- 1 - HC-KAR NC: 2026:KHC:13470 WP No. 16958 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF MARCH, 2026 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 16958 OF 2021 (GM-DRT) BETWEEN: 1. GOPAL KAMATH AND CO., A PARTNERSHIP FIRM HAVING ITS PLACE OF BUSINESS AT NO. 4-6-576 ‘SRIDHAR’, KUDMAL RANGA RAO ROAD KARANGALPADY, MANGALURU - 575 003 REPRESENTED BY ITS MANAGING PARTNER SRI. SRIDHAR L KAMATH 2. SRI SRIDHAR L KAMATH S/O LATE S LAKSHMAN KAMATH AGED ABOUT 67 YEARS R/AT NO.15-7-349/2, SULAKSHAN PLANTERS LANE LADRI ROAD KODIALBAIL MANGALURU – 575 003 DAKSHINA KANNADA 3. SRI SANJAY S KAMATH S/O SRI SRIDHAR L KAMATH AGED ABOUT 34 YEARS R/AT NO.15-7-349/2 SULAKSHAN PLANTERS LANE LADRI ROAD KODIALBAIL MANGALURU – 575 003 DAKSHINA KANNADA Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:13470 WP No. 16958 of 2021 4. SRI SANTHOSH S KAMATH S/O SRI SRIDHAR L KAMATH AGED ABOUT 37 YEARS R/AT NO 15-7-349/2 SULAKSHAN PLANTERS LANE LADRI ROAD KODIALBAIL MANGALURU - 575003 DAKSHINA KANNADA THE PETITIONER NO.1 TO 3 ARE REPRESENTED BY THEIR POWER OF ATTORNEY HOLDER SRI SANTHOSH S KAMATH THE PETITIONER NO.4 HEREIN R/AT NO.15-7-349/2, ‘SULAKSHAN’ PLANTERS LANE, LADRI ROAD KODIALBAIL MANGALURU – 575 003 DAKSHINA KANNADA …PETITIONERS (BY SRI. SANATHKUMAR SHETTY K., ADVOCATE) AND: 1. M/S KOTAK MAHINDRA BANK ABHIMAN COMMERCIAL COMPLEX GROUND FLOOR, PVS JUNCTION KODIALBAIL MANGALURU - 575 001 DAKSHINA KANNADA REPRESENTED BY ITS AUTHORIZED OFFICER SHEEBU M.K. S/O M.K.SOMAN AGED ABOUT 35 YEARS 2. UNION OF INDIA REPRESENTED BY THE SECRETARY MINISTRY OF MICRO SMALL AND MEDIUM ENTERPRISES - 3 - HC-KAR NC: 2026:KHC:13470 WP No. 16958 of 2021 UDYOG BHAVAN, RAJI MARG NEW DELHI-110 011 …RESPONDENTS (BY SRI. FRANCIS XAVIER, ADVOCATE FOR R1 SRI.SHNTHI BHUSHAN, DSGI FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE DECISION OF THE RESPONDENT BANK IN THEIR OBJECTION STATEMENT DATED: 25.08.2021 DENYING THE ENTITLEMENT OF THE PETITIONERS TO AVAIL THE BENEFITS AVAILABLE TO THE PETITIONERS AS PER THE GUIDELINES FOR CREDIT GUARANTEE SCHEME FOR SUBORDINATE DEBT (CGSSD) FOR STRESSED/NPD MSMEs. THE OBJECTION STATEMENT OF THE RESPONDENT VIDE ANNEXURE-N. THIS PETITION, COMING ON FOR FINAL HEARING, 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 relief: ”The Petitioners therefore pray that the Hon'ble Court may be pleased to: (a) Issue a writ in the nature of certiorari to quash the decision of the Respondent Bank in their objection statement dated 25/08/2021 denying the entitlement of the Petitioners to avail the benefits available to the Petitioners as per the guidelines for Credit Guarantee Scheme for Subordinate Debt (CGSSD) for Stressed/NPA MSMEs. The Objection statement of the Respondent at Annexure-N. - 4 - HC-KAR NC: 2026:KHC:13470 WP No. 16958 of 2021 (b) Issue a writ of mandamus directing the Respondent Bank to afford the benefits available to the Petitioners under the Scheme for Subordinate Debt (CGSSD) for Stressed/NPA MSMEs and restructure the loan as per the guidelines at Annexure: J. (c) Issue such other order or direction as this Hon'ble Court deems fit and proper under the circumstances of the case." 2. When the matter came up for hearing, learned counsel appearing for the respondent/Bank submits that, the auction was conducted, the property was delivered to the auction purchaser and sale certificate was also issued. It is submitted that the present writ petition is covered by the order passed by the Co-ordinate Bench of this Court in Traegen Systems Private Limited and others Vs. South Indian Bank Limited and another arising out of W.P.No.13071/2020(GM- RES) dated 04.10.2021. It is submitted that petitioners are not entitled for the benefits as he is seeking under the Scheme. 3. Learned counsel appearing for the petitioners has denied the same and submits that, the writ petition is not covered by the said judgment. It is submitted that petitioner/company is an MSME and whenever the account has to be declared as NPA, they have to follow the procedure as - 5 - HC-KAR NC: 2026:KHC:13470 WP No. 16958 of 2021 contemplated by the Reserve Bank of India/Union Bank of India under the Scheme. It is submitted that the respondents have failed to follow the procedure. Though this account has declared as NPA in the year 2019, as per the Scheme, the particular account stands as NPA as on 30.04.2020, they are entitled for the benefit. It is submitted that when he has made the said request, the same was rejected by the respondents. Hence, he has come before this Court. 4. Having heard the learned counsels on either side, perused the material on record. It is an undisputed fact that, before the DRT, the recovery proceedings initiated by the Bank are pending. Now during the pendency of this writ petition, already sale is concluded and the sale certificate is issued. The contentions that are raised before this Court, can be raised before the DRT. When a particular circular is issued by the Union Bank of India and if there is no compliance by the respondent/Bank, the petitioner is always at liberty to agitate and the DRT is bound to answer the same. 5. Considering the fact that the sale certificate is also issued and the writ petition is of the year 2021, no useful - 6 - HC-KAR NC: 2026:KHC:13470 WP No. 16958 of 2021 purpose will be served in going into the merits of the matter at this point of time. Accordingly, this Court is passing the following: ORDER i. The writ petition is disposed of reserving liberty to the petitioners to avail the alternative remedy before the DRT. ii. It is open to all the parties to raise all grounds before this Court/DRT. iii. The petitioners will have the benefit of Section 14 of the Limitation Act. iv. All I.As. in this petition shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE PKN List No.: 2 Sl No.: 34