IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25^TH DAY OF MARCH, 2026 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 23300 OF 2025 (GM-DRT)

BETWEEN:

MR. ASHOK KUMAR N., S/O. MR. V.K. NAGARAJ, AGED ABOUT 40 YEARS, NO.19, 7^TH CROSS, 1^ST PHASE, MANJUNATHANAGAR, RAJAJINAGAR, BENGALURU-560 010.

(THIRD PARTY/AUCTION PURCHASER)

…PETITIONER (BY SRI. RAJESH MAHALE, SENIOR ADVOCATE FOR SRI. V. MOHAN, ADVOCATE)

Digitally signed by SUVARNA T Location: HIGH AND:

COURT OF KARNATAKA KARNATAKA BANK, ASSET RECOVERY MANAGEMENT BRANCH, 1^ST FLOOR, FKCCI BUILDING, KEMPEGOWDA ROAD, BENGALURU -560 009.

REPRESENTED BY ITS AUTHORIZED OFFICER, ASSISTANT GENERAL MANAGER.

(SECURED CREDITOR).

…RESPONDENT (BY SRI. SHYAMA PRASADA K.V., ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF MANDAMUS DIRECTING THE RESPONDENT BANK TO REFUND THE PETITIONERS EARNEST MONEY DEPOSIT OF RS. 23,50,000/-(RUPEES TWENTY THREE LAKHS FIFTY THOUSAND ONLY) WITH 24PERCENT INTEREST PER ANNUM FROM THE DATE OF DEPOSIT TILL REALIZATION, HOLDING THAT THE LETTER OF COMMUNICATION BEARING NO. ARMB/BNG/PF- 729/OR/67/2025-2026 DATED 30.06.2025 ISSUED BY THE RESPONDENT BANK FORFEITING THE PETITIONERS EMD AS SHOWN IN ANNEXURE-A AS ILLEGAL AND ARBITRARY IN THE INTEREST OF JUSTICE AND EQUITY.

THIS PETITION, COMING ON FOR DISMISSAL, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

ORAL ORDER

The present writ petition is filed seeking the following prayer:

"WHEREFORE, it is respectfully prayed that this Hon'ble Court be pleased, (a) Issue Writ of Mandamus directing the Respondent Bank to refund the Petitioner's Earnest Money Deposit of Rs.23,50,000/- (Rupees Twenty Three Lakhs Fifty Thousand Only) with 24% interest per annum from the date of deposit till realization, holding that the letter of communication bearing No.ARMB/BNG/PF- 729/OR/67/2025-2026 dated 30.06.2025 issued by the Respondent Bank forfeiting the Petitioner's EMD as shown in ANNEXURE-A as illegal and arbitrary in the interest of justice and equity;

(b) To grant such other reliefs/orders which this Hon'ble Court deems fit and proper under the facts and circumstances stated above in the interest of justice and equity."

2. The respondent before this Court is Karnataka Bank Limited. It is the case of the petitioner that he is the auction purchaser, he had paid the Earnest Money Deposit of an amount of Rs.23,50,000/- and requested the bank to give the copies of the property title deeds to the petitioner. On the very same day, the petitioner handed over the property related documents to his legal advisor for scrutiny of title and search of encumbrance. The petitioner participated in the auction sale conducted by respondent/bank on 26.06.2025 and was held as a successful bidder quoting highest price bid of Rs.2,61,00,000/-. On the very same day, the petitioner received a mail from the respondent/bank intimating that the petitioner is the successful bidder and directed the petitioner to deposit 25% of the bid amount i.e., Rs.65,25,000/- which is inclusive of 10% EMD, within next day and the remaining 75% within 15 days. On 21.06.2025, the petitioner was shocked to know that there is a partition suit pending vide O.S.No.982/2025 before the City Civil and Sessions Judge, Bangalore and the respondent/bank is also a party to the said suit, who had filed vakalath and appeared before the Trial Court. The petitioner, who had long association with respondent/bank contacted the bank and questioned about vital information of known encumbrance not revealed in the auction sale notice dated 02.06.2025. The petitioner had also written a letter stating that had he known this encumbrance on the auction property, he would not have ventured on the auction. He also wrote a letter on 01.07.2025 about the suppression of the loan encumbrance and he had also requested for return of EMD amount. The respondent/bank wrote a letter dated 30.06.2025