- 1 - NC: 2025:KHC:12294 WP No. 7823 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 7823 OF 2025 (GM-DRT) BETWEEN: 1. M/S. SLN GAJA INDUSTRIES A PARTNERSHIP FIRM CONSISTING OF TWO PARTNERS MR. G.LOKESH AND MRS.R.VEENA ALSO AT: M/S. SLN GAJA INDUSTRIES SY. NO.445, 453, 454, GAJA FARMS, BRAHAMANIPURA ROAD, CHAKKARE DODDI, VIBHUTHIKERE GRAMA PANCHAYAT, KAILANCH HOBLI, RAMANAGAR TALUK AND DISTRICT. 2. G. LOKESH, MAJOR, S/O LATE GANGAIAH, NO.53, 5TH CROSS, BYRASANDRA, 1ST BLOCK, EAST, JAYANAGAR, BENGALURU-560 011. …PETITIONERS (BY SRI. RAJENDRA M. A., ADV.) AND: 1. THE AUTHORISED OFFICER ARM BRANCH-II, 2ND FLOOR, CIRCLE OFFICE, SPENCER TOWERS, NO.86, MG ROAD, R Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - NC: 2025:KHC:12294 WP No. 7823 of 2025 BENGALURU-560 001. 2. SURAKSHA VENTURES LLP (AUCTION PURCHASER) REP. BY ITS PARTNER, SRI. DINESH RAMACHANDRA, REGISTERED OFFICE NO. 13, 2ND FLOOR, GREEN LEAF LAYOUT, 80 FT ROAD, 4TH BLOCK, KORAMANGALA, BANGALORE – 560034. …RESPONDENTS (BY SRI. VIGNESH S. SHETTY, ADV. FOR R1 SRI ARJUN RAO., ADV. FOR C/R2) THIS PETITION IS FIELD UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA, PRAYING TO QUASH / SET ASIDE THE IMPUGNED ORDERS PASSED BY THE DRT-I IN S.A. NO.265/2024 ON 24.02.2025 ANNX-A. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioners, the borrowers are at the doors of this Court calling in question the order passed by the Debt Recovery Tribunal-I (for short ‘the DRT’) in S.A.No.265/2024 dated 24.02.2025, by which, challenge to the auction notification of the first respondent-Bank by the petitioners comes to be turned down. - 3 - NC: 2025:KHC:12294 WP No. 7823 of 2025 2. Heard learned counsel Sri.Rajendra M.A. for petitioners, learned counsel Sri.Vignesh S. Shetty for respondent No.1 and Sri.Arjun Rao, learned counsel for respondent No.2. 3. Facts in brief, germane, are as follows: The petitioners are the borrowers; borrow finance from Canara Bank by mortgage of the scheduled properties. The averment in the petition is, all the properties mortgaged are agricultural lands. 4. The petitioner defaults in making the payment for three consecutive months. The account slips into becoming a non-performing asset (NPA) and it is declared as one, on 29.10.2018. 5. On 03.11.2018, respondent No.1 - bank issues a demand notice invoking Sub-section(2) of Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short - 4 - NC: 2025:KHC:12294 WP No. 7823 of 2025 ‘the Act’). Thus, begins the proceedings against the petitioners under the Act. The proceedings were taken forward by seeking an order of possession from the hands of the learned Magistrate. The learned Magistrate passes an order under Section 14 of the Act permitting to take physical possession of the properties on 18.09.2019. 6. This act of taking possession is challenged by the petitioners before the DRT in S.A.No.238/2020. This comes to be dismissed on 26.10.2020. Four years thereafter, respondent No.1 - bank puts up the properties for sale in terms of the auction notification dated 24.10.2024, indicating that the auction would be held on 27.11.2024. The petitioners approach the DRT challenging the notification of auction in S.A.No.265/2024. The DRT protects the interest of the petitioners on certain conditions. The conditions are not complied with. The petition gets dismissed on 24.02.2025. The Bank proceeds with the sale; confirms the sale and issues the sale certificate in favour of the successful auction - 5 - NC: 2025:KHC:12294 WP No. 7823 of 2025 purchaser on 25.02.2025, the day after the DRT rejected the application in S.A.No.265/2024. The subject petition is preferred on 11th March, 2025 long after issuance of sale certificate by the respondent-Bank in favour of successful auction purchaser. 7. Learned counsel appearing for the petitioners project a solitary circumstance. The circumstance of statutory aberration. It is violation of Section 31 of the Act. Learned counsel for the petitioners submits that the lands that are mortgaged were agricultural and would not come within the ambit of the Act for the Bank to bring the mortgaged properties to sale. He would submit that the DRT did not consider this crucial aspect that the lands were agricultural. It is therefore submitted that the petition would become entertainable at the hands of this Court. 8. Per contra, learned counsel representing respondent No.1 – Bank, Sri.Vignesh Shetty takes this Court through the objections filed and would submit that - 6 - NC: 2025:KHC:12294 WP No. 7823 of 2025 the lands were not agricultural at all. They were converted in the year 2013 itself, and a perusal at the averments in the application – S.A.No.265/2024, preferred by the petitioners themselves would indicate that the lands were already converted. Whether there is dispute with regard to the conversion or otherwise, is not within the scope of the petitioners. 