- 1 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF DECEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE D K SINGH AND THE HON'BLE MS. JUSTICE TARA VITASTA GANJU WRIT PETITION NO. 27322 OF 2025 (GM-DRT) BETWEEN: AXIS BANK LIMITED, “TRISHUL” , 3RD FLOOR, OPPOSITE SAMARTHESWAR TEMPLE, LAW GARDEN, ELLIS BRIDGE, AHMEDABAD - 380 006. ALSO, AT ITS CORPORATE BANKING BRANCH, 2ND FLOOR, EXPRESS BUILDING, QUEENS' ROAD, BANGALORE-560 001. PRESENTLY AT NITESH TIME SQUARE LEVEL-3, NO. 8, M.G.ROAD, BENGALURU-560 001, REPRESENTED BY ITS VICE PRESIDENT, THE POWER OF ATTORNEY HOLDER, MISS GAYATHRI.S. …PETITIONER (BY SRI. ANIKETH.B.C., ADVOCATE) AND: 1. G.CORP LOTUS MALL PRIVATE LIMITED, NO. 40/1A, 7TH FLOOR, BASAPPA COMPLEX, LAVELLE ROAD, BANGALORE - 560 001. REPRESENTED BY ITS AUTHORISED SIGNATORY, MR. SHARATH GOWDA, SON OF MR.THIMME GOWDA. 2. M/S. LOTUS SHOPPING CENTERS PRIVATE LIMITED, (UNDER LIQUIDATION), HAVING ITS REGISTERED OFFICE AT DOOR NO. 15-8-441/50, SHOP NO. 46, 1ST FLOOR, YENEPOYA MALL, KADRI ROAD, Digitally signed by S NOORUNNISABEGUM Location: HIGH COURT OF KARNATAKA, BENGALURU - 2 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 MANGALORE - 575 003. REPRESENTED BY ITS LIQUIDATOR. 3. MR. SANJAY KUMAR MISHRA THE AUTHORISED OFFICER, M/S. AXIS BANK LIMITED, CORPORATE BANKING BRANCH, 2ND FLOOR, EXPRESS BUILDING, QUEENS' ROAD, BANGALORE-560 001. 4. M/S. ANUSHKA CONSTRUCTION PRIVATE LIMITED, NO. 100/1, CITY CENTRE, OPP TOWN HALL, J.C. ROAD, BENGALURU-560 002. …RESPONDENTS (BY SRI. MANU KULKARNI., ADVOCATE FOR R1; SRI. G.L.VISHWANATH., SENIOR COUNSEL FOR SMT. MANASA.B.RAO., FOR C/R4; NOTICE TO R2 & R3-DISPENSED WITH V/O DTD:05.11.2025) THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, 1950, PRAYING TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER WRIT, ORDER OR DIRECTION AS THIS HONBLE COURT MAY DEEM FIT, SETTING ASIDE THE ORDER DATED 25/06/2025 (ANNEXURE-A) IN IA NO.262/2024 IN AIR NO.1854/2023 AND IA NO.714/2024 IN AIR NO.84/2024 PENDING BEFORE THE HONBLE DEBTS RECOVERY APPELLATE TRIBUNAL, CHENNAI AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE D K SINGH & HON'BLE MS. JUSTICE TARA VITASTA GANJU - 3 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 ORAL ORDER (PER: HON'BLE MR. JUSTICE D K SINGH) The present writ petition has been filed impugning the order dated 25.06.2025 in I.A.No.262/2024 in A.IR No.1854/2023 and I.A.No.714/ 2024 in A.IR No.84/2024 passed by the Debts Recovery Appellate Tribunal at Chennai (hereinafter referred to as the ‘DRAT’). 2. The respondent No.1- M/s G.Corp Lotus Mall Private Ltd., was a guarantor to the Term Loan-1 of Rs.150 Crores advanced by the appellant/Axis Bank Ltd. to Respondent No.2-M/s Lotus Shopping Centers Pvt. Ltd in the year 2013. 3. The respondent No.1 was guarantor for a sum of Rs.95,91,36,750/- plus all interest, premium of prepayment or on redemption, costs etc, payable by the borrower to the Bank. 4. It is the case of the Bank that a further sum of Rs.20 Crores as Term Loan–II was sanctioned on 14.01.2015 and terms and conditions of Term Loan-I were - 4 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 revised and the amount of Term Loan-I was capped to Rs.120 Crores with further disbursement being made subject to various conditions and the bank disbursed Rs.104 Crores. A Term Loan-III of Rs.55 Crores was sanctioned on 25.04.2017 which stands repaid by the respondent No.2. 5. The respondent No.1 filed an appeal before the DRAT against the order dated 9.11.2023 passed by the DRT-1, Chennai dismissing the S.As. filed by the respondent No.1 against possession notices and sale notice. The DRT assessed the total liability of the borrower as Rs.1,90,30,58,067/- along with interest. Out of the said amount, the bank has recovered Rs.113 Crores pursuant to the sale of assets of the borrower under the provisions of the Insolvency and Bankruptcy Code, 2016 and the said amount has been appropriated towards the loan account pertaining to the Term Loan-1. 