Writ Petition No. 21694 of 2024 · Karnataka High Court · 2025

5. SRI RAJAT GUPTA S/O B S GUPTA AGED ABOUT 60 YEARS FLAT 1 CD ASCOT APPTS 6TH MAIN, DEFENCE INDIRA NAGAR BANGALORE - 560 038

6. MRS K S SHARADAMBA W/O MR SHIVARUDRAIAH AGED ABOUT 72 YEARS NO. 816/450, SAMSKRUTI 11TH CROSS, MALLESHWARAM VYALIKAVAL BANGALORE NORTH BANGALORE - 3 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR MALLESHWARAM KARNATAKA - 560 003

7. M/S ATREYA RESORTS FOR TRADITIONAL HEALING PVT LTD REGISTERED UNDER THE COMPANIES ACT, 1956 NO.3367/A, 13TH MAIN 8TH CROSS, HAL 2ND STAGE NATIONAL PUBLIC SCHOOL BANGALORE - 560 008 BY ITS MANAGING DIRECTOR DR PRASHANTH S

8. MRS K C NETHRAVATHY D/O MR CHANDRASHEKARIAH AGED ABOUT 52 YEARS NO 816/50, NEW 816/77 OLD 11TH CROSS VYALIKAVAL MALLESHWARAM BANGALORE NORTH - 560 003

9. MR. GIRISH S/O MR SHIVARUDRAIAH AGED ABOUT 54 YEARS NO.816/77, SAMSRKUTHI 11TH CROSS, VYALIKAVAL BANGALORE - 560 003 (BY SRI. K.G. RAGHAVAN, SENIOR ADVOCATE FOR SRI MURALI MOHAN C., ADVOCATE) … PETITIONERS AND:

1. CITY UNION BANK LIMITED CREDIT RECOVERY AND - 4 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR MANAGEMENT DEPARTMENT "NARAYANA" ADMINISTRATIVE OFFICE NO.24-B, GANDHI NAGAR KUMBAKONAM - 612 001

2. CITY UNION BANK OFFICE AT: 194, GROUND FLOOR 7TH CROSS, BINNAMANGALA 1ST STAGE, INDIRANAGAR BENGALURU - 560 038 (BY SRI. VINAY SWAMY C., ADVOCATE) … RESPONDENTS THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF MANDAMUS AND NOT TO EVICT THE PETITIONERS FROM THE SCHEDULED PROPERTIES AND QUASH THE DEMAND NOTICE DTD. 24.04.2024 AT ANNEXURE-C1, PUBLIC NOTICE DTD. 01.08.2024 AT ANNEXURE-D. ALSO POSSESSION NOTICE DTD. 01.08.2024 AT ANNEXURE-D1 AND ETC. THIS PETITION COMING ON IN THE FRESH MATTERS LIST THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER The petitioner has sought for setting aside of the Demand Notice at Annexure-D. The petitioner has also challenged the validity of the possession notice dated 01.08.2024. Certain other reliefs including challenge to the same notice dated

27.08.2024 has been made. - 5 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR

2. Various other contentions have been raised by the petitioner including that the provisions of MSME Act provides for separate procedure to be followed without which the respondent-Bank having treated the loan account of the petitioner as NPA and proceeding further does not arise.

3. Learned Counsel appearing for the respondent-Bank would submit that sale notice could not be taken to logical end and a memo is filed to that effect.

4. If that were to be so, the question of entering into the validity of sale notice does not arise. Insofar as contention raised regarding validity of the possession notice, in light of the contention that the petitioner is entitled for reliefs on the basis that petitioner is MSME is a mixed question of law and facts.

5. Learned counsel for petitioner submits that such aspect of the matter ought not to be decided in writ proceedings and may be relegated to the Debt Recovery Tribunal and appropriate action to be taken by the petitioner under Section 17 of the SARFAESI Act. - 6 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR

6. In light of the contentions raised it is relevant to take note of the observations of the Apex Court in the case of United Bank of India v. Satyawati Tondon and Others - (2010) 8 SCC 110 that the appropriate remedy would be to relegate the petitioner to seek for substantive remedy before the Debt Recovery Tribunal. The relevant observations of the Apex Court are as follows: "43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi- judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the - 7 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.

44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.

45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the - 8 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR particular legislation contains a detailed mechanism for redressal of his grievance.

55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the Sarfaesi Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection."

7. In light of the observations made by the Apex Court, it can be noticed that several factual contention raised by the petitioner are the matters that cannot be adjudicated in the present proceedings.

8. Accordingly, the petition is disposed off relegating the petitioner to avail of the substantive remedy as regards the impugned proceedings. All contentions of both the sides are kept open. - 9 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR

9. In light of disposal of writ petition, it would meet the ends of justice by directing the respondent- bank not to take any precipitative steps for a period of two weeks from today.

10. The interim protection granted under this order is only to enable the petitioner to avail of his substantive remedy and must not be considered to be an order passed on the basis of adjudication on merits. Upon the lapse of the time stipulated, the protection granted would cease to operate and the authorities before whom petitioner may approach are to look at the matter afresh uninfluenced by the observations made herein.

11. Needless to state that while considering the aspect of limitation, in the event the proceedings are instituted before the DRT, time spent before this Court may be taken note of appropriately.

12. In the event of petitioner taking recourse to substantive remedy and seeking appropriate relief before the DRT in the proceedings that is seized off by the DRT, at the - 10 - NC: 2025:KHC:25825 WP No. 21694 of 2024 HC-KAR outset, the question of petitioner availing the benefit as MSME Unit is to be decided before proceeding further. Sd/- (S SUNIL DUTT YADAV) JUDGE NP