A writ petition to obstruct recovery proceedings is not maintainable if the underlying award under the Karnataka Co-operative Societies Act has attained finality and the petitioner fails to comply with the court's interim deposit conditions.

WRIT PETITION NO. 103421 OF 2025 (CS-RES)

Digitally signed by MOHANKUMAR B SHELAR Date: 2026.04.27 15:44:47 +0530 (I)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO, ISSUE A

(I) A WRIT IN THE NATURE OF CERTIORARI QUASHING THE IMPUGNED AUCTION NOTIFICATION PUBLISHED IN NEWSPAPER DTD. 21.05.2025 NOTIFIED BY RESPONDENT NO.1 VIDE ANNEXURE-B.

(II) A WRIT IN A NATURE OF MANDAMUS DIRECTING THE RESPONDENT NO.2 BANK FOR OTS BY IMPOSING REASONABLE INTEREST FOR THE LOAN OBTAINED BY THE PETITIONER & ETC.

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

ORAL ORDER

(PER: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI)

1. The petitioner has filed this present writ petition challenging the impugned auction notification published in the newspaper dated 21.05.2025, issued by respondent No.1 vide Annexure-B. The petitioner has also sought for a writ of mandamus directing respondent No.2 to grant One Time Settlement (OTS) by imposing reasonable interest on the loan obtained by the petitioner.

2. The petitioner had obtained a loan from the respondent No.2 – i.e., the Azad Urban Co-operative Bank, Hubballi and committed default in repayment. Consequently, respondent No.2 raised a dispute under Section 70 of the Karnataka Co-operative Societies Act, 1959 (for short, ‘the Act’). The said dispute came to be allowed, and thereafter respondent No.2 initiated execution proceedings to enforce the award passed by the Registrar under Section 70 of the Karnataka Co-operative Societies Act, 1959.

3. Respondent No.1 issued an auction notification, published in the newspaper dated 21.05.2025 produced at Annexure-B, proposing to auction the properties of the petitioner. Aggrieved by the same, the petitioner has filed the present writ petition.

4. Heard the learned counsel for the petitioner and the learned counsel for respondent No.2.

5. Learned counsel for the petitioner submitted that the impugned auction notification is arbitrary and erroneous. He further submitted that the petitioner was unable to repay the loan amount due to the COVID-19 pandemic. It is contended that, if reasonable time is granted, the petitioner is ready to clear the entire outstanding dues. On these grounds, he prays to allow the writ petition.

6. Per contra, learned counsel for respondent No.2 submitted that from the date of filing of the petition till today, the petitioner has not paid a single paisa. He further submitted that the petitioner, by filing the present writ petition, is creating obstructions in the recovery proceedings. He further submitted that the writ petition is not maintainable, as the award passed under Section 70 of the Karnataka Co-operative Societies Act, 1959 has not been challenged and has attained finality. On these grounds, he prays for dismissal of the writ petition.

7. Perused the records, and considered the submissions of the learned counsel on both sides.

8. It is an undisputed fact that the petitioner had obtained a loan from respondent No.2 i.e., Azad Urban Co-operative Bank, Hubballi and has defaulted in the repayment of the loan amount. Respondent No.2 raised a dispute under Section 70 of the Act, which came to be allowed. The petitioner has not challenged the award passed by the competent authority, and the same has attained finality. Despite the award, the petitioner has not repaid the award amount with applicable interest.

9. Respondent No.1 h