- 1 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF OCTOBER, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 31494 OF 2025 (GM-DRT) BETWEEN: 1. YASEEN AHAMED KHAN S/O NASIR AHAMED KHAN AGED ABOUT 43 YEARS 2. MOHAMMED IBRAHIM KHAN S/O NASIR AHAMED KHAN AGED ABOUT 44 YEARS 3. NISAR AHMED KHAN S/O LATE KHASIM KHAN AGED ABOUT 76 YEARS ALL ARE R/AT MELEKOTE ROAD, 2ND CROSS, NAJARABAD EXTENSION, TUMKUR-572101. …PETITIONERS (BY SRI. SADDAM R MULLA., ADVOCATE FOR SRI. MOHAMMED TAHIR., ADVOCATE) AND: 1. PIRAMAL FINANCE LIMITED OFFICE AT, WARDEN HOUSE, 2ND FLOOR, SIR PM ROAD, FORT MUMBAI-400001 REP BY ITS MANAGER. Digitally signed by MEGHA MOHAN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 2. ASSETS CARE AND RECONSTRUCTION ENTERPRISE LTD (ACRE) HEAD OFFICE AT 14TH FLOOR, EROS CORPORATE TOWER, NEHRU PLACE, NEW DELHI, 110019. CORPORATE OFFICE AT UNIT NO. 502, C WING, ONE BKC, PLOT NO. C-66, G BLOCK, BANDRA KURLA COMPLEX, MUMBAI 400051. 3. AUTHORIZED OFFICER ASSETS CARE AND RECONSTRUCTION ENTERPRISE LTD OFFICE AT, 1ST FLOOR, PRESTIGE NUGETTE, OFFICE NO. 101, INFANTRY ROAD, BANGALORE-560001. …RESPONDENTS (BY SMT. SREEDEVI., ADVOCATE FOR SRI. JAI M PATIL., ADVOCATE FOR R1 SRI. VIKRAM HULIGOL., SR. COUNSEL FOR SRI. KARAN GUPTA., ADVOCATE FOR R2 & R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE R-2 TO ACCEPT THE CONSIDERATION AMOUNT ALONG WITH THE 10 PERCENT ADDITION AS PER THE MANDATE OF APEX COURT IN SALIL R UCHIL VS VISHNU KUMAR AND OTEHRS, IN SO FAR AS PETITIONER CONCERNED AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI ORAL ORDER The present petition is filed seeking the following prayer: "WHEREFORE, it is prayed before this Hon'ble Court please 1. To direct respondent No.2 to accept the consideration amount along with the 10% addition as per the mandate of Apex Court in Salil R Uchil Vs. Vishu Kumar & Others, insofar as petitioners are concerned. 2. Pass any other order as this Hon'ble Court deems fit in the interest of justice and equity." 2. The brief facts of the case are that on 13.08.2018, the petitioners availed the housing loan a sum of Rs.1,36,07,882/- from respondent No.1/Finance Company for a period of 15 years, interest at the rate of 12.60% per annum. It is stated that the petitioners have regularly paid EMIs and in the month of January-February-2024, the petitioners paid a sum of Rs.95,50,000/- to close the entire loan. On 28.03.2025 respondent No.1/Finance Company transferred the loan account to respondent No.2-Assets Care & Reconstruction Enterprises Ltd., and received a total sum of Rs.55,22,522/- - 4 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 from respondent No.2 in the month of September 2025. The respondent No.3 issued the Auction Notice stating that auction is scheduled on 27.10.2025 declaring the reserve price at Rs.1,49,00,000/- which is a lesser value with an intention to make wrongful gain. Questioning that notice, the petitioners are before this court. 3. It is further stated that when the outstanding loan is Rs.55,22,000/- quoting of reserve price at Rs.1.49 Crores itself clearly shows the intention of the bank to defraud the interest of the petitioners. It is submitted that the loan is a housing loan and the respondents cannot make a profit on the losses of the petitioners. The petitioners are ready to pay the entire consideration amount of Rs.55,22,000/- along with 10% additional amount. In the light of the law laid down by the Hon'ble Apex Court in the case of Salil R. Uchil Vs. Vishu Kumar and others1, the Court may pass an order. The reserve price of Rs.1.49 Crore shows that the respondents are claiming double interest which is clearly in violation of the RBI guidelines. Hence, they sought to stay the auction proceedings. 1 2024 SCC OnLine SC 2921 - 5 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 4. When the matter came upon on 28.10.2025, considering the argument of the learned Counsel appearing for the petitioners and learned Counsels for respondent/Assets Reconstruction Company i.e., the second and third respondents herein, to whom the debt of Rs.55,00,000/- is assigned and when the borrower is ready to pay Rs.55,00,000/- and now fixing the reserve price i.e., Rs.1.49 Crores, this Court has orally directed the respondents not to confirm the sale and permitted the petitioners to serve hand summons on the bank and directed the matter to be listed on 30.10.2025. When the matter came up on 30.10.2025, the learned Counsel for the second and third respondents led by the Senior Counsel has placed before this Court the 'Assignment of Debts' dated 28.03.2025 whereby, by the said assignment deed as many as 168 loans are assigned to the Assets Care & Reconstruction Company. Learned Senior Counsel