IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

****

WRIT PETITION NO: 17650 of 2024

SRI GOLLA HARIDASYADAV,, S/O. GOLLA LAKSHMANA

AGED ABOUT- 63 YRS, OCC- BUSINESS, R/O. D.NO.

15/117-A, VICTORIA PETA, ADONI, KURNOOL DISTRICT,

ANDHRA PRADESH, 518301.

… Petitioner

Versus

THE STATE OF ANDHRA PRADESH, . REP.BY ITS

PRINCIPAL SECRETARY, TRANSPORT DEPARTMENT,

SECRETARIATE AMARAVATI, GUNTUR DISTRICT AND

OTHERS

… Respondents

DATE OF ORDER PRONOUNCED : 01.07.2025

SUBMITTED FOR APPROVAL :

HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

1. Whether Reporters of Local Newspapers

may be allowed to see the order? : Yes/No

2. Whether the copy of order may be

marked to Law Reporters/Journals? : Yes/No

3. Whether His Lordship wish to

see the fair copy of the order? : Yes/No

_____________________

SUBBA REDDY SATTI, J

Page 2 of 15 SRS,J

W.P.No.17650 of 2024

* HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

WRIT PETITION NO: 17650 of 2024

% 01.07.2025

Writ Petition No. 17650 of 2024

SRI GOLLA HARIDASYADAV,, S/O. GOLLA LAKSHMANA

AGED ABOUT- 63 YRS, OCC- BUSINESS, R/O. D.NO.

15/117-A, VICTORIA PETA, ADONI, KURNOOL DISTRICT,

ANDHRA PRADESH, 518301.

… Petitioner

Versus

THE STATE OF ANDHRA PRADESH, . REP.BY ITS

PRINCIPAL SECRETARY, TRANSPORT DEPARTMENT,

SECRETARIATE AMARAVATI, GUNTUR DISTRICT AND

OTHERS

… Respondents

! Counsel for Petitioner : Ms. Priyanka, learned counsel

^ Counsel for Respondents : Sri Rasheed, Assistant Government

Pleader for Transport;

Sri Satyanarayana Moorthy, learned

standing counsel and Smt. Sodum

Anvesha, learned counsel

< Gist:

> Head Note:

? Cases referred:

1) (2004) 2 SCC 1

2) (2022) 5 SCC 710

3) (2022) 11 SCC 761

4) (2011) 14 SCC 739

5) (2007) 2 SCC 230

6) (2000) 7 SCC 521

7) (2003) 3 SCC 541

8) (2003) 5 SCC 413

9) (2003) 2 SCC 577

This Court made the following:

Page 3 of 15 SRS,J

W.P.No.17650 of 2024

APHC010347602024

IN THE HIGH COURT OF ANDHRA PRADESH

AT AMARAVATI

(Special Original Jurisdiction)

[3331]

TUESDAY,THE FIRST DAY OF JULY

TWO THOUSAND AND TWENTY FIVE

PRESENT

THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

WRIT PETITION NO: 17650/2024

Between:

1. SRI GOLLA HARIDASYADAV,, S/O. GOLLA LAKSHMANA AGED

ABOUT- 63 YRS, OCC- BUSINESS, R/O. D.NO. 15/117-A, VICTORIA

PETA, ADONI, KURNOOL DISTRICT, ANDHRA PRADESH, 518301.

...PETITIONER

AND

1. THE STATE OF ANDHRA PRADESH, . REP.BY ITS PRINCIPAL

SECRETARY, TRANSPORT DEPARTMENT, SECRETARIATE

AMARAVATI, GUNTUR DISTRICT.

2. STATE BANK OF INDIA, REP BY ITS AUTHORISED OFFICER,

REGISTERED OFFICE, GH ROAD, ADONI, 467 GHOSHA HOSPITAL

ROAD, ADONI KURNOOL DISTRICT.

