- 1 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 33161 OF 2025 (GM-DRT) BETWEEN: 1. M/S BALAJI STEEL AND PIPES REGISTERED OFFICE NO. 4, 16 AND 17, SY. NO.68, MYLASANDRA, UTTARAHALLI, KENGERI, BANGALORE - 560 060 REPRESENTED BY ITS PARTNERS 2. MR. P. VENUGOPAL NAIDU, S/O. LATE P.G. KANNAIAH NAIDU AGED ABOUT 67 YEARS RESIDING AT 2ND CROSS, 2ND MAIN, BANASHANKARI 2ND STAGE, PADMANABHA NAGAR, BANGALORE- 560 070 3. MRS. P. SUBAMMA, W/O P. VENUGOPAL NAIDU, AGED ABOUT 56 YEARS RESIDING AT 2ND CROSS, 2ND MAIN, BANASHANKARI 2ND STAGE, Digitally signed by MEGHA MOHAN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 PADMANABHA NAGAR, BANGALORE- 560 070 …PETITIONERS (BY SRI. M.A.RAJENDRA, ADVOCATE) AND: THE AUTHORIZED OFFICER PNB HOUSING FINANCE LTD., 40, JHOGH TOWERS, 3RD FLOOR, 27TH CROSS, 5TH MAIN ROAD, JAYANAGARA, 4TH BLOCK, BENGALURU-560 041 …RESPONDENT (BY SRI. FRANCIS XAVIER, ADVOCATE) THIS PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER PASSED BY HONORABLE DRT-II IN SA NO. 116/2025 DAED 17.10.2025 ANNEXURE-A. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI - 3 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 ORAL ORDER The present writ petition is filed seeking the following prayer: "PRAYER WHEREFORE, it is most respectfully prayed that this Hon'ble Court may be pleased to: a. To quash/aside the order passed by Hon'ble DRT-II in S.A.No.116/2025 dated 17.10.2025 ANNEXURE-"A" in the interest of justice and equity. b. To pass any other orders which this court deems fit in the interest of justice and equity." 2. The facts of the case as stated in the writ petition are that petitioner No.1 firm is into trading activities and the main business is procuring raw materials from manufacturers and in turn disturbing steel pipes and allied products to its various cliental all over the State. The petitioner No.1 had obtained loan in the year 2014. In the year 2020, the petitioner approached the respondent/Bank for restructuring the loan accounts and the Bank restructured the loan accounts by substituting the rate of interest from 13% per annum to 10.45% per annum. It is stated that to the surprise of the petitioners, rate of interest is not charged on fixed rate of - 4 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 interest @13% p.a. but have charged on floating rate of interest which is contrary to the Loan Agreement dated 30.08.2014 and 26.09.2014. The account of the petitioner was declared as non-performing asset on 14.10.2024. On 18.10.2024, notice under Section 13(2) of the SARFAESI Act was issued by the respondent/Bank. Later, possession notice was issued on 31.12.2024. According to the petitioner, it was not served on all the petitioners. The petitioners have questioned the same before the Debt Recovery Tribunal-II, at Bengaluru by filing S.A.No.105/2025. Thereafter, the respondent/Bank had filed an application under Section 14 of the SARFAESI Act before the II ACJM, Bengaluru, in Crl.Misc.No.690/2025 and an order was passed to take possession of the scheduled properties. Questioning the same, the petitioners had filed S.A.No.116/2025. The Tribunal had dismissed S.A.No.116/2025 and S.A.No.105/2025 on 17.10.2025. 3. As far as the order passed in S.A.No.105/2025 is concerned, the petitioners had filed an appeal before the Debt Recovery Appellate Tribunal and the same is pending - 5 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 consideration. As far as the order passed in S.A.No.116 /2025 is concerned, the petitioners are before this Court by filing the present writ petition. 4. Learned counsel appearing for the respondent/Bank submits that when the proceedings under Section 13(4) of the SARFAESI Act are initiated by the Bank and the petitioner has approached the Debt Recovery Tribunal as well, questioning the proceedings under Section 14 of the SARFAESI Act and when two Securitization Applications were dismissed on the same day, why the petitioner has challenged one order before this Court by filing this writ petition and other order before the Debt Recovery Appellate Tribunal is not known. It is submitted that the petitioners ought to have approached the Debt Recovery Appellate Tribunal. Learned counsel had relied on paragraph No.36 of the judgment of the Hon'ble Apex Court in case of Varimadugu Obi Reddy Vs. B. Sreenivasulu and Others1 which read thus: "36. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the 1 (2023) 2 SCC 168 - 6 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 SARFAESI Act, 2002, but the order of the Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of pre-deposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under 2nd proviso to Section 18 of the 2002 Act." 5. Relying on this judgment, it is submitted that when there is an effective alternative remedy that is available to the petitioner, he cannot come before this Court by filing this writ petition and this Court cannot entertain the writ petition in the light of the settled law. 6. Learned counsel appearing for the petitioners submits that though they have an alternative remedy of approaching the Debt Recovery Appellate Tribunal, as they are on a question of law and the measures that are interpreted and taken by the Bank, the writ petition is maintainable. It is submitted that without following the procedure and without giving a - 7 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 reasonable time as stipulated under the SARFAESI Act, the respondent/Bank has taken possession on 25.10.2025. It is submitted that the articles of the petitioners are lying in the property. While the writ petition is pending, the respondent/ Bank has issued the Sale Notification and questioning the said Sale Notification, they have filed S.A.No.446/2025 and the same is listed today before the Debt Recovery Tribunal. It is submitted that in the meantime, the respondent/Bank has also issued a Notice stating that if the petitioner is not going to collect the movables from the property, they are going to shift it to some other place. It is submitted that as the petitioner is on the question of law, the writ petition is maintainable. Learned counsel submits that this Court may hear the petitioners on the merits of the matter where the Debt Recovery Tribunal has failed to consider all the legal aspects. 7. Having heard the learned counsels on either side, perused the entire material on record. Against the proceedings under Sections 13(4) and 14 of the SARFAESI Act, two Securitization Applications are filed before the Debt Recovery Tribunal and both the applications were dismissed by way of - 8 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 separate orders on 17.10.2025. All the issues that are raised before this Court can as well be raised before the Debt Recovery Appellate Tribunal and in the light of the fact that against S.A.No.105/2025, already an appeal is filed before the Debt Recovery Appellate Tribunal, this Court finds force in the argument of the learned counsel appearing for the respondent/Bank that the petitioners cannot come before this Court against the order passed in S.A.No.116/2025. All the legal grounds that the petitioners want to urge before this Court as well be urged before the Debt Recovery Appellate Tribunal. In that view of the matter, this Court is not inclined to entertain this writ petition. However, considering the notice that issued by the Bank that they are going to move the movables from the premises and the fact that the petitioners are questioning the procedure that is adopted by the Bank contrary to the provisions of the SARFAESI Act, this Court deems it appropriate to pass the following: ORDER i. The writ petition is dismissed by giving liberty to the petitioners to approach the Debt Recovery - 9 - HC-KAR NC: 2025:KHC:51135 WP No. 33161 of 2025 Appellate Tribunal within a period of 30 days from the date of receipt of copy of this order. ii. The respondent/Bank shall not shift the articles from the property which is in possession of the Bank for a period of 45 days from the date of receipt of copy of this order. iii. The petitioners will have the benefit of Section 14 of the Limitation Act from the date of filing of this writ petition till 30 days from the date of receipt of copy of the order. iv. All I.As. in this petition shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE MEG List No.: 1 Sl No.: 16