- 1 - HC-KAR NC: 2026:KHC:3154 WP No. 9999 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE M.G.S. KAMAL WRIT PETITION NO. 9999 OF 2023 (GM-RES) BETWEEN: 1. SMT LAKSHMI K LAKSHMAN W/O SRI SREERAM D.K., AGED ABOUT 56 YEARS, 2. SRI SREERAM D.K., S/O D N KRISHNAMURTHY, AGED ABOUT 61 YEARS, 3. MISS POOJA D K D/O SRI SREERAM D K, AGED ABOUT 26 YEARS, ALL ARE RESIDING AT NO 2971/9, 6TH MAIN, MCC B BLOCK, DAVANAGERE 577001 …PETITIONERS (BY SMT. NANDITA HALDIPUR, ADVOCATE) AND: CANARA BANK J P EXTENSION BRANCH, DAVANAGERE - 577 001, DAVANAGERE DISTRICT, REPRESENTED BY ITS AUTHORIZED OFFICER …RESPONDENT (BY MISS PREETHU, ADVOCATE FOR SRI. VIGNESH S. SHETTY, ADVOCATE) Digitally signed by SUMA B N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:3154 WP No. 9999 of 2023 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE POSSESSION NOTICE DATED 13.04.2023 ISSUED BY THE RESPONDENT BANK TO TAKE THE POSSESSION OF THE SCHEDULE PROPERTY VIDE ANNEXURE-K. THIS PETITION, COMING ON FOR PRELIMINAY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL ORAL ORDER Though this petition is filed by the petitioners being aggrieved by the issuance of notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in and by which the respondent-bank has initiated the proceedings under Section 13 in respect of the secured asset and in the process of recovery of its dues in a sum of Rs.1,20,38,785.90p and though the petitioners have effective alternate remedy under Section 17 of the Act, this petition is entertained for the limited purpose of considering the `One Time Settlement' which was arrived at between the petitioners and the respondent and which is admittedly complied by the petitioners. - 3 - HC-KAR NC: 2026:KHC:3154 WP No. 9999 of 2023 2. Admittedly petitioners had 4 loan accounts opened with the respondent-bank namely; SL. NO. LOAN ACCOUNT NUMBER DATE OF LOAN LOAN AMOUNT IN RS. 1 0591605000002 29.10.2015 96,00,000.00 2 0591605000003 03.06.2016 50,00,000.00 3 0591704000001 30.03.2021 4,47,258.00 4 0591651005433 27.10.2016 19,00,000.00 3. The one time settlement proposal offer was made by the petitioners to the respondent-bank in respect of first three of the aforesaid loan accounts as per letter dated 27.06.2024 for a total sum of Rs.70,00,000/- in terms of which petitioners agreed to pay a sum of Rs.35,00,000/- on or before 27.06.2024 and remaining sum of Rs.35,00,000/- on or before 22.09.2024. The said proposal was accepted by the respondent- bank on the following terms of payment as evidenced by document No.2 produced along with the memo dated 02.07.2024 which reads as under: - 4 - HC-KAR NC: 2026:KHC:3154 WP No. 9999 of 2023 SL. NO. LOAN ACCOUNT NUMBER DATE OF LOAN LOAN AMOUNT IN RS. PRESENT LIABILITY IN RS 1 0591605000002 29.10.2015 96,00,000.00 44,38,873.90 2 0591605000003 03.06.2016 50,00,000.00 41,98,554.47 3 0591704000001 30.03.2021 4,47,258.00 94,811.05 4 0591651005433 27.10.2016 19,00,000.00 32,97,671.11 4. Accepted OTS offer of Rs.70,00,000/- in full and final settlement of the above mentioned accounts. This was followed by an email correspondence dated 25.06.2024 by the recovery section of the respondent-Canara Bank which is produced as Document No.3 to the said memo which reads as under: "With reference to above letter from the borrower, you may inform her that the down-payment of Rs.35,00,000/- should be paid by 27.06.2024 and for balance of Rs.35,00,000/- she can be given time upto 22.09.2024." 5. Today learned counsel for petitioners has filed a memo dated 20.01.2026 reporting full compliance of One Time Settlement which reads as under: MEMO OF COMPLIANCE "The undersigned humbly submits that as per the terms of One Time settlement Scheme (OTS) dated 28/06/2024 and the order dated 02/07/2024 passed by this - 5 - HC-KAR NC: 2026:KHC:3154 WP No. 9999 of 2023 Hon'ble Court, the Petitioner has paid the entire OTS amount sum of Rs.70,00,000/- (Rupees Seventy Lakhs only) on the following dates: SCHEDULE OF PAYMENTS MADE BY THE PETITIONER TO THE RESPONDENT BANK Sl. No. Date Loan Account Number Amount in Rs. 1 28/06/2024 0591704000001 96,180/- 2 28/06/2024 0591605000002 17,03,819/- 3 28/06/2024 0591605000003 17,00,000/- 4 18/09/2024 0591605000002 18,00,000/- 5 18/09/2024 0591605000003 17,00,000/- Total payment 70,00,000/- It is further submitted that the undersigned also furnishes the loan account statements disclosing aforesaid payment transactions for kind perusal of this Hon'ble Court. 1) Copy of Statement of accounts in Loan Account No. 0591704000001. 2) Copy of Statement of accounts in Loan Account No. 0591605000002. 3) Copy of Statement of accounts in Loan Account No. 0591605000003. Wherefore, it is prayed that this Hon'ble Court be pleased to take the Memo on record and pass necessary orders in the interest of justice and equity." 6. The said memo is also enclosed with a bank statement evidencing the payment of Rs.70,00,000/- as stated in the memo. Thus, referring to the above, learned counsel for - 6 - HC-KAR NC: 2026:KHC:3154 WP No. 9999 of 2023 petitioners submits that the impugned notice as per Annexure- B to the extent of the said three accounts be quashed . 7. In response, learned counsel for the respondent-bank drawing attention of this Court to the very same documents produced by the petitioners referred to above submit that admittedly petitioners are holding four accounts. Fourth one being the Education Loan account (EL account) towards which petitioners are liable to pay Rs.32,97,671/- and that one of the terms of acceptance of OTS was earlier closure of the said education loan. She submitted that the said education loan has not been closed till date and that the education loan of the petitioner's daughter was linked to the secured asset. She also refers to the memo which was filed today by the petitioners and submit that even according to the petitioners there is no payment made towards the said education loan of the daughter of petitioners. Therefore she submits that the OTS settlement cannot be accepted and accounts cannot be closed. However, she fairly submits that if liberty is reserved to the respondent- bank to initiate the proceedings afresh in respect of aforementioned education loan of the daughter of the - 7 - HC-KAR NC: 2026:KHC:3154 WP No. 9999 of 2023 petitioners, respondent-bank has no objection in closing the first three of the four accounts. 8. Submission taken on record. 9. In the light of the aforesaid admitted fact of petitioners having paid a sum of Rs.70,00,000/- on the dates mentioned in the memo extracted hereinabove, in compliance to the One Time Settlement scheme agreed to between the petitioners as well as the respondent-bank, this Court do not see any reason to sustain the impugned notice at Annexure-B to the extent of said three loan accounts. 10. Impugned notices at Annexures A and B to the said extent, are quashed. As regards the claim of the respondent- bank in respect of fourth account which is stated to be education loan of the daughter of petitioners, respondent-bank is at liberty to proceed in accordance with law if so advised. With the above, petition is partly allowed. SD/- (M.G.S. KAMAL) JUDGE SBN List No.: 1 Sl No.: 31