JUDGMENT :- M/s. Janardhana Earth Movers, initially a partnership concern, comprising L.Janardhana Rao and Srinivasa Rao, subsequently, it has been converted as proprietary concern. M/s. Janardhana Earth Movers availed loan of Rs.26,88,000/- from A.P. State Financial Corporation, Rajahmundry-1st respondent for purchasing excavator 200 (poclaimer). L.Sanjeeva Rao, L.B.Umamaheswara Rao, and L.V.B.Appa Rao are brothers and whereas, Smt.A.Srilakshmi, Smt.T.Rama Kumari are sisters of L.Janardhana Rao. They offered the house plots standing in their names as security for the loan availed by M/s.Janardhana Earth Movers. The borrower failed to pay the installments. Thereupon, the A.P. State Financial Corporation-1st respondent initiated proceedings under Section 29 of the State Financial Corporation Act, 1951, (for short, ‘the Act’) and notified sale of the mortgaged house plots in EENADU newspaper on 14.09.2002. The total extent of the six house plots situated in Survey No.4/6 of Narasimha Nagar, Gopalapatnam village, Visakhapatnam Mandal, is 2970 sq. yards. Some offers received pursuant to the notification. After due negotiations with the persons participated in the bidding, V.Venkateswara Rao offered to purchase house plots at Rs.63,25,000/-. Proceedings came to be issued on 24.12.2002 inviting offers over and above the highest offer made by V.Venkateswara Rao-6th respondent. There being no further offer, the highest offer made by V.Venkateswara Rao-6th respondent, came to be accepted and V.Venkateswara Rao-6th respondent has been directed to pay the bid amount in 60 days vide letter dated 01.101.2003. For better understanding, I may reproduce the text of the letter, which reads as hereunder: “With reference to the above, we are pleased to inform you that our Corporation has approved your offer for purchase of collateral security property of 6 plots covered by S.No.4/6 (Plot Nos.8, 9, 10, 11 & 13 – extent 2970 sq. yds.) forming part of Gopalapatnam (V), Visakhapatnam (M) & Town U/S.29 of SFCs Act, 1951 for a consideration of Rs.63.25 lakhs (Rupees Sixty three lakhs and twenty five thousands only), on 100% down payment basis, subject to the following terms and conditions: 1. You shall pay the entire sale consideration of Rs.63.25 Lakhs (including the EMD of Rs.1.70 Lakhs) within 60 days from the date of this letter and to take possession of the fixed assets offered for sale. 2. If you fail to make payment as stipulated above, the EMD paid by you shall be forfeited without further reference to you. 3. You shall pay the entire sale consideration of Rs.63.25 Lakhs (including the EMD of Rs.1.70 Lakhs) within 60 days from the date of this letter and to take possession of the fixed assets offered for sale. 2. If you fail to make payment as stipulated above, the EMD paid by you shall be forfeited without further reference to you. 3. If you fail to pay and take possession of the collateral security of the unit within the stipulated time, the asset carrying costs such as Insurance, Watch and Ward expenses and interest on sale consideration etc., shall be born by you for the delayed period as per the procedure of the Corporation. 4. You shall, at your own cost and expenses execute and/or register such instruments/legal documents or do or cause to be done such acts and deeds as maybe required by the Corporation for transfer of the collateral security of the unit offered for sale to you. 5. The Corporation shall not be liable to pay any dues either statutory or otherwise. This letter is issued to you, in duplicate, with a request to return one copy to the Sr. Branch Manager, APSFC, Rajahmudnry Branch, duly signed by you as a token of your acceptance of the above terms and conditions.” V. Venkateswara Rao-6th respondent paid EMD of Rs.1.70 Lakhs by way of Demand Draft on 11.12.2002. Balance sale consideration came to be paid by V.Venkateswara Rao-6th respondent from 31.03.2003 to 28.11.2003. He submitted letter dated 01.12.2003 to the Branch Manager, APSFC, Rajahmundry Branch for waiver of interest on the delayed payments of sale consideration. The text of the letter dated 01.12.2003 reads as hereunder: “We have purchased the collateral security of 6 plots covered by S.No.4/6, Plot Nos.8, 9, 10, 11, 12 & 13 admeasuring 2970 sq. yds. At Goapalapatnam (V) Visakhapatnam (M) & Town, u/s.29 of SFCs Act for a consideration of Rs.63.25 lakhs belonging to Janardhana Earth Movers Pvt. Ltd. As per the sale confirmation letter dt.1.1.2003 we were asked to pay the entire sale consideration of Rs.63.25 lakhs within 60 days i.e., on or before 1-3-2003. Due to the problems faced by us in mobilizing funds, there was delay in payment of the said sale consideration and finally the sale consideration of Rs.63.25 lakhs was paid on different dates by 29.11.2003. Due to the problems faced by us in mobilizing funds, there was delay in payment of the said sale consideration and finally the sale consideration of Rs.63.25 lakhs was paid on different dates by 29.11.2003. We request the corporation to waive the interest on the delayed payments and hand over the collateral security property to us at an early date.” Smt.L.Mahalakshmi, L.Sanjeeva Rao and LBS Uma Maheswara Rao (respondent No.6 and petitioners 1 and 2 herein) filed O.S.No.330 of 2004 on the file of the Principal District Judge at Visakahapatnam, seeking for partition and separate possession of their shares in the joint family properties. L.V.B.Apparao, L.Janardhana Rao, A.Sri Lakshmi, T.Rama Kumari