Karnataka High Court

Mr C R Ashok vs The Karnataka Bank Ltd on 30 March, 2022

Bench: S.G.Pandit

                              1


 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 30TH DAY OF MARCH, 2022

                         BEFORE

        THE HON' BLE MR. JUSTICE S.G. PANDIT

        WRIT PETITION No.7002/2022 (GM-RES)

BETWEEN:

MR. C R ASHOK
S/O LATE C T RENUKA PRASAD
AGED 46 YEARS
R/O NO.103, 3RD FLOOR
"PRISTINE VARA"
MUNICIPAL NO.123
INFANTRY ROAD
VASANTHNAGAR
BENGALURU-560001
KARNATAKA.
                                        ...PETITIONER
(BY SRI VIJAYALAKSHMI N., ADV.)

AND:

  1. THE KARNATAKA BANK LTD.,
     ASSET RECOVERY MANAGEMENT BRANCH
     FIRST FLOOR, FKCCI BUILDING
     KEMPEGOWDA ROAD
     BENGALURU-560009
     BY ITS CHIEF MANAGER AND
     AUTHORISED OFFICER
     SRI RAJARAM P N
     S/O LATE P N KRISHN RAMURTHY RAO
     AGED ABOUT 42 YEARS.

  2. MR. SHANAGONDA BHARATH VIKAS
     S/O VENKATESHAM SHANAGONDA
     AGED ABOUT 31 YEARS
     R/O NO.22 GATCOMBE ROAD
     WESTSILVER TOWN
     LONDON E16, 1TB
     UNITED KINGDOM.
                             2


     AND ALSO:
     R/O PLOT NO.18, POULOMI ESTATES
     VAISHALINAGAR
     MADINAGUDA
     CHANADANAGAR
     HYDERABAD
     TELANGANA-500050.
                                           ...RESPONDENTS
(BY SRI NITHIN CHANDRA M, ADV. FOR C/R1)

     THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO DIRECTING THE R1
BANK NOT TO INTERFERE WITH THE PEACEFUL POSSESSION
AND ENJOYMENT OF THE RESIDENTIAL BUILDING DURING
THE PERIOD OF LEASE PURSUANT TO THE REGISTERED
LEASE AGREEMENT DATED 27.01.2021 VIDE ANNEXURE-A.

      THIS PETITION COMING ON FOR PRELIMINARY HEARING
THIS DAY, THE COURT MADE THE FOLLOWING:-

                      ORDER

Petitioner is before this Court under Article 226 of

Constitution of India, praying for a direction in the

nature of writ directing the 1st respondent not to

interfere with the peaceful possession and enjoyment of

the residential building, during the period of lease

pursuant to registered lease agreement (Annexure-A)

dated 27.01.2021.

2. Heard Smt.Vijayalakshmi. N, learned counsel for

the petitioner and Sri. Nithin Chandra M, learned

counsel for the caveator/respondent No.1. Perused the

writ petition papers.

3. Learned counsel for the petitioner submits that

petitioner is a lessee under 2nd respondent under

registered lease agreement dated 27.01.2021 in respect

of the residential building No.103, 3rd floor, "PRISTINE

VARA", Infantry Road, Municipal Ward No.78,

Vasanthnagar, Bengaluru-560 001.

4. The 2nd respondent had obtained loan from the

first respondent-The Karnataka Bank Ltd. (for short

'the Bank'). Having failed to repay the loan amount the

1st respondent-Bank initiated recovery proceedings

under the provisions of SARFAESI Act, 2002 (for short

'the Act') and the Security Interest (Enforcement) Rules,

2002 (for short 'the Rules'). Demand notice dated

30.06.2021 under Section 13(2) of the Act, is issued to

the 2nd respondent and the 1st respondent-Bank also

obtained an order under Section 14 of the SARFAESI

Act.

5. Learned counsel for petitioner would contend that

since the petitioner is a lessee and having paid the lease

amount of Rs.40,00,000/- to the 2nd respondent, prays

for protection of petitioner's interest. It is her

submission that children of the petitioner are studying

and examinations are going on. During examination

time, possession of the petitioner's over schedule

property be protected. The learned counsel for

petitioner has also filed an affidavit dated 30.03.2022 of

the petitioner to say that along with the petitioner his

sister and sister's husband along with children are

residing with him. It is stated that petitioner's sister's

children are studying and they have taken up

competitive examinations. Thus prays for protecting the

possession of the petitioner's schedule property.

6. Learned counsel for the 1st respondent-Bank

submits that as on this day, 2nd respondent is due in a

sum of Rs.6,10,70,000/-. It is submitted that the Bank

is not in a position to take possession of the secured

asset for one or the other reason even after order under

Section 14 of the Act. Further the learned counsel

points out that petitioner, who claims as a lessee is

provided alternate remedy of approaching the Debt

Recovery Tribunal under Section 17 of the Act. Thus he

prays for dismissal of the writ petition.

