- 1 - HC-KAR NC: 2025:KHC:20109 WP No. 9197 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 9197 OF 2025 (GM-RES) BETWEEN: PROPCARE DEVELOPERS PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT 1956 HAVING REGISTERED OFFICE AT C-5 RICH HOMES NO. 5/1 RICHMOND ROAD BANGALORE, KARNATAKA POSTAL CODE 560 025, REP BY ITS AUTHORIZED SIGNATORY. …PETITIONER (BY SRI. VANDANA P L., ADVOCATE) AND: THE INDIAN BANK STRESSED ASSETS MANAGEMENT BRANCH HAVING REGISTERED OFFICE AT NO. 10 1ST FLOOR INDIAN BANK BUILDING K G ROAD BANGALORE 009 REP BY ITS AUTHORIZED OFFICER …RESPONDENT (BY SRI.DHYAN CHINNAPPA ADV AND CHITHRA NIRMALA P., ADV FOR R1 SRI.SRINIVASA RAGHAVAN V. FOR R2) Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:20109 WP No. 9197 of 2025 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO WRIT DECLARING THAT THE ACTION OF THE RESPONDENT BANK IN PROCEEDING AGAINST THE PETITIONER COMPANY, ITS PROMOTERS, GUARANTORS, AND AGAINST THE PETITION SCHEDULE PROPERTIES UNDER THE PROVISIONS OF SARFAESI ACT IS ILLEGAL DUE TO VIOLATION OF NON- ADHERENCE SECTIONS 23, 24 AND 25 OF SARFAESI ACT AND DUE TO VIOLATION OF MORATORIUM IMPOSED BY THE SCLT CASE NO. CP IB 92/022 BY ORDER DATED 7/10/2022 IN INDIABULLS VS. SUSHIL MANTRI AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER Learned counsel for the petitioner has sought for relief in the nature of the declaration, that the action of the respondent - Bank against the petitioner-company, its promoters, guarantors and petition scheduled properties under the SARFAESI Act, is illegal and in violation of Section 23, 24 and 25 of the SARFAESI Act and also due - 3 - HC-KAR NC: 2025:KHC:20109 WP No. 9197 of 2025 to violation of moratorium imposed by the NCLT in case No.CP IB 92/2022. 2. Various contentions have been raised. Learned counsel appearing for the respondent - Bank submits that all contentions raised ought to have been raised before appropriate forum, even that the petitioner ought to have raised the contentions raised herein by taking recourse under Section 17 of the SARFAESI Act. 3. Learned Senior Counsel appearing on behalf of the respondent - Bank further submits that the interim order passed without imposing any condition has caused great prejudice, as property has been auctioned in favour of respondent no.2. 4. It is submitted that some of the items of the property has been auctioned in favour of the respondent No.2, while other properties are auctioned in favour of others. Further it is submitted on behalf of the Bank that the present petition ought not to have been entertained, - 4 - HC-KAR NC: 2025:KHC:20109 WP No. 9197 of 2025 that the petitioner ought to be relegated to take recourse to substantive remedy. 5. Learned Senior Counsel appearing for respondent no.2 submits that in terms of the auction of item bearing Survey No.107, Block IX, situated at Badamanavathakaval Village, (B.M.Kaval), Kengeri Hobli, Bengaluru South, respondent No.2 is the successful bidder and has paid 25% in terms of the auction notification. It is submitted that the petitioner is required to pay remaining amount. It is further submitted that since the possession cannot be handed over as of now in favour of the 2nd respondent, 2nd respondent may also be relieved from his obligation to pay the remaining 75% in terms of the stipulation in the auction till such time the Bank is under an order of restraint by orders of Court. 6. Heard both the sides. 7. Though learned counsel for the respondent has submitted that the interim order is extended to the - 5 - HC-KAR NC: 2025:KHC:20109 WP No. 9197 of 2025 properties that do not belong to the petitioner, learned Senior Counsel appearing for the petitioner has raised various contentions in that regard as well. As this Court is not entering into the merits of the contentions raised noticing that the petitioner has a substantive remedy under Section 17 of the SARFAESI Act, it would be appropriate to relegate the petitioner to avail of such substantive remedy which are to be decided on its merits as is permissible in law. 8. All the contentions raised require adjudication on certain factual aspects, which this Court does not intend to enter upon in the present proceedings. Accordingly, petition is disposed off. Petitioner is relegated to avail of substantive remedy before DRT as is permissible in law. All contentions of the parties are kept open, in light of the relegation of the petitioner to avail substantive remedy in order to enable the petitioner to take appropriate steps as is permissible in law. - 6 - HC-KAR NC: 2025:KHC:20109 WP No. 9197 of 2025 9. Interim order granted in the present case will be extended for a period of three weeks. On the lapse of the period of three weeks entered above, the benefits of the interim direction stands discharged. Such relief granted must not be construed to be a reflection on the merits of the matter and is a relief being extended only to enable availing of substantive remedy. 10. Needles to say that the respondent no.2 will also be relieved of complying with the auction, till the order restraint operates against the Bank. 11. Needless to say time spent before this Court will be taken note of appropriately by the DRT while taking note the aspect of limitation. Sd/- (S SUNIL DUTT YADAV) JUDGE TIN