- 1 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 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. 8598 OF 2025 (GM-RES) C/W WRIT PETITION NO. 31476 OF 2024 (GM-RES) IN WP No. 8598/2025 BETWEEN: 1. M/S. NIRMAN EDUCATION TRUST NO. 1851, 5TH MAIN, 12TH CROSS, VIJAYANAGAR 2ND STAGE, BENGALURU - 560 040 REP BY ITS SECRETARY, SRI. O. MOHAN KUMAR, S/O. LATE B. OMKARAPPA, AGED ABOUT 64 YEARS, RESIDING AT NO.1851, 5TH MAIN, 12TH CROSS, VIJAYANAGAR 2ND STAGE, BENGALURU - 560 040 …PETITIONER (BY SRI. RATESH MAHALE, SENIOR COUNSEL FOR SRI D S JAYARAJ, ADVOCATE) AND: 1. THE BANK OF BARODA REP BY IT MANGER Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 JALAHALLI BRANCH, BENGALURU - 560 013 …RESPONDENT (BY SRI. VIGNESH SHETTY, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLE 226 AND 227 OF THE CONTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DTD. 10.03.2025 PASSED BY THE HONBLE COURT OF VI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE IN ALLOWING IN CRL.MISC.NO. 1179/2025 VIDE ANNX-A AND ETC., IN WP NO. 31476/2024 BETWEEN: M/S NIRMAN EDUCATION TRUST NO 1851, 5TH MAIN, 12TH CROSS, VIJAYANAGAR 2ND STAGE, BENGALURU -560040 REP BY ITS SECRETARY, SRI O MOHAN KUMAR, S/O LATE B OMKARAPPA, AGED ABOUT 63 YEARS, RESIDING AT NO.1851, 5TH MAIN 12TH CROSS, VIJAYANAGAR 2ND STAGE, BENGALURU - 560040 ...PETITIONER (BY SRI. RATESH MAHALE, SENIOR COUNSEL FOR SRI D S JAYARAJ, ADVOCATE) AND: THE BANK OF BARODA REP BY ITS MANAGER - 3 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 JALAHALLI BRANCH BENGALURU - 560013 ...RESPONDENT (BY SRI. VIGNESH SHETTY, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED E - AUCTION SALE NOTICE BY RESPONDENT DATED 07/11/2024 PUBLISHED FOR SALE OF THE SCHEDULE PROPERTIES BELONGING TO THE PETITIONER TRUST TO BE HELD ON 27/11/2024 VIDE ANN-A AND ETC., THESE PETITIONS, COMING ON FOR ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER W.P. No.8598/2025 has been filed challenging the order of the Chief Metropolitan Magistrate in Crl.Misc. No.1179/2025. By virtue of the said order of the Magistrate passed under Section 14 there is a direction that the application of the bank has been allowed and the bank is permitted to take possession of the secured assets. - 4 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 2. W.P. No.31476/2024 has been filed by the same petitioner with respect to the same loan account dues challenging the e-auction notice dated 07.11.2024 published regarding sale of properties appended to the schedule of the same notice and date of auction was fixed on 20.11.2024. In so far as W.P. No.31476/2024 this Court had passed an interim order on 25.11.2024 restraining the bank from confirming the sale subject to the petitioner depositing 25% of the outstanding amount within four weeks. It is stated that the said interim order not having been complied with the respondent bank has gone ahead and confirmed the sale and also issued sale certificate in favour of the auction purchaser. 3. In so far as WP No.8598/2025 the interim order that was passed on 24.03.2025 was to the effect that if the sale certificate was not issued as on that day, the same was not be issued till the next date. - 5 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 4. Both the matters relate to dues arising out of the same loan account and accordingly are taken up together and disposed of by the common order. 5. Learned Senior counsel appearing for the petitioner submits that apart from the legality of the impugned orders passed their request in terms of Annexure 'H' in WP No.8598/2025 is for retaining certain properties of the security while releasing the rest so that they could approach other financial institutions and get financial support in order to clear the dues. It is submitted that there are certain properties which are of vital importance and in the context of such peculiar facts, representation has been made and the respondent bank ought to consider such matter appropriately. 6. After hearing the matter for some time, it is noticed that both against the order passed under Section 14 of the SARFAESI Act by the Magistrate as well as the auction notice which is a measure under Section 13, the - 6 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 petitioner can avail of the substantive remedy under Section 17. 7. Taking note that sale certificate has also been issued in the interregnum, it is open for the petitioner to avail of the substantive remedy. 8. 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 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 the aggrieved person and that this rule applies with greater rigour in matters - 7 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 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 - 8 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 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 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 - 9 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 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 contention raised by the petitioner are the matters that cannot be adjudicated in the present proceedings. 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. - 10 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 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 instituted before the DRT, time spent before this Court may be taken note of appropriately. 14. It is submitted by the learned counsel for the respondent bank that if the auction with respect to the property relating to Site Nos.31 and 30 is upheld, dues if any remaining after adjusting the sale consideration would be worked out and if there are no dues consequential - 11 - HC-KAR NC: 2025:KHC:26337 WP No. 8598 of 2025 C/W WP No. 31476 of 2024 steps of granting loan closure certificate will be considered. 15. Learned Senior counsel appearing for the petitioner however would submit that the validity of the auction as well as order of the Magistrate regarding possession are matters that they intend to avail of the substantive remedy. If that were to be so, the petitioner is hereby entitled to avail of substantive remedy. In the interregnum there would be protection of the respondent bank not to take any further precipitative steps for a period of three weeks. 16. All contentions are kept open. Sd/- (S SUNIL DUTT YADAV) JUDGE YKL List No.: 1 Sl No.: 2