- 1 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 14037 OF 2025 (GM-RES) BETWEEN: 1. SMT NETHRAVATHI WIFE OF LATE C. A. SUKUMAR, AGED ABOUT 45 YEARS 2. KUM. C S VILASINI, D/O LATE C. A. SUKUMAR, AGED ABOUT 17 YEARS, 3. KUM. C. S. VIKASINI, D/O LATE C. A. SUKUMAR AGED ABOUT 15 YEARS 2 & 3 SINCE MINORS ARE REPRESENTED BY THEIR MOTHER AND NATURAL GUARDIAN SMT. NETHRAVATHI 1 TO 3 ARE RESIDING AT NO. 209, HOUSING BOARD COLONY, NEAR GOKUL COLLEGE, KOLAR 563 102. …PETITIONERS (BY SRI. SRINIVAS MANOHAR KULKARNI., ADVOCATE) AND: 1. M/S CANARA BANK NEAR DOOMLIGHT CIRCLE, NEW EXTENSION, KOLAR 563 102 Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 REPRESENTED BY ITS MANAGER. 2. THE AUTHORISED OFFICER, CANARA BANK, REGIONAL OFFICE, WARD NO. 24, KEELUKOTE EXTENSION, ANTHARGANGE MAIN ROAD, KOLAR TOWN 563 101. …RESPONDENTS (BY SRI. VINAY BHAT., ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECTING THE RESPONDENTS HEREIN TO ACCEPT THE PAYMENTS MADE BY THE PETITIONERS TOWARDS THE DISCHARGE OF THE LOANS AS FULL FINAL AND THEREBY CLOSE THE SAID LOAN ACCOUNTS AS HAVING BEING FULLY SATISFIED. 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 Petitioners have sought for issuance of writ of mandamus to accept payments made by the petitioners as being towards full and final settlement and to close the loan accounts as being fully satisfied. Petitioners have also sought for a direction to respondent - Bank to give NOC in respect of loan accounts bearing Nos. 0539772000015 and 0539261005755. - 3 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 2. It is the case of the petitioners that in terms of Annexure-B, there was one time settlement for Rs.40 lakhs in terms of the hand written endorsement. It is further submitted that the evidence of such OTS settlement is reflected in the statement of accounts produced at Annexure-D wherein there are entries made on 23.12.2019, 02.01.2020, 31.12.2020, 01.02.2021, 20.07.2021, 27.10.2021 and 29.12.2021. In light of the same, it is submitted that the loan account of the petitioner ought to have been closed. 3. Learned counsel for the respondent - Bank submits that Annexure-B is an endorsement without any signature. It is submitted that without prejudice to other contentions raised, this factual adjudication cannot be done in writ proceedings and petitioners may be relegated to avail of substantive remedy under Section 17 of the SARFAESI Act, as sale notice has been issued subsequently. - 4 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 4. The subsequent event of issuance of sale notice is taken note of. However, the contentions of the petitioners regarding offer of one time settlement and payments made towards OTS proposal as evidenced in the statement of accounts, are the factual contentions. Insofar as any measure by the respondent - Bank, petitioners may take up the contentions raised herein while opposing such action by recourse to proceedings under Section 17 of the SARFAESI Act. 5. 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 Debt 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 - 5 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 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- 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 - 6 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 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 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 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 6. In light of the observations made by the Apex Court, it can be noticed that several factual contentions raised by the petitioners are the matters that cannot be adjudicated in the present proceedings. 7. Accordingly, the petition is disposed off relegating the petitioners to avail of the substantive remedy as regards the impugned proceedings. All contentions of both the sides are kept open. 8. 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. 9. 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 petitioners may - 8 - HC-KAR NC: 2025:KHC:26467 WP No. 14037 of 2025 approach are to look at the matter afresh uninfluenced by the observations made herein. 10. 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. 11. Taking note that the auction is fixed on 30.07.2025, the Bank is at liberty to issue fresh sale notice, if found necessary. 12. Accordingly, petition is disposed off. Sd/- (S SUNIL DUTT YADAV) JUDGE VP