and A.P. State Financial Corporation, Rajahmundry (respondents 4, 3 and petitioners 3 and 4 herein) are the defendants in the said suit. The plaintiffs therein also filed interlocutory application seeking for interim injunction. The Civil Court granted an order of status quo. The six house plots have been shown as item No.2 in the suit schedule. Since the schedule has some significance in this case, I deem it appropriate to refer the description of the plots given in the schedule as item No.2, which reads as hereunder: “Item No.2: Land to the extent of 2,970 sq. yds. situated at Gopalapatnam, Narasimha Nagar in Survey No.4/6, Urban Vacant land residential …. Rs.49,00,500-00” Pending the suit, the plaintiffs therein sought for reference of the dispute to the Lok Adalat. The District Legal Services Authority, Visakhapatnam, issued notice to the parties. The A.P. State Financial Corporation filed memo before the District Legal Services Authority, Visakhapatnam, stating that the mortgaged property has been put to auction and in the auction, V.Venkateswara Rao-6th respondent offered highest price and his offer has been accepted and sale has been approved in his favour. Para.3 of the Memo filed by the APSFC before the District Legal Services Authority reads as hereunder: “3. It is respectfully submitted that the suit schedule property was already sold by this respondent long time back as per their rights conferred under Section 29 of the State Financial Corporation’s Act for realization of the dues for a sum of Rs.63.25 Lakhs (Sixty Three Lakhs Twenty Five Thousand only) in favour of V.Venkateswara Rao and others. It is respectfully submitted that the suit schedule property was already sold by this respondent long time back as per their rights conferred under Section 29 of the State Financial Corporation’s Act for realization of the dues for a sum of Rs.63.25 Lakhs (Sixty Three Lakhs Twenty Five Thousand only) in favour of V.Venkateswara Rao and others. Thereafter the entire sale consideration was also paid by the purchaser and therefore the question of the plaintiff and some of the defendants expressing their readiness and willingness to discharge the entire loan amount and showing a demand draft of Rs.38 Lakhs (Rupees Thirty Eight Lakhs only) does not arise at this stage.” Smt. A. Srilaxmi and Smt.T.Ramakumari (petitioners 3 and 4 herein) filed a petition under Section 29 of the Act before the Sate Financial Corporation at Hyderabad, to set aside the auction. The A.P. State Financial Corporation rejected the application filed by them, by order dated 01.03.2005. Thereafter, L.Sanjeeva Rao, L.B.Umamaheswara Rao, Smt.A.Srilakshmi and Smt.T.Rama Kumari filed this Writ Petition on 23.03.2005 seeking the following relief: “For the reasons stated in the accompanying affidavit, the petitioners herein pray that this Hon’ble Court may be pleased to issue a WRIT OF MANDAMUS declaring the alleged sale by the 1st respondent in favour of the 6th respondent of Plots 8-13 admeasuring 2970 sq. yds. In S.No.4/6, Narasimha Nagar, Gopalapatnam on 18.12.2002 and the subsequent proceedings of the 1st respondent in Ref.No.AFC/MR& R/2004-05, Dt.1.3.05 as illegal, arbitrary, mala fide, unreasonable and violative of Arts.14 and 300-A of the Constitution of India and consequently direct R.1 to return the original title deeds pertaining to Plots Nos.8 to 11 in Sy.No.4/6 of Narasimhanagar, Gopalapatnam, Visakhaptnam on receipt of proportionate amount due towards their share from the 2nd respondent as on the date of sale notification.” 2. Sale of the mortgaged property in favour of V.Venkateswara Rao-6th respondent is challenged on the following grounds: i) The period fixed for receipt of offers is unusual; ii) The account has not been transferred to non-performing asset as on the date of sale; iii) The auction purchaser/6th respondent has not paid the sale amount within 60 days as stipulated in the letter dated 01.01.2003; iv) As on the date of acceptance of the offer, the 6th respondent has not deposited the EMD. There is a collusion between the 1st respondent and the 6th respondent; v) Had the sale been true, the account would have been closed after adjusting the sale proceeds, balance ought to have been paid to the sureties/guarantors. Even on 05.11.2003 the 1st respondent Corporation informed the sureties/guarantors to pay the instalment of Rs.62,500/- by 30.12.2003, which indicates that the account has not been treated as non-performing asset; vi) Action of the 1st respondent Corporation in putting the 6 plots in one block when the sale consideration of some of the plots is adequate to clear the outstanding liability in the account of M/S.Janardhana Earth Movers is unjust; vii) The quantum of amount offered by the 6th respondent is far below the market value. 3. Rule Nisi came to be issued on 25.03.2005. 4. Respondents 1 and 6 filed separate counter-affidavits. 