9. The learned counsel Sri Arjun Rao, appearing for respondent No.2, the successful auction purchaser would contend that the writ petition is not entertainable as the remedy available to the petitioners is filing an appeal under Section 18 of the Act, as the right to redeem the properties after the issuance of the sale certificate, is lost by the borrower. Therefore, both the learned counsel in unison would seek dismissal of the petition. 10. I have given my anxious consideration to the submissions made by the learned counsel for the respective parties and have perused the material on record. - 7 - NC: 2025:KHC:12294 WP No. 7823 of 2025 11. The afore-narrated facts are not in dispute. The dates and the link in the chain of events are all a matter of record. It would suffice if the narration would commence from the date of issuance of sale notice by respondent No.1 - Bank against the petitioners. The sale notice is issued on 24.10.2024 seeking to auction the properties on 27.11.2024. The petitioners approach the DRT in S.A.No.265/2024 challenging the said notice of auction. The DRT in terms of its order dated 25.02.2025, rejects the petition. While so rejecting, considers the submission that is projected before this Court by the petitioners. This is discernable at the perusal of the issues framed by the DRT. The issues so framed and the answers rendered thereon, read as follows: “(ii) Whether the property against which the measures are initiated is exempted under S.31(i) of the act? 14. The applicant contends that, the property is purely an agriculture land and the measures are taken under S.31(i) of the act. At the first outset itself this contention cannot be accepted in view of the fact that, if the applicant - 8 - NC: 2025:KHC:12294 WP No. 7823 of 2025 is having the case that the property is agriculture, the same could and ought to have been raised at the first point of time when the S.A.No.238/2020 was filed. Having challenged the measures leading to the possession notice and failed therein, now the applicant cannot seek to revisit the legality of the measures contending that the property falls within exempted categorically as the same is agriculture land. 15. Even otherwise, a mere narration of the property by the valuer as fit to be agricultural in the valuation report is not sufficient to hold that the nature of the property is agricultural one. The applicant had also produced the non-conversion of land certificate in respect of the land which according to the applicant is issued by the competent authority. It is settled that, the description of the property in the revenue records or attending documents as agriculture or commercial land is totally irrelevant as to decide as to whether the measures are rightly taken under the S.31(i) of the act. The only a question that needs to look into is as the nature of the property at the time of creation of security interest. What is prohibited under as per S.31(i) of the act, is the measures taken against "security interest created on agriculture property". Hence, in order to substantiate the contention as to the measures are hit by the S.31(i) of the act, the applicant should prove with tangible evidence that at the time of creation of security interest, the property was put for agricultural purpose. Moreover, it is settled that, the purpose for which the property was put to use is relevant and not the nature of the property. The applicant being not able to prove the conduct of any agriculture activity in the property at the time of creation of security interest cannot seek to revisit the issue which is already gone into and settled In SA.No.238/2020. Admittedly, the plant is already set up in the schedule property, which also leads to - 9 - NC: 2025:KHC:12294 WP No. 7823 of 2025 presumption of the property is not intended to be used for agricultural purposes or at least not to be used for predominantly for agricultural purpose. 16. In view of the fact, this Tribunal is satisfied that there is no basis in the contention that the property is agriculture one and the measures are hit under S.31(i) of the act, this issue is also to be decided against the applicant. 17. In view of the findings entered in respect of Issue No.I & II, this Tribunal is satisfied that there is no merit in the SA and SA is liable to be dismissed. In the result, SA.No.265/2024 stands dismissed. Interim order granted if any stands vacated. Pending IA/s if any are disposed of. No order as to cost.” (Emphasis added) Based upon the issues so framed, the DRT holds that there is no evidence produced by the petitioners to demonstrate that the lands were agricultural and agricultural activities continue to take place in the said properties, notwithstanding the fact of conversion of the lands and therefore, the DRT has rejected the petition. - 10 - NC: 2025:KHC:12294 WP No. 7823 of 2025 12. If the rejection of the petition by the DRT was without