- 1 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 36841 OF 2025 (GM-DRT) BETWEEN: MR. PRAKASH H., S/O NARAYANA NAIK, AGED ABOUT 47 YEARS 'INCHARA', ANAGALLI HERIKUDRU, TALLUR VILLAGE, KUNDAPURA TALUK, UDUPI DISTRICT -576 230 …PETITIONER (BY SRI. REVANTH KAUSHIK, ADVOIOCATE AND SRI/SMT.KAUSHIKA U., ADVOCATE) AND: 1. CANARA BANK REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, HEAD OFFICE, NO.112, J.C. ROAD, BENGULURU – 560 002 EMAILHOCORPORATE@ CANARABANK.COM Digitally signed by MEGHA MOHAN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 2. THE BRANCH MANAGER, CANARA BANK, KUNDAPURA MUNICIPAL ROAD BRANCH, P.B. NO. 10, KAMATH BUILDING KUNDAPURA, UDUPI DISTRICT – 576 201 3. STATE CONSUMER DISPUTES REDRESSAL COMMISSION PRINCIPAL BENCH, K.G. ROAD, BENGALURU -560 009 (REPRESENTED BY ITS REGISTRAR) …RESPONDENTS (BY SRI. VIGNESH S SHETTY, ADVOCATE FOR R1) THIS PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED AUCTION SALE NOTICE DATED 18.11.2025 ISSUED BY THE RESPONDENT BANK UNDER THE PROVISIONS OF THE SARFAESI ACT, A COPY OF WHICH IS PRODUCED AT ANNEXURE-A, IN SO FAR AS IT RELATES TO THE RESIDENTIAL HOUSE PROPERTY OF THE PETITIONER. - 3 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 THIS PETITION, COMING ON FOR ORDERS, 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: “a) Quash the impugned Auction Sale Notice dated 18.11.2025 issued by the Respondent Bank under the provisions of the SARFAESI Act, a copy of which is produced at Annexure-A, in so far as it relates to the residential house property of the Petitioner; b) Quash the consequential newspaper publication dated 19.11.2025 proposing to auction the Petitioner's residential property, a copy of which is produced at Annexure-B; c) Quash the symbolic possession order passed under Section 14 of the SARFAESI Act by the learned CJM, Udupi, in so far as it relates to the Petitioner's residential house, a copy of which is produced at Annexure- Q; d) Quash the action of the Respondent Bank in classifying the Petitioner's account as a Non- Performing Asset, which is premised on a wrongful debit and without satisfying the statutory requirements contemplated under the SARFAESI Act; e) Declare that the invocation of SARFAESI proceedings by the Respondent Bank is illegal, arbitrary and unenforceable, as the alleged default stands disputed and adjudicated upon in favour of the Petitioner by the competent judicial authority in CC No.109/2023; - 4 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 f) Direct the Respondent Bank to rectify the wrongful debit of Rs.6,36,371.18/- and restore the Petitioner's ODCC account to its original and correct position in accordance with law; g) Direct the Respondent Bank to regularise the Petitioner's loan account in accordance with law and without treating the Petitioner as a wilful or intentional defaulter; h) Pass such other order/s or direction/s as this Hon'ble Court may deem fit in the interest of justice and equity, including all consequential directions necessary to protect the Petitioner's residential property, livelihood and status till adjudication of the dispute.” 2. The facts of the case are that petitioner has availed financial benefits under PMEGP scheme and started a bag manufacturing unit in the year 2021. The petitioner availed the loan from the respondent/Bank having the ODCC account with POS facility with the respondent/Bank. The credit limit for the ODCC account/POS facility is Rs.10,00,000/-. He used the swiping machine for his day to day business activities and the customers of the petitioner also used the swiping machine to credit amount by swiping the machine to the complainant's ODCC account and such swiped amount would directly be credited to the complainant's account. 3. It is the case of the petitioner that the bank without the complainant's permission or consent or use of swiping - 5 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 machine had directly debited an amount of Rs.6,36,317.18 and thereby caused an exceeded credit limit of the petitioner's ODCC account and the credit limit of the said account had exceeded upto Rs.16,96,639/-. Immediately the petitioner stopped his transaction through the swiping machine. When the petitioner came to know about these illegal and fraudulent debits, he informed the same to the respondent/bank and requested them to rectify the same shortly, but the Bank failed to correct the same. He gave a request letter to the bank on 28.02.2023 but the bank had not given any reply. Then, on 06.03.2023 the petitioner had issued a legal notice and the same was received on 07.03.2023 by the bank, still the Bank had not given any reply to the petitioner. Thereafter, the bank has initiated the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred to as ‘SARFAESI Act’). The petitioner filed a complaint before the Udupi District Consumer Disputes Redressal Commission i.e., CC.No.109/2023 which came to allowed by order dated 31.01.2025, whereby the Consumer Forum directed the Bank to re-credit an amount of Rs.6,36,317.18 to the complainant's - 6 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 account along with 10% interest per annum from the date of the respective debits till realization. 4. Additionally, the Bank was directed to pay an amount of Rs.1,00,000/- as compensation for mental anguish and Rs.10,000/- towards the litigation expenses. Against that, the bank has filed an appeal before the Karnataka State Consumer Disputes Redressal Commission, Bengaluru bearing Appeal No.443/2025 and the Karnataka State Consumer Disputes Redressal Commission granted an interim order of stay. In the meantime, the bank proceeded with the SARFAESI proceedings. Now the petitioner is before this Court questioning the sale notice dated issued by the respondent/bank dated 18.11.2025, whereby the sale is scheduled to be held on 19.12.2025 and also seeking to quash the consequential newspaper publication, the symbolic possession and the action of the bank in classifying the petitioner's account as a non-performing asset and also invoking the SARFAESI proceedings. 5. Learned counsel appearing for the Bank submits that the order of the Udupi District Consumer Disputes Redressal Commission is stayed by the Karnataka State Consumer Disputes Redressal Commission, Bengaluru. If the petitioner is - 7 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 aggrieved by any of the proceedings initiated by the Bank under SARFAESI Act, he has an alternative remedy to approach the DRT. It is submitted that the petitioners has already availed the alternative remedy before the DRT. Now, after the order passed by the District Consumer Forum, he has come before this Court and the writ petition has to be dismissed on that ground. 6. Having heard the learned counsel on either side, perused the entire material on record. This court has perused the order passed by the Udupi District Consumer Disputes Redressal Commission which clearly discusses how the account has been declared as an NPA and in fact considering all these aspects, the District Consumer Forum had directed the bank to pay damages of an amount of Rs.1,00,000/- to the petitioner. When there is an effective alternative remedy, this court will normally not interfere with any of the proceedings initiated by the Bank under the SARFAESI Act. 7. Considering the order passed by the Udupi District Consumer Disputes Redressal Commission, wherein all these issues were discussed in detail, in the facts and circumstances - 8 - HC-KAR NC: 2025:KHC:54367 WP No. 36841 of 2025 of this case, this court deems it appropriate to pass the following: ORDER i. Karnataka State Consumer Redressal Commission, Bengaluru is requested to dispose off the pending Appeal No.443/2025 within a period of two months from the date of receipt of the copy of the order. ii. Till such time, respondent/Bank shall not take any coercive steps. Thereafter, if the petitioner is aggrieved by the orders, he shall approach the DRT but not this Court. iii. Accordingly, the writ petition is disposed off. iv. All pending I.As., in the petition shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE TS List No.: 1 Sl No.: 22