5. S.V.Adinarayana, Deputy Manager (Legal), A.P. State Financial Corporation, Rajahmundry, has sworn to the counter-affidavit filed on behalf of 1st respondent. It is stated in the counter-affidavit that the petitioners having availed alternative remedy by approaching the civil Court by filing two civil suits against this respondent in respect of the lis cannot be permitted to invoke the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India. The petition is also liable to be summarily dismissed since the petitioners have initiated successive proceedings questioning the sale conducted by the 1st respondent Corporation. The 1st respondent Corporation advertised sale of the mortgaged plots in EENADU daily on 23.03.2002. None responded to the sale notification. Therefore, a fresh advertisement came to be issued on 14.09.2002 in EENADU daily. In response to the said advertisement, the 6th respondent herein offered to purchase the mortgaged plots for a total consideration of Rs.63.25 Lakhs. The 6th respondent paid the entire sale consideration of Rs.63.25 Lakhs by 29.11.2003. While so, L.Janardhana Rao claiming himself to be the proprietor of M/s.Janardhana Earth Movers filed O.S.No.3429 of 2003 on the file of the Junior Civil Judge, Visakhapatnam and sought for interim injunction against the 1st respondent Corporation from effecting sale of the secured plots. The said application being I.A.No.1439 of 2003 ended in dismissal on 23.11.2004. While so, L.Janardhana Rao claiming himself to be the proprietor of M/s.Janardhana Earth Movers filed O.S.No.3429 of 2003 on the file of the Junior Civil Judge, Visakhapatnam and sought for interim injunction against the 1st respondent Corporation from effecting sale of the secured plots. The said application being I.A.No.1439 of 2003 ended in dismissal on 23.11.2004. Thereafter, the petitioners 1 and 2 and 5th respondent in the writ petition filed a partition suit being O.S.No.153 of 2004 on the file of the Vacation Civil Judge, Visakhapatnam and subsequently, the suit came to be transferred to the file of the District Judge, Visakhapatnam and renumbered as O.S.No.330 of 2004. The plaintiffs therein filed I.A.No.311 of 2004 and obtained an order of status quo. The 1st respondent Corporation filed counter in the said I.A. The plaintiffs therein got the matter referred to Lok Adalat for exploring the possibility of amicable settlement. Since the 1st respondent Corporation received entire sale consideration from the purchaser, it expressed inability for any settlement. The Senior Manager and Law Officer of the 1st respondent Corporation attended the Lok Adalat on 18.01.2005 and submitted a memorandum expressing the inability of the respondent Corporation to settle the matter. Thereafter, the file came to be transmitted back to the District Court for taking necessary action. The petitioners filed this Writ Petition apprehending dismissal of their injunction application by the civil Court. The 2nd respondent firm availed loan for acquisition of Excavator 200 and offered six house plots in Survey No.4/6 of Narasimha Nagar, Gopalapatnam village, Visakhapatnam Mandal, admeasuring 2970 sq. yards, as collateral security. Sale of collateral securities has been properly effected by the respondent Corporation. Before the sale, neither the promoters nor the petitioners approached the respondent Corporation for settlement of outstanding dues. It is only after confirmation of the sale, the petitioners and others resorted to initiate several proceedings. The 6th respondent participated in a meeting of the Operations Committee held on 18.12.2002 after duly paying the EMD on 11.12.2002, and not on 27.12.2002 as claimed by the petitioners. It is only after confirmation of the sale, the petitioners and others resorted to initiate several proceedings. The 6th respondent participated in a meeting of the Operations Committee held on 18.12.2002 after duly paying the EMD on 11.12.2002, and not on 27.12.2002 as claimed by the petitioners. As per Clause No.3 of the sale confirmation letter, this respondent Corporation maintained the account of the unit even after auction upto 31.08.2004 duly disclosing the balance payable as Rs.41,88,988/- since the sale consideration was not adjusted to the loan account in view of status quo order obtained in I.A.No.1439 of 2003 in O.S.No.3429 of 2003 initially and in O.S.No.330 of 2004 subsequently. This respondent Corporation had not adjusted the outstanding dues payable to it in a sum of Rs.33.09 lakhs as on 30.10.2003, since the total sale consideration was not received from the 6th respondent by then. The 2nd respondent herein failed to respond to several notices issued, after filing O.S.No.153 of 2004. Neither the 2nd respondent nor the 3rd respondent offered to close the account by clearing the outstanding dues. It is only after dismissal of the injunction application and after a year of the payment of entire sale consideration by the 6th respondent herein, some of the sureties filed O.S.No.330 of 2004 on the file of the District Court, Visakhapatnam. 6. The counter-affidavit of the 6th respondent, in brief, is: The other partner in M/s.Janardhana Earth Movers is no other than the husband of the 4th petitioner herein. The 2nd respondent herein committed default in payment of instalments and interest and failed to respond to various letters of demand addressed by the 1st respondent Corporation. Way back in the year 2000 itself, the 1st respondent Corporation informed the petitioners of their failure to clear the loan amount and thereby compelling it to proceed against the secured properties. Thereupon, the 2nd respondent under letter dated 13.12.2000 promised to repay the loan amount while paying a sum of Rs.15,000/-. However, he failed to pay the outstanding dues. The 1st respondent Corporation has given him the account copy vide letter dated 31.05.2001 and the petitioners acknowledged the same, but made no payments to liquidate the liability. Ultimately, the 1st respondent Corporation was constrained to issue letter dated 12.12.2001 calling