hearing the petitioners or ignoring of any statutory aberration, it would have been altogether a different circumstance. The rejection is on its merit. If rejection is on the merit of the matter, the submissions of the learned counsel for petitioners would be in the realm of seriously disputed questions of fact as whether the properties were agricultural or otherwise. Though the learned counsel for respondent No.1 – bank and the auction purchaser would prima facie demonstrate that the lands were already converted but the submission of the learned counsel for petitioners is that, the agricultural activities are still taking place, despite conversion. This is again, a seriously disputed questions of fact. 13. The Apex Court interpreting Section 31(i) of the Act, with regard to exemption on the agricultural lands being brought to sale, in the case of INDIAN BANK AND ANOTHER VS. K. PAPPIREDDIYAR AND ANOTHER reported in (2018) 18 SCC 252, has held as follows: - 11 - NC: 2025:KHC:12294 WP No. 7823 of 2025 “8. The expression “security interest”, both before and after the amendment, excludes what is specified in Section 31. Clause (i) of Section 31 stipulates that the provisions of the Act will not be applicable to any security interest created in agricultural land. The statutory dictionary in Section 2 does not contain a definition of the expression “agricultural land”. Whether a particular piece of land is agricultural in nature is a question of fact. In the decision of this Court in Blue Coast Hotels Ltd. [ITC Ltd. v. Blue Coast Hotels Ltd., 2018 SCC OnLine SC 237], a security interest was created in respect of several parcels of land which were meant to be a part of a single unit, for establishing a hotel in Goa. Some of the parcels were purchased by the debtor from agriculturists and were entered as agricultural lands in the revenue records. The debtor had applied to the revenue authority for the conversion of the land to non-agricultural use, but the applications were pending. This Court held that the fact that the debtor had created a security interest was indicative of the position that the parties did not treat the land as agricultural land. The undisputed position was that the hotel was located on 1,82,225 sq. m. of land of which 2335 sq m were used for growing vegetables and fruits for captive consumption. In this background, the two-Judge Bench of this Court held that: “49. The mortgage is thus intended to cover the entire property of the Goa Hotel. Prima facie, apart from the fact that the parties themselves understood that the lands in question are not agricultural, it also appears that having regard to the use to which they are put and the purpose of such use, they are indeed not agricultural.” The Court further held that : (SCC OnLine SC para 57) “57. … having regard to the character of the land and the purpose for which it is set apart, we are of the view that the land in question is not an agricultural land. The High Court misdirected [Blue - 12 - NC: 2025:KHC:12294 WP No. 7823 of 2025 Coast Hotels Ltd. v. IFCI Ltd., 2016 SCC OnLine Bom 2663] itself in holding that the land was an agricultural land merely because it stood as such in the revenue entries, even though the application made for such conversation lies pending till date.” 9. The classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the SARFAESI Act does or does not apply. Whether a parcel of land is agricultural must be deduced as a matter of fact from the nature of the land, the use to which it was being put on the date of the creation of the security interest and the purpose for which it was set apart. 10. The Division Bench of the Madras High Court has failed to adjudicate on the basic issue as to whether the land in respect of which the security interest was created, was agricultural in nature. DRT rejected the objection of the debtor that the land was agricultural. In appeal, DRAT reversed that finding. Apart from referring to the position in law, the impugned judgment [A. Akthar Hussain v. K. Pappireddiyar, 2016 SCC OnLine Mad 1838 : AIR 2016 Mad 114] of the High Court contains no discussion of the material which was relied upon by the parties in support of their respective cases; the Bank urging that the land was not agricultural while the debtor urged that it was. Both having regard to the two- Judge Bench decision in Blue Coast Hotels Ltd. [ITC Ltd. v. Blue Coast Hotels Ltd., 2018 SCC OnLine SC 237] and as explained above, the question as to whether the land is agricultural has to be determined on the basis of the totality of facts and circumstances including the nature and character of the land, the use to which it was put and the purpose and intent of the parties on the date on which the security interest was created. In the absence of a specific finding, we are of the view that it would be appropriate and - 13 - NC: 2025:KHC:12294 WP No. 7823 of 