Calling in question the action of respondent No.1 in

forfeiting a sum of Rs.24.10 lakhs deposited by him,

petitioner is seeking direction to refund the same with

interest thereon at 18% p.a., in this writ petition.

It is the case of the petitioner that one

Sri.Jignesh N. Patel was the owner of immovable property

bearing No.9/1, Old No.5, Khatha No.30/A of Nayandahalli,

Mysore

Road,

Bengaluru.

He

obtained

loan

from

respondent No.1-State Bank of Mysore (which has now

3

been merged with State Bank of India) for his business

purposes and by way of security he created mortgage on

the aforementioned property at Nayandahalli, Mysore Road,

Bengaluru. The loan having remained outstanding,

respondent

No.1

initiated

proceedings

under

the

Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 (for short

‘SARFAESI Act’) and took over possession of the mortgaged

property. The property was brought to sale for the

recovery of outstanding loan and respondent No.1 issued a

newspaper publication dated 15.10.2010 (as per Annexure-

A). The petitioner having noticed the same, deposited the

EMD of Rs.5,63,500/- in terms of Annexure-A and

submitted his sealed tender. Same was accepted as per

the communication of respondent No.1 dated 15.11.2010

for a sum of Rs.56,40,000/-. Accordingly, petitioner was

directed to deposit 25% of the amount on the same date,

which was inclusive of EMD amount already deposited by

him. Thus, in all petitioner deposited a sum of

Rs.24,10,000/- before respondent No.1.

4

Further

as

per

the

communication

of

respondent No.1 dated 15.11.2010 (Annexure-B) petitioner

was

required

to

deposit

the

balance

amount

of

Rs.42,30,000/- by 30.11.2010. When he made enquiries in

the Office of jurisdictional Sub-Registrar, he came to know

that borrower had even before the sale notification dated

15.10.2010 alienated the property concerned in favour of

his wife Smt.Naina J. Patel by executing a registered gift

deed. Therefore, petitioner made a representation to

respondent No.1 to get the gift deed executed by the

borrower Sri.Jignesh N. Patel in favour of his wife annulled

so as to avoid any dispute regarding the title of property

which was going to be transferred to the petitioner as a

successful bidder in the sale held by respondent No.1.

However, respondent No.1 refused to do so and insisted on

the petitioner to make full payment and subsequently

forfeited the amount of Rs.24,10,000/- deposited by the

petitioner. Aggrieved by the same petitioner has filed this

writ petition seeking reliefs as aforesaid.

4.

In support of his prayer petitioner advances the

following contentions:

5

• Respondent No.1 has suppressed the fact in the sale

notification (Annexure-A) that borrower was not

having title over the property as mentioned therein

and in fact it was Smt.Naina J. Patel, who was the

owner of property as on the date sale notification was

issued.

• Respondent No.1 was aware of the same in view of

Smt.Naina

J.

Patel

filing

a

writ

petition

in

W.P.No.122/2008 against respondent No.1 in this writ

petition and others.

• The liability of borrower to respondent No.1 was

settled between them by means of One Time

Settlement (OTS) and borrower has paid the same

and the account was closed.

• Respondent No.1 has admitted the same in the

affidavit dated 26.03.2022.

• Respondent No.1 has not suffered any loss or damage

on account of non deposit of balance amount by the

petitioner and therefore, respondent No.1 was not

entitled

to

forfeit

the

sum

of

Rs.24,10,000/-

deposited by the petitioner.

6

5.

In support of above grounds the petitioner

places reliance on the following decisions:

(1)

W.P.No.15546/2011 - DD 01.06.2015 [E.Ali vs.

Syndicate Bank and others]

(2)

AIR

2010

SC

338

[Haryana

Financial

Corporation & Another vs. Rajesh Gupta]

(3)

W.P.No.6354/2010 – DD 07.10.2010 – Madras

High

Court

[Chemstar

Chemicals

&

Intermediates (P) Ltd vs. The Commercial Tax

Officer]

(4)

W.P.No.27079/2009 – DD