- 1 - HC-KAR NC: 2026:KHC:20220 WP No. 6761 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 6761 OF 2026 (GM-RES) BETWEEN: SAMPATH RAJU, S/O LATE CHANGAM RAJU, AGED ABOUT 63 YEARS, R/AT NO.342/18, SRI BALAJI NILAYA, 4TH BLOCK, JAYANAGAR, BENGALURU - 560 041. …PETITIONER (BY SRI. SHIVARAJU M K., ADVOCATE) AND: THE MANAGER, IDBI BANK LIMITED, IDBI HOUSE, NO.58, 3RD FLOOR, MISSION ROAD, BENGALURU - 560 027. …RESPONDENT (RESPONDENT SERVED) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO A) ISSUE A WRIT OR MANDAMUS DIRECTING THE RESPONDENT BANK TO CONSIDER THE REPRENTATION DATED 31.10.2025 OF THE PETITIONER AND TO TRANSFER A SUM OF RS.40.00 LAKHS WITH ACCRUED INTEREST ON THE SAME, FROM HIS BANK ACCOUNT WITH THE RESPONDENT BANK TO HIS BANK WITH Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2026:KHC:20220 WP No. 6761 of 2026 YES BANK AS REQUESTED VIDE HIS REPRESENTATION FORTHWITH VIDE ANNEXURE -D AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING (PART HEARD), THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The captioned petition is filed by the petitioner who is the customer of respondent/bank seeking to issue a writ of mandamus directing the respondent/bank to consider his representation dated 31.10.2025 vide Annexure-'D' and to transfer a sum of Rs.40,00,000/- (Rupees Forty lakhs only) with accrued interest in the account held in YES bank. 2. Heard the learned counsel for petitioner and the respondent/bank did not chose to contest the captioned petition. 3. The material on record would indicate that the petitioner had availed a housing loan from the respondent–Bank by mortgaging the subject property. It is - 3 - HC-KAR NC: 2026:KHC:20220 WP No. 6761 of 2026 the specific case of the petitioner that owing to the unprecedented financial distress triggered during the COVID-19 pandemic, he was unable to adhere to the repayment schedule, thereby resulting in the account being classified as a Non-Performing Asset. In that backdrop, the respondent–Bank, invoking its statutory powers under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘SARFAESI Act’), has proceeded against the secured asset and brought the mortgaged property to sale by way of public auction for recovery of its dues, which are stated to be to the tune of Rs.4.60 crores. 4. The gist of the petitioner’s grievance, however, does not pertain to the initiation of proceedings under the SARFAESI Act or the conduct of auction per se, but is confined to the alleged retention of surplus sale proceeds by the respondent–Bank even after the secured debt stood satisfied. It is the specific assertion of the petitioner that a - 4 - HC-KAR NC: 2026:KHC:20220 WP No. 6761 of 2026 sum of Rs.24,36,587/- (Rupees Twenty Four Lakhs Thirty Six Thousand Five Hundred and Eighty Seven only) is still being withheld by the respondent–Bank. In this regard, the petitioner has caused a detailed representation dated 31.10.2025 (Annexure–‘D’) calling upon the respondent– Bank to remit a sum of Rs.40,00,000/- along with accrued interest to his account maintained with YES Bank. Despite such representation, there is a conspicuous silence on the part of the respondent–Bank, compelling the petitioner to invoke the extraordinary jurisdiction of this Court. 5. This Court notes with concern that the respondent–Bank has chosen not to contest the present proceedings, thereby depriving this Court of the benefit of its version as regards the adjustment of sale proceeds and the exact outstanding, if any. In the absence of a counter, this Court is unable to conclusively adjudicate upon the precise entitlement of the petitioner. However, one principle remains well settled and admits of no ambiguity, namely, that once the secured creditor realizes its dues by - 5 - HC-KAR NC: 2026:KHC:20220 WP No. 6761 of 2026 sale of the secured asset, any amount in excess of the total liability cannot be unjustly retained by the Bank. The Bank, being a trustee of such surplus, is under a legal obligation to account for and refund the excess amount to the borrower with due promptitude. Retention of surplus sale proceeds, without lawful justification, would not only be arbitrary but would also run contrary to the scheme and object of the SARFAESI Act, which permits recovery of dues but does not sanction unjust enrichment at the cost of the borrower. 6. In the present case, the records would further disclose that the respondent–Bank has not even passed any speaking order on the representation submitted by the petitioner. Such inaction reflects a degree of apathy and administrative indifference which cannot be countenanced by this Court. When a borrower specifically asserts that surplus amounts are lying with the Bank, it is incumbent upon the secured creditor to examine the claim, reconcile the accounts, and either refund the excess amount with - 6 - HC-KAR NC: 2026:KHC:20220 WP No. 6761 of 2026 accrued interest or, in the alternative, clearly communicate the subsisting liability, if any, with supporting particulars. Failure to do so amounts to dereliction of statutory duty and warrants issuance of a writ of mandamus. 7. In that view of the matter, this Court is of the considered opinion that this is a fit case where appropriate directions are required to be issued to the respondent– Bank to consider the petitioner’s representation in accordance with law, keeping in view the settled principle that surplus amounts, if any, remaining after satisfaction of the secured debt, cannot be withheld and are liable to be refunded to the borrower along with applicable interest. 8. Accordingly, this Court proceeds to pass the following: ORDER (i) The Writ Petition is hereby allowed. - 7 - HC-KAR NC: 2026:KHC:20220 WP No. 6761 of 2026 (ii) The respondent–Bank is directed to consider the representation dated 31.10.2025 submitted by the petitioner vide Annexure–‘D’ and pass a reasoned and speaking order, strictly in accordance with law. (iii) While undertaking such exercise, the respondent– Bank shall specifically determine whether any surplus amount remains after adjustment of the entire loan liability and, if so, shall refund the same to the petitioner together with accrued interest, without any undue delay. (iv) The aforesaid exercise shall be completed within a period of four (4) weeks from the date of receipt of a certified copy of this order. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE SSD List No.: 1 Sl No.: 47