- 1 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF AUGUST, 2025 PRESENT THE HON'BLE MR. JUSTICE JAYANT BANERJI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA WRIT PETITION NO. 25926 OF 2023 (GM-DRT) BETWEEN: 1. SMT. ASHA S M AGED ABOUT 37 YEARS, W/O LATE DR. M.C. SHIVAKUMAR, 2. SRI. VASHISTA AGED ABOUT 14 YEARS, S/O LATE DR. M.C. SHIVAKUMAR, 3. MR. GOWSHIGNA AGED ABOUT 16 YEARS, S/O LATE DR.M.C. SHIVAKUMAR, SINCE 2ND AND 3RD PETITIONERS ARE MINORS, THEY ARE REP. BY THEIR MOTHER AS GUARDIAN, SMT. ASHA S.M. THE 1ST PETITIONER. ALL ARE RESIDING AT "GURUKRISHNA NILAYA" 2ND CROSS, CSI LAYOUT, 2B PARALLEL ROAD, 3RD CROSS, 4TH MAIN, JAYANAGAR WEST, TUMKUR-572 101. …PETITIONERS (BY SRI. JAGADISH BALIGA N., ADVOCATE) Digitally signed by ANNAPURNA G Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 AND: 1. THE AUTHORIZED OFFICER PUNJAB NATIONAL BANK, CIRCLE OFFICE RECOVERY DEPARTMENT/ SASTRA VERTICAL, NO.100, MOSQUE ROAD, FRAZER TOWN, BENGALURU-560 005. 2. SRI. SRINIVASAMURTHY AGED ABOUT 50 YEARS, S/O SRI. KEMPANNA, RESIDING AT VIJAYASHREE NILAYA, 3RD BLOCK, 1ST MAIN ROAD, 6TH CROSS, KUVEMPUNAGAR, TUMKUR-572 102. …RESPONDENTS (BY SRI. NARAYANAPPA S.R., ADVOCATE FOR R1; SMT. SNEHA NAGARAJ, ADVOCATE FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 ANDE 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF CERTIORARI OR ANY OTHER WRIT OR DIRECTION QUASHING ANNEXURE-A THE ORDER DATED 09.11.2023 PASSED BY THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI ON IA No.232/2023 IN AIR (SA) No. 537/2023 AND CONSEQUENTLY ALLOW IA No.232/2023 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 JAYANT BANERJI and HON'BLE MR. JUSTICE UMESH M ADIGA - 3 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 ORAL ORDER (PER: HON'BLE MR. JUSTICE JAYANT BANERJI) Heard the learned counsel for the petitioners as well as the learned counsel appearing for respondent No.1 - Bank and also the learned counsel appearing for respondent No.2, who is stated to be the auction purchaser. 2. This petition has been filed seeking the following reliefs: Therefore, following these reasons and other reasons urged at the time of hearing, it is prayed that this Hon'ble Court may be pleased to:- i) issue Writ of Certiorari or any other Writ or direction quashing Annexure-A the Order dated 09-11-2023 passed by the Debts Recovery Appellate Tribunal at Chennai on I.A.No.232/2023 in AIR (SA) No.537/2023 and consequently allow IA No.232/2023; and ii) grant such other and further reliefs deems fit under the circumstances of the case including the cost, in the interests of justice and equity. 3. The contention of learned counsel for the petitioners is that while filing the appeal under Section 18 of the Securitisation and Reconstruction of Financial - 4 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 Assets and Enforcement of Security Interest Act, 20021, an application has been filed by the petitioner supported by an affidavit of the petitioner No.1 giving out the reasons that could entail reduction by the Appellate Tribunal of the amount payable by the borrower before the Appellate Tribunal, from 50% to 25% of the debt referred to in the second proviso to Section 18 of the SARFAESI Act. 4. The learned counsel for the petitioner has placed the impugned order of the Appellate Tribunal and has contended that despite various grounds having been raised in the affidavit filed in support of the application for reduction of the amount payable to 25%, none of the grounds have been considered and the Appellate Tribunal has proceeded cursorily rejecting the application of the petitioner by directing the payment of 50% of the debt, which is in violation of the second proviso, to Section 18 of the SARFAESI Act. 1 SARFAESI Act, - 5 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 5. Learned counsel appearing for the Bank states that the matter is between the petitioner and the Appellate Tribunal and therefore, the Bank has little role to play, particularly in view of the fact of the property in question stands auctioned in favour of respondent No.2. 6. The counsel for respondent No.2 has opposed the petition stating that the property in dispute has already been auctioned in favour of respondent No.2 and therefore, the appeal before the Appellate Tribunal has been rendered otiose. 