- 1 - HC-KAR NC: 2025:KHC:52708 WP No. 34534 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 34534 OF 2025 (GM-DRT) BETWEEN: M/S. STAR BREEDING FARM THROUGH ITS PROPRIETOR SRI AMEERUL SHABAZ AGED ABOUT 46 YEARS S/O N R MOHAMMED GHOUSE HAVING OFFICE NEAR HANIF MASJID NAGAMANGALA KARNATAKA- 571432. …PETITIONER (BY SRI. RUDRABHUSHAN C. B., ADV.) AND: THE AUTHORIZED OFFICER CANARA BANK HAVING OFFICE AT ARM BRANCHII 2ND FLOOR, CIRCLE OFFICE SPENCER TOWERS NO.86, M G ROAD BENGALURU- 560001 REP. BY ITS CHIEF MANAGER CHANDRASHEKAR YADAV. …RESPONDENT (BY SRI. VIGNESH SHETTY, ADV.) Digitally signed by MEGHA MOHAN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:52708 WP No. 34534 of 2025 THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND SET ASIDE THE IMPUGNED DEMAND NOTICE DATED 20.08.2025 REF.6298/SARFAESI/ARM11/550/2025-26 AND REPLY NOTICE DATED 30.10.2025 ISSUED BY THE RESPONDENT BANK (ANNX-A AND B). THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI ORAL ORDER The present writ petition is filed seeking the following prayer: i. Issue a writ of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned Demand Notice dated 20.08.2025 REF.6298/SARFAESI/ARMII/550/2025-26 and reply Notice dated 30.10.2025 issued by the Respondent Bank Annexure-A&B); ii. Pass any such order or direction as deemed fit in the facts and circumstances of the case, in the interest of justice and equity in so far as petitioner is concerned. 2. The petitioner has borrowed the amount from the respondent/bank by mortgaging the lands. According to the - 3 - HC-KAR NC: 2025:KHC:52708 WP No. 34534 of 2025 petitioner those lands are the agricultural lands and he has established a poultry farm in the same. It is an agriculture activity and the Bank cannot initiate the SARFAESI proceedings. In the earlier round in the year 2022, when the bank has initiated the SARFAESI proceedings, the petitioner has approached the DRT and filed SA.No.161/2023 dated 31.07.2025 whereby, the DRT had set aside the proceedings initiated by the bank under Section (13)2 of the Securitization Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2022 (for short ‘SARFAESI Act’) on the ground that the demand notice dated 29.11.2022 under Section (13)2 of the SARFAESI Act is a foundational statutory requirement and the borrower’s right under Section 13(3A) of SARFAESI Act are directly linked to the accuracy of the amount demanded. An incorrect statement of dues in the demand notice defeats the object of giving the borrower a fair opportunity to make a representation to take remedial measures and such the defect goes to the root of the proceedings. Further, the representation dated 25.01.2023 made by the applicant after 63 days from the date of demand notice does not require consideration under Section 13(3A) of the SARFAESI Act. However, the delay in - 4 - HC-KAR NC: 2025:KHC:52708 WP No. 34534 of 2025 representation does no cure the fundamental defects in the demand notice itself. On this ground the DRT has allowed the SA.No.161/2023. Thereafter the Bank has issued the demand notice on 20.08.2025. After that the petitioner has given a reply dated 16.10.2025 to the demand notice, raising the agricultural exemption under Section 31(i) of the SARFAESI Act and bank has given a reply under Section 13(3A) of the SARFAESI Act. The writ petition filed by the petitioner i.e., WP.No.32523/2025 was disposed off observing that it is premature writ petition because the Bank had not replied to the petitioner’s letter dated 16.10.2025. It is stated that the Bank’s reply is dated 30.10.2025 in which it is stated that the properties that are mortgaged are not used for agriculture purpose. 3. Learned counsel appearing for the petitioner submits that the poultry farm is an agricultural activity, hence the SARFAESI proceeding cannot be initiated. He had relied on the order passed by the co-ordinate bench of this High Court in case of K. Narasimhamurthy Vs. Sondekoppa Grama panchayath and another arising out of WP.No.38871/2016 - 5 - HC-KAR NC: 2025:KHC:52708 WP No. 34534 of 2025 dated 05.09.2023, he relied on para No.9 of the order which reads thus: “9. As observed by this Court in E.Bhaskar Rao’s case supra, a poultry farm is an agricultural activity and does not require the land to be converted to a commercial purpose for putting up a construction thereon and usage thereof for such business. If that be so, a building which had been put up on an agricultural land cannot be said to be a commercial building coming under Clause A(ii) of Schedule IV. The land continues to be an agricultural land and the poultry farm activity cannot be said to be a commercial activity entitling the Panchayat to levy any tax let alone under the said provisions.” Basing on the above judgment it is submitted that the initiation of the SARFAESI proceedings is bad and same has to be set aside. 4. Learned counsel appearing for the respondent/bank submits that in the earlier round of litigation, the SA is allowed on the ground that there is discrepancy with regard to the amount. Later when they have issued the demand notice, petitioner has sent his reply, the reply is silent about the nature of the lands except saying that they are entitled for agricultural sector advances/borrowing accounts are exempted under the provisions of the SARFAESI Act, 2002. It is - 6 - HC-KAR NC: 2025:KHC:52708 WP No. 34534 of 2025 submitted that they have given a detailed reply under Section 13(3A) of the SARFAESI Act stating that lands are not used for the agricultural purposes as such the petitioner is not entitled for the benefit. The possession notice under Section under 13(4) of the SARFAESI Act is issued on 19.11.2025. 5. It is submitted that as on today the outstanding amount is Rs.18.00 crores and odd. It is submitted that the petitioner has an effective alternative remedy and DRT will adjudicate all these questions that are raised by the petitioner and the writ petition is not maintainable. In response to that learned counsel for the petitioner submits that it is a question of law as such he has come before this court. 6. Having heard the learned counsels on either side, perused the entire material on record. As on today the outstanding amount is Rs.18.00 crores and odd. This court has perused the demand notice, reply given by the petitioner and also the reply by the Bank under Section 13-A of the SARFAESI Act. All the issues raised before this court, the petitioner as well agitate the same before the DRT. Considering the substantial loan amount is outstanding and - 7 - HC-KAR NC: 2025:KHC:52708 WP No. 34534 of 2025 the petitioner has an effective alternative remedy, this Court is passing the following: ORDER i. The writ petition is disposed of giving liberty to the petitioner to avail remedy before the DRT. ii. From today for a period of five weeks, the respondent-Bank shall not take any coercive steps. iii. The petitioner is entitled for the exemption for the period the present writ petition is pending. iv. All pending I.As., in the writ petition shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE TS, CT:bms List No.: 1 Sl No.: 49