Karnataka High Court
Chandradhara Rice Mill vs Union Bank Of India on 28 October, 2025
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WA No. 1753 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF OCTOBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
WRIT APPEAL NO. 1753 OF 2025 (GM-DRT)
BETWEEN:
CHANDRADHARA RICE MILL
NO 17-C, 1ST PHASE, KIADB,
ANTHARASANAHALLI INDUSTRIAL AREA,
NH-4, TUMKUR-572106,
REPRESENTED BY ITS PROPREITOR
MRS ANITHA R,
W/O V B RAMESH,
AGED ABOUT 40 YEARS,
...APPELLANT
(BY SRI. KIRAN KUMAR K, ADVOCATE)
Digitally AND:
signed by
SUMATHY 1. UNION BANK OF INDIA
KANNAN TUMKUR BRANCH,
Location: AT KASTURI MANSION,
High Court of BEHIND KRISHNA TALKIES,
Karnataka M.G.ROAD,
TUMKUR-572101
REPRESENTED BY ITS
AUTHORISED OFFICER
2. RESERVE BANK OF INDIA,
10/3/8, OPP TO ST. MARTHA'S HOSPITAL,
NRUPATHUNGA RD,
OPP ST, NUNEGUNDLAPALLI,
AMBEDKAR VEEDHI,
BENGALURU,
KARNATAKA 560001
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WA No. 1753 of 2025
HC-KAR
BY GENERAL MANAGER
...RESPONDENTS
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO CALL FOR RECORDS AND
SET ASIDE THE JUDGEMENT PASSED BY THE LEARNED
SINGLE JUDGE IN WP NO.24937/2025 DATED 24/09/2025 AND
CONSEQUENTLY ALLOW THE WRIT PETITION.
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 MR. JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
The appellant has filed an appeal impugning an order dated
24.09.2025 passed by the learned Single Judge of this Court in
W.P. No.24937/2025 [GM-DRT]. The appellant had filed the said
writ petition impugning the proceedings initiated by respondent
No.1- Union Bank of India [hereinafter referred to as 'the Bank']
under the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 [hereinafter referred
to as 'SARFAESI Act'].
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2. It is the appellant's case that it is a Small Enterprise and is
covered within the scope of the Micro Small and Medium
Enterprises Development Act, 2006 [hereinafter referred to as
'MSMED Act']. The appellant admits that it has failed to discharge
its repayment obligations to the Bank in respect of financial facility
extended to it. Notwithstanding the fact that the appellant is in
default, it states that no action under the SARFAESI Act could be
initiated as the Bank is required to follow the guidelines stipulated
in the notification dated 29.05.2015 issued by the Reserve Bank of
India and permit measures for rehabilitating the appellant. It is
contented that only if such measures fail that the Bank could take
recourse to the SARFAESI Act for enforcement of its security
interest.
3. The account of the appellant was declared as a Non
Performing Asset [NPA] and the Bank had issued notice dated
29.04.2023 under Section 13(2) of the SARFAESI Act. The same
was followed by a possession notice dated 06.09.2023 issued
under Section 13(4) of the SARFAESI Act. The Bank had also filed
an application before the concerned Court for taking over
possession of the properties mortgaged to the Bank.
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4. As noted above, the said proceedings were challenged by the
appellant by filing the writ petition. Although the learned Single
Judge has made certain observations in favour of the appellant, the
writ petition was not entertained on the ground that some of the
issues required a factual enquiry and therefore, the petitioner must
necessarily avail its alternate remedies.
5. In view of the above, the only question that falls for
consideration of this Court is 'whether the impugned order can be
faulted on the ground that the appellant does not have any
alternate remedy and it was apposite for the Court to entertain the
petition?'
6. Learned counsel appearing for the appellant submits that it
does not have any alternate remedy and cannot file a petition
before the Debt Recovery Tribunal [hereinafter referred to 'DRT']
under Section 17 of the SARFAESI Act. He submits that the power
of the DRT to entertain a petition under Section 17 of the
SARFAESI Act is confined to only matters that arise out of the
SARFAESI Act. He submits that it is the petitioner's case that no
action could be taken under the SARFAESI Act. Therefore, the
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subject matter of dispute would be outside the jurisdiction of the
DRT. Sub -section (1) of Section 17 of the SARFAESI Act is set out
below:
17. [Application against measures to
recover secured debts].--(1) Any
person (including borrower), aggrieved
by any of the measures referred to in
sub-section (4) of section 13 taken by
the secured creditor or his authorised
officer under this Chapter, [may make
an application along with such fee, as
may be prescribed] to the Debts
Recovery Tribunal having jurisdiction in
the matter within forty-five days from the
date on which such measures had been
taken:
[Provided that different fees may be
prescribed for making the application by
the borrower and the person other than
the borrower.]
[Explanation. For the removal of doubts
it is hereby declared that the
communication of the reasons to the
borrower by the secured creditor for not
having accepted his representation or
objection or the likely action of the
secured creditor at the stage of
communication of reasons to the
borrower shall not entitle the person
(including borrower) to make an
application to the Debts Recovery
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Tribunal under sub-section (1) of
section 17.]
[(1A) An application under sub-section
(1) shall be filed before the Debts
Recovery Tribunal within the local limits
of whose jurisdiction-
(a) the cause of action, wholly or in part,
arises;
(b) where the secured asset is located;
or
(c) the branch or any other office of a
bank or financial institution is
maintaining an account in which debt
claimed is outstanding for the time
being.]
7. It is clear from the plain language of Section 17(1) of the
SARFAESI Act that any person aggrieved can move an application
before the DRT in respect to any measures taken by the Bank
under Section 13(4) of the SARFAESI Act. In the present case, the
petitioner's grievance stems entirely from the measures taken by
the Bank under the SARFAESI Act.
8. In this view, we find no merit in the contention that the DRT
did not have the jurisdiction to entertain an application against the
measures instituted by the Bank. We find no grounds to fault the
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decision of the learned Single Judge in relegating the petitioner to
avail its alternate remedies.
9. The Appeal is accordingly dismissed.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C.M. POONACHA)
JUDGE
BS