upon all the persons concerned to regularize the loan account. Even the telegrams issued to them had no effect. The 1st respondent Corporation has given him the account copy vide letter dated 31.05.2001 and the petitioners acknowledged the same, but made no payments to liquidate the liability. Ultimately, the 1st respondent Corporation was constrained to issue letter dated 12.12.2001 calling upon all the persons concerned to regularize the loan account. Even the telegrams issued to them had no effect. Therefore, the 1st respondent Corporation published a sale notice dated 21.03.2002. Subsequently, on 30.04.2002 the 1st petitioner assured the 1st respondent Corporation to regularize the account and sought time for payment, but no payment has been made by him. The 1st respondent Corporation issued a reminder to all the concerned. Again on 16.07.2002 the 2nd petitioner promised to regularize the loan account, but in vain. The plaintiffs in O.S.No.330 of 2004 filed the suit on 31.05.2004 and whereas, he made entire payment of Rs.63.25 Lakhs by 29.11.2003. He deposited EMD before participating in the Operations Committee meeting. The 1st respondent Corporation deposited the demand draft submitted by him for collection on 23.12.2002. He obtained the demand draft for EMD on 11.12.2002 and submitted the same on 13.12.2002 to the 1st respondent Corporation and not on 27.12.2002 as alleged by the petitioners. The Committee has valued all the six house plots covered by S.No.4/6 (Plot Nos.8, 9, 10, 11, 12 and 13) admeasuring 2970 sq. yds. at Rs.44.55 Lakhs and accordingly, all the plots are put to auction as one block. The petitioners having availed the alternative remedy by filing O.S.No.330 of 2004 on the file of the Principal District Judge, Visakhapatnam, are not entitled to invoke the extraordinary jurisdiction of this Court. 7. The writ petitioners filed reply affidavit. It is stated in the reply affidavit that the 1st respondent Corporation failed to obtain the best possible price for the mortgaged assets of the petitioners, but instead colluded with the 6th respondent and got the properties worth of Rs.1.50 Crores disposed for Rs.63.25 Lakhs to realize its due of Rs.33,44,361/-. Although the mortgaged assets could be sold on itemized basis, all the plots came to be put to sale as one block and thereby, the 1st respondent Corporation acted unfairly, unreasonably and improperly. Mere filing of suit by L.Janardhana Rao cannot be a bar to the petitioners for filing the present writ petition. Although the mortgaged assets could be sold on itemized basis, all the plots came to be put to sale as one block and thereby, the 1st respondent Corporation acted unfairly, unreasonably and improperly. Mere filing of suit by L.Janardhana Rao cannot be a bar to the petitioners for filing the present writ petition. Request for one time settlement was made on 09.11.2003 by respondents 2 and 3 herein and it was made much prior to the payment of sale consideration by the 6th respondent, but the 1st respondent corporation has not considered their request for one time settlement with a mala fide intention to favour the 6th respondent, who supposed to have made payments as per letter dated 01.01.2003 by 02.03.2003. The reasons for giving such indulgence to the 6th respondent enabling him to make payments in 8 months are obvious i.e. to favour 6th respondent. The 6th respondent never participated in the meeting of Operations Committee on 18.12.2002 after making payment of EMD. 8. Heard Sri P.Venugopal, learned counsel appearing for the petitioners, Sri Sreemannarayana Vattikuti, learned counsel appearing for the 1st respondent, Sri Reddy Venkata Ramana, learned counsel appearing for the respondents 2 and 3, Sri B.Appa Rao, learned counsel appearing for the respondent No.4, Sri M.V.S.Sai Kumar, learned counsel appearing for the respondent No.5 and Sri Siva S.Lanka, learned counsel appearing for respondent No.6. 9. Learned counsel appearing for the petitioners submits that the very procedure adopted by the 1st respondent for sale of the mortgaged property is most unusual and the confirmation of sale in favour of the 6th respondent is illegal and arbitrary since he failed to deposit the sale consideration within sixty days as stipulated in the letter dated 1.1.2003 and permitting the 6th respondent for payment of the sale consideration in instalments is not in accordance with the terms and conditions of sale notice. He would also submit that the amount offered by the 6th respondent is far below the market value, and therefore, his offer cannot be termed as fair and acceptance of the unfair offer of the 6th respondent by the 1st respondent indicates collusion between them. He would also submit that the amount offered by the 6th respondent is far below the market value, and therefore, his offer cannot be termed as fair and acceptance of the unfair offer of the 6th respondent by the 1st respondent indicates collusion between them. A further contention has been advanced by the learned counsel that by the date of sale notice, the account of M/s.Janardhana Earth Movers has not been categorized as Non Performing Asset (NPA) and the application dated 9.11.2003 under OTS scheme has been pending and in which case, initiation of proceedings under Section 29 of the Act is not legal and proper and consequently, proceedings thereto are deemed to non est in law. It is vehemently contended by the learned counsel that by the date of 6th respondent submitting its offer, EMD has not been paid, in which case, the very offer of him has become invalid. According to the learned counsel, the petitioner paid the EMD on 27.12.2008, which is much later to his submitting the offer and as his offer does not contain the EMD, the said offer is to be treated as invalid. In support of his submissions, reliance has been placed on the decision of the Supreme Court in The Maharashtra State Financial Corporation v. M/s.Suvarna Board Mills and another AIR 1994 SUPREME COURT 2657, wherein it has been held that State Finance Corporation being a public body should communicate its response to the representation before deciding to take over possession. 