Pridhvi Asset Reconstruction and Securitisation Company Limited. Vs State of A.P. (Andhra Pradesh High Court)
The Andhra Pradesh High Court considered a writ petition challenging an auction notice issued by the Deputy Commercial Tax Officer-I, Chittoor, published in the Chittoor District Gazette on 16.11.2020, and an attachment notice dated 17.02.2020 issued under the A.P. Revenue Recovery Act, 1864.
The third respondent had borrowed funds from Andhra Bank by mortgaging the subject property on 16.03.2013. Following default, the account was classified as a Non-Performing Asset (NPA), and Andhra Bank initiated proceedings under Sections 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Subsequently, on 26.09.2017, Andhra Bank assigned the debt to the petitioner, an Asset Reconstruction and Securitisation Company. Thereafter, the Commercial Tax Department issued an attachment notice dated 17.02.2020 under Section 27 of the A.P. Revenue Recovery Act, followed by an auction notice proposing sale of the property.
The petitioner contended that the attachment and auction notices were illegal, arbitrary and violative of Article 14 of the Constitution of India. It submitted that it had informed the respondent authority about the existing security interest by letter dated 18.11.2020, but the authorities nevertheless proceeded with the auction. Reliance was placed upon an earlier Division Bench decision in W.P. No.43841 of 2018.
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