- 1 - HC-KAR NC: 2025:KHC:44187 WP No. 31966 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 31966 OF 2025 (GM-DRT) BETWEEN: SMT. HEMALATHA BASAVARAJ AGED ABOUT 67 YEARS, W/O LATE BASAVARAJ, (SENIOR CITIZEN BENEFITS NOT CLAIMED) NO.286/16, 38TH CROSS, JAYANAGAR 8TH BLOCK, BENGALURU-560082 …PETITIONER (BY SRI. K S PONNAPPA., ADVOCATE) AND: 1. CANARA BANK A BODY CORPORATE CONSTITUTED UNDER THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKING ACT), HAVING ITS OFFICE AT J C ROAD, BENGALURU AND ONE OF ITS BRANCH AT, CANTONMENT BRANCH NO.86, GROUND FLOOR, SPENCER TOWER, M G ROAD, BENGALURU-560001. 2. BANK OF BARODA A BODY CORPORATE CONSTITUTED Digitally signed by MEGHA MOHAN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:44187 WP No. 31966 of 2025 UNDER THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS ACT) 1980 HAVING ITS HEAD OFFICE AT ALKAPURI, BARODA, GUJARATI STATE MUMBAI AND ITS REGIONAL OFFICE AT NO.41/2, M G ROAD, TRINITY CIRCLE, BANGALORE-560001 AND CARRY ON BUSINESS AT ITS BRANCH AMONG OTHER PLACES ALSO AT SHANTHINAGAR BRANCH, NO.29/A, K H ROAD, BENGALURU-560027 REPRESENTED BY ITS CHIEF MANAGER, SRI MOHAN NAIK. …RESPONDENTS (BY SRI. VIGNESH SHETTY., ADVOCATE FOR R1 SRI NAGARAJ DAMODAR., ADVOATE FOR R2) THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI AND CONSEQUENTLY QUASH THE ORDER DATED 21.08.2025 PASSED BY THE DEBT RECOVERY TRIBUNAL KARNATAKA - II, AT BENGALURU IN S.A. NO. 191/2024, PRODUCED AT ANNEXURE - AB. PASS ANY SUCH ORDERS OR DIRECTION AS THIS HONBLE COURT DEEMS PROPER AND FIT IN THE INTEREST OF JUSTICE AND EQUITY AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI - 3 - HC-KAR NC: 2025:KHC:44187 WP No. 31966 of 2025 ORAL ORDER The present writ petition is filed seeking to quash the order dated 21.08.2025 passed by the Debt Recovery Tribunal Karnataka - II, at Bengaluru in SA.No.191/2024. 2. The facts of the case are that the petitioner is the owner of the ground floor commercial premise with municipal No.29 measuring 2,000 sq.ft., located at Nanjappa Mansion, K.H.Road, Shantinagar, Bengaluru. The petitioner had executed a registered Lease Deed dated 29.04.2014 and leased the premise to Vijaya Bank for a period of 15 years commencing from 01.02.2014 up to 31.01.2029. Vijaya Bank was taken over by respondent No.2 and the lease is currently in subsistence with respondent No.2. The petitioner's daughter is the Director of BNH Infra Projects Pvt. Ltd. The petitioner had given personal guarantees to the loans obtained by BNH Infra Projects Pvt. Ltd. which had suffered financial setbacks and the petitioner was also under financial strain and they were no longer in a position to service the loans obtained from the banks. Hence, the petitioner had approached the National Company Law Tribunal, Bengaluru, under Section 94 of the - 4 - HC-KAR NC: 2025:KHC:44187 WP No. 31966 of 2025 Insolvency and Bankruptcy Code seeking initiation of insolvency resolution process on 07.03.2025. It is stated that as per Section 96 of the Insolvency and Bankruptcy Code, the interim moratorium commences from the date of filing of the application under Section 94/95 of the Insolvency and Bankruptcy Code. Therefore, the interim moratorium commenced on 07.03.2025. It is stated that respondent No.1 had also initiated proceedings against BNH Infra Projects Pvt. Ltd. and its Directors under Section 95 of the Insolvency and Bankruptcy Code before the National Company Law Tribunal, Bengaluru, in CP.IB.No.102 of 2025 and CP.IB.No.104 of 2025. Therefore interim moratorium under Section 96 of the Insolvency and Bankruptcy Code is in operation by virtue of respondent No.1’s application as well. 3. Learned counsel appearing for the petitioner submits that in these circumstances, the Tribunal ought not to have passed the impugned order on 21.08.2025 based on the request of respondent No.1/Bank directing to deposit the rent directly to respondent No.1/Bank. It is submitted that respondent No.1/Bank having initiated the proceedings under - 5 - HC-KAR NC: 2025:KHC:44187 WP No. 31966 of 2025 Section 94 of the Insolvency and Bankruptcy Code cannot go before the Debt Recovery Tribunal and file such an application. 4. Learned counsel appearing for respondent No.1/bank submits that he has no specific instructions with regard to whether the proceedings are initiated by the Bank. When an order is passed by the DRT, the petitioner ought to have filed an appeal before the DRAT. Hence, the writ petition may be dismissed and the petitioner may be directed to go before the DRAT. 5. Learned counsel appearing for respondent No.2/Bank submits that in none of the proceedings, respondent No.2 is made a party to the proceedings and it was never brought to the notice of respondent No.2/Bank. 6. Having heard the learned counsels on either side, perused the entire material on record. Respondent No.1/Bank i.e., Canara Bank had already initiated proceedings under Section 94 of the Insolvency and Bankruptcy Code against the BNH Infra Projects Pvt. Ltd. i.e., the property which is in question is mortgaged to the Canara Bank as the daughter of the petitioner is the Director of the said company. The Canara - 6 - HC-KAR NC: 2025:KHC:44187 WP No. 31966 of 2025 Bank is a party to the DRT proceedings and the impugned order is passed directing to deposit the rent directly to respondent No.1/Canara Bank. Considering the fact that the proceedings under Insolvency and Bankruptcy Code are pending before the NCLT and the moment an application is filed under Section 94 of the proceedings, the interim moratorium commences from the date of filing of application i.e., on 07.03.2024, the aggrieved parties are relegated to the pending insolvency proceedings. Coming to the submission of respondent No.2/Bank that they are not made a party to those proceedings, now as he is aware of the pending proceedings before the NCLT, both initiated by the petitioner as well as respondent No.1/Canara Bank, it is for respondent No.2 to take appropriate steps. 7. The second submission of the learned counsel for the Bank that as the order that is passed by DRT is appealable before the DRAT and the writ petition has to be dismissed, this Court do not find any force in the said submission. Admittedly, when an application under Section 94 of the Insolvency and Bankruptcy Code is filed by both the petitioner and respondent - 7 - HC-KAR NC: 2025:KHC:44187 WP No. 31966 of 2025 No.1/Bank and the same is pending before the NCLT, there cannot be any proceedings before any other Court in the light of the Section 96 of the Insolvency and Bankruptcy Code. In that view of the matter, this Court is of the view that no purpose would be served in relegating the petitioner to the DRAT. Hence, this Court is passing the following order: ORDER i. The order dated 21.08.2025 passed by the Debt Recovery Tribunal Karnataka - II, at Bengaluru in SA.No.191/2024 is set aside. ii. Respondent No.2 is at liberty to approach the National Company Law Tribunal. iii. Accordingly, the writ petition is allowed. iv. All I.As. in this petition shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE MEG List No.: 2 Sl No.: 5.1