Kotak Mahindra Bank vs Gopal Kamath And Co
2021 Latest Caselaw 5726 Kant

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 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

     DATED THIS THE 8TH DAY OF DECEMBER, 2021

                       PRESENT

THE HON'BLE MR. RITU RAJ AWASTHI, CHIEF JUSTICE

                          AND

THE HON'BLE MR.JUSTICE SACHIN SHANKAR MAGADUM

       WRIT APPEAL NO.1235 OF 2021 (GM-DRT)

BETWEEN:


KOTAK MAHINDRA BANK
ABHIMAN COMMERCIAL COMPLEX,
GROUND FLOOR, PVS JUNCTION
KODIALBAIL,
MANGALURU - 575 001
REPRESENTED BY ITS
AUTHORISED SIGNATORY
MR. SHEEBU M.K.
S/O MR. M.K. SOMAN
AGED ABOUT 35 YEARS
                                         ... APPELLANT

(BY SRI SRINIVAS RAGHAVAN, SENIOR ADVOCATE FOR
SRI ACHAL ANAND V, ADVOCATE)


AND:


1.     GOPAL KAMATH AND CO.
       A PARTNERSHIP FIRM WITH ITS
       PLACE OF BUSINESS AT:
       NO. 4-6-576, 'SRIDHAR',
       KUDMAL RANGA RAO ROAD
       KARANGALPADY
       MANGALURU - 575 003
       REPRESENTED BY ITS
       MANAGING PARTNER
       MR. SRIDHAR L KAMATH
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2.   MR. SRIDHAR L. KAMATH
     S/O LATE S. LAKSHMAN KAMATH
     AGED ABOUT 67 YEARS
     RESIDING AT NO.15-7-349/2
     'SULAKSHAN', PLANTERS LANE
     KODIABAIL
     MANGALURU - 575 003.

3.   MR. SANJAY S. KAMATH
     S/O MR. SRIDHAR L. KAMATH
     AGED ABOUT 34 YEARS
     RESIDING AT NO.15-7-349/2
     'SULAKSHAN' PLANTERS LANE
     KODIABAIL
     MANGALURU - 575 003.

4.   MR. SANTHOSH S KAMATH
     S/O MR. SRIDHAR L KAMATH
     AGED 37 YEARS
     RESIDING AT NO.15-7-349/2
     'SULAKSHAN' PLANTERS LANE
     KODIABAIL
     MANGALURU - 575 003.


                                       ... RESPONDENTS


(BY SRI SANATH KUMAR SHETTY K., ADVOCATE)
                          ---
     THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO SET ASIDE
THE IMPUGNED ORDER DATED 9TH NOVEMEBER 2021, PASSED
BY THE LEARNED SINGLE JUDGE IN W.P. NO. 16958/2021
(GM-DRT) AND CONSEQUENTLY ALLOW THE WRIT APPEAL
AND ETC.


     THIS APPEAL COMING ON FOR ORDERS THIS DAY, CHIEF
JUSTICE DELIVERED THE FOLLOWING:
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                               JUDGMENT

This writ appeal has been filed against the interim

order dated 09.11.2021 passed in Writ Petition

No.16958/2021 by learned Single Judge. The said order

reads as under:-

"Call after four weeks. In the meanwhile, auctions proceedings shall not be held."

2. Learned counsel for the appellant-Bank submits

that the respondents/petitioners have filed the writ petition

in order to circumvent the proceedings before the Debts

Recovery Tribunal (for short, 'DRT'). Moreover, the relief

granted by the interim order dated 09.11.2021 was neither

prayed as main relief nor as interim relief. The case of the

respondents/petitioners before the writ Court was that they

have not been granted the benefits of Credit Guarantee

Scheme for Subordinate Debt (CGSSD) for Stressed/NPA

MSMEs (for short, 'Credit Guarantee Scheme'). The

appellant-Bank, in their objection statement dated

25.08.2021, have denied the entitlement of the

respondents/petitioners to avail the benefits as per the

guidelines for Credit Guarantee Scheme.

