V. Amasa Reddy v. Chief Manager/Authorized Officer, Indian Bank & Ors.

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         Date of reserved for orders :30.04.2026



         Date of pronouncement       :10.07.2026



         Date of uploading            :10.07.2026







 APHC010295352025



                      IN THE HIGH COURT OF ANDHRA PRADESH



                                    AT AMARAVATI                        [3545]



                             (Special Original Jurisdiction)







                        FRIDAY, THE 10th DAY OF JULY 2026



                                         PRESENT



            THE HONOURABLE SRI JUSTICE BATTU DEVANAND



     THE HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA



                          WRIT PETITION NO: 14989/2025



Between:



   1. V AMASA REDDY, S/O. LATE CHENGALARAY REDDY AGED 40



      YEARS, R/O. KOTHAMARI KUPPAM VILLAGE,     SATYAVEDU



      MANDAL, TIRUPATI DISTRICT.



                                                               ...PETITIONER



                                             AND



   1. THE CHIEF MANAGER AUTHORIZED OFFICER, INDIAN BANK,



      STRESSED ASSETS MANAGEMENT BRANCH        CHENNAI, 2ND



      FLOOR, WELLINGTON ESTATE, ETHIRAJ SALAI, CHENNAI - 600



      008.



   2. THE ASSISTANT GENERAL MANAGER, INDIAN BANK, STRESSED



      ASSETS MANAGEMENT BRANCH,        CHENNAI, 2ND      FLOOR,



      WELLINGTON ESTATE, ETHIRAJ SALAI, CHENNAI - 600 008.



   3. INDIAN BANK, REPRESENTED BY THE GENERAL MANAGER,



      H55 WELLINGTON ESTATE,II FLOOR,       ETHIRAJ SALAI,EGMORE



      ,CHENNAI 600008 .     RESPONDENT NO.3 WAS INCORPORATED



      AS PER C.O.DT.24.06.2025 IN W.P.NO.14989 OF 2025.



                                                         ...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 a Writ or Order or direction more



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



respondents in neither handing over the subject property admeasuring



Ac.0.40 Cents in Sy.No.177/1P and 177/2P of Sri Kalahasthi Town, Sri



Kalahasthi Mandal, Tirupati District, purchased by the petitioner, nor refunding



the total auction amount of Rs. 1,30,50,000/- and registration charges of



Rs.9,78,970/- paid by the petitioner, along with interest, despite several



representations by the petitioner, as illegal, arbitrary, unjust and violative of



Articles 14,21 and 300-A of the Constitution of India, Consequently direct the



respondents herein, either to handover the subject property admeasuring



Ac.0.40 Cents in Sy.No. 177/IP and 177/2P of Sri Kalahasthi Town, Sri



Kalahasthi Mandal, Tirupati District, purchased by the petitioner, or refund the



total auction amount of Rs. 1,30,50,000/- and registration charges of



Rs.9,78,970/- paid by the petitioner, along with interest @ 24 percent p.a.



from 16.10.2021 till date of realization, to the petitioner and pass such



IA NO: 1 OF 2025



      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 to direct the respondents to either to handover the subject property



admeasuring Ac.0.40 Cents in Sy.No.177/1P & 177/2P of Sri Kalahasthi



Town, Sri Kalahasthi Mandal, Tirupati District, purchased by the petitioner, or



refund the total auction amount of Rs. 1,30,50,000/- and registration charges



of Rs.9,78,970/- paid by the petitioner, along with interest @ 24% p.a. from



16.10.2021 till date of realization, to the petitioner, pending disposal of the



writ petition and pass such



Counsel for the Petitioner:



   1. V VINOD K REDDY



Counsel for the Respondent(S):



   1. SREEDHAR VALIVETI



The Court made the following:



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            THE HONOURABLE SRI JUSTICE BATTU DEVANAND



                                      And



     THE HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA







                         W. P. No.14989 of 2025







O R D E R: (Per Hon’ble Sri Justice A. Hari Haranadha Sarma)











Introductory:-











      The writ petitioner is an auction purchaser of the property admeasuring







Ac.0.40 Cents in Sy.No.177/1P & 177/2P of Sri Kalahasthi Town, Sri







Kalahasthi Mandal, Tirupati District. Contending that, he is facing hardships in







getting delivery of property purchased under e-auction conducted by the







Creditor Bank (1st respondent), in view of the objections of the Kalahasthi







Municipality pursuant to the implementation of the directions of the Hon’ble







High Court in W.P.No.2430 of 2019, and the pendency of the Suit in







O.S.No.15 of 2022 on the file of X Additional District And Sessions Judge,







Tirupati, the W.P.No.14612 of 2022, and also W.P.No.4381 of 2025, he is not







inclined proceed with the delivery of possession, and he wants refund of total







Rs.1,30,50,000/- deposited and registration charges of Rs.9,78,970/- with







interest @24% p.a., prays for direction to the respondents to that effect.











