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2026 Supreme(Online)(Kar) 24151
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
NC: 2026:KHC:19345
WP No. 17374 of 2022
DATED THIS THE 8TH DAY OF APRIL, 2026
BEFORE
THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
WRIT PETITION NO. 17374 OF 2022 (GM-DRT)
BETWEEN:
MAGAN RAM CHOUDHARY
AGED ABOUT 53 YEARS,
S/O SRI BABULAJI
R/ATNO.24/1-1, 2ND FLOOR,
ADI ENCLAVE,
SOWRASTRAPET CITY,
BANGALORE SOUTH
BENGLAURU-560 053.
…PETITIONER
(BY SRI. KIRAN B S.,ADVOCATE)
AND:
1. THE AUTHORISED OFFICER
M/S. VYSYA CO OPERATIVE BANK LTD
OFFICE AT DR.SRI SRI SHIVAKUMARA
SWAMIJI CIRCLE,
B.H.ROAD, TUMAKURU-572 102.
2. M/S VYSYA CO OPERATIVE BANK LTD
REP BY ITS CHIEF EXECUTIVE OFFICER
OFFICE AT DR.SRI SRI SHIVAKUMARA
SWAMIJI CIRCLE, B.H.ROAD,
TUMAKURU-572 102.
3. SRI.RAMESH BABU K N
AGED ADULT
S/O LATE K.S.NARAYANASETTY
R/AT NO.82/4, SAI RATHNA,
4TH FLOOR, 2ND CROSS,
2ND BLOCK,
THYAGAAJANAGAR,
BENGALURU-560 061
ALSO AT NEW NO.567,
3RD FLOOR, 10TH CROSS,
JAYANAGAR, 7TH BLOCK,
BENGLAURU- 560 078.
4. SMT.K.R.SADHANA
AGED ADULT
W/O SRI RAMESH BABU K.N.
R/AT NO.82/4, SAI RATHNA,
4TH FLOOR, 2ND CROSS,
2ND BLOCK,
THYAGARAJANAGAR,
BENGALURU- 560 061.
5. SMT.K.R.MEGHANA
AGED 30 YEARS,
D/O SRI RAMESH BABU K.N. AND
W/O BHARGAV
R/AT NO.38/2-3 FLAT NO. 409,
A BLOCK, BRINDAVAN GARDEN APT
VASANTHAPURA VILLAGE,
KANAKAPURA MAIN ROAD,
DODDAKALLASANDRA
BENGLAURU-560 062.
6. SMT.K.R.SAI SINCHANA
(AGED ADULT)
D/O SRI RAMESH BABU K.N.
R/AT NO.82/4, SAI RATHNA,
4TH FLOOR, 2ND CROSS,
2ND BLOCK,
THYAGAAJANAGAR,
BENGALURU-560 061.
…RESPONDENTS
(BY SRI. KIRAN.B.CHANDEAN, ADVOCATE FOR
SRI. SHIVASHANKARA A., ADVOCATE FOR R1
AND R2)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE
THE IMPUGNED ORDER DTD. 28.02.2022 (ANNX-A) IN
C.MISC.NO.202/2022 OF THE IX ACMM BY HOLDING THAT
THE SAME IS UNSUSTAINABLE / NOT BINDING AGAINST
THE PETITIONER.DIRECTING THAT THE PETITIONERS BE
ALLOWED TO KEEP POSSESSION OF THEIR RESPECTIVE
PROPERTIES.
THIS PETITION, COMING ON FOR ORDERS, THIS
DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
For the Appellants/Petitioners: Kiran B S
For the Respondents: Kiran B Chandean, Shivashankara A
Under Section 17 of the SARFAESI Act, the right to approach the Debt Recovery Tribunal is not restricted to the borrower alone, and includes any person aggrieved by measures taken by a secured creditor, precluding the exercise of writ jurisdiction when an efficacious alternative legal remedy is available.
Headnote:(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(4) and Section 17 - Maintainability of writ petition - Third party aggrieved by measures taken by creditor - Whether a third party can approach the Debt Recovery Tribunal (DRT) - The Court observed that Section 17 explicitly permits 'any person (including borrower)' to approach the DRT if aggrieved by measures taken under Section 13(4) - The statute does not restrict the remedy to the borrower alone - Writ jurisdiction is not to be exercised when an effective and efficacious alternative statutory remedy is available before the DRT. (Paras 13, 14, 15, and 16)
Facts of the case:
Petitioner claiming to be a bonafide purchaser of a property challenged an order passed by the Magistrate under Section 14 of the SARFAESI Act. The Bank had initiated recovery proceedings against the property, which the petitioner alleged was purchased prior to the mortgage created by the borrower. The petitioner approached the High Court directly, bypassing the DRT, contending that the DRT lacked jurisdiction to hear a third party grievance.
