- 1 - NC: 2025:KHC:362 WP No. 45151 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 45151 OF 2019 (GM-CPC) BETWEEN: M/S PAVAMANA CREDIT CO-OPERATIVE SOCIETY LTD., NO.51, SRIMAN MADHWA SANGHA BUILDING, 5TH MAIN ROAD, CHAMARAJPET, BANGALORE-560 018 REPRESENTED BY ITS SECRETARY, B.S.LAKSHMINARASIMHA MURTHY …PETITIONER (BY SRI. S.B.HALLUR, ADVOCATE) AND: 1. SRI HEMANTH G. RAO S/O SRI GOVINDA RAO, AGE MAJOR, 2. SMT. SUCHITRA V.K. S/O SRI HEMANTH G. RAO, AGE MAJOR, BOTH ARE R/AT NO.5/1, BANNERAGHATTA ROAD, BANGALORE-560 029 3. SRI. DEEPAK RAJ S/O SRI G.V.KISHORE RAO, AGE MAJOR, R/AT NO.74, 10TH CROSS, 1ST MAIN, BALAJINAGAR, BANGALORE-560 029 4. SRI GUDWIN S/O SRI STELLAS CASTILLO, AGE MAJOR, Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:362 WP No. 45151 of 2019 R/AT NO.41/3, 1ST MAIN, BHARATHI LAYOUT, BANGALORE-560 027 5. SRI LAKSHMI MAHILA SAHAKARA BANK NIYAMITHA, NO.3/4, "LAKSHMI SADANA" EAST ANJANEYA TEMPLE STREET, BASAVANGUDI, BENGALURU-560004 REPRESENTED BY ITS MANAGER …RESPONDENTS (BY SRI.R.ASHOK KUMAR, ADVOCATE FOR R5 NOTICE TO R1-R4 IS DISPENSED WITH) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED: 24.7.2019 PASSED BY THE XLIV ADDL. CITY CIVIL AND SESSIONS JUDGE (CCH-45) IN EX.NO.522/2016 ON IA NO.1 AND 2 MARKED AS ANNEXURE-K TO THE W.P. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI ORAL ORDER Aggrieved by the order passed in I.A.Nos.1 and 2 in Ex.No.522/2016 dated 24.07.2019 by the XLIV Additional City Civil and Sessions Judge, Bengaluru, the petitioner is before this Court. 2. The petitioner who is the decree holder has filed an application in E.P.No.522/2016 for the attachment of the residual sale proceeds to the extend of about Rs.70,00,000/- out of the sale of the property of JDR No.1 under SARFAESI Act - 3 - NC: 2025:KHC:362 WP No. 45151 of 2019 as per their Public Notice dated 14.01.2016 in the auction held on 19.02.2016. 3. The trial Court by order impugned had rejected I.A.Nos.1 and 2. While rejecting the applications, the trial Court had observed that the decree holder has not participated in the auction proceedings and since the other creditors have participated in the auction sale proceedings, the sale proceeds had been appropriated with the other creditors who were present at the time of the auction sale proceedings and also at the time of registration of sale certificate in favour of the successful bidder. The trial Court had considered the scope of Rule 46-A of CPC and observed that in order to attract the provision, the decree holder has to establish that as on the date of receipt of notice the amount belonging to the Judgement debtor was in the possession of the garnishee, whereas in the present case, as on 26.02.2016 no amount was due in the hands of garnishee which is payable to the Judgment debtor. The sale proceeds had already been appropriated with other creditors on 24.02.2016. In view of that, the garnishee cannot be called upon to pay the amount due to the Judgment debtor into the Court. The trial Court further observed that the role of - 4 - NC: 2025:KHC:362 WP No. 45151 of 2019 garnishee is very limited. If an amount is there in his hands payable to the Judgment debtor, then that amount has to be deposited by him and the Court can attach only the said amount. The Court cannot go beyond the proceeding and give finding regarding the validity of the auction sale conducted by the garnishee. If at all, the decree holder is aggrieved by the auction sale conducted by the garnishee, he ought to have challenged it before the proper forum and not by filing the execution petition before the Court. Accordingly, the trial Court had dismissed the applications. 4. Learned counsel appearing for the petitioner submits that an interim order was passed by the DRT on 17.08.2012 for conducting the auction. Then on 25.02.2013, the SA itself was dismissed for default. The execution petition is filed on 20.02.2016 and the auction was conducted on 19.02.2016. It is the submission of the learned counsel that when the main SA.No.505/2012 itself is dismissed for non-prosecution, the interim orders that are passed will also go with the petition. The day when the auction was conducted, there is no authority for the respondent/bank to conduct the auction. In spite of it, they have conducted the auction. It is the case of the petitioner - 5 - NC: 2025:KHC:362 WP No. 45151 of 2019 that as on the date when the application is filed by them, the amounts are with the respondent/bank and the trial Court ought to have passed an order. Learned counsel submits that the garnishee totally disobeyed the orders of the Court and sold the subject property under the lapsed DRT order, issued the sale certificate to the auction purchaser on 24.02.2016. It is submitted that the SARFAESI Act is not applicable to the State Cooperative Society of Karnataka State and could not have auctioned the already attached property in favour of the petitioner by the JRC way back on 18.02.2012. It is submitted that the order impugned is contrary to law and the same is liable to be set aside. 5. Notice to respondent Nos.1 to 4 was dispensed with at the risk of the petitioner. 6. Learned counsel appearing for respondent No.5 - bank submits that the trial Court had rightly dealt with the application and rightly held that there is nothing in the hands of the garnishee as on the date of order and as per Rule 46-A of CPC, the powers of the Court are very limited and the Court cannot pass any order. He submits that the Court had rightly - 6 - NC: 2025:KHC:362 WP No. 45151 of 2019 dealt with and passed an order and there are no reasons to interfere with the well considered order passed by the Court. 7. Having heard the learned counsels on either side, perused the entire material on record. The petitioner has filed the application seeking a direction to the bank to attach the residual sale proceeds of about Rs.70,00,000/- out of the sale property of JDR No.1. As rightly observed by the trial Court, as on that day, no amount is lying with the bank and all the amounts are apportioned between the creditors. Learned counsel for the petitioner is mainly stressing upon the fact that the sale that is conducted by the bank is illegal as by that day the SA filed by them is dismissed for non-prosecution and they had no authority to conduct the sale. The submissions that are made are beyond the scope of the application that is filed by the petitioner/decree holder. If at all, as rightly observed by the Court, he is aggrieved by any of the sale that is conducted by the bank and it is contrary to law, he ought to have questioned the same. Those things cannot be agitated in an application filed before the Court and the Court had rightly observed that as on the day as there is no amount lying with the bank, there cannot be an order by the Court. In the considered opinion of - 7 - NC: 2025:KHC:362 WP No. 45151 of 2019 this Court, the Court had rightly considered all the aspects and had dismissed the applications. Hence, this Court is passing the following order: ORDER i. Accordingly, the writ petition is dismissed. ii. The petitioner is at liberty to avail the appropriate remedies, if any, in accordance with law. iii. All I.As. in this writ petition shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE MEG List No.: 1 Sl No.: 50