Case of the Writ Petitioner:-











2.    [i]    Pursuant to the paper publication of the auction Notice/Sale







Notice dated 14.08.2021 for sale of the subject property, the writ petitioner



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participated in the e-auction, conducted on 03.09.2021, became a successful







bidder for the bid amount of Rs.1,30,50,000/-, remitted 25% on 04.09.2021







(including 10% already deposited with MSTC), letter dated 16.09.2021 was







issued for remittance of balance. Accordingly, he remitted the same and the







Sale Certificate dated 05.10.2021 was issued and registered in his favour. A







Registered Sale Deed was also executed on the file of SRO, Sri Kalahasti, on







payment of Rs.9,78,970/- towards stamp duty and registration charges.







Possession Certificate dated 13.11.2018 was also handed over, informing that







the possession was taken by Bank and the same is handed over. But to the







shock of the petitioner, he received Notice in O.S.No.15 of 2022 on the file of







X Additional District and Sessions Judge, Tirupati, filed by one Mr.Kalapati







Babji and two others, against the petitioner, the respondent Bank and the







principal borrower and for cancellation of sale deed.       The pendency of







litigation and consequences of the litigation were not informed to the writ







petitioner. The writ petitioner has addressed a letter dated 14.02.2022 to the







2nd respondent-Bank people, bringing the matter to their notice about the







litigation, asking to refund of auction amount.     There was no response.







Further, the writ petitioner has received a letter from the Commissioner, Sri







Kalahasthi Municipality, stating that the subject premises is a vacant land







belonging to Sri Kalahasthi Municipality, and that pursuant to the orders dated







18.11.2020 in W.P.No.2430 of 2019 the petitioner was directed not to interfere







with the same.



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      [ii]    The   writ   petitioner   has   also   initiated   a   complaint   vide







C.No.517/CCB/COP/Visitor/2022 dated 04.05.2022 through CCTNS portal,







but no action is taken.        He has also addressed another letter dated







04.08.2022 to the respondents for refund of the auction amount with interest.







There is no response.







      [iii]   The plaintiffs in O.S.No.15 of 2022 on the file of X Additional







District and Sessions Judge, Tirupati have filed W.P.No.14612 of 2022 for







cancellation of Pattadar Passbooks and Title deeds issued in favour of the







principal borrower, the said writ petition is pending. Plaintiffs in the Suit have







also filed an ROR appeal before the RDO, Sri Kalahasthi, challenging the







Pattadar Passbooks and Title deeds of the principal borrower.







      [iv]    The writ petitioner made representations dated 19.04.2023,







22.12.2023, and 22.03.2024 to the 2 nd respondent explaining hardships. The







2nd respondent Bank issued a letter dated 15.07.2024 stating that steps were







being taken for refund of the auction sale price in consultation with higher







authorities. But there is no progress.          However, the respondents filed







W.P.No.4381 of 2025 seeking a direction for issuance of NOC from the Sri







Kalahasthi Municipality to facilitate in handing over the possession to the







petitioner herein and the same is also pending.







      [v]     The writ petitioner purchased the subject property with the hope







of reselling and earning some financial benefit, he has borrowed huge







amounts from various commercial lenders but legal complications stated



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above made him to suffer. He has almost become bankrupt and he has







exhausted all his savings in view of this investment and litigation. He is forced







to get his other properties pledged, mortgaged and borrow amount from







friends and relatives etc.. Thus, his sufferance is inexplicable. Hence, he is







entitled for refund of hard earned money kept with the bank for (4) years with







interest.







Case of the respondents:-







3.    [i]     The petition allegations are in correct.







      [ii]    One T.Surendra Kumar Reddy, has approached for loan from the







respondent Bank, Rs.300.00 Lakhs loan was sanctioned. Borrower was a







proprietary concerned. Wife of the proprietor of the borrower, one T. Usha







Shree stood as co-obligant-cum personal guarantor.







      [iii]   The respondent Bank in furtherance of recovery of proceedings in







terms of the SARFAESI Act has conducted e-auction of the vacant land. The







writ petitioner has become successful bidder for a reserved price of







Rs.130.50lakhs. The Sale Certificate was registered.







      [iv]    The principal borrower challenged the sale before the DRT,







Chennai vide S.A.No.312 of 2021, which was later re-numbered as TSA







221/2022 and the said appeal was dismissed on 28.06.2023.







      [v]     The principal borrower filed appeal in DRAT, Chennai as AIR







No.1023/2023, and the same was posted on 21.06.2024 and subsequently, it



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was dismissed for non-payment of precondition deposit for admission of the







appeal.