7. Claim of the petitioner, is that petitioner is a

lessee of the schedule premises under 2nd respondent

under lease deed dated 27.01.2021, whereas the 2nd

respondent had obtained loan from the 1st respondent-

Bank by mortgaging the property prior to the lease of

the schedule property. As on this day, the 2nd

respondent is due to the 1st respondent-Bank more than

Rs.6.10 crores. The 1st respondent-Bank has initiated

recovery action under Section 13 of the Act. When the

petitioner is provided with alternate remedy, normally

this Court would not entertain the writ petition under

Article 226 of the Constitution of India.

8. The Hon'ble Apex Court in a recent decision in

PHOENIX ARC PRIVATE LIMITED Vs. VISHWA

BHARATHI VIDYA MANDIR AND OTHERS reported in

2022 SCC ONLINE SC 44 considering Section 17 of the

Act and earlier decisions, has held that ordinarily relief

under Articles 226 and 227 of the Constitution of India

is not available, if an efficacious alternative remedy is

available to any aggrieved person. The relevant portion

at paragraphs 33, 34 and 35 reads as follows :-

"33. In the case of City and Industrial Development Corpn. Vs. Dosu Aardeshir Bhiwandiwala, (2009) 1 SCC 168, it was observed by this Court in paragraph 30 that the Court while exercising its jurisdiction under Article 226 is duty bound to consider whether ...............(c) the petitioner has any alternative or effective remedy for the resolution of the dispute.

34. In the case of Kanaiyalal Lalchand Sachdev and Ors. (supra) after referring to the earlier decisions of this Court in the cases of Sadhana Lodh Vs. National Insurance Co. Ltd. and Anr., (2003) 3 SCC

524; Surya Dev Rai Vs. Ram Chander Rai (2003) 6 SCC 675 and State Bank of India Vs. Allied Chemical Laboratories, (2006) 9 SCC 252 while upholding the order passed by the High Court dismissing the writ petition on the ground that an efficacious remedy is available under Section 17 of the SARFAESI Act, it was observed that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person.

35. Similar view has been expressed by this Court in subsequent decisions in the case of General Manager, Sri Siddeshwara Cooperative Bank Limited & Anr. (supra) as well as in the case of Agarwal Tracom Private Limited (supra)."

9. The Division Bench of this Court in a decision

SRI ABDUL KHADER Vs. SADATH ALI SIDDIQUI reported

in ILR 2022 KAR 13 has made it clear that a lessee is

required to approach the Debt Recovery Tribunal under

Section 17(4A) of the Act. The relevant paragraphs 14,

15, 16 reads as follows.

14. The Hon'ble Apex court in the case of Hemraj Ratnakar Salian vs. HDFC Bank Ltd. And Others, has declined to grant any relief even though a claim was made that he was a tenant and therefore, is entitled for protection under the Maharashtra rent Control Act. Therefore, on perusal of the above said sub- Section A) and the judgment of the Hon'ble apex Court we would sum up the issue by relegating the appellant to work out his remedies before the Debt Recovery Tribunal. The question as to whether a lawful lease was created before the borrower pledged his secured the consent of secured creditor while leasing the secured asset in favour of tenant are all questions to be examined by the competent Tribunal under Section 17(4A) of the SARFAESI Act.

15. The Hon'ble Apex Court in the case of UNITED BANK OF INDIA vs. SATYAWATI TONDON AND OTHERS has come down heavily on the Courts including High Courts entertaining writ petitions in respect of

matters exclusively falling within the domain of SARFAESI Act. The Hon'ble Apex Court at paragraph 55 has expressed its serious concern that despite repeated pronouncement, HighCourts have been entertaining writ petitions ignoring the availability of statutory remedies under the DRT and SARFAESI Act.

16. Therefore, the contention of the appellant that the orders under Section 13 of the SARFAESI Act are only amenable to the appellate jurisdiction under Section 17(1) of the SARFAESI Act is totally misconceived. The said issue is dealt by the Hon'ble Apex Court in the judgment cited supra and therefore, the contention urged by the appellant that since he has no remedy under the provisions of the SARFAESI Act, he can maintain a writ petition before this Court under Articles 226 and 227 of the Constitution of India cannot be acceded to. Accordingly, point No.1 formulated above is answered in the affirmative."

10. Therefore, the writ petition under Article 226 of

the Constitution of India, would not be maintainable

and it is open for the petitioner to approach Debt

Recovery Tribunal under Section 17 of the Act.

11. Learned counsel for the petitioner submits that

petitioner would be put to hardship, if the petitioner is

evicted on the 1st respondent-Bank taking possession of

the residential property, since the petitioner's sister's

children are studying, who are residing with the

petitioner. Paragraph 3 of the affidavit reads as follows: