- 1 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 22799 OF 2025 (GM-RES) C/W WRIT PETITION NO. 10880 OF 2025 (GM-RES) IN WP No. 22799/2025 BETWEEN: VIJAY RAYAPATI AGED ABOUT 40 YEARS S/O MR. SOMARAJ R. SLD-4, SHILPA DACHA NEXT TO MEGASTORE SARJAPUR MAIN ROAD, KAIKONDAHALLI, BENGALURU - 560 035 REPRESENTED BY HIS POWER OF ATTORNEY HOLDER MR. KAILASH K IYER &PETITIONER (BY SRI. ASHOK G V.,ADVOCATE) AND: 1. DR. JAGADISH HIREMATH ALIAS DR. JAGADISH J ALIAS DR. JAGADISH J H Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 ALIAS DR. JAGADISH J. HIREMUTT ALIAS DR. JAGADISH JAYANAND MAJOR IN AGE S/O MR. JAYANAND NO 9 TKN TOWER BANNERGHATTA ROAD TILAKNAGAR, JAYANAGAR BENGALURU 560 076 ALSO @ PLAT NO. 94 AND 95, NERALUR VILLAGE, UPKAR SPRINGFIELDS ATTIBELE HOBLI, ANEKAL TALUK BENGALURU 562 107 2. DR. REKHA HANJA RAJENDRA ALIAS DR. REKHA JAGADISH W/O DR. JAGADISH HIREMATH MAJOR IN AGE PLOT NO. 94 AND 95, NERALUR VILLAGE, UPKAR SPRINGFIELDS, ATTIBELE HOBLI, ANEKAL TALUK, BENGALURU - 562 107 NO 9 TKN TOWER BANNERGHATTA ROAD TILAKNAGAR, JAYANAGAR BENGALURU 560 076 ALSO 3. ACE EMBEDDED INTENSIVE CARE UNITS PVT. LTD. (ALSO OPERATING UNDER THE NAME AND STYLE OF 'AASRA' HOSPITALS) A COMPANY INCORPORATED UNDER THE COMPANIES ACT OF 2013 - 3 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 REPRESENTED BY ITS DIRECTORS, DR.JAGADISH HIREMATH AND DR. REKHA HANJA RAJENDRA NO. 94 AND 95 UPKAR SPRINGFIELDS NEAR SIPANI BLISS APARTMENTS NERALUR VILLAGE BENGALURU RURAL BENGALURU - 562 107 ALSO @ CA/2, JIGANI INDUSTRIAL AREA, NEAR APC CIRCLE JIGANI, BENGALURU - 560 076 4. CANARA BANK CONSTITUTED UNDER THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1970 ARM BRANCH -II, 2ND FLOOR CIRCLE OFFICE SPENCER TOWERS, NO. 86, MG ROAD, BENGALURU - 560001 ALSO HAVING ADDRESS AT CANARA BANK SPECIALIZED MID CORPORATE BRANCH, TRINITY (DP6993), NO. 206 AND NO. 207, NORTH BLOCK MANIPAL CENTRE, DICKENSON ROAD, BENGALURU 560 042 REPRESENTED BY ITS MANAGING DIRECTOR &RESPONDENTS (BY SRI. C. VINAY SWAMY, ADVOCATE FOR C/R4) - 4 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND SET ASIDE THE IMPUGNED NOTICE DATED 23.05.2025 ISSUED BY THE RESPONDENT BANK UNDER SECTION 13(2) OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 (AT ANNEXURE -A). IN WP NO. 10880/2025 BETWEEN: M/S ACE EMBEDDED INTENSIVE CARE UNITS PVT LTD A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 2013 HAVING ITS REGISTERED OFFICE AT NO.9 TKN TOWER BANNERGHATTA ROAD, BANGALORE SOUTH, BENGALURU-560076. ALSO HAVING ITS OFFICE AT NO.94 AND 95. UPKAR SPRINGFIELDS, NEAR SIPANI BLISS APARTMENTS, NERALUR VILLAGE BENGALURU RURAL DISTRICT, BENGALURU-562 107 REP.BY ITS AUTHORIZED SIGNATORY AND DIRECTOR DR. JAGADISH JAYANAND HIREMATH ...PETITIONER (BY SRI. MOHAN KUMAR B M.,ADVOCATE) - 5 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 AND: CANARA BANK A BODY CORPORATE CONSTITUTED UNDER THE BANKING COMPANIES ACT (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1970 HAVING ITS HEAD OFFICE AT NO.112, JC ROAD, BENGALURU- 560 002 ALSO AT MID CORPORATE BRANCH OFFICE AT NO.34, 1 MAIN ROAD, SHESHADRIPURAM, BENGALURU-560 020 ALSO AT SPISD MID CORPORATE BRANCH NO.206 AND 207, NORTH BLOCK MANIPAL CENTRE, DICKENSON ROAD BENGALURU-560 042 ...RESPONDENT (BY SRI. VIGNESH S. SHETTY, ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE LETTER DATED 18.03.2025 BEARING NO. REF.NO.CB6993/MCB-T/216/2024-25 JKC (IMPUGNED LETTER ) ISSUED BY THE RESPONDENT BANK PRODUCED AT ANNEXURE-D. THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING B GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 6 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD ORAL ORDER These petitions are by a borrower and the corresponding guarantor. The petition by the borrower is in W.P.No.10880/2025, and the petition by the guarantor is in W.P.No.22799/2025. The borrower has called in question the respondent - Bank's notice dated 18.03.2025, informing the petitioner that the liability as on 16.03.2025 is in a sum of Rs.12,15,76,816.63 and that if this amount is not paid within seven days, the hypothecated asset will be disposed of without further intimation. This Court has stayed the sale of hypothecated goods/movables subject to the condition that the petitioner deposits Rs.50,00,000/- before 04.06.2025. It is not clear whether the borrower