2025 proper to set aside the judgment of the High Court and to remit the proceedings for being considered afresh.” (Emphasis supplied) The Apex Court again following the afore-quoted judgment, in the case of K. SREEDHAR V. RAUS CONSTRUCTIONS (P) LTD., reported in (2023) 11 SCC 169, has held as follows: “35. The view taken by the High Court is just contrary to the two decisions of this Court in Blue Coast Hotels [ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99 : (2018) 4 SCC (Civ) 793] and K. Pappireddiyar [Indian Bank v. K. Pappireddiyar, (2018) 18 SCC 252 : (2019) 3 SCC (Civ) 166] . In both the aforesaid decisions, this Court has specifically observed and held after considering the object and purpose of Section 31(i) of the SARFAESI Act that merely because in the revenue records the secured properties are shown as agricultural land is not sufficient to attract Section 31(i) of the SARFAESI Act. In the aforesaid decision, it is specifically observed and held that for the purpose of attracting Section 31(i) of the SARFAESI Act, the properties in question ought to be actually used as agricultural lands at the time when the security interest was created. 36. In Blue Coast Hotels [ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99 : (2018) 4 SCC (Civ) 793] , it is also further observed by this Court that since no security interest can be created in respect of agricultural lands and yet it was so created, goes to show that the parties did not treat the land as agricultural land and that the debtor offered the land as security on this basis. - 14 - NC: 2025:KHC:12294 WP No. 7823 of 2025 37. After following the decision of this Court in Blue Coast Hotels [ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99 : (2018) 4 SCC (Civ) 793] , in K. Pappireddiyar [Indian Bank v. K. Pappireddiyar, (2018) 18 SCC 252 : (2019) 3 SCC (Civ) 166] , it is observed and held in paras 8 and 9 as under : (K. Pappireddiyar case [Indian Bank v. K. Pappireddiyar, (2018) 18 SCC 252 : (2019) 3 SCC (Civ) 166] , SCC pp. 255-56) “8. The expression “security interest”, both before and after the amendment, excludes what is specified in Section 31. Clause (i) of Section 31 stipulates that the provisions of the Act will not be applicable to any security interest created in agricultural land. The statutory dictionary in Section 2 does not contain a definition of the expression “agricultural land”. Whether a particular piece of land is agricultural in nature is a question of fact. In the decision of this Court in Blue Coast Hotels [ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99 : (2018) 4 SCC (Civ) 793] , a security interest was created in respect of several parcels of land which were meant to be a part of a single unit, for establishing a hotel in Goa. Some of the parcels were purchased by the debtor from agriculturists and were entered as agricultural lands in the revenue records. The debtor had applied to the revenue authority for the conversion of the land to non-agricultural use, but the applications were pending. This Court held that the fact that the debtor had created a security interest was indicative of the position that the parties did not treat the land as agricultural land. The undisputed position was that the hotel was located on 1,82,225 sq m of land of which 2335 sq m were used for growing vegetables and fruits for captive consumption. In this background, the two-Judge Bench of this Court held that : (SCC p. 121, para 39) ‘39. … The mortgage is thus intended to cover the entire property of the Goa Hotel. Prima facie, apart from the fact that the - 15 - NC: 2025:KHC:12294 WP No. 7823 of 2025 parties themselves understood that the lands in question are not agricultural, it also appears that having regard to the use to which they are put and the purpose of such use, they are indeed not agricultural.’ The Court further held that : (SCC p. 123, para 42) ‘42. … having regard to the character of the land the purpose for which it is set apart, we are of the view that the land in question is not an agricultural land. The High Court misdirected [Blue Coast Hotels Ltd. v. IFCI Ltd., 2016 SCC OnLine Bom 2663] itself in holding that the land was an agricultural land merely because it stood as such in the revenue entries, even though the application made for such conversation lies pending till date.’ 9. The classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the SARFAESI Act does or does not apply. Whether a parcel of land is agricultural must be deduced as a matter of fact from the nature of the land, the use to which it was being put on the date of the creation of the security interest and the purpose for which it was set apart.” 