      [vi]      Meanwhile, the Sri Kahalasti Electricity Employee’s Co-operative







House Building Society, Sri Kalasthi, Chittor District, filed a Writ Petition vide







W.P.No.2430 of 2019 against the Tahsildar, Sri Kalahasthi Mandla and the







Commissioner, Sri Kahalasthi Municipal Corporation, with the following







prayer:-







                   "For the reasons stated in the accompanying affidavit, it is hereby prayed



             that this Hon'ble Court may be pleased to issue a of Mandamus declaring the



             action of the 2nd Respondent herein in allowing the illegal constructions in the



             open space earn marked for park in sanctioned layout vide L.P. No. 275/82 in Sy.



             No. 177/1 and 177/2 Thottambedu Village, Srikalahasti, Chittoor District as



             illegal, arbitrary, unreasonable, without jurisdiction, contrary to the provisions of



             Hyderabad Municipal Corporation Act, 1956, contrary to the G.O.Ms. No. 72



             dated 20-02-2002 and also contrary to the Judgments of the Hon'ble High Court



             and also contrary to the Judgments of the Hon'ble High Court and the Hon'ble



             Apex Court and to pass such other order or orders as this Hon'ble Court may



             deems fit just and proper in the circumstances of the case".











      This Court upon hearing on both sides, passed orders on 18.11.2020,







as follows:







      “1.       Sri N. Ranga Reddy, learned Standing Counsel for the 2nd respondent



      appears and states that the Municipality is prepared to look into the issue raised



      in the writ petition as per the proceedings of law and after giving notice to all



      concerned. Noting the said submission of learned Standing Counsel, this Court



      is of the view that nothing further survives for consideration.







      2.        As the Writ is of the year 2019, the respondents are directed to give



      notice to all the concerned and take necessary action as required under law and



      complete the same within a period of four weeks from the date of receipt of a



      copy of this order.



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      3.       The writ petition, with the above direction, is disposed of. There shall be



      no order as to costs. As a sequel, interlocutory applications pending if any in



      this case, shall stand closed.”











      [vii] The directions in the W.P. No.2430 of 2019 is to take necessary







action, curbing illegal constructions in the open space earmarked for park in







sanctioned layout.       But the Commissioner, Sri Kalahasthi Municipality has







addressed a letter to the District Collector, Tirupathi with a direction not to







issue NOC to the petitioner Bank. Thus, it is clear that the Commissioner







have wrongly implemented the orders of the Court, whereby the respondent







Bank not in a position to hand over the possession to the auction purchaser /







the writ petitioner. Questioning the same, the bank has filed W.P.No.4381 of







2025 much prior to the present writ petition.







      [viii]   Therefore, the apprehension of the writ petitioner is baseless, the







sale proceeds are already adjusted to the loan account of the principal







borrower, the bank is putting all efforts to resolve the pending litigations, and







wrong interpretation of the orders passed in the Writ Petition, by the







Commissioner, Sri Kalahasthi Municipality is questioned by way of separate







Writ Petition. Therefore, there are no merits in the writ petition.







4.    Heard both sides extensively.







5.    Learned counsel for the writ petitioner would submit that the petitioner is







facing so many problems and he is vexed with the litigation, and the relief







prayed in the writ petition is just and equitable, in view of the unanticipated







litigation and his financial difficulties and that there are any amount of lapses



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on the part of the respondent-Bank. Four years of waiting of the petitioner, did







not make him, to realise the fruits of his investment and he has no other







alternative remedy.







6.     Per contra, learned counsel for the respondent bank would submit that







the Sale is completed, Sale Certificate has been registered, the Bank acted in







all fairness and bonafidely, Bank is putting all its efforts to clear the pending







litigations.   The amount was already adjusted to the loan account. After







purchase of the property, with regard to the litigations if any, the purchaser has







to face and as on the date of Sale no clear litigation was pending. Therefore,







the Writ Petition is liable to be dismissed.







7.     Thoughtful consideration is given to the arguments advanced and







Perused the material available on record.







Analysis:-







8.       Following points are clear from record and the submissions made







across the bar :-







       i)      As per the directions in the Writ Petition No.2430 of 2019 dated







18.11.2020 the Municipality, has to take necessary action against the illegal







occupations and constructions etc..







       ii)     The respondent Bank filed W.P.No.4381 of 2025 questioning the







proper implementation of the Orders passed in W.P.No.2430 of 2019 and the







said writ petition is pending.



