- 1 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO. 3078 OF 2025 (GM-CPC) BETWEEN: SRI YOGESH J S/O LATE JAVARAI, AGED 32 YEARS, MANAGING DIRECTOR OF IIFA LANCASTER COLLEGE, R/AT NO.1128, 4TH CROSS, 9TH MAIN ROAD, BSK 1ST STAGE, SRINIVASANAGAR, BENGALURU- 560 050 …PETITIONER (BY SRI. MANJUNATH K S., ADVOCATE) AND: 1. SMT S SANDYA W/O LATE D GANESH, AGED 55 YEARS, R/AT NO.4, 80' RING ROAD, SHIVANNA JYOTHI LAYOUT, NEAR BJP OFFICE, NAGADEVANAHALLI, JNANABHARATHI POST, BENGALURU-56. 2. M/S SIDDAGANGA URBAN CO-OPERATIVE BANK LTD., SHS BUILDING, B H ROAD, TUMKURU-572102 BY ITS CEO, SRI. SHIVAPRAKASH H K, AGED ABOUT 65 YEARS. …RESPONDENTS (BY SRI. ROHIT KASHYAP.M.S, ADVOCATE FOR R2; Digitally signed by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 R1 SERVED, UNREPRESENTED) THIS WP IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO PASS APPROPRIATE WRIT OR ORDERS IN THE NATURE OF WRIT OF CERTIORAN DECLARING THAT THE ORDER DT.15.11.2024 PASSED ON MEMO DT. 21.08.2024 AS WELL AS ON ISSUE NO.2 IN O.S.NO. 4139/2022 ON THE FILE OF THE LEARNED XLII ADDL. CITY CIVIL JUDGE, BENGALURU (CCH-43) REJECTING THE MEMO DT.21.08.2024 AND FURTHER HOLDING THAT THE SUIT OF THE PLAINTIFF SEEKING DECLARATION AND CONSEQUENTIAL RELIEF OF INJUNCTION IS HEREBY NOT MAINTAINABLE AS IT IS HIT BY SEC. 34 OF THE SARFAESI ACT, 2002 (ANNEXURE- A), IS NOT SUSTAINABLE IN LAW AND HENCE SET ASIDE THE SAME. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE PRADEEP SINGH YERUR ORAL ORDER Learned counsel Sri.Manjunath K.S. for the petitioner, learned counsel Sri.Rohit Kashyap M.S. for respondent No.2. Respondent No.1 though served is unrepresented. 2. This petition is filed by the plaintiff who had initiated a suit in O.S.No.4139 of 2022 for the relief of a right of pre-emption as against the respondent No.1 / defendant No.1, who was the sole defendant as on the date of filing of the suit. - 3 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 Subsequently during the course of the suit proceedings, plaintiff thought it necessary to implead the respondent No.2 / defendant No.2 - the bank, Siddaganga Urban Co-operative Bank Ltd., (for short "the bank"). 3. The present petition is filed by the petitioner /plaintiff challenging the order dated 15.11.2024. The petitioner / plaintiff has also questioned another order passed on the very same date on the application filed on the preliminary issue raised by the court after the statements were filed by the defendants No.1 and 2, viz., "Issue No.2: Whether the defendant No.2 proves that the suit is hit by Section 34 of the SARFAESI Act?". 4. During the pendency of the suit proceedings, petitioner / plaintiff filed a memo that he had filed the suit for the relief of right of pre-emption as against the tenant i.e., defendant No.1 and he paid a court fee of Rs.1,82,000/-. It is also contended that he had impleaded the defendant No.2 - bank in the suit proceedings for the bank had initiated proceedings against the defendant No.1 under the SARFAESI - 4 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 Act under Section 13(2) and Section 13(4) and in order to protect the interest of the plaintiff, he volunteered to implead the bank as a party to the suit as defendant No.2. 5. It is the contention of learned counsel for the petitioner that the claim of defendant No.2 - bank was hardly a sum of Rs.27,00,000/- on EMI basis and overall Rs.37,00,000/- against the defendant No.1 who had obtained the loan from the bank. Is further contented by the counsel for the petitioner that the petitioner's stake with defendant No.1 was about Rs.2.81 Crores and having put up educational institutions in the suit schedule property running a P.U. college, degree college and other institutions. Therefore, the right and claim of the petitioner over the respondent No.1 was much higher than the claim made by respondent No.2 - bank against respondent No.1 - the borrower. 6. Therefore, based on all these facts, a memo came to be filed requesting the court to strike off the issue No.2 for the reason that the issue No.2 would be considered and taken as a preliminary issue and in the meantime, the petitioner had entered into a settlement agreement with respondent No.1 and - 5 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 he is about to report the settlement to the trial Court. Accordingly, vide the memo the petitioner sought the matter to be referred to Lok Adalat, for reporting settlement. This being the state of affairs, the trial court instead of referring the matter for settlement to the Lok Adalat has proceeded to pass the orders on the memo as well as on the preliminary issue which is impugned herein. 