[Cites 3, Cited by 0]
Karnataka High Court
M/S Mythreyi Promoters And Developers ... vs State Bank Of India on 31 January, 2026
Author: B M Shyam Prasad
Bench: B M Shyam Prasad
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NC: 2026:KHC:5516
WP No. 38151 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF JANUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE B M SHYAM PRASAD
WRIT PETITION NO. 38151 OF 2025 (GM-RES)
BETWEEN:
1. M/S MYTHREYI PROMOTERS AND
DEVELOPERS PRIVATE LIMITED
A COMPANY INCORPORATED
UNDER THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFILCE
AT NO 152 20TH MAIN 12TH CROSS
JP NAGAR II PHASE, BENGALURU 560078
REP BY ITS MANAGING DIRECTOR
MR B K RAJENDRAN
AGED ABOUT 66 YEARS
Digitally 2. MYTHREYI DEVELOPERS
signed by
VANAMALA A PARTNER SHIPFIRM
N
HAVING ITS REGISTERED OFFICE
Location:
HIGH AT NO 152, 20TH MAIN 12TH CROSS
COURT OF
KARNATAKA JPNAGAR 2ND PHASE
BENGALURU 560078
REP BY ITS PARTNER
MR B K RAJENDRAN
AGED ABOUT 66 YEARS
3. MR B K RAJENDRAN
S/O N KUPPASWAMY
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WP No. 38151 of 2025
HC-KAR
AGED ABOUT 66 YEARS
R/A 48/A SRUSHTI ,
11 CROSS 6TH MAIN J PNAGAR
BENGALURU 560078
4. MYTHREYI ESTATES PRIVATE LIMITED
HAVING ITS REGISTERED
OFFICE AT NO 152, 20TH MAIN
12TH CROSS J P NAGAR 2ND PHASE
BENGALURU 560078
REP BY ITS DIRECTOR
MR B K RAJENDRAN.
5. MYTHREYI ADDRESS LLP
HAVING ITS REGISTERED OFFICE AT
NO 152 20TH MAIN, 12TH CROSS
J P NAGAR 2ND PHASE
BENGALURU 560078
REP BY ITS PARTNER
MR B K RAJENDRAN.
6. MYTHREYI INFRA SPACES LLP
HAVING ITS REGISTERED OFFICE
AT NO 152 20TH MAIN 12TH CROSS
JP NAGAR 2ND PHASE
BENGALURU 560078
REP BY ITS DESIGNED PARTNER
MR B K RAJENDRAN
...PETITIONERS
(BY SRI.MANMOHAN P N.,ADVOCATE)
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WP No. 38151 of 2025
HC-KAR
AND:
1. STATE BANK OF INDIA
RACPC BANASWDI 253
DOLPHIN MANSION,
BUS DEPOT HENNUR MAIN ROAD
NEAR HENNUR HBR LAYOUT
2ND BLOCK, 3RD BLOCK
HBR LAYOUT,
BENGALURU 560043
REPRESENTED BY ITS
BRANCH MANAGER
2. FRAUD IDENTIFICATION COMMITTEE
STATE BANK OF INDIA
LOCAL HEAD OFFICE
BELLARY ROAD
BENGALURU 560 024.
...RESPONDENTS
(BY SRI. VIGNESH S SHETTY.,ADVOCATE FOR
R1 AND R2)
THIS WP IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE ORDER DATED 04/10/2025 BEARING
NO. FMC/RO/2025-26/582 PASSED BY THE R2
(PRODUCED AS ANNEXURE-L) AND
CONSEQUENTLY DIRECT THE RESPONDENTS TO
FORTHWITH REMOVED THE NAME OF
PETITIONERS FROM ALL LISTS, RECORDS,
COMPLAINANTS, AND COMMUNICATIONS
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WP No. 38151 of 2025
HC-KAR
WHEREIN THE PETITIONERS HAVE BEEN
IMPROPERLY TAGGED OR CLASSIFIED OR
DECLARED AS FRAUD; DIRECT THE
RESPONDENTS TO ISSUE A COMMUNICATION TO
ALL CONCERNED AUTHORITIES, BANKS, ETC.
DECLARING THAT THE PETITIONERS HAVE NOT
COMMITTED ANY FRAUD.
THIS PETITION, COMING ON FOR ORDERS,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The first petitioner, who is party to a sale
transaction with the first respondent's borrower, is
joined by the group entities in making a grievance
against the second respondent's order dated
04.10.2025 [Annexure-L]. The second respondent is a
Committee constituted by the first respondent under
the Reserve Bank of India [Fraud Risk Management
in Commercial Banks[including Regional Rural
Banks] and All India Financial Institutions]
Directions, 2024 [for short, 'the Master Directions'].
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The second respondent, by this impugned order, has
reasoned that the first petitioner and its
representative must be reported as 'fraudsters' to the
Reserve Bank of India [RBI] as per the guidelines.
2. Sri. Vignesh Shetty, the learned counsel,
on behalf of the first respondent, places on record the
following to justify the second respondent's decision.
[a] The first respondent has processed the
borrower's loan application based on an
agreement which showed the agreed value
as Rs.2,60,00,000/-, and because of such
value, a sum of Rs.1,95,00,000/- is
sanctioned as loan and disbursed.
[b] The sale deed is concluded for a much
lower value, and the loan is under
distress because of a default. The default
is because of the fraud contrived between
the petitioners' representative, the
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borrower [the purchaser] and the owner of
the property.
[c] A loan much higher than the permissible
loan is obtained.
3. Sri Manmohan P N, the learned counsel
for the petitioners, submits that the first petitioner
can dispute neither the receipt of Rs.1,95,00,000/-
as part of the agreed consideration nor that it has
acted as a Power of Attorney and Confirming Party in
the transaction, but the first petitioner is bona fide in
asserting that though the initial agreed value was
Rs.2,60,00,000/-, this amount had to be revised
because of Covid-19 restrictions and the resultant
constraints to complete the transaction in a time
bound manner. On the participation in the
proceedings with the second respondent, the learned
counsel does not dispute that a Show Cause Notice
[as contemplated under paragraph 2.1.1.1 under the
Master Directions] is addressed to the petitioners but
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contends that some person within the hierarchy of
the first petitioner has refused to receive the notice
without understanding the significance of the fallout
from the proceedings.
4. The question is whether this Court must
intervene to set aside the second respondent's order
and restore the proceedings for reconsideration with
some opportunity to the petitioner. This question is
examined in the light of the second respondent's
observation, and the second respondent has observed
that it has relied upon the documents produced by
the first respondent to declare the first petitioner and
its Managing Director 'fraudsters'. This view is only
because of the petitioners' failure to place on record
material that perhaps could justify its defense as
against being labeled as 'fraudsters' and that the
ends of justice demand that the petitioners must
have a reasonable opportunity because the
petitioners' business otherwise could be brought
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under jeopardy with such a declaration. Hence, the
following:
ORDER
[a] The petition is allowed in part
quashing the second respondent's
order dated 04.10.2025 [Annexure-L]
but restoring the proceedings to the
second respondent for due
consideration leaving open all
contentions to be considered.
[b] The petitioners shall respond to the
show-cause notice before 23.02.2026
and thereafter the second respondent
shall pass a reasoned order in the
light of the response that is shown.
[c] The first respondent shall ensure that
the information about this Court's
intervention is uploaded, and such
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communication will be subject to
further consideration.
Sd/-
(B M SHYAM PRASAD)
JUDGE
AN/-
