Karnataka High Court
Sri. Ashok Kumar vs The Housing & Urban on 17 July, 2025
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
-1-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 9465 OF 2015 (GM-RES)
C/W
WRIT PETITION NO. 50267 OF 2019 (GM-DRT)
IN W.P.NO.9465/2015
BETWEEN
1. SRI. ASHOK KUMAR
S/O LATE SUMERMAL,
AGED ABOUT 63 YEARS,
2. SRI PRAVEEN KUMAR
S/O SRI ASHOK KUMAR
AGED ABOUT 42 YEARS,
3. SRI ARVIND KUMAR
S/O SRI ASHOK KUMAR,
Digitally signed AGED ABOUT 39 YEARS,
by SHWETHA
RAGHAVENDRA
Location: HIGH 4. SRI SANTHOSH KUMAR
COURT OF S/O SRI ASHOK KUMAR
KARNATAKA AGED ABOUT 37 YEARS,
ALL ARE RESIDING AT NO.209
A K JAIN PARIVA PALACE,
V V PURAM, BANGALORE.
...PETITIONERS
(BY SRI. P.D. SURANA., ADVOCATE)
AND
1. THE HOUSING & URBAN
DEVELOPMENT CORPORATION LTD
-2-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
BANGALORE OFFICER,
UNIT NO.703-704, 7TH FLOOR,
NORTH BOCK, MANIPAL CETRE,
DICKENSON ROAD,
BANGALORE-560042
REPRESENTED BY ITS
AUTHORIZED OFFICER
2. SRI MAHESH KUMAR
S/O LATE CHIKKANNA,
NO.205, E-1, 1ST FLOOR,
14TH MAIN, SUBRAMANYA NAGAR
BANGALORE.
.... RESPONDENTS
(BY SRI. VARADARAJ R. HAVALDAR., ADVOCATE FOR R1;
NOTICE TO R2 IS D/W)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
PROHIBITION PROHIBITING THE 1ST RESPONDENT FROM SELLING
THE SCHEDULE PROPERTY IN PURSUANCE OF THE SALE NOTICE
DATED 22.02.2015 COPY OF WHICH IS PRODUCED AS ANNEXURE-H,
AND TO GRANT SUCH OTHER RELIEF'S IN THE INTEREST OF
JUSTICE.
IN W.P.NO.50267/2019
BETWEEN
1. SRI. ASHOK KUMAR
S/O LATE SUMERMAL,
AGED ABOUT 67 YEARS,
2. SRI PRAVEEN KUMAR
S/O SRI ASHOK KUMAR
AGED ABOUT 46 YEARS,
3. SRI ARVIND KUMAR
S/O SRI ASHOK KUMAR,
AGED ABOUT 43 YEARS,
4. SRI SANTHOSH KUMAR
S/O SRI ASHOK KUMAR
AGED ABOUT 41 YEARS,
-3-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
ALL ARE RESIDING AT NO.209
A K JAIN PARIVA PALACE,
V V PURAM, BANGALORE.
...PETITIONERS
(BY SRI. P.D. SURANA., ADVOCATE)
AND
1. THE HOUSING & URBAN
DEVELOPMENT CORPORATION LTD
BANGALORE OFFICER,
UNIT NO.703-704, 7TH FLOOR,
NORTH BOCK, MANIPAL CETRE,
DICKENSON ROAD,
BANGALORE-560042
REPRESENTED BY ITS
AUTHORIZED OFFICER
2. SRI MAHESH KUMAR
S/O LATE CHIKKANNA,
AGED ABOUT 51 YEARS
NO.205, E-1, 1ST FLOOR,
14TH MAIN, SUBRAMANYA NAGAR
BANGALORE-560055
3. RECOVERY OFFICER-1
DEBTS RECOVERY TRIBUNAL-1, BENGALURU,
JEVAN MANGAL BUILDING,
2ND FLOOR, RESIDENCY ROAD,
BENGALURU-560025.