38. The purpose of enacting Section 31(i) of the SARFAESI Act has been considered by this Court in Blue Coast Hotels [ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99 : (2018) 4 SCC (Civ) 793] in para 36, which reads as under : (SCC p. 120) “36. The purpose of enacting Section 31(i) and the meaning of the term “agricultural land” assume significance. This provision, like many others is intended to protect agricultural land held for agricultural purposes by agriculturists from the extraordinary provisions of this Act, which provides for - 16 - NC: 2025:KHC:12294 WP No. 7823 of 2025 enforcement of security interest without intervention of the Court. The plain intention of the provision is to exempt agricultural land from the provisions of the Act. In other words, the creditor cannot enforce any security interest created in his favour without intervention of the court or tribunal, if such security interest is in respect of agricultural land. The exemption thus protects agriculturists from losing their source of livelihood and income i.e. the agricultural land, under the drastic provision of the Act. It is also intended to deter the creation of security interest over agricultural land as defined in Section 2(1)(zf) [Per S.A. Bobde, J. — In ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99 : (2018) 4 SCC (Civ) 793 : (SCC p. 120, para 36)“2. (1)(zf) “security interest” means right, title or interest of any kind, other than those specified in Section 31, upon property created in favour of any secured creditor and includes—(i) any mortgage, charge, hypothecation, assignment or any right, title or interest of any kind, on tangible asset, retained by the secured creditor as an owner of the property, given on hire or financial lease or conditional sale or under any other contract which secures the obligation to pay any unpaid portion of the purchase price of the asset or an obligation incurred or credit provided to enable the borrower to acquire the tangible asset; or(ii) such right, title or interest in any intangible asset or assignment or licence of such intangible asset which secures the obligation to pay any unpaid portion of the purchase price of the intangible asset or the obligation incurred or any credit provided to enable the borrower to acquire the intangible asset or licence of intangible asset;”] . Thus, security - 17 - NC: 2025:KHC:12294 WP No. 7823 of 2025 interest cannot be created in respect of property specified in Section 31.” Xxxxxx 40. The High Court has also materially erred in shifting the burden upon the secured creditor to prove that the properties were not non-agricultural lands or have been put to non-agricultural use. When it was the case on behalf of the borrowers that in view of Section 31(i) of the SARFAESI Act, the properties were agricultural lands, the same were being exempted from the provisions of the SARFAESI Act, the burden was upon the borrower to prove that the secured properties were agricultural lands and actually being used as agricultural lands and/or agricultural activities were going on. Therefore, the High Court has materially erred in shifting the burden upon the secured creditor to prove that the properties are non- agricultural lands or have been put to non- agricultural use.” (Emphasis supplied) In the light of the law as laid down by the Apex Court in the afore-quoted judgments, the question whether the mortgaged lands are agricultural or otherwise, depends on the evidence. The Apex Court holds that the High Court has erred in shifting the burden on the secured creditor to prove that the lands were not agricultural and the lands were put to use for non- agricultural activities. It is held that the burden was on - 18 - NC: 2025:KHC:12294 WP No. 7823 of 2025 the borrower. The borrower in the case at hand has failed to discharge, is what the DRT has held as there was no evidence produced before the DRT. Therefore, on these seriously disputed questions of fact, this Court would not entertain the petition in exercise of its jurisdiction under Article 226 of the Constitution of India. It is for the petitioners to avail of the remedy by filing an appeal under Section 18 of the Act before the Tribunal against a proceeding that is terminated by the DRT, on its merit. 14. The other aspect is with regard to the entertainability of the petition after the sale certificate is issued to the auction purchaser. Noticing few dates are of significance. The accounts of the petitioner is declared to be a NPA on 29.10.2018; order of possession is granted on 18.09.2019; this is challenged before the DRT in S.A.No.238/2020 and this comes to be dismissed on 26.10.2020; the properties are put to auction by a sale notice on 24.10.2024; this is again challenged by the - 19 - NC: 2025:KHC:12294 WP No. 7823 of 2025 petitioners in S.A.No.265/2024; this is dismissed on 24.02.2025 and after the dismissal, sale certificate is also issued in favour of the auction purchaser. The subject petition is preferred on 11.03.2025, which would be after the issuance of the sale certificate. In such circumstance, the petition would not