10. Learned counsel appearing for the 1st respondent submits that the borrower and the guarantors have been put on notice before initiation of proceedings under Section 29 of the Act and number of opportunities have been given to them to liquidate the liability and as a last resort only, proceedings have been initiated under Section 29 of the Act, and in which case, neither the petitioners nor the respondents 2 to 5 can be permitted to contend that recourse to Section 29 of the Act has been taken without putting them on notice. He would also contend that the petitioners and the respondents 3 to 5 made their efforts to stall the proceedings initiated under Section 29 of the Act by taking recourse to civil Court and obtained status quo orders for a limited period and subsequently, failed to get any relief. He would also contend that the petitioners and the respondents 3 to 5 made their efforts to stall the proceedings initiated under Section 29 of the Act by taking recourse to civil Court and obtained status quo orders for a limited period and subsequently, failed to get any relief. After exhausting their efforts to stall the sale proceedings, some of the members of the joint family have chosen to approach this Court by invoking jurisdiction under Article 226 of the Constitution of India, and in the given facts and circumstances, invocation of jurisdiction of this Court by the petitioners under Article 226 of the Constitution of India is wholly unjustified. Even, the representation for One Time settlement has been made by the petitioners 3 and 4 after the sale has been held. Proper response has been given to the petitioners 3 and 4 rejecting their petition. The present writ petition has been filed with the sole object of delaying further proceedings consequent on the sale being approved in favour of the respondent No.6. It is stated by the learned counsel that respondent No.6 deposited EMD on 11.12.2002 along with his offer, and therefore, the plea advanced by the petitioners that the offer of the 6th respondent has not been accompanied by EMD does not hold water. It is also submitted by the learned counsel that the 6th respondent paid Rs.3,66,296/- on 13.01.2004 towards interest on delayed payments and the process left over, pursuant to the sale notification, is execution of the sale deed in favour of the 6th respondent. Learned counsel clarifies that the sale proceeds could not be adjusted in the year 2003 because of some parties approaching civil Court and obtaining interim orders and soon after the interim orders are vacated, the sale proceeds have been adjusted to loan account and treated as account closed and the same has been communicated to respondent No.3 under letter dated 23.12.2003. While answering the plea of the petitioners that the offer made by the 6th respondent is not fair, learned counsel refers the plaint copy in O.S.No.330 of 2004 on the file of the Principal District Judge, Visakhapatnam and contends that the plaintiffs therein including petitioner No.1, 2 and respondent No.5 put the valuation of the mortgaged property which is shown as item No.2 at Rs.49,00,500/- as on 31.5.2004, and whereas the property has been purchased by the 6th respondent for Rs.62,50,000/-which is far higher than the valuation given by the plaintiffs in the suit, which itself suggests that the plea taken by the petitioners herein is wholly unsustainable. 11. Learned counsel appearing for the 6th respondent while adopting the arguments of the learned counsel appearing for the 1st respondent submits that the sale conducted by the 1st respondent is fair, reasonable and the price offered by the 6th respondent is far higher than the valuation made by the plaintiffs in O.S.No.330 of 2004 to which the petitioners herein and the respondents 1 to 5 are parties. Learned counsel contends that the Court exercising power under Article 226 cannot act as an appellate authority over the decision taken by the State Financial Corporation under Section 29 of the Act. In support of his contention, learned counsel placed reliance on the decisions of the Supreme Court in U.P.Financial Corporation v. M/s.Gem Cap (India) Pvt. Ltd. AIR 1993 SUPREME COURT 1435, State Financial Corpn. V M/s. Jagadamba Oil Mills AIR 2002 SUPREME COURT 834, Industrial Investment Bank of India Ltd. V. Biswanath Jhunjhunwala (2009)9 Supreme Court Cases 478 and Punjab Financial Corporation v. Surya Auto Industries (2010)1 supreme Court Cases 297. 