L. Narasimha Reddy, J.@mdashBoth these appeals arise out of O.S. No. 3 of 1992 on the file of Subordinate Judge, Parvathipuram. For the sake of convenience, the parties herein are referred to as arrayed in the suit.
2. The 1st plaintiff is a Partnership Firm and plaintiffs 2 to 6 are its partners. Plaintiff No. 1 obtained a loan from the A.P. State Financial Corporation, Visakhapatnam Branch - defendant No. 1. On the ground that the loan was not repaid, defendants 1 and 2 initiated proceedings under the A.P. State Finance Corporations Act (for short ''the SFC Act''). An item of the property was brought to sale.
3. Plaintiffs filed W.P. No. 17937 of 1988, challenging the sale that was effected on 27.06.1988 by raising various grounds. During the pendency of the writ petition, they filed the suit claiming damages of Rs. 15,00,000/-. The writ petition was allowed on 18.09.1992. The suit was partly decreed on 01.11.1996 for a sum of Rs. 1,50,000/-. While the plaintiffs filed A.S. No. 676 of 1997 not satisfied with the amount awarded to them, defendants 3 and 4 filed A.S. No. 1308 of 2000.
4. Sri. T. Lakshminarayana, learned counsel for the plaintiffs, submits that his clients sustained heavy losses, on account of the illegal and untenable steps initiated by the defendants. He contends that even after obtaining the decree in O.P. No. 53 of 1977, defendants 1 and 2 have chosen to approach defendants 3 and 4 for initiation of proceedings under the Revenue Recovery Act (for short "the RR Act") and that on account of the hasty and imperfect steps taken by them, plaintiffs are put to heavy losses. He submits that the trial Court ought to have decreed the suit as prayed for.
5. Learned Advocate General appearing for defendants 3 and 4, on the other hand, submits that the very institution of the suit by the plaintiffs was impermissible, since W.P. No. 17937 of 1988 filed by them challenging the auction notification was very much pending before this Court. He contends that the trial Court did not record any finding as to the so called illegality and still the decree was passed. Learned Advocate General further submits that the sole basis for grant of relief to the plaintiffs was the order passed by this Court in W.P. No. 17937 of 1988 and that the same has since been reversed in the writ appeal. He contends that the writ appeal is not maintainable against defendants 3 and 4, once the plaintiffs have withdrawn the appeal against defendants 1 and 2.
6. The 1st plaintiff is a firm and plaintiffs 2 to 6 are not only partners, but also constitute Hindu Undivided Family. While the 1st defendant is the A.P. State Financial Corporation, the 2nd defendant is its Branch Manager, Visakhapatnam. Defendants 3 and 4 are, District Collector and Mandal Revenue Officer, respectively. The 5th defendant is said to be the highest bidder in the auction. The plaintiffs raised loan from defendants 1 and 2. Since the amount was not paid, initially defendants 1 and 2 initiated proceedings u/s 29 of the SFC Act by filing O.P. No. 53 of 1977. The basis for the plaintiffs to file the suit is that defendants 1 and 2 have chosen to approach defendants 3 and 4 for initiating proceedings under the RR Act, in stead of themselves taking steps u/s 30 of the SFC Act. They have challenged the auction notification by filing W.P. No. 17937 of 1988. Even while that writ petition was pending, they filed this suit.
7. The trial Court framed the following issues for its consideration:
i) "Whether the sale of the plaintiff''s sugar unit land, buildings and the machinery therein at Garugubilli by the 4th defendant is illegal, invalid and void since he had not followed the provisions of Revenue Recovery Act i.e. Sections 25 to 44 for the amount due by the plaintiffs to the 1st defendant independently?
ii) Whether the defendants 1 and 2 have got any right to resort to the procedure u/s 29 of the A.P. State Finance Corporation Act when they had already obtained a decree against the plaintiffs under Sec. 31(1) of A.P. State Finance Corporation Act in O.P. No. 53 of 1977 on the file of the District Judge''s Court, Srikakulam?
iii) Whether the auction, if any, held by the 4th defendant regarding the sugar factory (machinery and the land and building without notice to the plaintiffs is ab initio, void, illegal as it was conducted behind the back of the plaintiffs?
iv) What is the total loss sustained by the plaintiffs on account of the illegal act the on part of the defendants 1 to 4 by selling away the plaintiffs sugar unit at Garugubilli in auction without any attachment or without serving the demand notice to the plaintiffs as contemplated under the provisions of Revenue Recovery Act?
v) Whether the cause of action mentioned in the plaint is true?
vi) Whether the plaintiffs claim is barred by limitation?
vii) Whether the 4th defendant and 5th defendant colluded together and dismantled the machinery and pulled down the building and thrown out of the machinery in open air, suspectable to seasonal effects?
viii) Whether the 5th defendant has got any right in the pulled down machinery land and building of the plaintiffs sugar unit when the alleged sale is not confirmed by the Sub-Collector, Parvatipuram?
ix) Whether attachment of sugar unit by the Tahasildar, Parvatipuram, in the year 1979 for the realization of dues of sugar cane tax or cess due from the plaintiffs will enure to the defendants 1 and 2 for the recovery of their debt and to conduct the sale on 27.06.1988?
x) Whether the alleged sale of the sugar unit of the plaintiffs is a paper sale?
xi) Whether the plaintiffs are entitled for a decree for the loss and injury by way of damages as prayed for?
xii) To what relief?