7. The provision of Section 18 of the SARFAESI Act, 2002, reads as follows: Section 18: Appeal to Appellate Tribunal. "18. (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal along with such fee, as may be prescribed to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal. Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower: Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty percent of the amount of - 6 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 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 percent 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." 8. The impugned order/proceedings dated 09.11.2023 is as follows:- "This application is filed seeking waiver of statutory deposit required under Section 18 of SARFAESI Act, for entertaining the Appeal. Advocate for petitioners/appellants submitted that petitioners are legal heirs of guarantor and that first petitioner is the wife of deceased guarantor and mother of petitioners 2 and 3 and she is the sole bread earner and that she has no other income and considering the same, statutory deposit may be reduced. Advocate for R1 bank opposed the request of advocate for petitioners/appellants and submitted that no payments were made till today and petitioners/appellants have not made out any ground for reduction of statutory deposit from 50% to 25%. I have perused the material papers and impugned order dated 17.4.2023 passed in SA 251/2021 on the file of DRT-II, Bengaluru. This appeal is - 7 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 preferred against final order dated 17.4.2023 and as per material papers, claim of the secured creditor is Rs.22,77,072/- as on 23.7.2021. Admittedly, no money is paid subsequent to 23.7.2021. Considering the same and the fact that impugned order is against final order, I am of the view that petitioners/appellants shall deposit 50% of above said claim amount to meet the requirement under Section 18 of the SARFAESI Act, which comes to Rs.11,38,536/-. Therefore, petitioners/appellants shall deposit Rs.11,38,536/- within two weeks from today i.e., on or before 23.11.2023, failing which, appeal stands rejected. On making such deposit, Registrar shall invest the same in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed. Post the matter on 24.11.2023 for compliance of deposit." 9. On perusal of the affidavit filed in support of the application seeking reduction of the amount payable before the Debt Recovery Tribunal to 25%, it appears that various grounds have been raised in the affidavit, which find no proper consideration whatsoever in the impugned order of the proceedings of the Debt Recovery Appellate Tribunal. It would have been appropriate for the Appellate Tribunal to duly consider the application and - 8 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 affidavit referred to above prior to recording a finding of payment of 50% of the amount. It is not for the Appellate Tribunal to pass orders so cursorily without application of mind, and without taking into account the relevant circumstances reflected in the affidavit filed in support of the application seeking reduction of the amount. We also noticed that by means of an order dated 23.11.2023, this Court had granted an interim order subject to deposit of 25% that is to say Rs.7,00,000/- within a period of two weeks. By means of memo dated 07.12.2023, the learned counsel for the petitioner submitted a proof of deposit of the amount directed by this Court in the aforesaid order. 10. The amount has, admittedly, been deposited before the Appellate Tribunal. 11. In view of this aforesaid, we set aside the order/proceedings dated 09.11.2023 passed by the Appellate Tribunal, Chennai. The Appellate Tribunal is - 9 - HC-KAR NC: 2025:KHC:33578-DB WP No. 25926 of 2023 required to take a fresh decision on the aforesaid application of the petitioner expeditiously and preferably within a period of one month from the date a certified copy of this order is filed before the Appellate Tribunal. Subject to the aforesaid observations, this petition is allowed. Sd/- (JAYANT BANERJI) JUDGE Sd/- (UMESH M ADIGA) JUDGE AG List No.: 1 Sl No.: 30