Andhra Pradesh High Court Dismisses Plea To Stall SARFAESI Proceedings, Bars Piecemeal Litigation

The Andhra Pradesh High Court has dismissed a writ petition seeking to stall recovery proceedings under the SARFAESI Act, holding that a litigant cannot raise pleas in a piecemeal manner and terming the petition a “misadventure.”

A Division Bench of Justice Lisa Gill and Justice Ninala Jayasurya noted that the petitioner had executed a gift deed in 2006 in favour of his son. The deed, initially without acceptance, was later accepted before the son availed a loan from South Indian Bank, for which the petitioner stood as guarantor. Upon default in repayment, the account was classified as a non-performing asset, and proceedings under the SARFAESI Act were initiated.

The court recorded that an earlier writ petition filed by the petitioner and his son challenging the same proceedings had been dismissed on the ground of concealment of material facts, with costs of Rs 25,000 imposed. The interim order in that case had been obtained by suppressing material facts. A subsequent special leave petition challenging that order was also dismissed.

In the present petition, the petitioner stated that he felt insecure with the turn of events and sought to cancel the gift deed under Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.

He further contended that the SARFAESI proceedings were invalid in view of the interplay between Section 35 of the SARFAESI Act and Section 3 of the Senior Citizens Act, both containing non-obstante clauses, and urged the Court to decide which provision would prevail.

Rejecting the plea, the court observed, “Present writ petition has now been filed in a clever manner, purportedly raising a question of law whereas it is apparent that petitioner is in effect seeking to avoid the consequences of proceedings initiated under the SARFAESI Act. Arguments raised on behalf of petitioner are clearly misconceived and devoid of any merits, hence, rejected. Moreover, it is to be noted that it is incumbent upon a litigant to raise all available pleas at one time, there can be no piecemeal raising of pleas. Present petition is misconceived and a misadventure on the part of petitioner.”

Finding no ground to interfere in the exercise of its writ jurisdiction, the Court dismissed the petition. It, however, refrained from imposing costs at this stage in view of the fervent request made on behalf of the petitioner.