12. Learned counsel appearing for the 4th respondent while adopting the arguments of the learned counsel appearing for the petitioner submits that permitting the 6th respondent in payment of the sale consideration in instalments is contrary to the proceedings issued by the 1st respondent on 1.1.2003 and as the 6th respondent failed to pay the sale consideration within 60 days, acceptance of his offer deemed to have been recalled, in which case, there cannot be any impediment for the 1st respondent to consider the application filed by the borrower for One Time Settlement. In support of his contention, reliance has been placed on the decisions of this Court in Sri Venkateshwara Rice Mill, Addakal village and Mandal, Mahaboobnagar District v. Andhra Pradesh State Financial Corporation, Hyderabad and others 2009(2) ALD 530 , D.Lakshmi v. A.P.State Financial Corporation 2009(1) ALT 143 , Bandaru China Narayana Murthy v. A.P.State Financial Corporation, Hyderabad and others 2009(2) ALD 690 and the decision of Orissa High Court in Bhabagrahi Panigrahi v. Union of India and others AIR 1990 ORISSA 42. 13. The question that arises for consideration in view of the various submissions made by the learned counsel is whether the sale of the mortgaged properties is arbitrary, illegal or violative of principles of natural justice? Incidentally, it is also required to be examined whether the acceptance of the offer made by the 6th respondent is unfair or unreasonable. 14. In Gajraj Jain v. State of Bihar 2004(7) SCC 151 , the Supreme Court held that the extraordinary power conferred under the provisions of Section 29 of the Act is coupled with a duty to ensure that a unit seized under that provision is sold at a reasonable price. It was pointed out that the predominant consideration must be to realize the best possible price. In Karnataka State Industrial Investment and Development Corporation Ltd. V. Cavalet India Ltd. 2005(4) SCC 456 , the Supreme Court observed that Court cannot act as an appellate authority over the decisions taken by the Financial Corporation under Section 29 of the Act, except where the Corporation acts unfairly or unreasonably. Relevant guidelines in this regard are summed up in paragraph 19 of the judgment. Securing the best possible price shall be the predominant factor. 15. Indisputably, M/s. Janardhana Earth Movers, once a partnership firm and subsequently became a Proprietary concern, availed loan from the 1st respondent to a tune of Rs.26.88 lakhs for purchase of excavator 200 (poclaimer) Worth Rs. 38,66,973/-. Six house plots which are said to be one compact block have been offered as a security for the said loan. The 3rd respondent is stated to be proprietor of M/s.Janardhana Earth Movers. The borrower failed to pay the instalments. Thereupon, notices have been issued to the borrower as well as the sureties. It appears some telegrams have also been sent. The borrower has been put on notice to produce the primary security. The 3rd respondent is stated to be proprietor of M/s.Janardhana Earth Movers. The borrower failed to pay the instalments. Thereupon, notices have been issued to the borrower as well as the sureties. It appears some telegrams have also been sent. The borrower has been put on notice to produce the primary security. But the borrower has not produced the primary security. Therefore, 1st respondent initiated proceedings under Section 29 of the Act and advertised the mortgaged property for sale. The procedure for finalization of the offers has been indicated in the sale notice dated 14.9.2002. After due negotiations with the tenderers, the offer made by the 6th respondent for Rs. 63,25,000/- came to be accepted on 01.11.2003. Accordingly, the 1st respondent issued proceedings on 01.11.2003 accepting the offer of the 6th respondent and directing to pay Rs.63,25,000/- including EMD of Rs.1.70 lakhs within sixty days. 16. Learned counsel by placing reliance on Karanataka State Industrial Investment and Development Corporation case (11 supra) contends that since the petitioners are sureties/guarantors, initiation of proceedings under Section 29 of the Act cannot be issued and at the most, the 1st respondent-Corporation can initiate proceedings as provided under Section 31 of the Act. In nutshell, his contention is that the property of the sureties/guarantors cannot be brought to sale by the 1st respondent-Corporation by invoking Section 29 of the Act. The right of the Financial Corporation in terms of Section 29 of the Act must be exercised only on a defaulting party. There cannot be any default as is envisaged in Section 29 of the Act by a surety or guarantor. The contention of the counsel appears to be sound at the first blush, but on close scrutiny of the averments of the plaint in O.S.No.330 of 2004d to which the petitioners herein as well as other members of the joint family are parties, I do not detain myself too long to reject the said contention. 17. I may refer the relevant portion of the plaint, which reads as hereunder:- “III a) The 1st plaintiff is the mother, the plaintiff two and three are sons of the 1st plaintiff. The defendants 1 and 2 are the sons of the 1st plaintiff and brothers of the plaintiffs 1 and 2. 