- 1 - NC: 2025:KHC:1556-DB MFA No. 1214 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JANUARY, 2025 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL MISCELLANEOUS FIRST APPEAL NO. 1214 OF 2022 (RES) BETWEEN: SRI. G.N. MANJUNATH S/O G.C. NATARAJ AGED ABOUT 51 YEARS R/AT. No.17, KAIVALYA MARG SIDDARTH NAGAR NAZARABAD MOHALLA MYSURU CITY-570 011 …APPELLANT (BY Ms. HEENA S.A., FOR SRI. SHARATH S. GOGI, ADVOCATE) AND: 1. THE COMPETENT AUTHORITY FOR-INJAZ INTERNATIONAL AND ASSOCIATED GROUP OF COMPANIES/ REGIONAL COMMISSIONER-(REV.) BENGALURU DIVISION, BENGALURU 2ND FLOOR, BMTC COMPLEX K.H. ROAD, SHANTHI NAGAR BENGALURU-560 027 2. INJAZ INTERNATIONAL A PARTNERSHIP FIRM REP. BY MANAGING PARTNER/ DIRECTOR SUHAIL AHMED SHARIFF S/O IQBAL PASHA No.6, SRIVATSA ARECADE Digitally signed by CHANNEGOWDA PREMA Location: High Court of Karnataka - 2 - NC: 2025:KHC:1556-DB MFA No. 1214 of 2022 12TH CROSS, WILSON GARDEN BENGALURU-560 027 …RESPONDENTS (BY SRI. VEERESH R. BUDIHAL, ADVOCATE FOR R1; NOTICE TO R2 IS DISPENSED WITH V/O DATED 15.01.2025) THIS MFA IS FILED UNDER SECTION 16 OF KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL ESTABLISHMENT ACT, 2004 AGAINST THE ORDER DATED 03.12.2021 PASSED IN MISCELLANEOUS PETITION No.1072/2019 ON THE FILE OF THE XCI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE FOR KPIDFE CASES, BENGALURU, CCH-92 ALLOWING THE PETITION FILED UNDER SECTION 5(2) OF THE KPIDFE ACT-2004. THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL ORAL JUDGMENT (PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN) Heard the learned counsel appearing for the appellant as well as the learned counsel for the respondents. 2. Learned counsel for the appellant submits that the appellant is an absolute owner in possession of the subject property and that property was purchased by sale deed dated 23.05.2016. It is submitted that the sale consideration of Rs.75,00,000/- was paid by way of two demand drafts; one for - 3 - NC: 2025:KHC:1556-DB MFA No. 1214 of 2022 Rs.35,00,000/- dated 23.05.2016 and another for Rs.40,00,000/- dated 21.05.2016. 3. It is the specific case of the appellant that at the time of purchase of the property, he had contributed Rs.35,00,000/- out of his own savings and has availed loan of Rs.40,00,000/- from one Suhail Ahmad Shariff on interest at the rate of 10% per annum. It is submitted that the amount was lent by the said person in his personal capacity and that in this manner, the purchase value had been met by the appellant. It is further contended that the appellant was ready and willing to repay the loan with interest, but Suhail Ahmad Shariff refused to respond to the calls of the appellant and it was later learnt that Suhail Ahmad Shariff is the Managing Director of a Financial Establishment and he was wanted in a cheating case. It is submitted that the appellant who had been put on notice had raised all these contentions before the Special Court, but the Special Court did not consider the contention on the merits and the order impugned was passed by the Special Court. It is submitted that the Special Court failed to consider that the appellant had paid part of the sale - 4 - NC: 2025:KHC:1556-DB MFA No. 1214 of 2022 consideration from his own funds and that therefore, the order impugned is not sustainable. 4. Learned counsel appearing for the respondents on the other hand contends that though the appellant had raised the contention before the Special Court that part of the sale consideration had been paid by the appellant, there was absolutely no material whatsoever placed before the Special Court to show that any part of the sale consideration had been met by the appellant from his own funds. Further, it is contended that the property in question is 1 acre 30 guntas of land in Sathagalli village, Kasaba Hobli, Mysuru Taluk and Mysuru District and that no materials including the income tax returns had been produced by the appellant to substantiate his contention that at least part of the sale consideration had been paid from his own funds. Further, it is submitted that in the objections filed by the financial establishment before the Special Court, it was specifically stated as follows: This Respondent most respectfully submits that the Petition schedule property has been acquired on behalf of first Respondent Company for the benefit of its members in the name of the Second Respondent i.e., Sri. G N Manjunath Since the First Respondent cannot hold or acquire agricultural land directly in its - 5 - NC: 2025:KHC:1556-DB MFA No. 1214 of 2022 name. The entire sale consideration to acquire this land has been paid by the First Respondent. 5. It is further contended that the contention raised by the appellant that he is ready and willing to pay the amount which had been advanced by respondent No.2 along with the interest is also not tenable in view of the fact that there is absolutely no material before the Special Court or before this Court to show that even a penny of the amount had been paid by the appellant from his own resources. 6. Having considered the contentions advanced, we notice that it is the admitted case of the appellant that Rs.40,00,000/- of the sale consideration had been paid by respondent No.2-Financial Establishment or atleast by the Managing Director of the said Financial Establishment, who is also personally liable under the provisions of the Act. Further, we also notice that though it is contended that Rs.35,00,000/- has been raised by the appellant from his own resources, absolutely no material is available either before the Special Court or before this Court, in appeal, to hold that any amount had been expended by the appellant for purchase of property in question. - 6 - NC: 2025:KHC:1556-DB MFA No. 1214 of 2022 7. Further, it is clear that respondent No.2 had in categorical terms pleaded that the entire sale consideration for the purchase of property had in fact being paid by the Financial Establishment. In the said factual circumstances, we are of the opinion that the contentions raised by the appellant in this appeal does not deserved to be considered. We find that the decision of the Special Court is well founded inasmuch as all the contentions raised by the appellant have been considered and it has been found that there is no material to uphold the claim of the appellant. On an anxious consideration of the findings of the Special Court, we find no reason to differ. The appeal is therefore fails, the same is accordingly dismissed. The appellant, however, is permitted to withdraw an amount of Rs.40,00,000/- with interest, which has been deposited pursuant to the interim order of this Court dated 28.03.2022 on IA No.1/2022. Sd/- (ANU SIVARAMAN) JUDGE Sd/- (VIJAYKUMAR A. PATIL) JUDGE RAK,List No.: 1 Sl No.: 13