become entertainable before this Court in exercise of its jurisdiction under Article 226 of the Constitution of India, as held by the Apex Court in the case of CELIR LLP v/s BAFNA MOTORS (MUMBAI) PRIVATE LIMITED AND OTHERS reported in (2024)2 SCC 1 has held that once the sale notice is issued and the right to redeem the property by the borrower is lost. The Hon’ble Apex Court has held as follows: “97. This Court has time and again, reminded the High Courts that they should not entertain petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person under the provisions of the SARFAESI Act. This Court in Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] made the following observations : (SCC pp. 123 & 128, paras 43-45 & 55) “43. Unfortunately, the High Court [Satyawati Tondon v. State of U.P., 2009 SCC OnLine All 2608] overlooked the settled law that the High - 20 - NC: 2025:KHC:12294 WP No. 7823 of 2025 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 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 - 21 - NC: 2025:KHC:12294 WP No. 7823 of 2025 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 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.” 98. In CIT v. Chhabil Dass Agarwal [CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603] , this Court in para 15 made the following observations : (SCC p. 611, para 15) “15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case [Thansingh Nathmal v. Supdt. of Taxes, 1964 SCC OnLine SC 13] , Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131] and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is - 22 - NC: 2025:KHC:12294 WP No. 7823 of 2025 created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.” 99. In Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345 : (2022) 3 SCC (Civ) 153] , it was observed as under : (SCC pp. 359-61, paras 18 & 21) “18. Even otherwise, it is required to be noted that a writ petition against the private financial institution — ARC — the appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lent the money to the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable. Therefore, decisions of this Court in Praga Tools Corpn. [Praga Tools Corpn. v. C.A. Imanual, (1969) 1 SCC 585] and Ramesh Ahluwalia [Ramesh Ahluwalia v. State of Punjab, (2012) 12 SCC 331 : (2013) 3 SCC (L&S) 456 : 4 SCEC 715] relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers. *************** 21. Applying the law laid down by this Court in Mathew K.C. [State Bank of Travancore v. Mathew - 23 - NC: 2025:KHC:12294 WP No. 7823 of 2025 K.C., (2018) 3 SCC 85 : (2018) 2 SCC (Civ) 41] to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the court. The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13-8-2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs 1 crore only (in all Rs 3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs 117 crores. The ad interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of court. It appears that the High Court has initially granted an ex parte ad interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.” 100. In Varimadugu Obi Reddy [Varimadugu Obi Reddy v. B. Sreenivasulu, (2023) 2 SCC 168 : (2023) 1 SCC (Civ) 58] , it was held as under : (SCC p. 183, para 36) - 24 - NC: 2025:KHC:12294 WP No. 7823 of 2025 “36. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the SARFAESI Act, 2002, but the order of the Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of pre-deposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under the second proviso to Section 18 of the 2002 Act.” 101. More than a decade back, this Court had expressed serious concern despite its repeated pronouncements in regard to the High Courts ignoring the availability of statutory remedies under the RDBFI Act and the SARFAESI Act and exercise of jurisdiction under Article 226 of the Constitution. Even after, the decision of this Court in Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] , it appears that the High Courts have continued to exercise its writ jurisdiction under Article 226 ignoring the statutory remedies under the RDBFI Act and the SARFAESI Act. (Emphasis supplied) The Hon’ble Apex Court in the later judgment in the case of PHR INVENT EDUCATIONAL SOCIETY v/s UCO BANK AND OTHERS reported in (2024) 6 SCC 579 has held as follows: - 25 - NC: 2025:KHC:12294 WP No. 7823 of 2025 “22. The law with regard to entertaining a petition under Article 226 of the Constitution in case of availability of alternative remedy is well settled. In Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260 : 2010 INSC 428] , this Court observed thus : (SCC p. 123, paras 43-45) “43. Unfortunately, the High Court [Satyawati Tondon v. State of U.P., 2009 SCC OnLine All 2608] 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 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 - 26 - NC: 2025:KHC:12294 WP No. 7823 of 2025 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.” 