has complied with this condition. - 7 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 2. The guarantor has called in question the respondent - Bank's subsequent notice dated 23.05.2025 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short, 'the SARFAESI Act']. The guarantor has called in question this notice, as canvassed by Mr. Ashok G. V, the learned counsel for the petitioner in W.P.No.22799/2025, on the ground that if this Court has intervened at the borrower's instance, no proceedings can be initiated to the guarantor's detriment. The learned counsel also submits that, after the present petition, certain amounts have been deposited with the Bank towards closure of the loan. 3. Mr. C. Vinay Swamy and Mr. Vignesh S. Shetty, the learned counsels for the Bank, are categorical in asserting that the guarantor cannot have any quarrel with issuance of notice under Section 13(2) of the SARFAESI Act and that the - 8 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 notice to the borrower is only as a precursor for initiation of the proceedings. In fact, Mr. C. Vinay Swamy submits that the outstanding as of today will be over Rs.12 Crores. The primary question for consideration is: Whether this Court must intervene and quash the notice addressed to the borrower calling for the amounts due and the subsequent notice under Section 13(2) of the SARFAESI Act. 4. This question must be answered necessarily in view of Section 13(3A) of the SARFAESI Act, which stipulates that if a borrower makes a representation or raises any objection, the secured creditor shall consider such representation and communicate the decision, if the decision is not to accept the objections/representation, within fifteen days from the date of such representation. - 9 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 5. This right to a borrower would be crucial because if the secured creditor is not persuaded to accept the representations/objections, a way is paved for action under Section 13(4) of the SARFAESI Act, of course subject to intervention under Section 17 of the SARFAESI Act. This Court is of the view that if a borrower has any cause against the commencement of the proceedings under the SARFAESI Act with the notice under Section 13[2] of the SARFAESI Act, it should avail the opportunity under Section 13(3A) thereof. 6. This Court opines that a borrower, only because notice is issued resulting in a possible further proceedings for the sale of the hypothecated goods/movable properties, cannot avoid the proceedings under the SARFAESI Act by invoking this Court9s jurisdiction under Article 226 of the Constitution of India. Further, in the circumstances such as in the present case, the guarantor's right - 10 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 could only tail the rights that could be in the borrower and not otherwise. 7. In the light of the afore, the question for consideration is answered opining that this Court need not interfere with either the impugned notice dated 18.03.2025 or the impugned notice dated 23.05.2025 under the SARFAESI Act and the petitions must be disposed of reserving liberty to the borrower to show cause as contemplated under Section 13(3A) of the SARFAESI Act calling upon the respondent - Bank to consider before proceeding to take action. The assertion on behalf of the respondent - Bank is that notice under Section 13(4) of the SARFAESI Act is issued on 30.07.2025 during the pendency of these petitions, but the notice under Section 13(4) of the SARFAESI Act now issued must yield. As such, the following: - 11 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 ORDER [A] The petitions are disposed of dissolving the respondent 3 Bank9s notice dated 30.07.2025 under Section 13(4) of the SARFAESI Act with liberty to the borrower to file a representation/objections as contemplated under Section 13(3A) of the SARFAESI Act within four [4] weeks from today. [B] The respondent - Bank is called upon to consider the same by a reasoned order and communicate its decision as contemplated under Section 13(3A) of the SARFAESI Act but within fifteen [15] days from the date of receipt of the - 12 - HC-KAR NC: 2025:KHC:36930 WP No. 22799 of 2025 C/W WP No. 10880 of 2025 representation/objections as now been enabled. Sd/- (B M SHYAM PRASAD) JUDGE RB