[Cites 9, Cited by 0]
Karnataka High Court
Reliance Projects And Property vs Deputy Registrar on 2 April, 2026
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WP No. 8682 of 2026
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 02ND DAY OF APRIL, 2026
BEFORE
THE HON'BLE MR. JUSTICE E.S.INDIRESH
WRIT PETITION NO.8682 OF 2026 (CS-RES)
BETWEEN:
1. RELIANCE PROJECTS AND PROPERTY
MANAGEMENT SERVICES LIMITED
(PREVIOUSLY KNOWN AS RELIANCE
CORPORATE IT PARK LIMITED)
A 'COMPANY'
WITHIN THE MEANING OF
THE COMPANIES ACT, 2013
REGISTERED OFFICE AT: 101,
SAFFRON, NEAR CENTER POINT,
PANCHWATI 5 RASTA,
AMBAWADI, AHMEDABAD,
GUJARAT - 380006.
WITH ITS BRANCH OFFICE AT
NO.62/2, RICHMOND ROAD,
BANGALORE - 560025
REPRESENTED BY ITS
Digitally signed by AUTHORISED SIGNATORY.
CHAYA S A
Location: HIGH
....PETITIONER
COURT OF
KARNATAKA
(BY SRI. MANU PRABHAKAR KULKARNI, ADVOCATE)
AND:
1. DEPUTY REGISTRAR
OF CO-OPERATIVE SOCIETIES
UDUPI DISTRICT,
FIRST FLOOR,
DEPUTY COMMISSIONER OFFICE,
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RAJATADRI, MANIPAL,
UDUPI DISTRICT - 576104.
2. ASSISTANT REGISTRAR
RECOVERY OFFICER
SOUTH CANARA DISTRICT
CENTRAL CO-OPERATE BANK LTD.
UTHKRUSHTA SAHAKARI SOWDHA,
KODIALBAIL,
MANGALURU - 575 003.
3. SOUTH CANARA DISTRICT CENTRAL
CO-OPERATIVE BANK LTD.
HAVING ITS HEAD OFFICE AT:
UTHKRUSHTA SAHAKARI SOWDHA,
KODIALBAIL, MANGALURU 575 003
ALSO HAVING ITS OFFICE AT:
PUTTUR MAIN ROAD,
PUTTUR 574 201
REPRESENTED BY ITS
CHIEF EXECUTIVE OFFICER.
4. SAHAD RENTAL PRIVATE LIMITED
A COMPANY UNDER COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
FORUM HEIGHTS, DARBE,
PUTTUR, DAKSHINA KANNADA 574202
REPRESENTED BY ITS DIRECTOR
5. MR. SULAIMAN K.
S/O YUSOOF BEARY,
AGED ABOUT 54 YEARS
RESIDING AT MURABAIL HOUSE
KALLADKA POST, GOLTHAMAJALU VILLAGE,
BANTWALA TALUK,
DAKSHINA KANNADA - 574 222.
6. MOHAMMAED SALEEL
S/O AHMED
RESIDING AT PURUSHARA KATTE HOUSE,
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NARIMOGARU POST AND VILLAGE,
PUTTHUR TALUK,
DAKSHINA KANNADA - 574221.
7. MUMTAZ P.
W/O SULAIMAN K.
RESIDING AT MURABAIL HOUSE
KALLADKA POST,
GOLTHAMAJALU VILLAGE,
BANTWALA TALUK,
DAKSHINA KANNADA - 574 222.
8. HAMID SAHEB,
S/O CHATA ISMAIL SAHEB
RESIDING AT DOMRADI HOUSE,
KADABA POST AND VILLAGE,
PUTTHUR TALUK,
DAKSHINA KANNADA - 574221.