23. It could thus be seen that, this Court has clearly held 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. It has been held 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. The Court clearly observed that, 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. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court - 27 - NC: 2025:KHC:12294 WP No. 7823 of 2025 should entertain a petition filed under Article 226 of the Constitution. 24. The view taken by this Court has been followed in Agarwal Tracom (P) Ltd. v. Punjab National Bank [Agarwal Tracom (P) Ltd. v. Punjab National Bank, (2018) 1 SCC 626 : (2018) 1 SCC (Civ) 425 : 2017 INSC 1146] . 25. In State Bank of Travancore v. Mathew K.C. [State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85 : (2018) 2 SCC (Civ) 41 : 2018 INSC 71] , this Court was considering an appeal against an interim order passed by the High Court in a writ petition under Article 226 of the Constitution staying further proceedings at the stage of Section 13(4) of the SARFAESI Act. After considering various judgments rendered by this Court, the Court observed thus : (SCC p. 94, para 16) “16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter-affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference.” 26. The same position was again reiterated by this Court in Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345 : (2022) 3 SCC (Civ) 153 : 2022 INSC 44] . 27. Again, in Varimadugu Obi Reddy v. B. Sreenivasulu [Varimadugu Obi Reddy v. B. Sreenivasulu, (2023) 2 SCC 168 : (2023) 1 SCC (Civ) 58 : 2022 INSC 1207] , after referring to earlier judgments, this Court observed thus : (SCC pp. 181-82, para 34) - 28 - NC: 2025:KHC:12294 WP No. 7823 of 2025 “34. The order of the Tribunal dated 1.8.2019 was an appealable order under Section 18 of the SARFAESI Act, 2002 and in the ordinary course of business, the borrowers/person aggrieved was supposed to avail the statutory remedy of appeal which the law provides under Section 18 of the SARFAESI Act, 2002. In the absence of efficacious alternative remedy being availed, there was no reasonable justification tendered by the respondent borrowers in approaching the High Court and filing writ application assailing order of the Tribunal dated 1-8-2019 under its jurisdiction under Article 226 of the Constitution without exhausting the statutory right of appeal available at its command.” 28. It could thus be seen that this Court has strongly deprecated the practice of entertaining writ petitions in such matters. 29. Recently, in Celir LLP [Celir LLP v. Bafna Motors (Mumbai) (P) Ltd., (2024) 2 SCC 1 : (2024) 1 SCC (Civ) 62 : 2023 INSC 838] , after surveying various judgments of this Court, the Court observed thus : (SCC p. 81, para 101) “101. More than a decade back, this Court had expressed serious concern despite its repeated pronouncements in regard to the High Courts ignoring the availability of statutory remedies under the RDBFI Act and the SARFAESI Act and exercise of jurisdiction under Article 226 of the Constitution. Even after the decision of this Court in Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260 : 2010 INSC 428] , it appears that the High Courts have continued to exercise its writ jurisdiction under Article 226 ignoring the statutory remedies under the RDBFI Act and the SARFAESI Act.” 30. It can thus be seen that it is more than a settled legal position of law that in such matters, the High Court should not entertain a petition under Article 226 of the Constitution particularly - 29 - NC: 2025:KHC:12294 WP No. 7823 of 2025 when an alternative statutory remedy is available.” (Emphasis supplied) In the light of the unequivocal fact of the sale certificate is issued in favour of the auction purchaser, the petition would not become entertainable, unless there is gross statutory aberration projected. What is projected in the case at hand is violation of Section 31 of the Act. The petitioners have to discharge their burden of proving that the properties mortgaged were agricultural lands, not before this Court, but before the Appellate Court for having failed to establish before the DRT. 15. Finding no merit to entertain the petition, the petition stands dismissed, leaving open to the petitioners to avail of the remedy of filing an appeal, before the Debts Recovery Appellate Tribunal, if they so desire. In the event, the petitioners chose to file an appeal within 30 days from the date on which the order is uploaded on the website of the High Court, the period - 30 - NC: 2025:KHC:12294 WP No. 7823 of 2025 spent before this Court, after 11.03.2025, the day on which the petition is preferred, shall not be taken for the purpose of computation of limitation in filing an appeal before the Debts Recovery Appellate Tribunal. Ordered accordingly. Sd/- (M.NAGAPRASANNA) JUDGE MPK CT:bms List No.: 1 Sl No.: 55