- 1 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 35007 OF 2024 (GM-RES) BETWEEN: 1. ARYA BUILDING SOLUTIONS A PROPRIETORSHIP CONCERN NO. 105, I FLOOR, SUPRABATH, BEJAI KAPIKAD ROAD, MANGALURU 575 004 REPRSENTED BY ITS PROPRIETOR MR. A. ABHIJITH HEGDE …PETITIONER (BY SRI. RAKESH B BHATT., ADVOCATE) AND: 1. CANARA BANK ARM BRANCH, CIRCLE OFFICE BUILDING BALMATTA ROAD, MANGALURU 575001 REPRESENTED THROUGH ITS AUTHORIZED OFFICER 2. MR. GODFREY MENEZES R S/O R RAJU #2-9-727/16(1) BEJAI NEW ROAD SANKAI GUDDA, MANGALORE-575004 …RESPONDENTS (BY SRI. VIGNESH SHETTY., ADVOCATE FOR C/R-1; SRI. ARJUN RAO., ADVOCATE FOR R-2) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA., PRAYING TO QUASH THE SALE CERTIFICATE DTD. 11.12.2024 ISSUED BY THE R-1 BANK (ANNX-E) IN THE INTEREST OF JUSTICE AND EQUITY, ETC. Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER Petitioner has sought for issuance of writ of certiorari to set aside the sale certificate dated 11.12.2024 issued by the 1st respondent - Bank at Annexure-E. Petitioner has also sought for other relief including issuance of a direction to the 1st respondent - Bank to permit the petitioner to redeem the auctioned property by receiving the bid amount quoted by the 2nd respondent. 2. During the pendency of the writ petition, the petitioner has filed I.A.3/2025 seeking for issuance of writ of certiorari to set aside the certificate of sale for the movable property dated 23.01.2025 issued by respondent No. 1. In light of the subsequent events, it is pleaded that the said application be considered. - 3 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 3. I.A.3/2025 is considered and allowed in light of the averments made. Necessary amendments to be carried out. 4. Various contentions have been raised by the petitioner including that he has deposited a sum of Rs.1 crore in two installments in terms of the interim order with a delay of 8 days without adhering to the timeline fixed by the Court. The other contentions raised by the petitioner in the present proceedings including regarding the hurried action of the bank in putting the property to sale and the undervaluation of the property. 5. Learned counsel for the respondent - Bank has relied on the order passed in W.P. No.29918/2024 and submits that the Court had taken note of the deposit of Rs.1 crore referred to by the petitioner but had relegated the petitioner to challenge the sale certificate issued in favour of the auction purchaser. - 4 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 6. Learned counsel for the respondent - Bank submits that even otherwise the substantive remedy for the petitioner is always under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal. 7. Learned counsel appearing for the 2nd respondent would submit that the right of redemption is lost as on the date of the notice of auction, in light of the judgment of the Apex Court in the case of CELIR LLP v. BAFNA MOTORS (MUMBAI) PRIVATE LIMTED AND OTHERS reported in 2023 SCC Online SC 1209. Accordingly, it is submitted that the writ petition itself is to be dismissed without prolonging the matter. 8. In light of the contentions raised 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 - 5 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 remedy before the Debt 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 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 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 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 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." 9. In light of vesting of rights in favour of the 2nd respondent and taking note that the matter has been pending before this Court since 19.12.2024 and during the pendency of the present proceedings, interim order was passed and payment of Rs. 2 crores were made and taking note of the extension of interim order from time to time, petitioner is relegated to avail of the alternative remedy. All contentions of both the sides are kept open 10. In light of relegating the petitioner to avail of the alternative remedy, it would meet the ends of justice by directing the respondent - Bank not to take any precipitative steps for a period of two weeks from today. - 8 - HC-KAR NC: 2025:KHC:20980 WP No. 35007 of 2024 11. The interim protection granted under this order is only to enable the petitioner to avail of his 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. 12. 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. Sd/- (S SUNIL DUTT YADAV) JUDGE VP