3. THE REGIONAL TRANSPORT AUTHORITY, ADONI, KURNOOL

DISTRICT.

4. PEPAKAYALA SRINIVASULU, S/O. P. CH. VENKATA RAO, AGED 48

YEARS, R/O. D. NO. 28-1574-A, NEAR GOODS SHED, R.S. ROAD,

NANDYAL, NANDYAL DISTRICT. R4 IS IMPLEADED AS PER

COURT'S ORDER DT. 20/12/2024 IN IA 3/2024.

...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 tomay be pleased to issue any writ, order or direction more

particularly one in the nature of Writ of Mandamus declaring the action of the

Page 4 of 15 SRS,J

W.P.No.17650 of 2024

2nd respondent in not allowing the petitioner to clear the outstanding loan

amount for vehicle loan Account No. 39127412549 and thereby issuing letter

dt.04.04.2024 and the notice dt.20.06.2024 issued by the 3rd respondent for

transfer of ownership of vehicle without considering the petitioners reply

dt.08.07.2024 is illegal, arbitrary and violative of article 14 and 300-A of the

constitution of India and to consequently direct the 2nd respondent to receive

the demand draft no 147983 dated 4 -03-2024 towards clearance of

outstanding loan amount and to release the vehicle bearing No. AP-39 EA-

3699 by closing the loan Account No. 39127412549 and set aside the notice

issued by the respondent No.2 dated 20-06-2024 and to pass

IA 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

may be pleased to direct the respondent No.2 to forthwith release the vehicle

bearing No. AP 39 EA 3699 by receiving the Demand Draft No. 147983 dated

4-03-2024 drawn on Central Bank of India, Adoni Branch and further direct

the respondent No.3 not to effect the transfer of vehicle bearing No.AP-39

EA-3699 in the name of any third person pending disposal of the Writ Petition

and pass

IA NO: 2 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

Pleased to Vacate the Interim order Dated 09-08-2024 in Writ Petition

Number 17650 of 2024 , with costs

IA NO: 3 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

pleased to implead the Proposed Respondent No.4 herein as Party

Respondent No.4 in W.P.No. 17650/2024 and pass

IA NO: 4 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

pleased to vacate the Interim Order, dt.9.8.2024 passed in l.A.No.1/2024 in

W.P.No.17650/2024 and pass

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W.P.No.17650 of 2024

Counsel for the Petitioner:

1. GRANDHI PRIYANKA

Counsel for the Respondent(S):

1. S SATYANARAYANA MOORTHY

2. SODUM ANVESHA

3. GP FOR TRANSPORT

The Court made the following:

::ORDER::

The above writ petition has been filed to declare the action of

respondent No.2 in not allowing the petitioner to clear the outstanding loan in

respect of vehicle loan account No.39127412549; the letter dated 04.04.2024

and notice dated 20.06.2024 issued by respondent No.3 for transfer of

ownership of the vehicle without considering the petitioner’s reply dated

08.07.2024, as illegal and arbitrary.

2. Heard Ms. Priyanka, learned counsel for the petitioner; Sri Rasheed,

learned Assistant Government Pleader for Transport, for respondents 1 and 3;

Sri S. Satyanarayana Moorthy, learned standing counsel for respondent No.2

and Smt. Sodum Anvesha, learned counsel for respondent No.4.

3. Initially, the writ petition was filed against respondents 1 to 3.

Respondent No.4, the auction purchaser, filed I.A.No.3 of 2024 to implead him

as a party respondent to the writ petition. The I.A. was allowed on 20.12.2024,

and accordingly, the auction purchaser came on record as respondent No.4.

4. The averments of the writ affidavit, in brief, are that the petitioner, after

obtaining a loan of Rs.15,00,000/- from respondent No.2 bank, vide loan

account No. 39127412549 purchased a vehicle bearing No.AP 39 EA 3699

under ‘hypothecation’. The petitioner made certain payments, and due to

pandemic and drought conditions, the petitioner failed to pay the instalments

regularly, and hence, the loan account was declared as ‘NPA’ on 01.04.2023.