.... RESPONDENTS
(BY SRI. VARADARAJ R. HAVALDAR., ADVOCATE FOR R1;
SRI. H.C. SHIVARAMU., ADVOCATE FOR R2;
R3-SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
PROHIBITION PROHIBITING THE 1ST & 3RD RESPONDENT FROM
SELLING THE SCHEDULE PROPERTY IN PURSUANCE OF
PROCEEDINGS NO. DCP/13243 IN O.A.NO.119/2011 ON THE FILE OF
THE THIRD RESPONDENT AS PER PROCLAMATION DATED 17.09.2019
(ANNEXURE-J) IN THE INTEREST OF JUSTICE.
-4-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
THESE WRIT PETITIONS COMING ON FOR ORDERS AND
HAVING BEEN RESERVED FOR ORDERS ON 10.06.2025, THIS DAY,
THE COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CAV ORDER
1. The Petitioner in W.P.No.9465/2024 is before this
Court seeking for the following relief:
Issue a writ of prohibition prohibiting the R1 from
selling the schedule property in pursuance of the sale
notice dated 22.02.2015 Copy of which is produced
as Annexure-H and to grant such other relief's in the
interest of justice.
2. The Petitioner in W.P.No.50267/2019 are before this
Court seeking for the following reliefs:
Issue a writ of prohibition prohibiting the R1 & R3
from selling the schedule property in pursuance No.
DCP/13243 in O.A.No.119/2011 on the file of the
Third Respondent as per proclamation dated
17.09.2019 (Annexure-J), in the interest of justice.
3. The facts in WP No.9465 of 2015;
3.1. The petitioners claim that the respondent No.2-
Sri.Mahesh Kumar had entered into an
agreement dated 11.04.2005 to sell his
property described in the schedule to the
-5-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
petition for consideration of Rs.2,25,00,000/-.
The sale deed not having been executed, the
agreement of sale being governed by an
Arbitration Clause, initially the petitioners had
invoked the remedy under Section 9 of the
Arbitration and Conciliation Act, 1996
(hereinafter referred to as
"A & C Act, 1996") and filed A.A. No.41 of
2007 before the City Civil Court, Bangalore,
seeking interim measures where the
respondent No. 2, Sri.Mahesh Kumar was
restrained from alienating the property and the
parties were directed to be maintained in status
quo till the conclusion of the Arbitration
proceeding.
3.2. An Arbitrator having been appointed, the
Arbitrator passed an award under Section 31 of
the A & C Act, 1996 on 13.03.2012, rejecting
the claim of the petitioner for specific
-6-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
performance but directing Sri.Mahesh Kumar to
pay the petitioner a sum of Rs.One crore
together with interest at 10% per annum from
11.04.2005 upto the date of the award and at
15% per annum from the date of the award till
the date of payment.
3.3. In pursuance thereof, the learned Arbitrator
directed that the scheduled properties would
stand attached till all payments under the
award are made, and as such, the said
properties were charged for the payment due to
the claimant.
3.4. The petitioners, on account of the refusal of the
relief of the specific performance, have filed
A.S.No.42 of 2012, which is pending on the file
of the City Civil Court, Bangalore. It is alleged
that in violation of the interim orders in
A.A.No.41 of 2007, Sri.Mahesh Kumar had
created an equitable mortgage in favour of the
-7-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
respondent No.1-Bank viz., Housing and Urban
Development Corporation Limited (for short
hereinafter referred to as "HUDCO"). In view
thereof, alleging that there is a violation of the
interim order and contempt of the orders of the
City Civil Court. The petitioners have filed a
petition in Misc.No.1082 of 2010, which is also
pending consideration.
3.5. HUDCO is stated to have sanctioned a loan of
Rs.2,75,00,000/- on the deposit of title deeds
relating to said property. The loan amount has
been disbursed in favour of M/s Avva
Developers of which Sri.Mahesh Kumar and his
wife are partners. The deposit of title deeds
made on 30.11.2007, was subsequent to the
interim order dated 23.08.2007, and therefore,
it is alleged that the same is in gross violation
of the interim orders passed in OS No.41 of
2007.
-8-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
3.6. HUDCO having published a possession notice
under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security
Interest Act, 2002 (hereinafter referred to as
"SARFAESI Act, 2002"). On 08.01.2015, the
petitioners had objected to the same, thereafter
HUDCO has published a notice of sale in a
newspaper-"Times of India" on 22.2.2015.
