- 1 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 35948 OF 2024 (GM-RES) BETWEEN: 1. SRI SURESH K K S/O LATE KRISHNE GOWDA K B AGED ABOUT 68 YEARS, 2. SRI NANDHAN SURESH GOWDA S/O SURESH K K AGED ABOUT 38 YEARS, BOTH ARE R/AT NADUVINA MADKAL VILLAGE, HESGAL POST, KASABA HOBLI, MUDIGERE TALUK, CHIKKAMAGALURU DISTRICT-577132. (NOTE:PETITIONER NO.1 EVEN THOUGH SENIOR CITIZEN NOT CLAIMING BENEFITS THEREUNDER) 3. SMT NITHYA SURESH KOTREKERE D/O SURESH K K W/O ABHINAY MANJUNATH AGED ABOUT 40 YEARS R/AT HEBBASALE VILLAGE, SAKALESHPURA TALUK HASSAN DISTRICT - 573134. …PETITIONERS (BY SRI. SANCHAN JAI NANDAN., ADVOCATE) AND: 1. M/S CANARA BANK MUDIGERE BRANCH ( 1162) MUDIGERE TALUK Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 CHIKKAMAGALURU DISTRICT PIN CODE - 577130 REP BY ITS AUTHORIZED OFFICER MUDIGERE BRANCH. 2. SRI. JAFAR ABBAS ADDOOR KOYYAR S/O BAVA AGED MAJOR R/AT NO.1-93, KOYYAR HOUSE ADDOOR VILLAGE & POST MANGALORE DAKSHINA KANNADA DISTRICT-574 145. …RESPONDENTS (BY SRI. RUKKOJI RAO., ADVOCATE FOR C/R IN CP 25100/24; SRI. SURENDRA Y S, ADVOCATE FOR R2) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE SALE NOTICE DATED 30/11/2024 ISSUED BY RESPONDENT BANK UNDER SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTERESTS ACT, 2002 (SARFESI ACT, 2002) FOR SALE OF SCHEDULE PROPERTY PRODUCED AT ANN-A AND THE AUCTION PROCEEDINGS CONDUCTED ON THE BASIS OF IMPUGNED NOTICE. 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 The petitioners have sought for setting aside of the Sale Notice at Annexure-'A' dated 30.11.2024 issued by the respondent Bank under the provisions of the SARFAESI Act. - 3 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 2. It is the case of the petitioners that the petitioners had availed agricultural loan in a sum of Rs.16.00 lakhs. It is submitted that the Demand Notice was issued and proceedings were taken for sale and the said Sale Notice has been challenged in the present proceedings. 3. It is the specific contention of the petitioners that the nature of loan taken, if looked into, the provisions of SARFAESI Act would not apply. Such ground is taken in para-8 of the amended petition, where it is specifically asserted that the secured asset is an agricultural non-converted land. 4. Reliance is placed on Section 31(i) and submitted that the provisions of SARFAESI Act would not apply, if the security interest is created in an agricultural land. Accordingly, it is submitted that, if the security interest is created in a non-agricultural land as in the - 4 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 present case, the question of proceeding under the SARFAESI Act does not arise. 5. Learned counsel for the petitioners further submits that without prejudice to the contentions raised, the petitioners have also made remittance of entirety of dues on 03.01.2025 with respect to the auction on 20.12.2024. It is submitted that such aspect needs to be taken note of as well by the respondent Bank. 6. An additional contention is taken by the petitioners that the reserved price is fixed at Rs.203.50 lakhs and it does not reflect the market value of the property. Various other contentions have been raised, including the regularity of procedure followed in conducting the auction. 7. Learned counsel appearing for the respondent Bank on the other hand would submit that sale has been confirmed in the auction proceedings. - 5 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 8. Learned counsel for the petitioners finally submits that efforts were made for amicable resolution and the petitioners was ready to compensate the auction purchaser by way of interest on the amount spent by the auction purchaser for a period from 20.12.2024 till today, however, the auction purchaser was not ready to make efforts for an amicable resolution. 9. Learned counsel appearing for the respondent Bank submits that they are not in a position to take any stand, as the auction was at the instance of the Bank. It is submitted that the proceedings have been conducted as per the procedure. 10. After hearing the matter for some time, noticing the contentions raised by the petitioners as noticed, it would be appropriate that the petitioners be relegated to avail of the substantive remedy under Section 17 of the SARFAESI. - 6 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 11. In light of the contentions raised, it is relevant to take note of the observations of the Apex Court in the case of United Bank of India v. Satyawati Tondon and Others - (2010) 8 SCC 110 that the appropriate remedy would be to relegate the petitioners to seek for substantive remedy before the Debts 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- - 7 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 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 - 8 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 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 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." 12. In light of the observations made by the Apex Court, it can be noticed that several factual contentions raised by the petitioners are matters that cannot be adjudicated in the present proceedings. 13. Accordingly, the petition is disposed off relegating the petitioners to avail of the substantive - 9 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 remedy as regards the impugned proceedings. All contentions of both the sides are kept open. 14. While it is open for the petitioners to challenge the validity of Sale Notice as well as the consequent sale proceedings, before the DRT. Needless to state that the contention regarding Section 31(i) is required to be decided as a preliminary point before entering into the other issues that would be raised by the petitioners before the DRT. 15. The respondent Bank not to issue the Sale Certificate for a period of four weeks from today. Upon expiry of four weeks, the interim protection granted would stand discharged. 16. In light of disposal of the writ petition, 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. - 10 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 17. The interim protection granted under this order is only to enable the petitioners to avail of the 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. 18. 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. 19. The petitioners make a plea that the respondent Bank may provide for inspection of files pursuant to auction and permit them to take necessary copies to enable them to pursue the substantive remedy. 20. Needless to state that as requested by petitioners, the respondent Bank may furnish the copies to - 11 - HC-KAR NC: 2025:KHC:24994 WP No. 35948 of 2024 the petitioners to enable them to take appropriate steps to invoke the substantive remedy. 21. Registry is directed to return the certified/original copies to the petitioners after retaining the Photostat copies for the record purpose. Sd/- (S SUNIL DUTT YADAV) JUDGE VGR