- 1 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 20310 OF 2022 (GM-RES) BETWEEN: 1. SRI. N. BALAKRISHNA S/O. NINGEGOWDA, AGED ABOUT 52 YEARS, RESIDING AT NO 202. 2ND E CROSS, 2ND B MAIN, VISHWABHARAHI LAYOUT, GIRINAGARA, BANGALORE - 560 085. … PETITIONER (BY SRI. VINAY BHAT., ADVOCATE) AND: 1. THE AUTHORIZED OFFICER STATE BANK OF INDIA, STRESSED ASSETS RECOVERY BRANCH, NO.11/90. 3RD FLOOR NEAR OLD SHIVAJI THEATRE, J.C.ROAD, BANGALORE - 560 002. REPRESENTED BY AUTHORISED OFFICER/ CHIEF MANAGER … RESPONDENT (BY SRI. K. SHIVARAM., ADVOCATE FOR C/R IN C.P. NO.16030/2022) Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED NOTICE DATED 01.10.2022 ISSUED BY THE RESPONDENT AS PER ANNEXURE-A AND ETC. THIS PETITION COMING ON FOR FRESH MATTERS LIST THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER The petitioner has sought for issuance of writ in the nature of certiorari to set aside the Possession Notice at Annexure-'A' dated 01.10.2022 issued by the respondent Bank. In terms of the said Possession Notice, the petitioner was called upon to pay an amount of Rs.2,84,68,485/-. 2. It is the case of the petitioner that the respondent Bank had accepted the One Time Settlement (OTS) offer and petitioner had paid part of the amount and that the petitioner had requested for further time to honour the OTS amount and, as the respondent Bank has failed to do so and has proceeded to issue the Possession Notice, the present petition has been filed. - 3 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 3. Learned counsel appearing for the respondent Bank would submit that the OTS offer was accepted by the petitioner and communication was made by the Bank on 20.10.2020, however, even as per the version of the petitioner, a sum of Rs.65,84,836.52 has not been paid within the stipulated time, in terms of Annexure-'R1'. It is submitted that the entirety of the amount under the OTS Scheme was required to be paid by 23.11.2020. As the petitioner had committed default, the proceedings under Section 13 of SARFAESI Act have been instituted in the year 2022. 4. Learned counsel for the petitioner submits that a sum of Rs.20.00 lakhs has been paid on 10.11.2020. However, it is submitted that as regards remaining amount of Rs.40.00 lakhs, the same has been deposited before this Court. 5. It must be noticed that insofar as the amount of Rs.65,84,836/- which was to be paid under the OTS - 4 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 Scheme, admittedly payment has not been complied with, within the time stipulated. In terms of Annexure-'R1' filed alongwith the statement of objections, the amount crystallized as an offer for OTS was required to be paid on 23.11.2020. Admittedly, till January 2022, the amount was not paid to the respondent Bank insofar as the OTS offer is concerned. If that were to be so, the OTS offer does not stand to be valid after January 2022 and the Bank has rightly proceeded further. 6. Insofar as the Possession Notice is concerned, the petitioner's remedy is to avail of substantive remedy under Section 17 of the SARFAESI Act as against the measure taken under Section 13 of SARFAESI Act by way of issuance of Possession Notice. 7. Insofar as direction sought at prayer (b) to the respondent Bank to receive the balance of OTS amount of Rs.45,84,836/-, the said relief cannot be granted in light of the decision of Apex Court in the case of State Bank of - 5 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 India v. Arvindra Electronics Private Limited reported in (2023) 1 SCC 540. 8. Further, 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 mind that the legislations enacted by Parliament - 6 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 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. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not - 7 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 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." 9. In light of the observations made by the Apex Court, it can be noticed that several factual contentions raised by the petitioner, are matters that cannot be adjudicated in the present proceedings. - 8 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 10. 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. 11. 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 three weeks from today. 12. 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. 13. Needless to state that while considering the aspect of limitation, in the event the proceedings are - 9 - HC-KAR NC: 2025:KHC:27571 WP No. 20310 of 2022 instituted before the DRT, time spent before this Court may be taken note of appropriately. Sd/- (S SUNIL DUTT YADAV) JUDGE VGR