3.7. On the filing of the writ petition by order dated
11.03.2015, this Court had directed HUDCO not
to sell the petitioner's property which order has
been continued from time to time. It is in that
background that the petitioners are before this
Court seeking the aforesaid reliefs.
4. Facts in 50267 of 2019.
4.1. The petitioners in this writ petition are the
same as those in WP No.9465 of 2015. The
respondent No.1 in this petition is HUDCO, and
the respondent No.2 is Sri.Mahesh Kumar and
-9-
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
the respondent No.3 is the Recovery Officer of
the Debt Recovery Tribunal (hereinafter
referred to as "DRT")
4.2. Insofar as the creation of a mortgage and the
issuance of a sale notice are the same. Upon
the sale notice having been issued, the
petitioners had issued a legal notice on
06.02.2015, placing on record their right in the
property.
4.3. The petitioners contend that they came to know
of HUDCO having initiated Recovery
Proceedings in O.A.No.119 of 2011 before the
DRT. The proclamation had been issued on
17.09.2019 by the Recovery Officer, and as
such, it is contended that the recovery
proceedings initiated in Rrcovery proceedings
No.13243 in pursuance of the award in O.A.
No.119 of 2011 should cause injustice to the
petitioners affecting their claims over the
- 10 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
subject property, since their claim for specific
performance is still pending for consideration in
a proceeding filed under Section 34 of the A &
C Act, 1996 challenging the award of the
learned Arbitrator. It is in that background that
the petitioners are before this Court seeking the
aforesaid reliefs.
5. The submission of Sri.P.D.Suvarna., learned counsel
for the petitioner, is that;
5.1. The agreement of sale in favour of the
petitioner being prior to the mortgage
documents in favour of HUDCO, the mortgage
in favour of HUDCO being created in violation of
the orders passed under Section 9 proceedings
in A.A.No. 41 of 2007. The contempt
proceedings have been filed, which are
pending. Arbitral proceedings have been filed
for specific performance, though Specific
perdormance was refused and order directing
- 11 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
Mahesh Kumar to pay a sum of Rs.One crore
with applicable interest (supra) and has
directed a charge to be created on the subject
property. The petitioner's interest would be
adversely affected, if HUDCO were to bring the
property for sale.
5.2. His submission is that, apart from the charge
which has been created in favour of the
petitioners, insofar as the refusal of the relief of
specific performance, the petitioners have
challenged the same by filing a proceedings
under Section 34 of the A & C Act 1996, where
the petitioners are more than likely to succeed
and as such he submits that, if HUDCO were to
sell the subject property and the petitioners
were to succeed in those proceedings, the
petitioners will be left with no relief or recourse
since a third party interest would have been
created.
- 12 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
5.3. Insofar as charge which has been created, he
submits that even if the petitioners were to fail
in the proceedings under Section 34 of the A &
C Act 1996, even then they would be entitled to
recover the sum of Rs.1,00,000/- along with
interest as regards which the charge has been
created. Even to enforce this charge, it would
be required that HUDCO does not sell the
property and on that grounds, he submits that
both the petitions are required to be allowed.
6. On service of notice, HUDCO has entered appearance
and is represented by Sri.Varadaraj R. Havaldar.,
learned counsel for respondent No.1-Bank would
submits that;
6.1. The relief praying for a prohibition of selling the
property in WP No.9465 of 2015 is not
maintainable. Such action has been taken by
HUDCO under the SARFAESI Act, 2002, by
- 13 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
following a due procedure. If at all the
petitioners are aggrieved by the same, the only
recourse available to the petitioner is one which
is available under Section 17 of the SARFAESI
Act, 2002. A writ petition under Article 226 and
227 is not maintainable.
6.2. The rights of the petitioners are inchoate
inasmuch as their right is only under the
agreement of sale, which is required to be
adjudicated as on the date on which a
mortgage was created by Sri.Mahesh Kumar
and his wife, what existed was only an
agreement of sale which would not confer any
right, title or interest on the petitioners to stop
HUDCO from bringing the property for sale to
recover its money.