17. I may refer the relevant portion of the plaint, which reads as hereunder:- “III a) The 1st plaintiff is the mother, the plaintiff two and three are sons of the 1st plaintiff. The defendants 1 and 2 are the sons of the 1st plaintiff and brothers of the plaintiffs 1 and 2. The defendants 3 and 4 are daughters of the 1st plaintiff and the sisters of the plaintiffs 2 and 3 and the defendants 1 and 2. The plaintiffs 1 to 3 and the defendants 1 and 2 are residing in the house situated at Allipuram, Visakhapatnam. The defendants 3 and 4 are after performing their marriage residing with their husbands at Visakhapatnam and Hyderabad respectively. The plaintiffs 2 and 3 and the defendants 1 to 4 are the sons and daughters of the 1st plaintiff and they are having the joint family property which was succeeded from their grand father and enjoyed the same till the year 2003, when the husband of the 1st plaintiff died on 22nd August, 2000. All the plaintiffs and defendants 1, 2, 3 and 4 are in the joint possession and enjoyment of the suit schedule properties. Late Lagudu Pydiraju acquired the property in various villages and purchased the same out of the funds derived from the joint family which was succeeded by his late father, i.e., Late Vomula Naidu. Till the year 2000 the entire property was managed by the father of the plaintiffs 2 and 4 and the defendants 1 to 4. Thereafter, the 1st plaintiff was managing the same as per the wishes of her late husband i.e., Late Pydiraju. Till the year 2000 the entire property was managed by the father of the plaintiffs 2 and 4 and the defendants 1 to 4. Thereafter, the 1st plaintiff was managing the same as per the wishes of her late husband i.e., Late Pydiraju. b) xxx xxxxx xxxxxx c) xxx xxxxx xxxxxx d) xxx xxxxx xxxxxx IV) The cause of action for the suit arose when the plaintiffs 1 to 3 and defendants 1 to 4 are the joint family and the father of the plaintiffs 2 and 3 and defendants 1 to 4 i.e., late Lagudu Pydiraju succeeded the ancestral property and dispose of the same and purchased the present suit schedule property in his name, in the name of his wife and sons and on 13-01-1999, the loan was raised and the plaintiffs 1 to 3 and the defendants 1, 3 and 4 are stand as security to the 5th defendant in order to sanction the loan to M/s.Janardhana Earth Movers and the 5th defendant issued the letter on 16-3-2003 the 2nd defendant written a letter to the 5th defendant agreed to pay the loan amount and on 24-11-2003 the plaintiffs issued a legal notice to all the defendants and when the plaintiffs 1 to 3 demanded for partition the defendants 1 to 4 have refused for partition of the suit schedule property all are at Visakhapatnam within the jurisdiction of this Honourable Court”. 18. The plaint averments do not give any room for doubt that the establishment as well as the properties mortgaged as a security for the loan availed by the establishment belong to the joint family. The plaintiffs in the suit sought for partition of the industrial unit as well as the mortgaged properties. Therefore, the petitioners herein as well as respondents 3 to 5 cannot be treated as third parties to the transaction. The veil is required to be lifted to know whether the petitioners as well as respondents 3 to 5 are principal borrowers or mere guarantors. Their own pleadings in the suit in O.S.No. 330 of 2004 clearly established that the industrial establishment in the name and style of M/s.Janardhana Earth Movers is owned by the family and all the mortgaged properties also belong to the joint family. Their own pleadings in the suit in O.S.No. 330 of 2004 clearly established that the industrial establishment in the name and style of M/s.Janardhana Earth Movers is owned by the family and all the mortgaged properties also belong to the joint family. That is the reason for some of the members of the joint family in seeking partition of the TATA Hitachi model Excavator 200 CC, which has been acquired by the industrial establishment and also mortgaged properties. In the given facts and circumstances, the petitioners are to be construed as principal borrowers along with other members of the joint family, in which case, the decisions relied upon by the petitioners in Karnataka State Industrial Investment and Development Corporation (11 supra) and so also the decision of the learned Single Judge of this Court in Sri Venkateshwara Rice Mill, Addakal village and Mandal, Mahaboobnagar District v. Andhra Pradesh State Financial Corporation, Hyderabad and others (6 supra) are wholly inapplicable. 19. At this juncture, one point is required to be clarified and it is with regard to payment of EMD amount. It is the serious contention of the petitioners that the 6th respondent has not paid the EMD as on the date of submitting his offer. This contention has been repelled both by the respondent No.1 and 6. The 1st respondent also placed on record copy of the tender form submitted by the 6th respondent on 13.12.2002, wherein it is stated that EMD of Rs.1,70,000/- has been paid by way of Demand Draft on 11.12.2002. Therefore, the contention of the petitioners that the 6th respondent has not paid the EMD along with the tender has no substance. 20. It is also pertinent to note as to how the joint family members have been changing their positions in various proceedings. Initially, Janardhan Rao alone filed O.S.No.3429 of 2003 on the file of Principal Junior Civil Judge, Visakhapatnam after the sale has been held to stall further proceedings. He failed to secure relief sought for by him in the said proceedings. Thereafter, L.Mahalakshmi, L.Sanjeeva Rao and LBS Uma Maheswara Rao , who are petitioners No.1, 2 and respondent No.5 herein filed O.S.No.330 of 2004 pleading that the excavator and the mortgaged properties belong to the joint family. The State Financial Corporation has also been added as one of the defendants in the said suit. Thereafter, L.Mahalakshmi, L.Sanjeeva Rao and LBS Uma Maheswara Rao , who are petitioners No.1, 2 and respondent No.5 herein filed O.S.No.330 of 2004 pleading that the excavator and the mortgaged properties belong to