Page 6 of 15 SRS,J

W.P.No.17650 of 2024

The vehicle was taken possession of by the bank on 08.08.2023. A sale notice

dated 27.02.2024 was issued proposing to conduct an auction on 11.03.2024.

Respondent No.2 estimated the value of the vehicle at Rs.7,00,000/-.

Challenging the said notice, dated 27.02.2024, the petitioner filed

W.P.No.6223 of 2024. On the submission made by learned counsel for the

petitioner that it was informed that the auction was not conducted on

11.03.2024, for want of bidders, the writ petition was closed, giving liberty to

the petitioner to avail appropriate remedy, if a new cause of action arises.

b) The petitioner approached respondent No.2 with demand drafts,

dated 04.03.2024, for Rs.7,00,000/-. Respondent No.2, without accepting the

demand draft, is proceeding to conduct an auction. The petitioner made a

representation on 03.04.2024, and respondent No.2 sent a reply on

04.04.2024, intimating the petitioner that the auction was conducted on

11.03.2024. However, the said reply was not communicated to the petitioner

till notice, dated 30.06.2024 was issued by respondent No.3. Respondent

No.3 issued notice under Form 37, calling upon the petitioner to surrender the

certificate of registration. Aggrieved by the said action, the above writ petition

is filed.

5. A counter affidavit was filed on behalf of respondent No.2. It was

contended, inter alia, that the loan was sanctioned on 07.02.2020, and since

the petitioner failed to pay the instalments regularly, the account was declared

as NPA on 01.04.2023. An auction notice was issued on 27.02.2024, the

auction was conducted on 11.03.2024 and knocked down for an amount of

Rs. 7,05,000/-. The total due amount is Rs.9,84,924/-. The vehicle bearing

No.AP 39 EA 3699 was involved in an accident in the year 2023 and was

given for repairs. An amount of Rs. 1,20,625/-, incurred to repair the vehicle,

has not been paid, and the vehicle is in the custody of the KIA showroom. The

officials of the bank informed the showroom about the auction, and the

showroom management expressed no objection to handing over the vehicle if

the bill is cleared.

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W.P.No.17650 of 2024

b) Regarding W.P.No.6223 of 2024, and the order passed therein, it

was contended that, on verification of the High Court website, it came to know

that W.P.No.6223 of 2024 was filed on 06.03.2024; listed before learned

Single Judge on 12.03.2024; and at the request of learned counsel for the

petitioner, it was listed before the Division bench, on 19.03.2024. On the

representation made by the learned counsel for the petitioner that the auction

was not conducted on 11.03.2024, the said writ petition was closed, giving

liberty to the petitioner to avail an appropriate remedy. But, the e-auction was

conducted on 11.03.2024 and two bidders participated. Respondent No.4

became the highest bidder and paid the entire amount.

c) A reply was given to the petitioner on 04.04.2024, intimating

about the auction conducted on 11.03.2024 and creation of a third-party

interest. The appraiser of respondent No.2 approached respondent No.3 for

the transfer of the ownership of the vehicle in the name of the auction

purchaser. However, due to the interim order granted on 09.08.2024, further

steps have not been taken. Eventually, prayed to dismiss the writ petition.

6. The auction purchaser filed a separate counter affidavit. It was pleaded

about the purchase of the vehicle through auction and the payment of the

entire amount.

7. An additional affidavit was filed by the petitioner, by annexing copies of

two demand drafts for Rs.70,000/- and Rs.9,80,000/- and contended that the

petitioner is ready and willing to pay the interest at 12% per annum in favour

of the auction purchaser.

8. The auction purchaser filed a reply affidavit expressing disinclination to

accept the petitioner’s proposal.