6.3. The mortgage has been created as regards the
loan availed by M/s Avva Developers of which
Sri.Mahesh Kumar and his wife Smt.Mahadevi
- 14 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
are partners. The loan having been disbursed to
M/s Avva Developers on the security of the
aforesaid property, as regard which the
property is one of the securities. HUDCO is
entitled to exercise its rights as regard to
security.
6.4. The dispute between the petitioners,
Sri.Mahesh Kumar and his wife is one between
themselves as regard which HUDCO is not
concerned. The proceedings in A.A.No.41 of
2007 was between the petitioners and
Sri.Mahesh Kumar as regard to which HUDCO
was not a party nor is it a party in the
arbitration proceedings. Thus, neither the
interim orders passed in A.A.No.41 of 2007 nor
the award passed by the Arbitrator is binding
on the Court.
6.5. The petitioners, knowing fully well of a
mortgage having been created by a written
- 15 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
instrument which is registered, had not brought
it to the knowledge of the concerned in either
the Section 9 proceeding or the Arbitral
proceedings. The deposit of title deeds having
been registered in the office of Sub-Register of
Basavanagudi on 01.12.2007, prior to the
award passed by the Arbitrator. The security
created under the said mortgage would be
binding on the petitioners.
6.6. His submission is also that a statutory notice
under Sub-section (2) of Section 13 of the
SARFAESI Act, 2002, followed by a notice under
Sub-section (4) of Section 13, had been issued
to Sri.Mahesh Kumar, and thereafter, the
possession notice was published. The action
taken under the SARFAESI Act, 2002 is one
which is authorised and such action would
enure to the benefit of HUDCO, which cannot
- 16 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
be challenged in the manner in which it has
been done.
6.7. As regards to sale proceedings, he submits that
there being an amount of Rs.1,51,61,589/-
along with interest and cost which was due,
HUDCO initiated recovery proceedings before
the DRT in Bangalore under the Recovery of
Debts and Bankruptcy Act, 1993 (hereinafter
referred to as "RDB, Act 1993") which ended
in an award in favor of HUDCO and a recovery
certificate was issued to HUDCO in terms of
Section 25 of the Act.
6.8. The recovery officer, being authorised to
execute the recovery certificate action taken in
accordance with law, the petitioners cannot find
fault with it, and the only remedy available to
the petitioners is an Appeal under Section 30 of
the RDB Act, 1993 and not by way of a writ
petition before this Court.
- 17 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
6.9. On facts, he submits that though Sri.Mahesh
Kumar had allegedly agreed to sell certain
properties to the petitioners. Sri.Mahesh Kumar
was not the owner of the properties as on that
day. In fact, a sale deed was executed in favour
of the petitioner on 01.07.2005 as regards the
property bearing No.13/1, old No.357, VV
Puram, Bangalore by one Ciciliamma @ Sushila.
6.10. On 23.09.2005, the agreement of sale dated
11.04.2005 had been cancelled and Sri.Mahesh
Kumar had agreed to pay the advance amount
along with 18% interest per annum.
6.11. It is only thereafter on 20.06.2006 that a sale
deed came to be executed by Smt.Anjali
Prabhakar & another in favour of Sri.Mahesh
Kumar as regards property bearing No.13, old
No.355, VV Puram, Bengaluru.
6.12. It is on 01.04.2007 that M/s Avva Developer of
which Sri.Mahesh Kumar and his wife
- 18 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
Smt.Mahadevi are partners had approached
HUDCO for sanction of loan. Thus, he submits
as on date on which Sri.Mahesh Kumar and his
Wife had approached HUDCO for a loan, the
agreement of sale between Sri.Mahesh Kumar
and the petitioners had been cancelled, and as
regards this, he places reliance on the award
passed by the learned Arbitrator, where even
according to the petitioners, the amount of
Rs.One crore was not repaid by Sri.Mahesh
Kumar in terms of the cancellation dated
23.09.2005.
6.13. He submits that the learned Arbitrator has
categorically come to a conclusion that the
agreement of sale between the parties has
been cancelled and denied a relief of specific
performance to the petitioners and directed
refund of the monies.