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      iii)    The scope of the W.P.No.4381 of 2025 is touching the aspect of







all compliance and interpretation of the orders in earlier Writ Petition, but the







subject matter of earlier Writ Petition is relating to the possession in respect of







the property said to have been ear-marked for a park.







      iv) There is a Suit vide O.S.No.15 of 2022, pending on the file of X







Additional District and Sessions Judge’s Court, Tirupati.







      v) Further, it appears that there is another Writ petition No.14612 of







2022, either directly or indirectly touching the subject property.







      vi) The vendor has to set clear title in vendee, and in case of any defect







in title, the vendee cannot be insisted to proceed and abide by the Sale of







property with defective title.







      vii)    The principle of Caveat emptor (buyer beware) and its







applicability to the Sale of immovable property, more so in respect of latent







defects, canvassed by the Bank cannot be appreciated or accepted.







      viii)   Any buyer intends to purchase property, not the litigation. A series







of litigations in respect of the property would cause frustration to any







prospective buyer.     Requiring such a purchaser to endure and contest the







litigations alongside the vendor, particularly those initiated by third parties,







cannot be appreciated.







      ix)     Several aspects and interests of different stakeholders are







involved which are outside scope and jurisdiction of SARFAESI Act.



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9.       As per Section 55 (2) of Transfer of Property Act –







         “The seller shall be deemed to contract with the buyer that the interest which



        the seller professes to transfer to the buyer subsists and that he has power to



        transfer the same.”







10.      Defects in title are latent defects.        In the absence of words to the







contrary in sale deed, the presumption is that the seller is having title free from







reasonable doubt. In case of non-disclosure of material defect, and in case of







defect in title of the seller, cannot prevent the buyer to seek for relief for refund







of their money etc..







11.      Even in cases of flat buyers buying the flats and occupying the same







with the full awareness that the revised plans for their flats have been rejected







by the authorities, the Supreme Court held that only remedy available to the







flat owners is to sue the sellers of the flats/developers, refund of their money







or damages as observed in Esha Ekta Apartments Co-operative Housing







Society Ltd. v. Municipal Corporation of Mumbai1.











12.      There cannot be implied waiver on the part of the purchasers that they







have purchased property with knowledge of clouds over the title and that they







have to prosecute their remedies by way of litigation against all the litigating







parties and that they cannot ask for refund of Sale consideration paid. If that







principle is accepted, the same will amount to encouraging dishonesty.







Therefore, the contention of the Bank that the writ petitioner is not entitled for







1



    AIR 2013 SC 1861



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the remedy of refund found not acceptable from the admitted fact situation in







this case.















13.   Generally, auction conducted by the Bank will give a general impression







that the Bank might have verified the title with all clarity and certainty after







having legal opinion. The public will opt for purchasing the same with the







confidence and trust on the bank, but when they experience the litigation after







investing all their life time savings, the sufferance, they experience is







inexplicable and they deserve redressal. The Bank ought to have verified the







title more thoroughly or ought to have put the property to sale after clearing all







clouds over the title. There are lapses on the part of the Bank in failing to do







what they ought to have done. The Suit in O.S.No.15 of 2022 may be after







the Sale, but the Writ petition is much prior to the Sale.   The question as to







whether the subject property in all or part is meant for Park, is a clear subject







matter of the undisclosed pending litigation by the date of sale, therefore, the







writ petitioner is entitled to seek for refund of the money.       However, the







interest claimed at 24% p.a. is not proper.      We feel that the petitioner is







entitled for refund of the sale amount with interest @ 9% p.a., and also the







stamp duty and registration expenses, from the date of deposit/payment with







simple interest at the same rate.



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14.   In the result, the Writ Petition is allowed as follows:-







      1) The Writ petitioner is entitled to refund of the bid amount of







           Rs.1,30,50,000/- with simple interest @9% per annum from the date







           of deposit and reimbursement of the Stamp duty and registration







           expenses of Rs.9,78,970/- together with simple interest at the same







           rate from the date of incurring till the date of payment to him.







      2) Consequently, the Sale Certificate and the Sale Deed issued in







           favour of the writ petitioner shall stand set aside and respective entry







           shall be made by the registration office concerned, to that effect and







           the writ petitioner shall cooperate for the same.







      3) Time for compliance is (30) days.







      4) No order as to costs.







      5) As a sequel, miscellaneous petitions pending, if any, shall stand



           closed.







                                                 __________________________



                                                  JUSTICE BATTU DEVANAND















                                      __________________________________



                                       JUSTICE A.HARI HARANADHA SARMA



Date: 10 .07.2026



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 Whether the order is:



Speaking               √        Non-speaking                   -



Reportable             -        Non-reportable                 √



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            THE HON’BLE SRI JUSTICE BATTU DEVANAND



                              And



      THE HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA



















                      W.P. No.14989 of 2025



















                         Dt. .10 07.2026



















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