submits that this document, they cannot serve a copy on the petitioners. However, for the perusal of the Court, they have placed the documents before this Court. As rightly submitted by the leaned Senior Counsel, in the said assignment deed there is no mention about Rs.55,00,000/- as contended by the petitioners. - 6 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 5. Further, learned Counsel appearing for the petitioners has argued that once the debt is assigned to the Assets Care & Reconstruction Company, they shall issue notice, they should negotiate with the borrower and thereafter they can proceed with the matter. In response to that, learned Senior Counsel submitted that when the debt is assigned to the Assets Care & Reconstruction Company, they will step into the shoes of the bank and the proceedings will roll from the stage where it stopped and not necessarily that they have to go back. It is further submitted that none of the grounds are raised in support of the petition and without any basis, assuming that the outstanding amount is Rs.55,00,000/-, the petitioners have come before the Court. It is submitted that the outstanding amount as on the date of auction is Rs.1,43,22,694/. It is submitted that assignment of the debt is done as per the RBI guidelines. If the petitioners feels any fraud that is played by the bank in assigning the debt to the second and third respondents, they can file an appropriate complaint to the RBI. It is further submitted that on these grounds, if the Court interferes, then it would be very difficult for the financial institutions to recover the amount. Learned Senior Counsel - 7 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 submits that absolutely there is no illegality in assigning the debt to the second and third respondents. It is submitted that there is an alternative remedy available to the petitioners to approach the DRT questioning the E-Auction notice or Sale Notice issued by the respondents. They have not pointed out any of the grounds seeking interference of this Court without availing alternative remedy. It is further submitted that the petitioners cannot have the right of redemption of the mortgage, once auction notice is issued and such a prayer cannot be considered unless and until the sale is set aside on the ground of fraud and other illegalities. 6. Having heard the learned Counsels on either side, perused the material on records. When the matter came up on the first day, this Court was not convinced with the reliefs sought, seeking interference of this Court under Article 226 of the Constitution of India. When the learned Counsel for the petitioners has argued stating that the debt of Rs.55,00,000/- is assigned to the second and third respondents, and they are selling it for a reserve price of Rs.1.49 Crores, when the petitioners are ready to pay that amount, this Court has specifically asked the respondents to get instructions and - 8 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 directed them not to confirm the sale. On 28.10.2025, this Court has orally directed the respondents not to finalize the sale. When the matter came up on 30.10.2025, after hearing the learned Senior Counsel and also looking at the document, i.e., Assignment of Debt, this Court has permitted the respondents to accept the 25% deposit. After perusal of the document i.e., 'Assignment of Debt' which is placed before the Court, makes it very clear that the submission of the petitioners that the debt of Rs.55,00,000/- is assigned to the second and third respondents is not correct. Further, the grounds that are raised by the petitioners which are already discussed by this Court in preceding paragraph, none of those grounds are raised in the petition. Then, coming to the question of redemption of mortgage, the moment the auction notice is issued by the respondents, the borrowers will lose the right of to redemption of mortgage, unless and until it is held that the issuance of notice and the sale conducted by the respondents is bad and the same is set aside. With regard to the conducting of auction, issuance of the notice and all other aspects, it is always open for the petitioners to approach the DRT and the DRT will decide all these issues. Hence, this Court cannot grant - 9 - HC-KAR NC: 2025:KHC:43667 WP No. 31494 of 2025 the reliefs as sought for by the petitioners. In the light of the above discussion this Court deems it appropriate to pass the following: ORDER i. Accordingly, the writ petition is dismissed. ii. However, liberty is reserved to the petitioners to avail the appropriate legal remedy in accordance with law. iii. All IAs. in this petition shall stands closed. SD/- (LALITHA KANNEGANTI) JUDGE DL CT: JL