9. MANGALORE REAL ESTATE
AND DEVELOPERS PRIVATE LIMIT
A COMPANY UNDER COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT:
DOOR NO.16-1-32/4, 3RD FLOOR,
ROHAN CORPORATION,
BENDOREWELL, BALMATA ROAD,
MANGALORE - 575002
REPRESENTED BY ITS DIRECTOR
10. SALE OFFICER
SOUTH CANARA DISTRICT CENTRAL
CO-OPERATIVE BANK
UTHKRUSHTA SAHAKARI SOWDHA,
KODIALBAIL,
MANGALURU - 575 003.
...RESPONDENTS
(BY SRI. YOGESH D. NAIK, AGA FOR R1, R2 & R10;
SRI. D.R. RAVISHANKAR, SENIOR COUNSEL FOR
SRI. RAKSHIT KUMAR, ADVOCATE FOR R3;
V/O DATED 23.03.2026 NOTICE TO R4 TO R8
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IS DISPENSED WITH;
SRI. MAHESH KIRAN SHETTY, ADVOCATE FOR R9)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE
THE ORDER OF THE RESPONDENT NO.1 DEPUTY REGISTRAR OF
CO-OPERATIVE SOCIETIES, UDUPI DISTRICT DATED
09.03.2026 IN APPEAL NO.02/2025 (ANNEXURE -A) ISSUED TO
THE PETITIONER ON 11.03.2026; AND ETC.
THIS WRIT PETITION HAVING BEEN RESERVED FOR
ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, E.S.
INDIRESH J., MADE THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH
CAV JUDGMENT
In this writ petition the petitioner is assailing the
order dated 09.03.2026 (Annexure-A) in Appeal No.2
of 2025 passed by respondent No.1; order dated
29.12.2022 in EP No.2 of 2022-23 passed by the
respondent No.2 (Annexure-B); notice dated
05.01.2023 (Annexure-C) issued by the respondent
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No.10; order dated 10.12.2025 (Annexure-D) issued
by the respondent No.10 inter-alia sought for
declaration that, the Sale Certificate dated 16.12.2022,
registered on 26.12.2022 is subject to the registered
Lease Deed dated 01.12.2017 as well as to declare
that the petitioner is a tenant under the registered
Lease Deed dated 01.12.2017.
2. Relevant facts for adjudication of this writ
petition are that, the petitioner is a "Company" and a
tenant in schedule property No.2, constructed on
schedule property No.1. The petitioner was previously
known as Reliance Corporate IT Park Ltd., and merged
with Reliance Digital Platform and Project Services Ltd.
Respondent No.3, is a Society, constituted under the
provisions of Karnataka State Co-operative Societies
Act, 1959 (for short, the Act). The respondent No.3-
Society, has extended the loan to the respondent
No.4. Respondent No.6 to 8 are the guarantors of the
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loan extended by respondent No.3-Society. The
respondent No.5, is a owner of the constructed
commercial building on schedule property No.1. It is
stated that, schedule property No.2 is a portion of the
building "Forum Heights" which is constructed on the
schedule property No. 1. Lease Deed dated 01.12.2017
(Annexure-F) was entered into between the petitioner
with the respondent No.5, in respect of schedule
property No.2 for a period of 15 years till 24.08.2032.
It is also stated that respondent No.5 had mortgaged
schedule property No.1, in favour of Vijaya Bank, and
on account of Non-Performing Assets (NPA), Vijaya
Bank initiated proceedings under Section 13(2) of the
Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (for
short 'SARFAESI' Act). It is also stated that the Vijaya
Bank, did not dispute as to the lease made in favour of
the petitioner. Respondent No.5 had created an
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encumbrance by way of mortgage in respect of the
premises in question to Vijaya Bank, Puttur.
3. It is further stated that, the respondent
No.5, through respondent No.4, availed the loan of Rs.
10 Crores from respondent No.3-Bank/Society, and
further mortgaged schedule property No.1 with the
respondent No.3 Bank/Society to the said loan.
