- 1 - HC-KAR NC: 2025:KHC:29432 WP No. 21567 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 21567 OF 2025 (GM-RES) BETWEEN: 1. UMA BAI NAIK W/O LATE RAVI NAIK, AGED ABOUT 60 YEARS, 2. SHANTKUMAR NAIK S/O LATE RAVI NAIK AGED ABOUT 40 YEARS 3. CHAITRA NAIK D/O LATE RAVI NAIK AGED ABOUT 38 YEARS, ALL ARE RESIDENT OF SITE NO 37, DOOR NO 870/2-37, RE. SY. NO 4/1B 2 AND 3, NITTUVALLI, DAVANAGERE -577 004. ALSO AT SITE NO 870/1, NEAR DURGAMBIKA TEMPLE, NITTUVALLI, DAVANAGERE-577004. …PETITIONERS (BY SRI. M.R. HIREMATHAD.,ADVOCATE) Digitally signed by VANAMALA N Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:29432 WP No. 21567 of 2025 AND: 1. KOTAK MAHINDRA BANK LIMITED REGISTERED OFFICE AT NO 27, BKC, G- BLOCK, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI -400 051 REPRESENTED BY ITS AUTHORIZED OFFICER. 2. THE BAJAJ FIN SERVE LIMITED., BRANCH OFFICE AT VISHAL ARCADE, DOOR NO 828, 2ND FLOOR, PB ROAD, DAVANAGERE, 577002. 3. HDFC LIFE INSURANCE COMPANY LIMITED LODHA EXCELUS, 13TH FLOOR APPOLLO MILLS COMPOUND N.M. JOSHI MARG, MHALAKSMI MUMBAI - 400 011. …RESPONDENTS (BY SRI. FRANCIS XAVIER., ADVOCATE FOR R1 AND R2; SMT. JAIN M PATIL, ADVOCATE FOR R3) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTIUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 25.01.2025 PASSED BY THE LEARNED PRINCIPAL SENIOR CIVIL JUDGE AND CJM, DAVANAGERE IN CR.MISC.NO. 320/2024 PRODUCED AT ANNX-F CONSEQUENTLY QUASH THE ENTIRE RECOVERY PROCEEDINGS INITIATED BY THE R-1 AND PASS SUCH OTHER OR DIRECTION IN THE INTEREST OF JUSTICE AND EQUITY. - 3 - HC-KAR NC: 2025:KHC:29432 WP No. 21567 of 2025 THIS PETITION, COMING ON FOR FRESH MATTER, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD ORAL ORDER The question is whether this Court must interfere with the order dated 25.01.2025 in Criminal Miscellaneous No.320/2024 on the file of the Principal Senior Civil Judge and C.J.M., Davanagere [for short, 'the Magistrate Court']. The Magistrate Court, while entertaining a petition under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short, 'the SARFAESI Act'], has appointed a member of the Bar as the Commissioner to take possession of the subject property from the petitioners who claim under one Sri. Ravi Naik who is no more. - 4 - HC-KAR NC: 2025:KHC:29432 WP No. 21567 of 2025 2. The material circumstances leading to the present petition could be stated thus: [a] Sri Ravi Naik has availed loan from the second respondent and certain amounts were outstanding on the date of his demise. The loan account with the second respondent is closed with effect from 31.03.2022. [b] The first respondent has initiated proceedings under the SARFAESI Act, including the petition under Section 14 of the Act, for possession which has resulted in the impugned order. [c] After the impugned order, the first respondent has caused pre-intimation letter dated 12.02.2025 informing the petitioners about the outcome and the keenness to take possession of the subject property. - 5 - HC-KAR NC: 2025:KHC:29432 WP No. 21567 of 2025 [d] The petitioners, apart from calling in question the aforesaid order, have also filed an application with the Magistrate's Court contending, amongst others, that they have not been heard before the impugned order. 3. In the present proceedings, the petitioners contended that the loan availed from the second respondent is closed by this petitioner on remittance from the third respondent–Insurer. However, it is now brought on record by the Insurer that only a life insurance policy was issued in favour of Sri Ravi Naik and on his demise only a sum of Rs.2,83,040/- is payable but that amount is also not settled because necessary documents have not been furnished by the nominee. On behalf of the first and the second respondents, it is contended that the loan is closed with the second respondent because the loan stands assigned to the first respondent and it is for this - 6 - HC-KAR NC: 2025:KHC:29432 WP No. 21567 of 2025 reason that the first respondent has commenced the proceedings under the SARFAESI Act including the proceedings before the Magistrate's Court. 4. In the light of the aforementioned stand of the first and second respondents, the statements made in the petition under Section 14 of the SARFAESI Act are seen. There is no reference to the initial loan being extended by the second respondent and the subsequent assignment of the loan to the first respondent except in so far as referring to a Deed of Assignment dated 30.03.2022. 5. This Court is of the opinion that, in the peculiarities of this case, the Magistrate Court could not have allowed the application without examining the terms of the assignment between the first respondent and the second respondent and therefore there must be limited interference to this extent leaving open all contentions to be considered in the - 7 - HC-KAR NC: 2025:KHC:29432 WP No. 21567 of 2025 proceedings. Insofar as the third respondent, this Court must record that there is nothing on record to disbelieve that it had only issued a policy to cover the life of Sri Ravi Naik and it would not have to pay the outstanding in the loan account. In the light of the above, the following: ORDER The petition is allowed in-part and the impugned order dated 25.01.2025 in Criminal Miscellaneous No.320/2024 on the file of the Principal Senior Civil Judge and C.J.M., Davanagere is set aside restoring the proceedings for reconsideration leaving open all questions to be considered. SD/- (B M SHYAM PRASAD) JUDGE SA ct:sr