Findings of Court:
The Court held that the terminology in Section 17 of the SARFAESI Act, 'any person (including the borrower)', is clear and unambiguous. It confers a right upon any aggrieved person, including third-party claimants, to seek redressal before the DRT. The Court refused to entertain the writ petition, directing the petitioner to avail the effective alternative remedy provided under the statute.
Issues: Whether a third party, not being a borrower or guarantor, has the locus to approach the DRT under Section 17 of the SARFAESI Act against measures taken by the secured creditor, and whether a writ petition is maintainable when such a remedy exists.
Ratio Decidendi: The expression 'any person (including the borrower)' in Section 17 of the SARFAESI Act is inclusive and wide enough to cover third parties aggrieved by the measures of a secured creditor; therefore, such parties must exhaust the alternative statutory remedy before the DRT.
Result: Petition disposed of with liberty to the petitioner to approach the DRT; interim protections extended for four weeks.
ORAL ORDER
The present writ petition is filed seeking the following prayer:
"A) SETTING ASIDE the impugned Order
dated 28-02-2022 (ANNEXURE-A) in
C.Misc No.202/2022 of the IX ACMM by
holding that the same is
unsustainable/not binding against the
Petitioner;
B) DIRECTING that the Petitioners be
allowed to keep possession of their
respective properties.
C) GRANTING all other reliefs as this
Hon'ble Court may deem fit, proper and
necessary under the facts and
circumstances of the case."
2. It is the case of the Petitioner that he had purchased the property by way of a registered sale deed dated 19.09.2019, and the predecessor-in-title of the petitioner had purchased the said property in the year 2013. It is stated that, after selling the property to various purchasers, respondent No. 3 applied for a loan on 13.02.2017 and borrowed a sum of Rs.3 crores on 21.02.2017 from Respondent No. 2 Bank by fraudulently mortgaging the property by concealing the fact of prior sale. Thereafter, respondent No.6, who is the daughter of Respondent No. 3 and was a 17-year-old minor at the the time, also applied for a loan and borrowed Rs.67 lakhs on 31.03.2018 from Respondent No. 2 Bank by again fraudulently mortgaging the same property fraudulently by concealing the fact of prior sale/conveyance of the flats.
3. Even the Bruhat Bengaluru Mahanagara Palike has issued a khata in favour of the Petitioner in respect of the said property. The petitioner has been paying property tax on the said immovable property till date. Thereafter, without informing the Petitioner, respondent No. 2 Bank issued a notice dated 18.10.2021 to Respondent Nos. 3, 4, 5, and 6, recalling both the said loans and demanding immediate payment of a total sum of Rs.4,01,36,152/-. The petitioner was not served with a copy of the said notice.Subsequently, the Bank filed an application before the learned Magistrate under Section 14 of the Securitisation and Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 (for short 'SARFAESI Act'), registered as Crl. Misc. No. 202/2022, seeking enforcement of its security interest and praying that respondent No.2 Bank be put in possession of the said property allegedly mortgaged by respondent Nos. 3 and 6. The learned Magistrate disposed of the said application by way of the impugned order dated 28.02.2022. It was only upon issuance of a possession notice dated 02.03.2022 that the petitioner has come to know abut the said proceedings. Thereafter, the petitioner approached the Debt Recovery Tribunal (for short, 'DRT') by filing an application on 07.03.2022 under Section 17 of the SARFAESI Act, seeking to restrain the Respondent Bank from taking possession of the property. However, there is a reasonable apprehension that respondent No. 1–Officer and respondent No.2 Bank may forcibly take over the petitioner from lawful possession of the property. Hence, the petitioner has come before this Court.
4. Learned counsel for the petitioner submits that there is collusion and fraud between the borrower and the Bank. It is contended that the property had already been sold in the year 2013 and despite the same, the Bank has granted loans by treating the said property as a secured asset. It is the specific contention of the petitioner that the said property does not constitute a secured asset and was not mortgaged to the Bank. It is further submitted that the Petitioner is neither a borrower nor a guarantor. In such circumstances, the respondent Bank has no authority to initiate proceedings under the SARFAESI Act against the Petitioner’s property. Upon a specific query by this Court with regard to the maintainability of the present writ petition, particularly in the light of the availability of an effective alternative remedy before the DRT and especially when the petitioner has already approached the DRT by filing an application, learned counsel for the petitioner submitted that the DRT has no jurisdiction to adjudicate the present case.