7. Learned counsel for the respondent No.2 - bank Mr. Rohith Kashyap M.S. contends that the respondent No.1 - borrower has made good the loan amount in its entirety and there is no balance due from respondent No.1 to the bank. He also agrees with the submissions made by learned counsel for the petitioner that there are talks for settlement with the respondent No.1 and there is no claim whatsoever by the bank from the respondent No.1. This being the background, this Court will have to consider the orders on the memo and the subsequent events and developments that have taken place post the filing of the memo on the orders passed by the trial Court. - 6 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 8. Admittedly there is no dispute to the fact that the petitioner / plaintiff filed the suit for preemption of his right of tenancy over the suit schedule property against respondent No.1 and during the course of the suit proceedings, he has impleaded respondent No.2 - bank, which had initiated proceedings against respondent No.1 under the SARFAESI Act to recover the loan amount. It is also not in dispute that during the course of the suit proceedings, the respondent No.1 borrower has made good the loan amount along with the interest to the full satisfaction of the bank - respondent No.2 and no amount is due to the bank as of now. Under the circumstances, the entire question of proceeding further in the matter when the petitioner and the respondent No.1 have agreed and would like to resolve the matter amicably between themselves which is stated in the memo requires to be considered, which has not been done by trial Court. Therefore, this Court is of the opinion that when the lis is between the petitioner and respondent No.1 i.e., plaintiff and defendant No.1, it would be appropriate for the trial Court to deal with the matter once again to record the statement of the petitioner and - 7 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 the respondent No.1 i.e., plaintiff and defendant No.1 and if there is any scope for settlement to record the same or send it to Lok Adalat for settlement. 9. Learned counsel for the respondent No.2 - bank submits that the entire amount of loan borrowed by the respondent No.1 was made good after the impugned order came to be passed by the trial Court. Had it been a situation where the respondent No.1 had paid this amount prior to the passing of the order, nothing would have survived in this matter for the Court to proceed and pass an order on the preliminary issue. Therefore, considering the subsequent events and the fulfilment of the loan amount to the respondent No.2 - bank, this Court deems it appropriate to set aside the orders dated 15.11.2024 and remit it back to the trial Court for consideration of the memo once again in view of the subsequent events and repayment of the borrowed loan amount by respondent No.1 to respondent No.2 and decide the memo in accordance with law. - 8 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 10. Petitioner has filed the suit against respondent No.1 for pre-emption and other reliefs. It is the respondent No.1 who is the borrower of loan from respondent No.2-Bank. It is not in dispute that no proceedings are filed against the petitioner by the Bank. Therefore, the suit being hit by the provisions of Section 34 of the SARFAESI Act itself is doubtful and is not the correct analysis. In the present case, respondent No.2 - Bank was subsequently impleaded to protect the rights of the petitioner - plaintiff. 11. This being the state of affairs, a preliminary issue regarding maintainability came to be framed by the trial court. Thereafter, petitioner filed a memo to delete respondent No.2- Bank. Had the court decided the memo dated 21.08.2024 by deleting the respondent No.2-Bank, then the question of considering issue No.2 would not have arisen as the Bank would be deleted from the array of parties since no relief is sought against the Bank. - 9 - HC-KAR NC: 2025:KHC:43845 WP No. 3078 of 2025 12. In view of the subsequent events and the respondent No.1 having repaid the entire loan amount borrowed from the Bank and the counsel for the Bank making a submission to the effect of full satisfaction of the loan amount, this court deems it appropriate to pass the following: ORDER (i) The petition is allowed. (ii) The impugned order dated 15.11.2024 passed by the trial Court is hereby set aside. (iii) The matter is remitted back to the trial Court to consider the memo dated 21.08.2024 in accordance with law. SD/- (PRADEEP SINGH YERUR) JUDGE SS List No.: 1 Sl No.: 49