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2026 DAILYLAW 23256 (KAR)

SYED ABRAR @ SYED ABRAR GHOUSE v. CANARA BANK

WA/1482/2026 · 2026-06-12

K S Hemalekha

body2026

Judgment text

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- 1 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JUNE, 2026 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA WRIT APPEAL NO.1482 OF 2026 (GM-RES) BETWEEN: 1. SYED ABRAR @ SYED ABRAR GHOUSE S/O. SYED GHOUSE .M AGED ABOUT 48 YEARS, RESIDING AT NO. 8, FLAT NO.1202, 2ND FLOOR, ANRIYA PALATIAL, DOLLARS COLONY, RMV II STAGE EXTENSION, BANGALORE-560 094. 2. VINAY .N S/O. G.H. NAGARAJU, AGED ABOUT 36 YEARS, RESIDING AT NO.8, FLAT NO.1205, C-BLOCK, ANRIYA PALATIAL, DOLLARS COLONY, RMV II STAGE EXTENSION, BANGALORE-560 094. …APPELLANTS (BY SRI RAHUL KAMERKAR, ADVOCATE FOR SRI SHIVA SRINIVASAN, ADVOCATE) AND: CANARA BANK, A BODY CORPORATE CONSTITUTED UNDER THE BANKING COMPANIES, (ACQUISITION AND TRANSFER OF Digitally signed by MAHALAKSHMI B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 UNDERTAKING) ACT, 1970, HAVING ITS HEAD OFFICE AT NO.112, J.C. ROAD, BANGALORE-560 002. AND ONE OF ITS BRANCH OFFICES AT: ARM BRANCH, NO.86, II FLOOR, SPENCERS BUILDING, BANGALORE-560 001, REPRESENTED BY ITS GENERAL MANAGER. …RESPONDENT THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT, 1961 PRAYING TO ALLOW THIS WRIT APPEAL AND SET ASIDE THE ORDER DATED 04.02.2026 PASSED IN WRIT PETITION NO.15840/2024 (GM-RES) IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MRS. JUSTICE K.S. HEMALEKHA ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE) 1. For the reasons stated in the affidavit accompanying the application, I.A No.1/2026, the same is allowed. The delay of 88 days in filing the appeal is condoned. 2. The appellants have filed the present appeal impugning the order dated 04.02.2026 passed by the learned Single Judge in W.P. No.15840/2024 (GM-RES) [impugned order]. The appellants had filed the said writ petition, inter alia, praying as under: - 3 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 "WHEREFORE, it is most respectfully prayed that this Hon'ble Court may kindly be pleased to: a. Issue a writ of certiorari to quash the letter dated 03.05.2024 (issued on 05.06.2024) bearing No. AMR/CR- 020/24-25/YU vide Annexure - G; b. Issue a writ in the nature of Mandamus directing the Respondent to issue sale certificate with respect to the subject lands to the Petitioners in accordance with Order dated 18.11.2020 in W.P. No.47565-67/2014 and W.P.No.59430 of 2014 the Hon'ble Single Judge vide Annexure-A and Orders dated 07.06.2021 in W.A. No.577 of 2020 and W.A.No.1 of 2021 of the Hon'ble Divisional Bench of this Hon'ble Court vide Annexure-B and C for the auction amount of Rs.19,60,30,000/-, within two weeks from the date of the Order; c. Direct the Respondent, not to auction the subject land and not to create any third party rights in the subject land except in favour of the Petitioners, and to set aside the fresh auction if already conducted; d. Pass such other order or writ or direction as this Hon'ble Court deems fit under the facts and circumstances of the case, in the interest of justice and equity." 3. The learned Single Judge examined the merits and held that the appellants were not entitled to the reliefs sought and accordingly, disposed of the writ petition. 4. Briefly stated, the facts are that the respondent bank initiated proceedings for recovery of `69,41,62,722/- against certain borrowers and guarantors. The borrowers had defaulted in discharging their repayment obligations to the respondent bank. - 4 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 5. The respondent bank sought to enforce the security interest in respect of certain properties, which had been mortgaged to secure the loans sought to be recovered. In the aforesaid context, the respondent bank issued an e-auction notice dated 18.08.2014 for the sale of the subject property (lands situated in Javali and Koove, Baloor Hobli, Mudigere Taluk, Chikkamagalur District). Pursuant to the said e-auction notice, a public auction was conducted on 26.09.2014. The appellants participated in the said auction and their bid of `19,60,30,000/- (Rupees Nineteen Crores Sixty Lakhs Thirty Thousand only) was declared to be the highest bid. Accordingly, the respondent bank took steps to sell the subject property to the appellants. In compliance with their obligations, the appellants deposited the entire bid amount with the respondent bank. 6. After the auction was conducted, the erstwhile owners of the subject land challenged the said auction proceedings and deposited a sum of `19,75,00,000/- with the respondent bank. They claimed that they were entitled to redeem the mortgage. However, the appellants as well as the respondent bank contested the said claim. They contended that the auction had been - 5 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 concluded and therefore, the subject property was required to be conveyed to the appellants. 7. In the aforesaid backdrop, the erstwhile owners of the subject property filed the writ petition [W.P. Nos.47565/2014 and 59430/2014] claiming that the auction conducted on 26.09.2014 be set aside and mortgage be considered as redeemed. 8. During the pendency of the said proceedings, the learned Single Judge passed an interim order dated 17.06.2015, which reads as under: "In the meanwhile, considering that respondents No.2 and 3 had deposited a sum of Rs.19,65,30,000/- which was the price offered by them and in order to avoid prejudice being caused to them, respondents No.2 and 3 are granted liberty of receiving back the said amount of Rs.19,65,30,000/-. If such a request is made by respondents No.2 and 3, respondent No.1 shall refund the same to them. The refund of the above-said amount is however subject to result of these petitions and if ultimately the petitioners fail herein, respondents No.2 and 3 would redeposit the amount and proceed further the matter at their option." 9. Pursuant to the aforesaid interim order, on 08.07.2015 the respondent bank refunded the amount of `19,60,30,000/-, which - 6 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 was deposited by the appellants. The said refund was subject to the outcome of the writ petitions. 