- 1 - HC-KAR NC: 2025:KHC:29776-DB WP No. 37734 of 2011 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF AUGUST, 2025 PRESENT THE HON'BLE MR. JUSTICE D K SINGH AND THE HON'BLE MR. JUSTICE VENKATESH NAIK T WRIT PETITION NO. 37734 OF 2011 (GM-DRT) BETWEEN: 1. SRI J C REDDY S/O LATE VENKATRAMA REDDY, AGED ABOUT 63 YEARS, PROPRIETOR M/S CHAMPION EXTRUSIONS UNITE 2, A-21, PEENYA INDUSTRIAL AREA III STAGE, BANGALORE …PETITIONER (BY SRI. M M SWAMY., ADVOCATE) AND: 1. STATE BANK OF MYSORE SPECIALIZED SSI BRANCH REP BY ITS BRANCH MANAGER NO.220, DOUBLE ROAD, PEENYA INDUSTRIAL AREA BANGALORE-560058. 2. SRI A PATRICK S/O S M ARUL DOSS, SINCE DEAD BY LRs., 2(a) MRS.FRANCINA PATRICK, W/O LATE A.PATRICK, AGED ABOUT 62 YEARS, Digitally signed by VASANTHA KUMARY B K Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:29776-DB WP No. 37734 of 2011 2(b) MR.MIVHAEL GEORGE PATRICK, S/O LATE A.PATRICK, AGED ABOUT 40 YEARS, 2(c) MR.VINODH PATRICK, S/O LATE A.PATRICK, AGED ABOUT 37 YEARS, 2(d) MISS MARIA, D/O LATE A PATRICK, AGED ABOUT 32 YEARS, 2(e) MR.ROBERT PATRICK, S/O LATE A.PATRICK, AGED ABOUT 29 YEARS, ALL ARE R/AT No.31, 4TH MAIN ROAD, 3RD CORSS, CHAMARAJPET, BANGALORE-560018 …RESPONDENTS (BY SRI. CHITHAPPA., ADVOCATE FOR R-1; SRI. SYED KHAMARUDDIN, ADVOCATE FOR R-2(A TO E) LRs OF DECEASED R-2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER PASSED IN M.A.NO.298/2008 BY THE DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI ON 17.9.10 VIDE ANNEXURE-N, ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE D K SINGH and HON'BLE MR. JUSTICE VENKATESH NAIK T - 3 - HC-KAR NC: 2025:KHC:29776-DB WP No. 37734 of 2011 ORAL ORDER (PER: HON'BLE MR. JUSTICE D K SINGH) The petitioner herein has filed this writ petition impugning the order dated 17.09.2010 in M.A.No.298/2008 passed by the Debt Recovery Appellate Tribunal, Chennai (for short 'the DRAT'). 2. The petitioner is neither a borrower nor a guarantor for the loan advanced by respondent No.1 - Bank to respondent No.2. It appears that the borrower had executed an agreement of sale (unregistered) on 19.08.2003 in favour of the petitioner. The bank permitted the sale of the secured assets on the condition that entire sale consideration of Rs.26,50,000/- should be deposited with the bank. The petitioner has not paid the amount of Rs.26,50,000/- of the sale consideration which was agreed between the parties way back in the year 2003 with the bank and therefore, the bank proceeded with the SARFAESI proceedings to recover its dues. - 4 - HC-KAR NC: 2025:KHC:29776-DB WP No. 37734 of 2011 3. As the petitioner did not deposit the sale consideration of Rs.26,50,000/- with the bank, the agreement of sale stood terminated inasmuch as the conditions of the sale was not complied with by the petitioner. 4. Despite the petitioner having not been complied with the condition of depositing Rs.26,50,000/- with the bank, the bank extended the time for making the deposit till 31.12.2003 and duly warned the borrower that in the event of default, the recovery proceedings would be initiated. As the deposit of Rs.26,50,000/- was not made even within the stipulated time till 31.12.2003, the bank initiated the recovery proceedings. 5. In the meantime, the petitioner had filed a suit seeking specific performance in O.S.No.9161/2003 before the XXV Additional City Civil and Sessions Judge, Bengaluru on the basis of unregistered agreement of sale dated 19.08.2003 between the petitioner and respondent - 5 - HC-KAR NC: 2025:KHC:29776-DB WP No. 37734 of 2011 No.2 and obtained an order of injunction restraining respondent No.2 from alienating the property in any manner. 6. As the debts remained unpaid, respondent No.1 - Bank filed O.A.No.105/2004 before the Debt Recovery Tribunal (for short the 'DRT'), Bengaluru. The Recovery Officer took up the proceedings under the provisions of Sections 25 and 27 of the Income Tax Act, 1961 for recovery of dues. The petitioner filed the claim petition before the Recovery Officer claiming his right over the property which had been brought for sale. The Recovery Officer, after due consideration, dismissed the claim petition filed by the petitioner. Aggrieved by the said order passed by the recovery officer, the petitioner had filed an appeal before the Presiding Officer and the same was also dismissed. This order passed by the Presiding Officer was challenged in the appeal by the petitioner in M.A. No.298/2008. The DRAT dismissed the appeal on the ground that the bank had permitted respondent No.2 - - 6 - HC-KAR NC: 2025:KHC:29776-DB WP No. 37734 of 2011 borrower to sell the property to the petitioner and deposit the sale proceedings into the loan account as respondent No.2 failed to utilize the opportunity afforded to him by the respondent No.1- Bank. Further, respondent No.1 - Bank had been compelled to obtain the recovery certificate due to the default on the part of respondent No.2 and by the said default, respondent No.2 or anyone claiming through him had lost all the rights over the mortgaged property. It was left open to respondent No.1 - Bank to proceed to recover the dues as per the recovery certificate issued in its favour. 7. The facts as stated are not in dispute. The bank had permitted private sale of the property way back on 19.08.2003 on the condition that the entire sale consideration of Rs.26,50,000/- would be deposited with respondent No.1 - bank. Despite granting time till 31.12.2003, the sale proceeds of Rs.26,50,000/- as agreed was not deposited. Therefore, respondent No.1- - 7 - HC-KAR NC: 2025:KHC:29776-DB WP No. 37734 of 2011 bank proceeded with its recovery proceedings as per the recovery certificate issued by the DRT. 8. We, therefore, find no error of law or jurisdiction committed either by the DRT or by the DRAT. This writ petition has no merit or substance and therefore, it stands dismissed. 9. If respondent No.1 - bank has not recovered the dues, it is at liberty to recover the same by putting on sale of secured assets. Sd/- (D K SINGH) JUDGE Sd/- (VENKATESH NAIK T) JUDGE RKA List No.: 1 Sl No.: 1