6. As per the affidavit filed on behalf of the appellant/bank, as on 30.04.2024, the outstanding dues in respect of the loan advanced to the borrower company - 5 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 was Rs.82,58,87,541/-. This affidavit was filed on 20.02.2025 and the appellant/bank has further stated that as on the date of filing of the affidavit, the total outstanding of the borrower company was Rs.91,64,12,120/-. 7. The respondent No.1/guarantor has filed the appeal before the DRAT, Chennai, impugning the order passed by the DRT, Chennai, along with their application under Section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act’). The DRAT has directed the respondent No.1/guarantor to deposit 40% of the balance amount due to the appellant/bank. The DRAT has determined the 40% of Rs.33,91,58,067/- to be Rs.13,56,63,227/- which the respondent No.1/guarantor has deposited for maintaining the appeal. The writ petition has been filed by the appellant/bank impugning the said determination of 40% to be of Rs.13,56,63,227/-. - 6 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 8. Mr.S.S.Naganand, learned Senior Counsel appearing for the appellant/bank submits that the total amount which was due as on 20.02.2025 was Rs.1,72,94,00,120/- and it would have added further interest on the date of the impugned order, i.e. 25.06.2025. Therefore, the amount determined by the DRAT is erroneous. The respondent No.1/guarantor has not deposited 40% of the amount due to the bank for maintaining the appeal. It is further noted that Rs.43 crores recovered from another guarantor is not towards the term loan-1 but it is in respect of Term Loan-II. 9. We have considered the submissions of learned counsel for the parties and perused the record. 10. As per Section 18(1) of the SARFAESI Act, for maintaining the appeal, the borrower has to deposit at least 25% of the amount due and payable to the creditor as claimed by the creditor or determined by the DRT, whichever may be less. - 7 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 11. Section 18 of the SARFAESI Act, 2002, reads as under:- “18. (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal 1[under section 17, may prefer an appeal along with such 4fee, as may be prescribed] to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal. 2[Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower:] 3[Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent. of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less: Provided also that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twenty-five per cent. of debt referred to in the second proviso.] (2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder.” 12. Even if the statements made in the affidavit dated 20.02.2025 and 14.03.2025 are taken into consideration, the total amount would be little above Rs.91 Crores. Out of Rs.91 Crores, the bank has received Rs.43 Crores from the second guarantor and therefore the remaining amount - 8 - HC-KAR NC: 2025:KHC:50286-DB WP No. 27322 of 2025 was around Rs.49 Crores. The respondent No.1/guarantor has already deposited Rs.13,56,63,227/- which is more than 25% of the outstanding dues of the Bank as per the Bank’s oath in the affidavit dated 20.02.2025. We direct the respondent No.1/guarantor to deposit a further sum of Rs.2 Crores within a period of four weeks. We request the DRAT to proceed with the appeal expeditiously and finalize the same within a period of three months from today. 13. The writ petition is accordingly disposed of. 14. Let a copy of this order be forwarded to the DRAT, Chennai, for necessary action. Sd/- (D K SINGH) JUDGE Sd/- (TARA VITASTA GANJU) JUDGE YN List No.: 1 Sl No.: 28