APHC010134352019 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3558] THURSDAY,THE FIFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY THE HONOURABLE SRI JUSTICE TUHIN KUMAR GEDELA WRIT PETITION NO: 6116/2019 Between: 1. MEDHEPALLI BHASKAR NAIDU, S/O. LATE M. RAMANNA, AGED 44 YEARS, R/O. D.NO.13-888-4, MARUTHI NAGAR, TADIPATHRI TOWN, ...PETITIONER AND 1. STATE BANK OF INDIA, REP. BY ITS AUTHORIZED OFFICER, JNTU BRANCH, ANANTHAPURAMU, ANANTHAPURAMU DISTRICT. 2. KADULA MADHUKAR SAM, S/O. SAN, AGED 50 YEARS, OCC BUSINESS, R/O. H.NO.10-279-A, GUIZARPET, ANANTHAPURAMU, ANANTHAPURAMU DISTRICT. 3. THE DEBTS RECOVERY TRIBUNALII, AT HYDERABAD, REP. BY ITS REGISTRAR. ...RESPONDENT(S): 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 toTo issue a writ of mandamus or any other appropriate writ order or direction declaring theorder passed in S.A.No.503 of 2017 (old S.A.No.324 of 2015) passed by the Hon'ble Debts Recovery Tribunal-II at Hyderabad in setting aside the sale held on 27.03.2015 is illegal, arbitrary and consequently set aside the same and to pass 2 CMR,J & GTK,J W.P.No.6116 of 2019 IA NO: 1 OF 2019 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 21-05-2018 passed in S.A.No.503 of 2017 (old S.A.No.324 of 2015) passed by the Hon'ble Debts Recovery Tribunal-II at Hyderabad pending disposal of the above writ petition and to pass Counsel for the Petitioner: 1. N ASWARTHA NARAYANA Counsel for the Respondent(S): 1. O UDAYA KUMAR 2. K B RAMANNA DORA The Court made the following: 3 CMR,J & GTK,J W.P.No.6116 of 2019 ORDER: (Per Hon’ble Sri Justice Cheekati Manavendranath Roy) This writ petition for a mandamus is filed challenging the legal validity of the order dated 21.05.2018 passed in S.A.No.503 of 2017 by the Debts Recovery Tribunal-II, Hyderabad, setting aside the sale held on 27.03.2015 as illegal. 2. Heard Mr.N.Aswartha Narayana, learned counsel for the writ petitioner, Mr.O.Udaya Kumar, learned Standing Counsel for 1st respondent- bank and Mr.Ch.Venkata Challa Rao, learned counsel representing Mr.K.B.Ramanna Dora, learned counsel for the 2nd respondent. 3. The 2nd respondent is the principal borrower who availed loan from the 1st respondent-bank. As he committed default in repayment of the loan amount, the 1st respondent-bank has initiated measures under the SARFAESI Act and sold away the secured asset in the public auction that was held on 27.03.2015. The writ petitioner participated in the said auction and he was declared as highest bidder and he has paid the entire sale consideration. Therefore, the writ petitioner is the auction purchaser of the secured asset in the auction that was held on 27.03.2015 by the 1st respondent-bank. 4. The 2nd respondent-principal borrower has challenged the validity of the said sale before the Debts Recovery Tribunal-II, Hyderabad, in S.A.No.503 of 2017. The said securitization application was allowed by the impugned order dated 21.05.2018 and the Tribunal has set aside the sale dated 27.03.2015 held in favour of the writ petitioner. 5. Aggrieved by the impugned order of the Tribunal, the writ petitioner/auction purchaser has preferred the present writ petition challenging the order of the Tribunal. Section 18 of the Act is relevant in the context to consider. It provides a right of appeal to an aggrieved person against the order passed by the Tribunal. Section 18 starts with the wording and expression “any person aggrieved”. Therefore, it covers not only the principal borrower, guarantor and the bank relating to the loan transaction, but also any person 4 CMR,J & GTK,J W.P.No.6116 of 2019 who is aggrieved by the order passed by the Tribunal. The petitioner, who is the auction purchaser, squarely falls within the ambit of the said expression “any person aggrieved” as contemplated under Section 18 of the Act. Therefore, when the statute provides an efficacious remedy of appeal to an aggrieved person against the order of the Tribunal, the writ petitioner/auction purchaser, being the aggrieved person by the order of the Tribunal has to prefer an appeal to the appellate authority. Without preferring the appeal to the appellate authority, he cannot maintain the writ petition challenging the order of the Tribunal. 6. Learned counsel for the writ petitioner placed reliance on the judgment of the Apex Court rendered in the case of Varimadugu Obi Reddy vs. B.Sreenivasulu and Others1. In fact, the ratio laid down the said case is against the writ petitioner. At paragraph no.34 of the judgment, the Apex Court held as follows: “34. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the SARFAESI Act, 2002, but the order of the Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of pre-deposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under 2nd proviso to Section 18 of the Act 2002.” 7. Therefore, from the law laid down in the aforesaid judgment of the Apex Court, the legal position is clear that when a person aggrieved by the order passed by the Tribunal that the said order is appealable under Section 18 of the Act, subject to compliance of condition of pre-deposit and without exhausting the said statutory remedy of appeal, if the aggrieved person approaches the High Court way of filing a writ application under Article 226 of the Constitution, the Apex Court deprecated the practice of entertaining the 1 (2023) 2 SCC 168 5 CMR,J & GTK,J W.P.No.6116 of 2019 writ applications by the High Court in exercise of jurisdiction under Article 226 of Constitution of India without exhausting the alternative statutory remedy available under law. The Apex Court further held that this circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under 2nd proviso to Section 18 of the Act, 2002. 8. Therefore, in view of the dictum laid down by the Apex Court in the above judgment, we are not inclined to entertain the writ petition. It is contended by the learned counsel for the writ petitioner that even though the Apex Court held in the said judgment that without exhausting the statutory remedy of appeal provided under Section 18 of the Act that a writ petition is not maintainable that the Apex Court ultimately decided the said case on merits. But it cannot be used as a proposition of law to contend that writ application is maintainable even when a statutory remedy of appeal is provided under the Act to an aggrieved persona against an order passed by the Debts Recovery Tribunal. 9. Therefore, the Writ Petition is dismissed as not maintainable. However, the writ petitioner is at liberty to avail his statutory remedy of law under Section 18 of the Act. As this writ petitioner is pending before this Court since the year 2019 and as the impugned order was suspended by way of granting interim relief, the said interim relief shall continue till the petitioner prefers an appeal before the appellate authority subject to law of limitation. In case the petitioner fails to approach the appellate authority within a period of one month from the date of this order and obtain an interim order, the extension of interim order granted in this writ petition shall stand vacated without any further reference to the Court. In case any such appeal is preferred by the writ petitioner, since it is an old matter relating to the sale that took place long back in the year 2015 about 11 years ago, the appellate authority shall make an endeavor to dispose of the said appeal after hearing both the parties on merits according to law within six months from the date of preferring the appeal. There shall be no order as to costs. 6 CMR,J & GTK,J W.P.No.6116 of 2019 10. As a sequel, Miscellaneous Applications pending, if any, shall stand closed. ________________________________________ CHEEKATI MANAVENDRANATH ROY, J _______________________ TUHIN KUMAR GEDELA, J Date : 05-02-2026 BMS