- 1 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO.25023 OF 2025 (GM-RES) BETWEEN: 1. MR. ROSHAN KUMAR SEETHARAM SHETTY (BORROWER), S/O. M. SEETHARAM SHETTY, AGED ABOUT 55 YEARS, R/AT NO.101, ‘A’ WING, 1ST FLOOR, SAI RADHA GOKULDHAM, OPP. VIDHYODHAYA SCHOOL PLAYGROUND, BAILKERE, UDUPI TOWN, UDUPI TALUK - 576 101. …PETITIONER (BY SRI. MOHAMMED ATIF & SMT. RENUKADEVI, ADVOCATES FOR SRI. M.A. RAJENDRA, ADVOCATE) AND: 1. THE AUTHORIZED OFFICER, Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 UNION BANK OF INDIA, CB ROAD, CORPORATION BANK BUILDING, UDUPI - 576 101. …RESPONDENT (BY SRI. VIGNESH S. SHETTY, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF MANDAMUS, DIRECTING THE RESPONDENT BANK NOT TO SEIZE THE VEHICLES BEARING NO.KA20AC1636 AND KA20AC1637 WHICH REVOCATION/CANCELLING ARE OPERATING, BASED ON THE SANCTION VIDE THEIR LETTER NO.OR/00012/CS-CO-57/2025-2026 (ANNEXURE-A) DATED 18.07.2025 AND ETC. THIS PETITION COMING ON FOR FRESH MATTERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD - 3 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 ORAL ORDER The petitioner has called in question the respondent’s decision to seize buses under a Hypothecation Agreement dated 29.09.2023, and this agreement stipulates that it would be lawful for the respondent to recover possession in the event of default and bring the asset to sale. The petitioner has sought restructuring of the loan that is in default, and the respondent has permitted restructuring but on terms. The petitioner contends that the terms are stringent. 2. The respondent has revoked the restructuring on 18.07.2025 for certain non- compliance, and on 01.08.2025, the respondent has issued notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short ‘the SARFAESI Act] while - 4 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 simultaneously calling upon the petitioner to pay the entire dues within seven days putting the petitioner on notice that in default he must surrender the hypothecated buses. It is now not in dispute that the respondent has recovered the hypothecated buses and notified sale thereof under the SARFAESI Act. 3. Sri Mohammed Atif, the learned counsel for the petitioner, apart from reiterating the petitioner's case that the revocation of restructuring is arbitrary, submits that the respondent could not have simultaneously begun proceedings under the SARFAESI Act and permit the petitioner only seven days to clear the loan and recover the asset as also notifying the same for sale. 4. Sri Vignesh S. Shetty, the learned counsel for the respondent, proposes to rely upon the terms of the Hypothecation Agreement and the respondent's Recovery Management Policy 2025-26, - 5 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 to justify seizure of the hypothecated vehicles. The learned counsel asserts that if the petitioner is aggrieved, he must avail remedy with the Civil Court as the respondent's action is in exercise of contractual rights. 5. However, Sri Vignesh S. Shetty cannot dispute that if notice under Section 13(2) of the SARFAESI Act is issued, the concerned borrower will have an opportunity to respond as contemplated under Section 13(3A) of the SARFAESI Act and it must be duly considered before proceeding further under the SARFAESI Act. Thus, this Court is of the view that unless this opportunity is given, the consequences that could be if proceedings are continued under the SARFAESI Act, must be averted. 6. When queried in this regard, Sri Vignesh S. Shetty submits that there would be no - 6 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 precipitation to bring the assets to sale and there would be due consideration if the petitioner files a representation/objection under Section 13(3A) of the SARFAESI Act. As such, this Court must dispose of the petition in the light of the afore, but also stipulating lest there be precipitation that the respondent cannot have recourse to the contractual terms when the petitioner’s representation/objections are pending consideration under the SARFAESI Act. ORDER (i) The petition stands disposed of with liberty to the petitioner to file representation/ objection to the notice dated 01.08.2025 issued under Section 13(2) of the SARFAESI Act and the petitioner shall ensure that such representation/objections is - 7 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 filed within two [2] weeks from today without waiting for a certified copy. (ii) The respondent is called upon to desist taking coercive measures to bring the assets to sale for such period of two weeks and to ensure that there is due consideration of the petitioner’s representation/objections under Section 13(3A) of the SARFAESI Act. (iii) The petitioner will be at liberty to avail remedy under the SARFAESI Act, if there is further proceedings thereunder, or to avail remedy even otherwise, if the proceedings are continued under the contractual terms. - 8 - HC-KAR NC: 2025:KHC:37648 WP No. 25023 of 2025 (iv) It is needless to observe that when the assets are in the respondent's custody, the respondent shall be answerable to any claim for damage. SD/- (B M SHYAM PRASAD) JUDGE MD List No.: 1 Sl No.: 9