the joint family. The State Financial Corporation has also been added as one of the defendants in the said suit. The other members of the joint family have been arrayed as defendants 1 to 4. For better understanding, I may refer the relationship of the parties to the above-referred suit proceedings. L.Sanjeeva Rao, LBS Uma Maheswara Rao, L.Janardhan Rao and L.V.Appa Rao are sons and whereas Smt. A.Sri Lakshmi and T.Rama Kumari are daughters and Smt. Mahalakshmi is the widow of Pydi Raju. In the plaint, the plaintiffs sought for partition of the suit schedule property in equal shares and also allotment of one share each to the plaintiffs 1 to 3 by metes and bounds. They also sought for direction to the State Financial Corporation to proceed against the defendant No.2-L.Janardhana Rao alone for recovery of the loan amount. For better understanding, I may refer para 3(b) of the plaint, which reads as hereunder:- “3(b) While the matter stood thus the 2nd defendant who is an employee in the Hindustan Zinc Ltd., Visakhpatnam approached the plaintiffs 1 to 3 and the defendants 1, 3, and 4 and requested to co-operate with him for purchase of a Excavator 200 (poclain) for the purpose of carry out the business in order to uplift the entire family. Believing the version of the 2nd defendant the plaintiffs 1 to 3 and defendant 1, 3 and 4 have offered their properties as security to the 5th defendant. The total cost of the Excavator 200 (poclain) was about Rs.38,66,973/- and the loan was taken by the 2nd defendant was Rs.28,00,000/-. The letter issued by the 5th defendant is filed herewith which may please be read as part of this plaint. After purchasing the excavator 200 (poclain) with a malafide intention not to pay the instalments to the 5th defendant and run the business under the name and style of M/s.Janardhana Earth Movers as a proprietory concern. This fact was suppressed by the 2nd defendant to the other members of the family and enjoying the funds and profits from the excavator 200 (poclain) and not paying the single paise to plaintiffs 1 to 3 and defendants 1, 3 and 4.” 21. This fact was suppressed by the 2nd defendant to the other members of the family and enjoying the funds and profits from the excavator 200 (poclain) and not paying the single paise to plaintiffs 1 to 3 and defendants 1, 3 and 4.” 21. A plain reading of the plaint indicates that the plaintiffs therein treated the primary security and the mortgaged property as joint family properties. At this juncture, it is appropriate to note that all the six house plots have been treated as one compact block and shown as Item No.2 in the plaint. This itself falsifies the plea taken by the petitioners that the 1st respondent committed a serious error in putting all the six plots as one item instead of putting the plots individually. 22. The plaintiffs in the suit put the valuation of the plots admeasuring 2970 square yards at Rs.49,00,500/- as on 31.5.2004. Whereas the 6th respondent offered Rs.62,50,000/- in December 2002. If the valuation of the property mentioned by the plaintiffs in the suit is considered, it cannot be said that the offer made by the 6th respondent is unfair or unreasonable. Much contention has been advanced by the learned counsel appearing for the petitioners that the petitioners 3 and 4 submitted representation for One Time Settlement and pending consideration of their application, confirmation of sale in favour of the 6th respondent ought not to have been made. 23. Petitioners 3 and 4 submitted the application to the 1st respondent to cancel the sale. The 1st respondent considered the said representation and refused to set aside the sale by giving cogent and convincing reasons. It is not for this Court to sit over the decision taken by the 1st respondent in rejecting the application to set aside the sale, as an appellate authority. What all grounds urged by the petitioners 3 and 4 in their application have been negatived by the 1st respondent in its proceedings dated 1.3.2005. I do not see any valid ground to interfere with the proceedings issued by the 1st respondent in rejecting the application filed by petitioners 3 and 4. 24. The next contention of the petitioners is that 1st respondent ought not to have allowed the 6th respondent to pay the sale consideration by way of instalments. I do not see any valid ground to interfere with the proceedings issued by the 1st respondent in rejecting the application filed by petitioners 3 and 4. 24. The next contention of the petitioners is that 1st respondent ought not to have allowed the 6th respondent to pay the sale consideration by way of instalments. Learned counsel has not brought to my notice any provision, which bars the 1st respondent in allowing the 6th respondent to pay sale consideration by way of instalments. It is a matter of record that the 6th respondent paid the entire sale consideration by 28.11.2003. He also paid interest on the delayed payment to a tune of Rs.3,66,296/- as on 13.1.2004. When there is no irregularity or illegality in the sale notification or proceedings subsequent to the sale notification, it is impermissible for this Court to interfere with the sale held by the 1st respondent, pursuant to the notification dated 14.9.2002 in exercise of powers under Article 226 of the Constitution of India. 25. Accordingly, the Writ Petition fails and the same is accordingly dismissed. No costs. The interim order granted on 23.6.2005 in W.P.M.P.No.8378 of 2005 shall stand vacated.