8. On behalf of plaintiffs, PWs. 1 to 9 were examined and Exs. A.1 to A.43 were filed. On behalf of defendants, DWs. 1 and 2 were examined and Exs. B.1 to B.13 were filed. The suit was decreed for a sum of Rs. 1,50,000/-.
9. On the basis of the contentions advanced by the learned counsel for the parties, the following points arise for consideration in these appeals:
(i) Whether the plaintiffs were entitled to file the suit, even while the writ petition filed by them challenging the auction notification was pending before this Court?
(ii) Whether the trial Court was justified in passing the decree, unless it has pronounced upon the legality and validity of the steps taken by the defendants?
(iii) Whether any relief can be granted to the plaintiffs, once the present appeal was withdrawn against defendants 1 and 2?
(iv) Whether the plaintiffs are entitled for any further amount over and above what was awarded by the trial Court?
Point No. (iii):
10. Before the matter is discussed on merits, the preliminary objection raised by the learned Advocate General, needs to be considered. Left to themselves, defendants 3 and 4 did not have any claim or grievance vis-a-vis the plaintiffs. It is only when defendants 1 and 2 have approached them that they initiated proceedings under the RR Act, against the plaintiffs. Obviously for that reason, the plaintiffs have expressed their principal grievance against defendants 1 and 2. However, the plaintiffs have withdrawn the appeal against defendants 1 and 2.
11. With the dismissal of the appeal against defendants 1 and 2, virtually nothing remains to be there. Not only the claim for recovery of the amount against the plaintiffs was made by defendants 1 and 2, but also the sale proceeds were appropriated by them. Defendants 3 and 4 did not have any independent cause or claim against the plaintiffs. Therefore, the appeal virtually becomes untenable or infructuous, against defendants 3 and 4, once it was dismissed as withdrawn against defendants 1 and 2. Hence, point No. (iii) is answered accordingly.
12. Strictly speaking, no further discussion is necessary, in view of answer in point No. (iii). However, it needs to be seen as to whether any case was made out by the plaintiffs.
Point Nos. (i), (ii) & (iv):
13. The plaintiffs do not dispute their obligation to repay the amount borrowed from defendants 1 and 2. When the O.P. filed by plaintiffs 1 and 2 was decreed, the plaintiffs did not choose to challenge the same and they have acknowledged their obligation to pay that amount. Their principal grievance is only about the method of recovery chosen by defendants 1 and 2.
14. As long as the obligation towards a State Finance Corporation is not disputed, the entitlement of the Corporation to choose one or the other method to recover the amount, cannot be denied. Except stating that defendants 1 and 2 ought to have brought the decree in the O.P. to execution, the plaintiffs did not state as to what prejudice they have suffered on account of the initiation of provisions of the RR Act.
15. The plaintiffs have already approached this Court by challenging the auction notice issued by respondents 3 and 4. There was no basis for them to file the suit, even while that writ petition was pending. The trial Court did not undertake any exercise for ascertaining the damages or claim made by the plaintiffs. Once this Court has decided the writ petition, it was for the plaintiffs to claim every possible relief therein. Though casual reference is made to the filing of the suit, in the order passed in the writ petition, no justification was pleaded or stated as to how such a suit can be maintained. At any rate, the plaintiffs did not seek the leave of the Court to pursue the remedies in the suit.
16. Whatever be the permissibility in law for the plaintiffs to proceed with the suit, once this Court has passed an order in the writ petition, they lost every right, with the setting aside of the order in the writ petition, by a Division Bench. Obviously, because it is a subsequent development, no reference is made by the parties to that event.
17. We therefore, hold that there was no basis for the plaintiffs to file the suit and that the decree passed by the trial Court cannot be sustained in law. Accordingly, point Nos. (i), (ii) & (iv) are answered.
18. Consequently, A.S. No. 676 of 1997 is dismissed and A.S. No. 1308 of 2000 is allowed and the decree passed by the trial Court in O.S. No. 3 of 1992 is set aside. There shall be no order as to costs. The miscellaneous petitions filed in these appeals shall also stand disposed of.
