- 1 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI WRIT PETITION NO. 7437 OF 2024 (GM-DRT) BETWEEN: 1. MOHAMMED SALEEM S/O LATE ZAHEER AHMED AGED ABOUT 53 YEARS NO.M 16/1, BAMBOO BAZAR ROAD BAMBOO BAZAR MYSORE-570021 2. BALKEES SULTANA W/O LATE ZAHEER AHMED AGED ABOUT 75 YEARS NO.M 16/1, BAMBOO BAZAR ROAD BAMBOO BAZAR MYSORE-570021 …PETITIONERS (BY SRI. ANISH ACHARYA., ADVOCATE) Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 AND: M/S CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LTD., REGISTERED OFFICE AT DARE HOUSE, 2 N S C BOSE ROAD PARRYS, CHENNAI-600001 BRANCH OFFICE AT: 271 ASHRAY, LAKSHMI VILAS ROAD DEVARAJ MOHALLA MYSURU-570024 …RESPONDENT (BY SRI. FRANCIS XAVIER., ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE E-AUCTION SALE DATED 21.02.2024 FIXING THE AUCTION ON 12.03.2023 ISSUED BY THE RESPONDENT VIDE ANNEXURE-B AND TO DECLARE THE E-AUCTION SALE ISSUED BY THE RESPONDENT DTD 21.02.2024 ILLEGAL. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI - 3 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 ORAL ORDER 1. The petitioners have filed this writ petition challenging the E-auction sale notice dated 21.02.2024 fixing the auction on 12.03.2024 issued by the respondent, and to declare the E-auction sale notice issued by the respondent dated 21.02.2024 as illegal. 2. Brief facts, leading rise to the filing of this writ petition are as follows: 3. The petitioners are the borrowers from the respondent finance company in a sum of ₹68,00,000/- and ₹13,38,803/- against the collateral security of the schedule property. The petitioners committed a default. The respondent initiated a recovery proceedings against the petitioners and the mortgaged property. A notice under Section 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest - 4 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 Act, 2002 (for short, ‘the Act’) came to be issued. Further, an E-auction sale notice came to be issued on 21.02.2024. It is contended that the respondent has undervalued the property. Hence, this petition. 4. Heard the arguments of the learned counsel for the petitioners and learned counsel for the respondent. 5. Learned counsel for the petitioners submits that the respondent has not followed the procedure as contemplated under the Act and the Rules, and issued the E-auction sale notice. The said auction notice is arbitrary and erroneous and hence, on these grounds, prays to allow the writ petition. 6. Per contra, learned counsel for the respondent submits that the petitioners have not approached the Court with clean hands. He submits that the petitioners have executed a Memorandum of the Deposit of Title Deed dated 09.08.2019 and the said - 5 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 Memorandum of the Deposit of Title Deed was registered. 7. He submits that the petitioners were again granted an additional Term Loan of ₹13,38,803/-. The petitioners have executed a supplemental Memorandum of Deposit of Title Deed on 06.10.2020. The loan account was classified as Non- Performing Asset on 05.03.2022, and a notice was issued under Section 13(2) of the Act on 14.03.2022, and a notice was issued under Section 13(4) of the Act on 07.06.2022. 8. He also submits that the proceedings were initiated under Section 14 of the Act in Criminal Miscellaneous Petition No.208 of 2022. The said petition was allowed and thereafter, the respondent has taken the physical possession. The petitioners, suppressing the said fact, have filed this writ petition. Hence, he - 6 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 submits that the petition may be dismissed with exemplary costs. 9. Perused the records, and considered the submissions of the learned counsel to the respective parties. 10. It is an undisputed fact that the petitioners had obtained a loan from the respondent-Bank and committed a default. The respondent initiated a recovery proceedings under the Act by issuing a notice under Section 13(2), and under Section 13(4) of the Act, and thereafter, approached the learned Magistrate under Section 14 of the Act. The said petition came to be allowed vide order dated 13.06.2023. The said order has attained a finality and thereafter, the respondent Bank has taken the possession, as per the provisions of the Act. 11. The petitioners have executed a Memorandum of the Deposit of Title Deeds and the same was registered on 09.08.2019. Knowing fully well, that the - 7 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 petitioners have mortgaged the title deeds and created a charge over the property in question, the petitioners have sold the property in favour of the purchaser under the registered sale deed dated 08.09.2023. 12. To consider the case on hand, it is necessary to examine Section 53 of the Transfer of Property Act, which reads as follows: “53. Fraudulent transfer.—(1) Every transfer of immoveable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this sub- section shall impair the rights of a transferee in good faith and for consideration. Nothing in this sub-section shall affect any law for the time being in force relating to insolvency. A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground - 8 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors. (2) Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.” 13. Section 53 of the Transfer of Property Act enumerates that every transfer of immoveable property made with an intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. 14. The petitioners, to defeat the claim of the creditor, has executed a registered sale deed dated - 9 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 08.09.2023 in favour of a purchaser. Thus, the petitioners have played a fraud on the purchaser as well as on the respondent Bank. 15. As rightly pointed out by the learned counsel for the respondent that the petitioners have not approached the Court with clean hands, the petitioners are guilty of misrepresentation of facts and also guilty of suppression of material facts. Hence, the petition is liable to be dismissed with the exemplary costs. 16. In view of the above discussion, I proceed to pass the following: ORDER (I) The writ petition is dismissed with cost of ₹25,000/- payable by the petitioners to the respondent-Bank within one month from the date of receipt of a copy of this order, failing which, the respondent Bank is entitled - 10 - HC-KAR NC: 2026:KHC:8533 WP No. 7437 of 2024 to recover the said amount from the petitioners as arrears of land revenue. (II) Pending applications, if any, stand disposed of accordingly. Sd/- (ASHOK S.KINAGI) JUDGE RK CT:KHV List No.: 2 Sl No.: 7