9. Learned counsel for the petitioner, learned standing counsel for

respondent No.2 and learned counsel for respondent No.4 reiterated the

Page 8 of 15 SRS,J

W.P.No.17650 of 2024

contentions as per the averments made in the writ affidavit, additional affidavit

and respective counter affidavits.

10. The writ petition was filed on 09.08.2024, in pursuance of form No.37

dated 20.06.2024 issued by respondent No.3, directing the petitioner to

surrender the certificate of registration of the subject vehicle.

11. As narrated supra, e-auction of the subject vehicle was conducted

on 11.03.2024, and respondent No.4 emerged as the successful bidder and

the entire amount was deposited on the same day.

12. As seen from the order dated 19.03.2024 in W.P.No.6223 of 2024, none

appeared for the respondents. It seems the learned counsel for the petitioner

brought to the notice of the Court about the non-conducting of the auction on

11.03.2024 for want of bidders, and the same was recorded. Liberty was given

to the petitioner to avail appropriate remedy. Thereafter, by letter dated

04.04.2024, the petitioner was informed about the e-auction conducted on

11.03.2024 and payment of the entire amount by the successful bidder on

12.03.2024.

13. At the hearing on a previous occasion, learned counsel for the

petitioner, at one stage, contended that the learned counsel appearing for the

bank represented in W.P.No.6223 of 2024 and sought time to get that

information; however, could not produce any proof to that effect.

14. From the above facts, this Court presumes that the petitioner got

knowledge about the auction, if not on 11.03.2024, at a later date, through

Ex.P6 letter, dated 04.04.2024. The petitioner is made aware of the auction,

on a second occasion, by proceedings, dated 20.06.2024, of respondent No.3.

The petitioner filed the above writ petition on 09.08.2024.

15. It is not the case of the petitioner that respondent No.2 committed any

illegality in conducting the auction, and hence, the auction is liable to be set

aside. In the absence of such a plea and supporting proof, this Court has no

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W.P.No.17650 of 2024

other option except to conclude that respondent No.2 conducted the e-auction

by adhering to the procedure. Respondent No.4 became the successful

bidder, and the entire amount was paid by respondent No.4 on 12.03.2024.

16. It is pertinent to mention here that the vehicle met with an accident and

has been in the KIA showroom for a considerable time (till date).

17. The petitioner’s grievance, as seen from the prayer, is that respondent

No.2 is not allowing the petitioner to clear the outstanding amount. In fact, it is

a factually incorrect statement, given the developments discussed supra. Of

course, the petitioner filed two demand drafts along with an additional affidavit

and also made averments in the affidavit that he will pay interest at 12%.

However, in the absence of any illegality in the e-auction conducted and

creation of a right in favour of a third party, the e-auction cannot be set aside.

18. Viewing the issue from another perspective, the vehicle was

hypothecated with the Bank. Section 2(n) of the SARFAESI Act, defines that

‘Hypothecation’ means a charge in or upon any movable property, existing or

future, created by a borrower in favour of a secured creditor without delivery of

possession of the movable property to such creditor, as a security for financial

assistance and includes floating charge and crystallisation of such charge into

fixed charge on movable property.

19. Chapter III, Section 13 of the SARFAESI Act deals with the

Enforcement of security interest. Section 13(8) of the SARFAESI Act was

substituted by Act 44 of 2016 w.e.f. 01.09.2016. It reads as follows:

13(8) Where the amount of dues of the secured creditor together with all

costs, charges and expenses incurred by him is tendered to the secured

creditor at any time before the date of publication of notice for public

auction or inviting quotations or tender from public or private treaty

for transfer by way of lease, assignment or sale of the secured assets,—

(emphasis is added)

Page 10 of 15 SRS,J

W.P.No.17650 of 2024

(i) the secured assets shall not be transferred by way of lease

assignment or sale by the secured creditor; and

(ii) in case, any step has been taken by the secured creditor for

transfer by way of lease or assignment or sale of the assets before

tendering of such amount under this sub-section, no further step shall be

taken by such secured creditor for transfer by way of lease or assignment

or sale of such secured assets.