Accordingly, the respondent No.5 has closed the loan
account with the Vijaya Bank, as per letter dated
06.06.2018. It is the case of the petitioner that the
petitioner was not aware about the mortgage of the
schedule property No.2, with the respondent No.3 and
came to know about the same during December, 2022.
It is stated in the petition that, the petitioner has been
continued to be the tenant in the schedule property
No.2 and unaware about the mortgage about the said
property. It is further stated that on account of failure
on the part of respondent No.5, to repay the loan with
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the respondent No.3, and as such respondent No.3 has
initiated recovery proceedings under the Act. It is
stated that, the petitioner was not a party in the
proceedings initiated by the respondent No.3 before
the respondent No.2. On 17.06.2022 the respondent
No.2, caused notice, under Rule 34 (3) of the
Karnataka State Co-operative Societies Rules, 1960
(hereinafter referred to as KCS Rules) to the
respondent No.4 to 8 for clearing the loan account,
and further intimated to the respondent No.4 to 8 that,
in the event of default in satisfying the claim of the
respondent No.3, the schedule property No.1 would be
sold through public auction. It is also stated that, on
01.08.2022, respondent No.2, caused notice as to
attach the schedule property No.1 towards recovery of
debts owed by the respondent Nos. 4 and 5 to the
respondent No.3-Bank/Society and the public auction
was fixed on 13.09.2022 at 12 pm.
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4. It is the case of the petitioner that, the
respondents failed to considered the prior registered
Lease Deed executed in favour of petitioner having
earlier encumbrance with the schedule property No.2.
It is also stated that the auction proceedings were
conducted, without hearing the petitioner, and as such,
the respondent No.2 has passed an order dated
29.12.2022 directing the respondent No.10 to take
possession of the schedule property No.1 including the
schedule property No. 2 with the police assistance. It
is the case of the petitioner that, Rule 38-A, (8)(b) of
the Rules, is not applicable to the case on hand and
therefore, the impugned auction is null and void. The
respondent No.10, was a successful bidder in the sale
auction held on 28.10.2022. It is also stated that, the
alleged public auction is contrary to law and as such,
the petitioner has presented this writ petition
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challenging the orders passed by the respondent-
authorities at Annexure-A to D.
5. I have heard Sri. Manu Prabhakar Kulkarni,
learned counsel for the petitioner; Sri. Yogesh D. Naik,
learned counsel for the respondent Nos. 1, 2 and 10;
Sri. D.R. Ravishankar, learned Senior Counsel
appearing on behalf of Sri. Rakshit Kumar learned
counsel for the respondent No.3. and Sri. Mahesh
Kiran Shetty, learned counsel for the respondent No.9.
6. It is submitted by Sri. Manu Prabhakar
Kulkarni, learned counsel for the petitioner that the
impugned orders passed by the respondent-authorities
are erroneous and both the respondent - authorities
have not considered the fact that the petitioner is in
possession of the property as per the registered Lease
Deed dated 01.12.2017 and got prior interest and
encumbrance, by the petitioner has been ignored by
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the respondent-authorities and accordingly, sought for
interference of this Court.
7. It is also argued by the learned counsel for
the petitioner that, Rule 38-A(5) and 38-A(8) of the
KCS Rules, are not applicable to the case on hand and
the impugned orders passed by the respondent-
authorities is erroneous as the respondent No.2 does
not have the powers, identical with the civil court for
executing orders of recovery proceedings subject to
the extent provided under Section 117 of the Act. It is
further argued by the learned counsel for the
petitioner by referring to Section 101 to 103 of Act and
Rules 31, 32, 33A to 49 of KCS Rules, that, the
aforementioned proceedings makes it clear that, the
respondent No.2 does not have power of the Civil
Court, and therefore, sought for interference of this
Court. It is also argued by the learned counsel for the
petitioner by referring to Section 65 of the Transfer of
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Property Act, that, the alleged mortgage of the
schedule property No.2 with the respondent No.3
Bank/Society, was subsequent to the execution of the
registered Lease Deed dated 01.12.2017 and
therefore, the respondent-authorities failed to consider
that the loan with the Vijaya Bank was closed and a
fresh loan was taken from the respondent No.3 by the
respondent No.4, and further, the Lease Deed between
the petitioner and respondent Nos.4 and 5 was prior to
the raising loan and alleged mortgage by the
respondent No.5 with the respondent No.3-
Bank/Society, and same is in violation of Section 65 of
the Transfer of Property Act and accordingly, sought
for interference of this Court.