- 19 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
6.14. Thus, no claim could be made by the petitioners
as regard the properties. The only claim that
could be made by them was as regards the
refund of the monies as directed by the learned
Arbitrator. On these grounds, he submits that
the rights which have been exercised by
HUDCO, being statutory rights, the petitioners
are not entitled to the relief which is sought.
7. Sri H.C. Shivaramu, learned counsel for the
petitioner had filed the writ Petition in WP No.24022
of 2021 on behalf of Sri.Mahesh Kumar but has
chosen not to enter an appearance in this matter.
Though they were linked together and subsequently
delinked.
8. Heard Sri.P.D.Surana., learned counsel appearing for
the Petitioner, Sri.Varadaraj R.Havaldar., learned
counsel appearing for HUDCO and perused papers.
9. The points that would arise for consideration are;
1. Whether this Court, in exercise of its writ
jurisdiction, could intercede and/or
- 20 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
intervene with action taken under the
SARFAESI Act, 2002 and RDB Act, 1993?
2. Whether the respondents can be restrained
from selling the property as regards which a
Recovery Certificate has been issued by the
DRT and the Recovery Officer has taken
action?
3. What Order?
10. I answer above points are as under;
11. Answer to point No.1: Whether this Court, in
exercise of its writ jurisdiction, could intercede
and/or intervene with action taken under the
SARFAESI Act, 2002 and RDB Act, 1993?
11.1. The facts are not in dispute in as much as no
one has disputed that Sri.Mahesh Kumar and
his wife had mortgaged the property to HUDCO
and availed a loan.
11.2. What is in dispute is the transaction between
the petitioners and Sri.Mahesh Kumar in as
much as though there was an agreement of
sale entered into between the petitioner and
- 21 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
Sri.Mahesh Kumar on 11.04.2005 as per the
award of the Arbitrator, the same has been
cancelled on 23.09.2005. Of course, this aspect
is pending consideration in proceedings under
Section 34 of A & C Act, 1996.
11.3. Several submissions which have been made as
regards the proceedings under Section 9 of the
A & C Act, 1996 which had been initiated by the
petitioners against Sri.Mahesh Kumar as also
the Arbitral proceedings which had been
initiated. On the basis of Section 9 proceedings,
it is contended that, there being an order of
injunction, a mortgage could not have been
affected. On the basis of the award, it is
contended that a charge is created with regard
to the properties, and therefore, HUDCO cannot
bring the property for sale.
- 22 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
11.4. Initially, HUDCO had taken action under Section
13 of the SARFAESI Act, 2002 to enforce
security interest.
11.5. Action being taken under Section 13 for
enforcement of security interest, the only
ground for challenge in relation thereto is in
terms of Section 17 of the SARFAESI Act which
relates to applications against measures to
recover secured debts. Section 17 is
reproduced hereunder for easy reference;
17. [Application against measures to recover
secured debts.]
(1)Any person (including borrower), aggrieved by any of
the measures referred to in sub-section (4) of section 13
taken by the secured creditor or his authorised officer
under this Chapter, [may make an application alongwith
such fee, as may be prescribed,] [Substituted by the
Enforcement of Security Interest and Recovery of Debts
Laws (Amendment) Act, 2004 (30 of 2004), Section 10,
for "may prefer an appeal" (w.r.e.f. 21.6.2002).] to the
Debts Recovery Tribunal having jurisdiction in the matter
within forty-five days from the date on which such
measures had been taken:
[Provided that different fees may be prescribed for
making the application by the borrower and the person
other than the borrower.]
[Explanation. For the removal of doubts, it is hereby
declared that the communication of the reasons to the
- 23 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
borrower by the secured creditor for not having accepted
his representation or objection or the likely action of the
secured creditor at the stage of communication of reasons
to the borrower shall not entitle the person (including
borrower) to make an application to the Debts Recovery
Tribunal under this sub-section (1) of section 17.]
(1A)[ An application under sub-section (1) shall be filed
before the Debts Recovery Tribunal within the local limits
of whose jurisdiction-
(a) the cause of action, wholly or in part, arises;
(b)where the secured asset is located; or
(c)the branch or any other office of a bank or financial
institution is maintaining an account in which debt claimed
is outstanding for the time being.]
