANARDHAN REDDY, S/O. SUNDARARAMI REDDY, AGED ABOUT 47 YEARS, OCC BUSINESS, R/ O. KAPU STREET, CHENNURU VILLAGE AND POST, GUDUR MANDAL, SPSR NELLORE DISTRICT. ...RESPONDENT(S): Counsel for the Petitioner: 1. P S P SURESH KUMAR 2 HBKM,J W.P.No.469 of 2021 Counsel for the Respondent(S): 1. GP FOR REVENUE 3 HBKM,J W.P.No.469 of 2021 The Court made the following Order:- Heard the learned counsel for the petitioner and the learned Assistant Government Pleader for the 3rd respondent. Inspite of service of notice, none appears for the 4th respondent. 2. This writ petition was filed questioning the auction notice issued by the 3rd respondent under Section 36 of the Andhra Pradesh Revenue Recovery Act, 1864 in issuing the auction notice dated 11.12.2020 proposing to conduct the auction in Form-7 inspite of existence of registered Mortgage Deed in respect of Sy.No.359-1 admeasuring Ac.1.31 cents land in Sy.No.413 admeasuring Ac.0.06 cents land in Sy.No.414-1 admeasuring Ac.0.76 cents and land in Sy.No.414-3 admeasuring Ac.0.25 cents (Ac.10.07 cents) total admeasuring Ac.2.38 cents situated at Chennuru Bit-2 Village, Gudur Mandal, SPSR Nellore District. 3. The learned counsel for the petitioner submits that the 4th respondent executed the Mortgage Deed for a sum of Rs.20,00,000/- showing the schedule of the property. While so, the 3rd respondent issued the above said notice dated 11.12.2020 to recover the arrears of land revenue from the 4th respondent for a sum of Rs.38,74,000/- by fixing the public auction dated 12.01.2021 at 10:00 A.M. The schedule of the property and the default amount payable by the defaulter/the 4th respondent is also shown in the said impugned notice. 4 HBKM,J W.P.No.469 of 2021 4. The learned counsel for the petitioner submits that the 3rd respondent cannot proceed with the said public auction as the petitioner is having the above said Mortgage Deed with respect to the schedule of the property that was executed by the 4th respondent much prior to the above said public auction notice, as the above said document of Mortgage was executed on 15.07.2019, whereas the public auction notice was dated 11.12.2020. 5. He contends that, the petitioner’s debt will have priority over the revenue recovery of the State, for which, he relies upon the decision of the erstwhile High Court reported in 1998 (5) ALD 637 (DB), in the matter of Sitani Textiles and Fabrics Private Ltd. Vs. Assistant Collector of Customs and Central Excise, Hyderabad and Another. The matter fell for consideration in the said case was with regard to the provisions of State Financial Corporation Act, 1951, Section 46-B and the provisions of Central Excise and Salt Act, 1944. 6. The then Division Bench of the erstwhile High Court observed that the Government cannot claim over the petitioner’s rights for recovery of its excise duty as no charge lies on the property for recovery of the duty. In other words, the excise duty is not a secured debt, as for recovery of which no charge lies on the property. 7. It was further observed that, the mortgage is a transfer of an interest in immovable property. The owner out of the bundle of rights transfers some of those rights to the mortgager and keeps the remainder of them still with him. 5 HBKM,J W.P.No.469 of 2021 The transfer of interest under mortgage is less than ownership which continues with the mortgager. The characteristic of the mortgage is that it transfers an interest in immovable property. Therefore, these mortgagees have an interest which is less than ownership has a preferential right over other unsecured creditors. 8. On the other hand, the learned Assistant Government Pleader relying upon the counter of the 3rd respondent submits that the 4th respondent herein is the defaulter to pay the huge amount of Rs.38,74,000/- to the Government and he is deliberately and wantonly avoiding to pay the defaulted amount to the Government and he has not even responded properly. The 4th respondent with a malafide intention mortgaged his land in favour of the writ petitioner to defeat the revenue recoveries for the said land of Rs.38,74,000/- under the Andhra Pradesh Revenue Recovery Act, 1864. The 4th respondent is a chronic defaulter colluded with the writ petitioner and thereby the writ petitioner pressed into service the above said mortgage deed dated 15.07.2019, which cannot be utilized against the official respondents herein, who are proceeding in accordance with law. 9. In view of the above said facts and circumstances and upon consideration of the rival submissions made, it is to be seen that admittedly the 4th respondent is a chronic defaulter for a sum of Rs.38,74,000/- and as such, the 3rd respondent issued the above said impugned public auction notice under Section 36 of the Andhra Pradesh Revenue Recovery Act, 1864. 6 HBKM,J W.P.No.469 of 2021 If the petitioner has got any mortgage deed as obtained, he has got all the opportunity to proceed against the 4th respondent in accordance with law but he cannot stall the public auction scheduled to be held under the above said impugned public auction notice dated 11.12.2020, which was initiated at the instance of the official respondents herein specifically the 4th respondent. At best he can bring it to the notice about the alleged transaction with the 4th respondent before the authorities concerned. The decision relied upon by the learned counsel for the petitioner cannot be made applicable to the facts and circumstances of this case as it was dealt with the provisions of Section 29 and Section 46 (b) of the Central Excise Act, 1944. Their lordships as they then were observed that the Government cannot claim preferential right for recovery of its excise duty as no charge lies on the property for recovery of the duty. In other words, excise duty is not a secured debt, as for recovery of which no charge lies on it. But those are not the facts and circumstances of this case as discussed above and no relief can be granted in this writ petition. However, liberty is given to the petitioner to make representation to the notice of the 3rd respondent in response to the above said public auction notice dated 11.12.2020 about the alleged transaction between the petitioner and the 4th respondent dated 15.07.2019 and it is also open for the petitioner to work out his remedies by proceeding against the 4th respondent in accordance with law before the appropriate authorities concerned, if so advised. 7 HBKM,J W.P.No.469 of 2021 10. Accordingly, this Writ Petition is disposed of. Interim order, if any, deemed to have been vacated. There shall be no order as to costs. As a sequel, Interlocutory Applications pending, if any, shall stand closed. __________________________ JUSTICE B. KRISHNA MOHAN 06.08.2025 PGT