8. It is also argued that, the respondent-
authorities failed to considered that the alleged sale of
the schedule property was subject to the prior
encumbrance in favour of petitioner under Rule
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38(2)(e) and therefore, sought for interference of this
Court. In this regard, learned counsel for the petitioner
places reliance on the judgment of the Hon'ble
Supreme Court in the case of Harshad Govardhan
Sondagar v. International Assets Reconstruction
Company Ltd and others reported in (2014) 6 SCC
1 and argued that, in the event of valid Lease Deed
has been executed prior to the creation of the
mortgage with the respondent No.3 and such tenancy
right cannot be disturbed.
9. Learned counsel for the petitioner further
argued that, the respondent - authorities failed to
consider the right of the lessee - petitioner herein had
a right to enjoy the property till the completion of the
lease period and such right cannot be taken away
without the authority of law, as per Article 300-A of
the Constitution of India and accordingly, sought for
interference of this Court.
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10. Per contra, Sri. D.R. Ravishankar, learned
Senior Counsel appearing on behalf of Sri. Rakshit
Kumar, learned counsel for respondent No.3, invited
the attention of the Court to various provisions under
the Act, particularly referring to Section 102 of the Act
and contended that, if the language employed under
Section 102 of the Act is read along with Rule 38 of the
Rules, the respondent - authority exercising
jurisdiction under Section 70 of the Act, is a 'Civil
Court' for the purpose of execution of the orders and
therefore, submitted that, the arguments advanced by
the learned counsel appearing for the petitioner cannot
be accepted. Referring to Section 65-A(e) of the
Transfer of Property Act, 1882, it is contended by the
learned Senior Counsel that, the remedy available for
the petitioner to continue the lease in respect of the
subject building is narrowed down and at any rate, the
right of the lessee shall in no case exceed three years
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from the execution of the Lease Deed under the
circumstances of the case, and accordingly, sought for
dismissal of the petition.
11. Learned Additional Government Advocate
Sri. Yogesh D. Naik, has referred to Section
101(2)(b)(iv) of the Act and argued that the
respondent - Registrar is clothed with all the powers of
the Civil Court as to execution of the Award or Decree
and therefore, sought for dismissal of the petition.
12. In the light of the submissions made by
learned counsel appearing for the parties, it is not in
dispute that, the respondent No.5 is the absolute
owner of the schedule property No.1 and the schedule
property No.2 is the portion of the building constructed
on the schedule property No.1. It is also to be noted
that the petitioner took the schedule property No.2 on
lease as per the registered Lease Deed dated
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01.12.2017 for a period of 15 years till 24.08.2032. It
is also to be noted that, the schedule property No.1
was mortgaged by respondent No.5 in favour of Vijaya
Bank and proceedings were initiated under SARFAESI
Act against the respondent No.5 towards the loan
dispute. In the meanwhile, the respondent No.5
availed loan from the respondent No.3 - Bank/Society
and as such, mortgaged the entire schedule property
No.1 to the respondent No.3-Bank/Society. It is the
case of the petitioner that, petitioner was unaware
about the mortgage made by the respondent No.5 in
favour of the respondent No.3 as a security of loan.