(2)[ The Debts Recovery Tribunal shall consider whether
any of the measures referred to in sub-section (4) of
section 13 taken by the secured creditor for enforcement
of security are in accordance with the provisions of this
Act and the rules made thereunder.]
(3)[ If, the Debts Recovery Tribunal, after examining the
facts and circumstances of the case and evidence
produced by the parties, comes to the conclusion that any
of the measures referred to in sub-section (4) of section
13, taken by the secured creditor are not in accordance
with the provisions of this Act and the rules made
thereunder, and require restoration of the management or
restoration of possession, of the secured assets to the
borrower or other aggrieved person, it may, by order,-
(a)declare the recourse to any one or more measures
referred to in sub-section (4) of section 13 taken by the
secured creditor as invalid; and
(b)restore the possession of secured assets or
management of secured assets to the borrower or such
other aggrieved person, who has made an application
under sub-section (1), as the case may be; and
(c)pass such other direction as it may consider
appropriate and necessary in relation to any of the
- 24 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
recourse taken by the secured creditor under sub-section
(4) of section 13.]
(4)If, the Debts Recovery Tribunal declares the recourse
taken by a secured creditor under sub-section (4) of
section 13, is in accordance with the provisions of this Act
and the rules made thereunder, then, notwithstanding
anything contained in any other law for the time being in
force, the secured creditor shall be entitled to take
recourse to one or more of the measures specified under
sub-section (4) of section 13 to recover his secured debt.
(4A)[ Where-
(i)any person, in an application under sub-section (1),
claims any tenancy or leasehold rights upon the secured
asset, the Debt Recovery Tribunal, after examining the
facts of the case and evidence produced by the parties in
relation to such claims shall, for the purposes of
enforcement of security interest, have the jurisdiction to
examine whether lease or tenancy,-
(a)has expired or stood determined; or
(b)is contrary to section 65A of the Transfer of Property
Act, 1882; or
(c)is contrary to terms of mortgage; or
(d)is created after the issuance of notice of default and
demand by the Bank under sub-section (2) of section 13
of the Act; and
(ii)the Debt Recovery Tribunal is satisfied that tenancy
right or leasehold rights claimed in secured asset falls
under the sub-clause (a) or sub-clause (b) or sub-clause
(c) or sub-clause (d) of clause (i), then notwithstanding
anything to the contrary contained in any other law for
the time being in force, the Debt Recovery Tribunal may
pass such order as it deems fit in accordance with the
provisions of this Act.]
(5)Any application made under sub-section (1) shall be
dealt with by the Debts Recovery Tribunal as expeditiously
as possible and disposed of within sixty days from the
date of such application:
- 25 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
Provided that the Debts Recovery Tribunal may, from time
to time, extend the said period for reasons to be recorded
in writing, so, however, that the total period of pendency
of the application with the Debts Recovery Tribunal, shall
not exceed four months from the date of making of such
application made under sub-section (1).
(6)If the application is not disposed of by the Debts
Recovery Tribunal within the period of four months as
specified in sub-section (5), any party to the application
may make an application, in such form as may be
prescribed, to the Appellate Tribunal for directing the
Debts Recovery Tribunal for expeditious disposal of the
application pending before the Debts Recovery Tribunal
and the Appellate Tribunal may, on such application,
make an order for expeditious disposal of the pending
application by the Debts Recovery Tribunal.
(7)Save as otherwise provided in this Act, the Debts
Recovery Tribunal shall, as far as may be, dispose of the
application in accordance with the provisions of the
Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993) and the rules made thereunder.
11.6. What has been essentially challenged in WP
No.9465 of 2015 is the sale notice which has
been issued under the SARFAESI Act. The sale
notices also being in furtherance of right
exerciseD under Section 13 of the SARFAESI
Act. The only remedy that was available to the
petitioner was to have recourse under Section
- 26 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
17 of the Act (Supra) writ petition is not a
remedy which is available.
11.7. Though the said above writ petition was filed in
the year 2015 and the matter is now being
considered, if it was only a question of
Alternate Efficacy Remedy taking into
consideration the long lapse of time this Court
could have exercised jurisdiction.