3. Learned counsel for the respondents/petitioners

submits that the appellant-Bank might have initiated

recovery proceedings against the respondents/petitioners

before the DRT under Section 19 of the Recovery of Debts

Due to Banks and Financial Institutions Act, 1993 which

could have been contested by the respondents/petitioners.

Since it was brought to the knowledge of the

respondents/petitioners that the appellant-Bank has denied

the benefits to the respondents/petitioners under Credit

Guarantee Scheme, they approached the writ Court. Since

after filing of the writ petition, the auction was fixed, as

such, the writ Court, on the request of the respondents-

petitioners, has granted interim order. It is submitted that

the DRT could have considered the grievance of the

respondents/petitioners regarding denial of the benefits of

the Credit Guarantee Scheme.

4. We have considered the submissions made by

learned counsel for the appellant-Bank and learned counsel

for the respondents/petitioners.

5. With the consent of learned counsel for the

parties, we proceed to decide the appeal at the admission

stage.

6. The questions involved in this appeal are as to

whether the writ petition itself preferred by the

respondents/petitioners was maintainable or not and as to

whether the interim order granted by the writ Court was

within the scope of the writ petition.

7. So far as the first question is concerned, we are

of the considered view that in view of the law laid down by

the Apex Court in the case of United Bank India vs.

Satyawati Tondon and Others reported in (2010) 8 SCC

110, while interpreting the scope of remedy under Section

17(1) has held that the expression 'any person' used in

Section 17(1) is of wide import. The Apex Court was of the

view that it takes within its fold, not only the borrower but

also the guarantor or any other person who may be

affected by the action under Section 13(4) or Section 14. In

the very same judgment, the Hon'ble Apex Court has come

down heavily on High Courts entertaining the writ petitions

ignoring the availability of statutory remedy under the DRT

Act and the SARFAESI Act.

8. The Hon'ble Apex Court in the case of

Authorized Officer, State Bank of Travancore and

Another vs. Mathew K.C. reported in (2018) 3 SCC 85,

reiterating the principles laid down by the Apex Court in the

case of Commissioner of Income Tax and Others vs.

Chhabil Dass Agarwal reported in (2014) 1 SCC 603,

was of the view that the High Courts should not entertain a

writ petition under Article 226, if alternative statutory

remedies are available, except in cases falling within the

well-defined exceptions carved out in the judgment cited

supra. Therefore, in the light of the principles laid down by

the Hon'ble Apex Court, the High Court shall not interfere in

matters which are cognizable by DRT. In the present case,

it is an admitted position that the DRT was seized with the

recovery proceedings initiated by the appellant-Bank

against the respondents/petitioners and the

respondents/petitioners had already appeared before the

DRT and were contesting the said proceedings.

     9.    It      was              incumbent         upon         the

respondents/petitioners        to    have     moved        appropriate

application before the DRT on the grounds based on the

benefits applicable to them as per the guidelines of Credit

Guarantee Scheme. It was for the DRT to have considered

the said application and pass appropriate orders. The

respondents/petitioners on their own could not have

presumed that the relief claimed before the writ Court could

not have been granted by the DRT and therefore, filed the

said writ petition. In the given facts, we are of the

considered view that the writ petition preferred by the

respondents/petitioners is not maintainable and deserves to

be dismissed.

10. So far the second question is concerned, it is to

be noted that in the writ petition, the

respondents/petitioners have not challenged the auction

proceedings. In the interim prayer also, they have not

claimed any such relief to restrain the appellant-Bank from

proceeding with the auction. However, the learned Single

Judge has surpassed beyond the scope of the writ petition

to grant the interim relief vide impugned order dated

09.11.2021 which is under challenge.

11. In view of the above, we are of the considered

view that the impugned order is liable to be set aside.

Accordingly, the impugned order dated 09.11.2021 passed

in W.P.No.16958/2021 by learned Single Judge is hereby

set aside. The writ appeal is allowed. Consequently,

W.P.No.16958/2021 stands dismissed.

Sd/-

CHIEF JUSTICE

Sd/-

JUDGE

KPS