20. The Hon’ble Apex Court in Celir LLP v. Bafna Motors (Mumbai) (P)

Ltd.

1

, considered the scope of Section 13(8) of the SARFAESI Act and

observed as under at para 110.3:

“110.3. In accordance with the unamended Section 13(8) of the SARFAESI

Act, the right of the borrower to redeem the secured asset was available

till the sale or transfer of such secured asset. In other words, the

borrower's right of redemption did not stand terminated on the date of the

auction-sale of the secured asset itself and remained alive till the transfer

was completed in favour of the auction-purchaser, by registration of the

sale certificate and delivery of possession of the secured asset. However,

the amended provisions of Section 13(8) of the SARFAESI Act make it

clear that the right of the borrower to redeem the secured asset

stands extinguished thereunder on the very date of publication of the

notice for public auction under Rule 9(1) of the 2002 Rules. In effect,

the right of redemption available to the borrower under the present

statutory regime is drastically curtailed and would be available only till the

date of publication of the notice under Rule 9(1) of the 2002 Rules and not

till the completion of the sale or transfer of the secured asset in favour of

the auction-purchaser. (emphasis is added)

21. In the case at hand, the auction was conducted according to a

hypothecation agreement, after declaring the loan account as NPA, and a

third-party interest has already been created. A mortgage is in respect of

immovable property, and hypothecation is in respect of movable property.

1

(2024) 2 SCC 1

Page 11 of 15 SRS,J

W.P.No.17650 of 2024

Since the provisions are analogous, this Court relied upon the judgment

referred to supra wherein the scope of Section 13(8) of the SARFAESI Act

was considered. The case at hand, since the e-auction was completed, in the

absence of any irregularity or fraud, while exercising the jurisdiction under

Article 226 of the Constitution of India, in the considered opinion of this Court,

it cannot be interdicted.

22. In K. Kumara Gupta v. Sri Markendaya & Sri Omkareswara Swamy

Temple

2

, the Hon’ble Apex Court considered the scope of interference by the

Courts in the public auction and, while reversing the judgement of the Division

Bench of the Andhra Pradesh High Court, observed as under:

14. Once the appellant was found to be the highest bidder in a public

auction in which 45 persons had participated and thereafter when the sale

was confirmed in his favour and even the sale deed was executed, unless

and until it was found that there was any material irregularity and/or

illegality in holding the public auction and/or auction-sale was vitiated by

any fraud or collusion, it is not open to set aside the auction or sale in

favour of the highest bidder on the basis of some representations made by

third parties, who did not even participate in the auction proceedings and

did not make any offer.

16. It is also required to be noted that the sale was confirmed in favour of

the appellant by the Commissioner, Endowments Department after

obtaining the report of the Assistant Commissioner. Therefore, we are of

the opinion that in the aforesaid facts and circumstances of the case, the

High Court ought not to have ordered re-auction of the land in question

after a period of 23 years of confirmation of the sale and execution of the

sale deed in favour of the auction-purchaser by observing that the value of

the property might have been much more, otherwise, the object and

purpose of holding the public auction and the sanctity of the public auction

will be frustrated. Unless there is concrete material and it is established

2

(2022) 5 SCC 710

Page 12 of 15 SRS,J

W.P.No.17650 of 2024

that there was any fraud and/or collusion or the land in question was sold

at a throwaway price, the sale pursuant to the public auction cannot be set

aside at the instance of strangers to the auction proceeding.

