- 1 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 20658 OF 2025 (GM-RES) BETWEEN: 1. M. SRIDHAR S/O MALLIKARJUN, AGED ABOUT 43 YEARS, RESIDING AT: NO.68, FIRST FLOOR, 7TH B CROSS ROAD, U.A.S. LAYOUT, NEAR BSNL TELEPHONE EXCHANGE, SANJAYNAGAR, BENGALURU-560 094 … PETITIONER (BY SRI. MOHAMAD AYUB ALI., ADVOCATE) AND: 1. CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LTD COMPANY ACT 2013. REPRESENTED BY ITS AUTHORIZED OFFICER HAVING ITS OFFICE AT NO. C-54-55 AND SUPER B-4, CHOLA CREST, THIRU-VI-KA INDUSTRIAL ESTATE, GUINDY, CHENNAI-600 032, TAMIL NADU 2. NARAYANAMMA.J W/O LATE G. JANARADHANA SWAMY, Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 AGE MAJOR RESIDING AT NO.43, NARAYANI COMPLEX 3RD CROSS, 5TH MAIN ROAD PAPANNA BLOCK GANGENAHALLI BENGALURU-560 032. … RESPONDENTS (BY SRI. FRANCIS XAVIER., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE POSSESSION NOTICE DATED 07.04.2025 ISSUED BY THE R1 UNDER SECTION 13 (12) READ WITH RULE 3 OF THE SARFAESI ACT; VIDE ANNEXURE-D INSOFARAS PETITIONER CONCERNED 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 Sri Francis Xavier, learned counsel accepts notice for respondent No.1. The issuance of notice to respondent No.2 is dispensed with, as lis is between the petitioner and respondent No.1. 2. The petitioner, who is stated to be a tenant has called in question the validity of Possession Notice at - 3 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 Annexure-'D' dated 07.04.2025 issued by respondent No.1. 3. It is the case of the petitioner that the Lease Deed was executed and extended from time to time much prior to respondent No.2 having availed loan from the respondent Bank. It is further submitted that action may not be taken by the respondent Bank to dispossess the petitioner tenant due to default of the borrower and the tenant needs to be protected. 4. Sri Francis Xavier, learned counsel appearing for respondent Bank submits that the statutory remedy for the tenant is to approach Debts Recovery Tribunal (DRT) and make out a case of protected tenant in terms of the opportunity granted under Section 17(4A) of the SARFAESI Act. 5. Taking note of the contentions raised, the matter involves factually dense issues which cannot be decided in the present proceedings. The procedural lapse, - 4 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 if any, is a matter that could be raised in the substantive remedy by the tenant under Section 17(4A) of the SARFAESI Act. 6. 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 petitioner 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 - 5 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 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 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. - 6 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 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 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." 7. In light of the observations made by the Apex Court, it can be noticed that several factual contentions - 7 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 raised by the petitioner are the matters that cannot be adjudicated in the present proceedings. 8. Accordingly, the petition is disposed off relegating the petitioner to avail of the substantive remedy as regards the impugned proceedings. All contentions of both the sides are kept open. 9. In light of disposal of writ petition, it would meet the ends of justice by directing the respondent- bank not to take any precipitative steps for a period of four weeks from today. 10. The interim protection granted under this order is only to enable the petitioner to avail of 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. - 8 - HC-KAR NC: 2025:KHC:25964 WP No. 20658 of 2025 11. 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 VGR List No.: 2 Sl No.: 29