Writ Petition No. 25200 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 25200 OF 2024 (GM-RES) BETWEEN: 1. M/S ASWANI PROPERTIES INDIA PVT LTD NO 50/7, 2ND AND 3RD FLOOR, 39TH CROSS, 16TH MAIN, 4TH T BLOCK, JAYANAGARA BENGALURU - 560 041 REP BY ITS AUTHORIZED PERSON AND ADDITIONAL DIRECTOR MR NARESH BABU (BY SRI. SHRIDHARA K., ADVOCATE) AND: 1. BAJAJ HOUSING FINANCE LIMITED BRANCH OFFICE AT: NO. 801 TO 805, 8TH FLOOR, PRESTIGE TOWERS, RESIDENCY ROAD, BENGALURU - 560 025 REGISTERED OFFICE AT: MUMBAI - PUNE ROAD, AKURDI, PUNE, MAHARASHTRA - 411 035 Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA … PETITIONER - 2 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR REPRESENTED BY ITS AUTHORIZED OFFICER … RESPONDENT
Legal Reasoning
(BY SRI. VIKRAM HUILGOL, SENIOR ADVOCATE FOR SRI KARTHIK.N., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE AUCTION PROCEEDINGS INITIATED BY THE RESPONDENT AS PER ANNEXURE-H IN RELATION TO THE SCHEDULE PROPERTY, BY ISSUING AN APPROPRIATE WRIT, ORDER OR DIRECTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA AND ETC. THIS PETITION COMING ON FOR FRESH MATTERS LIST THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER Petitioner has called in question the validity of the auction proceedings initiated by the respondent - Bank at Annexure-H in relation to the schedule property. Petitioner has also sought for a direction to the respondent - Bank to formalise one time settlement agreement in writing and permit the petitioner to deposit an amount of Rs.9 crore within 6 months. Further relief is also sought to restrain the respondent from taking any steps to auction the - 3 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR schedule property till finalisation of one time settlement offer. 2. Various contentions have been raised by the petitioner. Petitioner also states that their offer under one time settlement was a matter of consideration before the respondent - Bank. It is also submitted that demand draft of Rs.3 crore has been made over to the respondent - Bank. It is also submitted that their offer under OTS scheme has been rejected only due to the pendency of the petition despite they having made various offers increasing the amount mentioned in the earlier offer. It is asserted that their offer under the OTS scheme has been increased from Rs.8 crore to Rs.10 crore, despite which respondent - Bank has rejected such offer which is an arbitrary action. 3. Sri. Vikram Huilgol, learned Senior Counsel appearing for respondent submits that the question of maintainability of the writ as against a Non-Banking Financial Company (NBFC), is a matter that also requires - 4 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR to be gone into as the NBFC cannot be stated to be State under Article 12 of the Constitution of India. Reliance is placed on the judgment of the Apex Court in the case of S. Shobha v. Muthoot Finance Limited in Special Leave Petition No. 2625-2627/2025. 4. A memo is filed by the respondent along with the communication by email dated 04.06.2025, whereby the OTS offered by the petitioner has been rejected. 5. Heard both sides. 6. It must be noticed that this Court is bound to abide by the directions of the Apex Court passed in several matters for entertaining writ petitions arising out of the proceedings under the SARFAESI Act. 7. It is relevant to take note of the observations of the Apex Court in the case of Union 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 - 5 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR 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 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 - 6 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR 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 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 - 7 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR 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." 8. In light of the observations made by the Apex Court, it can be noticed that several factual contentions raised by the petitioner are the matters that cannot be adjudicated in the present proceedings. 9. 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. 10. 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 three weeks from today. The interim protection granted under this order is only to enable the petitioner to avail of the - 8 - NC: 2025:KHC:20177 WP No. 25200 of 2024 HC-KAR 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 above. 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. The demand draft for Rs.3 crore is handed back to the learned counsel for petitioner by the learned counsel for respondent - Bank.
Decision
Writ petition is disposed off accordingly. Sd/- (S SUNIL DUTT YADAV) JUDGE VP