The respondent No.2, in a dispute raised by the
respondent No.3, against respondent No.5, passed a
demand notice on 11.07.2022 as to sale of the
schedule property No.1. I have carefully examined the
language employed under Rule 38 of the Rules. On
careful consideration of the aforementioned Rule,
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embodies the authority of the respondent No.2 to
attach and sale of immoveable property in a dispute
raised under Section 70 of the Act.
13. The core question to be raised at Bar that
the respondent No.2 - authority has no jurisdiction like
a Civil Court in the execution proceedings as to sale
and attachment. On careful consideration of the right
of the respondent No.3 - Bank to take over the
schedule property No.1 for auction on account of
default on the part of respondent No.5 has to be
decided based on the recitals in the registered Lease
Deed dated 01.12.2017 (Annexure-F). Clause 21 of
the Lease Deed provides for attornment of the Lease
Deed, which reads as under:
21. Attornment: In the event the lessor at any time during
the subsistence of the lease intends to sell/ transfer/
assign his rights in the Demised Premises as a whole or in
part, in such an event, lessor shall ensure that such sale,
transfer or assignment shall be subject to the rights of the
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Lessee under the Lease Deed and the Lessee shall attorn
to such transferee on the same terms and conditions as
are contained therein and also a letter shall be issued by
the lessor to the prospective new owner(s) in favour of the
Lessee confirming that the terms of the lease shall be
binding on the new owner(s) and that they shall also
acknowledge the Security Deposit paid by the Lessee to
the lessor, the benefit of which shall also be transferred to
the new owner(s) and all adjustments shall be made
accordingly. The lessor further covenants with the Lessee
that in such an event, the lessor shall ensure that such
third party transferee or assignee shall execute
appropriate deed of novation in favour of Lessee and also
extend full co-operation to the Lessee to protect its rights
flowing therefrom.
(underlined by me)
14. On careful examination of the aforementioned
Clause 21 of the Lease Deed which determines the
rights of the parties in the event of the lessor intends
to sell / transfer / assign his rights in respect of the
subject schedule property No.1 and taking into
consideration the finding recorded by both the original
authorities in Execution Petition No.2/2022-23
(Annexure-B) and the Appellate Authority - respondent
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No.1 in Appeal No.2/2025 (Annexure-A) has not
discussed the rights of the parties in the light of Clause
21 of the Lease Deed. Though several grounds have
been urged by the learned counsel appearing for the
parties, however, there needs to be a finding by the
respondent - authorities as to the rights of the parties
for attornment of the lease in the light of Clause 21 of
the Lease Deed.
15. Therefore, without going to the merits of
the case, I am of the view that, it is a fit case to
remand the matter to respondent No.2 to re-consider
the dispute afresh as to observation made above and
to decide the rights of the parties in the light of Clause
21 of the Lease Deed. While doing so, the respondent
No.2 - authority shall consider the relevant provisions
under the Act and the rights and liabilities of the
parties to the Lease Deed as per the Transfer of
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Property Act, 1882 in consonance with Article 300-A of
the Constitution of India.
16. In the result, I pass the following:
ORDER
(i) Writ Petition is allowed.
(ii) Order dated 09.03.2026 (Annexure-A) in
Appeal No.2/2025 on the file of respondent No.1
and the Order dated 29.12.2022 in Ex.P.
No.2/2022-23 (Annexure-B) on the file of
respondent No.2 are hereby set aside and the
matter is remitted to the respondent No.2 to
reconsider the issue afresh after affording
opportunity of hearing to the parties and to
decide the rights of the parties by looking into
Clause 21 of the Lease Deed including other
grounds that may be urged by the parties.
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(iii) Respondent No.2 is directed to complete the
entire proceedings within a period of four months
from the date of receipt of certified copy of this
order.
(iv) Since the parties are represented through
their counsel, the parties are directed to appear
before respondent No.2 on 28.04.2026 at 11
a.m., without waiting for further notice in this
regard.
SD/-
(E.S.INDIRESH)
JUDGE
SB
List No.: 1 Sl No.: 70