11.8. However, in view of Section 17 SARFAESI Act
this Court lacks jurisdiction. The appropriate
action that was required to be taken was one
under Section 17 of the SARFAESI Act. Thus, it
is not an issue of alternative efficacy remedy as
sought to be contended by Sri.P.D.Surana.,
learned counsel for the petitioner. What is
required to be considered is the essential lack
of jurisdiction of this Court. Though this Court
in many matters exercises its equitable
jurisdiction to enable settlement of matters for
- 27 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
the purpose of deciding a lis in respect of
actions taken under the SARFAESI Act, this
Court would not have jurisdiction to decide any
lis.
11.9. Insofar as the reliefs which have been sought
for in WP No.50267 of 2019 as regards the
proceedings to bring the property for sale in
pursuance of a recovery certificate by the
recovery officer who is an officer constituted
under the recovery of RDB, Act 1983 and it is
defined in terms of Section 2 (k) thereof.
11.10. The recovery proceedings have been initiated,
and it is the recovery officer who has sought to
bring the property for sale. The remedy in
relation thereto is in terms of Section 30 RDB,
Act. Section 30 is reproduced hereunder for
easy reference;
30. [ Appeal against the order of Recovery
Officer.
(1)Notwithstanding anything contained in section
29, any person aggrieved by an order of the
- 28 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
Recovery Officer made under this Act may, within
thirty days from the date on which a copy of the
order is issued to him, prefer an appeal to the
Tribunal.
(2)On receipt of an appeal under sub-section (1),
the Tribunal may, after giving an opportunity to the
appellant to be heard, and after making such
enquiry as it deems fit, confirm, modify or set aside
the order made by the Recovery Officer in exercise
of his powers under sections 25 to 28 (both
inclusive).]
11.11. An appeal in terms of Section 30 above an
appeal would have to be filed before the
Tribunal. That being the statutory remedy
which is available the remedy of writ petition is
not available to the petitions.
11.12. Thus, I answer point No.1 by holding that,
this Court would not have jurisdiction to
intercede and/or intervene with action
taken under the SARFAESI Act, 2002 and
RDB Act, 1993.
12. Answer to point No.2: Whether the respondents
can be restrained from selling the property as
regards which a Recovery Certificate has been
issued by the DRT and the Recovery Officer has
taken action?
- 29 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
12.1. Much of this point is already been dealt with in
answer to point No.1 above.
12.2. When the writ petitions are not maintainable
the question of this Court restraining the
recovery officer from selling the property would
not arise. The recovery certificate has been
issued, the recovery officer being appointed,
the recovery officer has undertaken necessary
action to sell the property in order to satisfy the
recovery certificate. The said actions being
taken by the recovery officer under the statute,
this Court cannot intercede and prohibit such
action on part of the recovery officer.
12.3. Insofar as the argument of the Sri.P.D.Surana.,
learned counsel for the petitioner that there is a
charge which is created in respect of the
subject properties, it would be for them to
place the claim relating to said charge before
the recovery officer in accordance with law as
- 30 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
may be permissible. Merely holding a charge
would not entitle the petitioners to come in the
way of a sale to be executed by the recovery
officer. Whether the said charge would override
the award and judgment of the DRT and what is
the effect of said charge would be considered
by the appropriate authority under the RDB,
Act.
12.4. In that view of the matter, I answer point
No.2 by holding that respondents cannot
be restrained from selling the property as
regards which a Recovery Certificate has
been issued by the DRT and the Recovery
Officer has taken action.
13. Answer to point No.3: What order?
13.1. In view of my answers to points No.1 and 2
above, I pass the following;
- 31 -
NC: 2025:KHC:26699
WP No. 9465 of 2015
C/W WP No. 50267 of 2019
HC-KAR
ORDER
i. There being no grounds being made out in
the both the petitions, both the petitions
are dismissed reserving liberty to the
petitioner to avail such remedies as may
be available including placing their claim
of a charge before the recovery officer.
SD/-
(SURAJ GOVINDARAJ)
JUDGE
SR
List No.: 1 Sl No.: 76
[ad_1]
Source link