10. The said writ petitions were dismissed by an order dated 18.11.2020. The operative part of the said order reads as under: "(i) Writ petitions are dismissed with cost of Rs.5,00,000/- (Rupees Five Lakhs) payable by first petitioner-Company to the first respondent-Canara Bank. (ii) Bank is at liberty to receive the amount of Rs.19.75 crores, with interest, if any, from the auction purchaser and confirm the sale in his name as per the terms and conditions of auction held on September 26, 2014." 11. It is apparent from the above that the respondent bank was granted liberty to receive the amount of `19,75,00,000/-, along with interest, if any, from the appellants, and to confirm the sale in their favour in terms of the auction conducted on 26.09.2014. It is material to note that the appellants did not take any immediate steps to pay the said amount and to secure the confirmation of the sale of the subject property in their favour, after the writ petitions were dismissed on 18.11.2020. 12. Aggrieved by the order dated 18.11.2020, the writ petitioners (erstwhile owners of the subject property) filed W.A. No.577/2020 (GM-RES) and W.A. No.1/2021 (GM-RES) before the Division - 7 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 Bench of this Court. The said appeals were dismissed. The said writ petitioners filed SLP Nos.7846/2021 and 11594/2021 before the Supreme Court against the orders passed by the Division Bench of this Court in the said appeals. The said petitions are pending before the Supreme Court. 13. The respondent bank took steps to enforce the security interest and to re-auction the subject property. 14. The appellants sent a letter dated 15.05.2024, seeking transfer of the subject lands on the payment of a sum of `19,60,30,000/-. The respondent bank replied to the said communication by its letter dated 16.05.2024, pointing out that, in terms of the order dated 18.11.2020 passed in W.P. No.47565/2014, it had been granted liberty to receive the amount and confirm the sale and was not compelled to do so. It had the discretion to accept or reject the amount, along with interest, offered by the appellants. 15. It is relevant to note that, prior to the said communication, the respondent bank by its communication dated 03.05.2024 (erroneously), had informed the appellants that it proposed to re- - 8 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 auction the subject property on 10.07.2024 and permitted the appellants to participate in the said auction. 16. This Court is informed that the respondent bank has sold the subject property to a third party. 17. It is the appellants' case that, in terms of the interim order passed in W.P. Nos.47565/2014 and the final order dated 18.11.2020, the appellants are entitled to purchase the subject property at the auction price tendered by them along with the interest. 18. The learned Single Judge rejected the said contention essentially on three grounds. First, the Court found that the interim order on which the appellants premised their claim had merged with the final order dated 18.11.2020. The said order did not reserve any liberty to the appellants to purchase the subject property at the auction price. On the contrary, the liberty to receive the amount and confirm the sale in favour of the appellants was granted only to the respondent bank. The appellants did not raise any objections to the said order at the material time, and insofar as the appellants are concerned, the said order attained finality. Thus, - 9 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 the appellants could not, at a later stage, contend that they were entitled to seek conveyance of the subject property on the basis of the auction price as offered by them. 19. Second, the Court held that, even if it were accepted that the appellants had an option to purchase the subject property at the auction price offered by them, they had failed to exercise such option within a reasonable period. 20. Third, the Court noted that although the appeals were preferred by the erstwhile owners of the subject property against the order dated 18.11.2020, there was no order staying the operation of the said order. 21. It is not necessary to examine whether the option to sell the property was reserved to the respondent bank, and the appellants were not left with any such option. This is because, concededly, the appellants had failed to take any steps within a reasonable time of the writ petitions being disposed, to seek conveyance of the subject property. 22. The learned counsel for the appellants submits that, since the appellants were contesting the appeals filed by the erstwhile - 10 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 owners of the subject property along with the respondent bank as co-respondents, the respondent bank could not have proceeded to sell the property to any other party. He further submits that the appellants were in constant communication with the respondent bank, and the bank had never communicated its view that the appellants had forfeited their right to seek conveyance of the subject property. He also submits that the appellants were not precluded from exercising their rights even at this stage. 23. We find no merit in the aforesaid contentions. As noted above, according to the appellants, they were entitled to exercise their option immediately after 18.11.2020, the date on which the writ petitions (W.P. Nos. 47565/2014 and 59430/2014, preferred by the erstwhile owners) were dismissed. It is also undisputed that they had not communicated their intention to exercise the option immediately thereafter. Even if we accept that the final order dated 18.11.2020 has to be construed as reserving the appellants' right to exercise the option in terms of the interim order, we are unable to accept that the said option was open-ended and could be exercised at any time. - 11 - HC-KAR NC: 2026:KHC:28465-DB WA No. 1482 of 2026 24. The appellants, having failed to communicate their option to purchase the subject property immediately after 18.11.2020, are disentitled from claiming such rights in the year 2024, which is nearly three and a half years after the order dated 18.11.2020 was passed. 25. We find no ground to interfere with the impugned order. 26. The appeal is accordingly dismissed. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (K.S. HEMALEKHA) JUDGE MBM List No.: 2 Sl No.: 8