17. The sale pursuant to the public auction can be set aside in an

eventuality where it is found on the basis of material on record that the

property had been sold away at a throwaway price and/or on a wholly

inadequate consideration because of the fraud and/or collusion and/or

after any material irregularity and/or illegality is found in

conducting/holding the public auction. After the public auction is held and

the highest bid is received and the property is sold in a public auction in

favour of the highest bidder, such a sale cannot be set aside on the basis

of some offer made by third parties subsequently and that too when they

did not participate in the auction proceedings and made any offer and/or

the offer is made only for the sake of making it and without any serious

intent. In the present case, as observed hereinabove, though Shri Jagat

Kumar immediately after finalising the auction stated that he is ready and

willing to pay a higher price, however, subsequently, he backed out. If the

auction-sale pursuant to the public auction is set aside on the basis of

such frivolous and irresponsible representations made by such persons

then the sanctity of a public auction would be frustrated and the rights of a

genuine bidder would be adversely affected.

23. The other issue, incidentally, to be considered is whether the law prevails

over equity or equity prevails over the law. The answer to the question is no

longer res integra.

24. In National Spot Exchange Ltd. v. Dunar Foods Ltd. (Resolution

Professional) [National Spot Exchange Ltd. v. Dunar Foods Ltd.

(Resolution Professional)

3

, after referring to a catena of its other judgments,

it was held that where the law is clear, the consequence thereof must follow.

The High Court has no option but to implement the law.

3

(2022) 11 SCC 761

Page 13 of 15 SRS,J

W.P.No.17650 of 2024

25. In BSNL v. Mishri Lal

4

, it was observed that the law prevails over equity if

there is a conflict. It is further observed that equity can only supplement the

law and not supplant it.

26. In Raghunath Rai Bareja v. Punjab National Bank

5

, the Hon’ble Apex

Court in paras 30 to 35 considered the earlier judgements, and held as under:

“30. Thus, in Madamanchi Ramappa v. Muthaluru Bojjappa [Madamanchi

Ramappa v. Muthaluru Bojjappa, 1963 SCC OnLine SC 36 : AIR 1963 SC

1633] (vide para 12) this Court observed : (AIR p. 1637)

“12. … what is administered in courts is justice according to law,

and considerations of fair play and equity, however important they

may be, must yield to clear and express provisions of the law.”

31. In Council for Indian School Certificate Examination v. Isha Mittal

6

it

was observed:

“4. … Considerations of equity cannot prevail and do not permit a

High Court to pass an order contrary to the law.”

32. In P.M. Latha v. State of Kerala

7

it was observed

“13. Equity and law are twin brothers and law should be applied

and interpreted equitably but equity cannot override written or

settled law.”

33. In Laxminarayan R. Bhattad v. State of Maharashtra

8

it was observed:

“73. It is now well settled that when there is a conflict between law

and equity, the former shall prevail.”

34. In Nasiruddin v. Sita Ram Agarwal

9

it was observed:

4

(2011) 14 SCC 739

5

(2007) 2 SCC 230

6

(2000) 7 SCC 521]

7

(2003) 3 SCC 541

8

(2003) 5 SCC 413

9

(2003) 2 SCC 577

Page 14 of 15 SRS,J

W.P.No.17650 of 2024

“35. In a case where the statutory provision is plain and

unambiguous, the court shall not interpret the same in a different

manner, only because of harsh consequences arising therefrom.”

35. In E. Palanisamy v. Palanisamy

10

it was observed :

Equitable considerations have no place where the statute contained

express provisions.”

27. Thus, from the conspectus of the above authorities, it is clear that the law

prevails over equity. The contention of the learned counsel for the petitioner

that the petitioner will deposit the amount with 12%, on the ground of equity,

this Court is not persuaded by the said submission, given the authoritative

pronouncements referred to supra.

28. Given the above facts and circumstances of the case, this Court does

not find any merit in the writ petition and the same is liable to be dismissed.

29. Hence, this writ petition is dismissed. No costs.

As a sequel, the miscellaneous applications, if any pending, shall stand

closed.

___________________________

JUSTICE SUBBA REDDY SATTI

Date: 01.07.2025

IKN

10

(2003) 1 SCC 123

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W.P.No.17650 of 2024

THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

WRIT PETITION NO: 17650/2024

Date: 01.07.2025

IKN