Dismissed

Sri. Narendra Kumar J N v. State Bank of India

Karnataka HC4 Oct 2023WP/416/2020

Case brief

AI extract

What is this about?

Petitioners challenged auction proceedings regarding mortgaged properties and sought specific directions. The Court recorded a settlement between the petitioners and the bank, accepting the offer to discharge the mortgage on Schedule A property and dismissing the writ based on this compromise.

What did the court decide?

Writ petition disposed of based on settlement; Rs. 5 Lakhs deposited with Court released to Petitioner No. 1.

Sri. Narendra Kumar J N Vs State Bank of India — Banking and Recovery | Karnataka HC (2023)

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1 - NC: 2023:KHC:35897 WP No. 416 of 2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF OCTOBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ WRIT PETITION NO. 416 OF 2020 (GM-RES)

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BETWEEN:

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SRI. NARENDRA KUMAR J. N. AGED ABOUT 44 YEARS, SON OF LATE SRI. K. NAGARAJU,

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SMT. H. SHOBHA AGED ABOUT 41 YEARS, WIFE OF SRI NARENDRA KUMAR J. N.

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BOTH ARE RESIDING AT: NO.70, G ROAD, IDEAL HOME TOWNSHIP, 2ND PHASE, R. R. NAGAR, BENGALURU-560 098.

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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(BY SRI. ARJUN RAO.,ADVOCATE)

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AND:

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STATE BANK OF INDIA ARM BRANCH, 2ND FLOOR, A BLOCK, BKG COMPLEX, MYSORE BANK CIRCLE, AVENUE ROAD, BENGALURU-560009.

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…PETITIONERS

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RECOVERY OFFICER DEBTS RECOVERY TRIBUNAL-11, DEBTS RECOVERY TRIBUNAL LIC JEEVAN MANGAL BUILDING, 2ND FLOOR, NO.4, RESIDENCY ROAD, BENGALURU-560025

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2 - NC: 2023:KHC:35897 WP No. 416 of 2020

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M/S KOZY SILKS PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, 1ST FLOOR, POBBATHI MARKET BASAVANNA LANE, AVENUE ROAD CROSS, BENGALURU-560002.

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JEETENDRA SHAH SON OF SRI MANGILAL SHAH, AGED MAJOR, MALLIKARJUNA LANE, V K R SHETTY ROAD, AVENUE ROAD CROSS, BENGALURU-560002

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RESPONDENT NOS. 2 TO 4 DELETED AS PER ORDER DATED 04.10.2023.

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…RESPONDENTS

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(BY SRI. FRANCIS XAVIER,ADVOCATE FOR R1)

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THIS WP FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE R-1 TO CONSIDER THE REPRESENTATION DATED 04.01.2020 FILED BY PETITIONERS (ANNX-V) RESTRAIN THE R-1 AND 2 FROM AUCTIONING AND/OR SELLING AND/OR TAKING ANY ACTION IN RESPECT OF THE SCHEDULE PROPERTY. DIRECTING THE R-1 AND 2 TO AUCTION AND/OR SELL THE SCHEDULE B PROPERTY SO AS TO REALISE THE DUES OWED TO THE R-1 BANK, IF ANY.QUASHING THE SALE PROCLAMATION DATED 11.12.2019 ISSUED BY THE R-2 BEFORE THE DEBTS RECOVERY TRIBUNAL-2 AT BENGALURU (ANNXT) TO THE EXTENT OF ITEM NO.2 THEREIN.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

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3 - NC: 2023:KHC:35897 WP No. 416 of 2020

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ORDER

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The petitioners have filed this writ petition challenging the auction proceedings to auction the schedule 'A' property. They have also sought for a direction to the respondent Nos.1 and 2 to auction schedule 'B' property to realise the dues owed to the respondent No.1 - Bank. They also sought for a writ in the nature of certiorari to quash sale proclamation dated 11.12.2019 issued by the respondent No.2 in TRC No.1564/2017 in DCP No.7252 in O.A.No.331/2001 before the Debts Recovery Tribunal-2.

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When this writ petition was listed for 'Preliminary Hearing in 'B' Group', the petitioners and the respondent No.1 have entered into a settlement in respect of schedule 'A' property and the terms of such settlement read as follows:

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" 2. During the year 2006, the Respondent No. 3, M/s Kozy Silks (P) Limited availed cash credit limit of Rs. 200.0 lakhs from erstwhile State Bank of India and Mr. Jeetendra Shah, Mrs. Kamala Shah, Mr. Mangilal Shah, Mrs. Roopa Shah stood as a guarantor for the said transaction and towards the repayment of the said facility, an equitable

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NC: 2023:KHC:35897 WP No. 416 of 2020

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mortgage was created by deposit of title tile deed/s in respect of the Schedule A and B Properties.

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3. Since, borrower/s have committed default, the Respondent No. 1 Bank initiated recovery proceedings in OA No. 331 on 2007 on the file of Hon'ble Debt Recovery Tribunal at Bangalore and the said Original Application was allowed and issued recovery certificate in respect of Schedule A and B Properties in TRC 1564 of 2017 in DCP 7257 in OA 331/2007 and the Petitioners appeared in the said recovery proceedings, filed their statement of objection and contesting the matter on merit. In meanwhile, the Recovery Officer, brought the Schedule A and B Properties for sale by way of sale proclamation dated 11.12.2019.

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4. Aggrieved by the said measures, the Petitioners have approached this Hon'ble Court with the present Writ Petition with a relief/s that: (i) a direction to the Respondent No. 1 to consider the Representation dated 04.01.2020 filed by the Petitioners (" Representation "), (ii) an order restraining the Respondent Nos. 1 and 2 from auctioning and/or selling and/or taking any action in respect of the Schedule A Property, (iii) a direction to the Respondent Nos. 1 and 2 to auction and/or sell the Schedule B Property so as to realise the

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5 - NC: 2023:KHC:35897 WP No. 416 of 2020

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dues owed to the Respondent No. 1 Bank, if any, (iv) Quash the Sale Proclamation dated 11.12.2019 in TRC No. 1564/2017 in DCP No. 7252 in O.A. No. 331/2007 before the Debts Recovery Tribunal - 2 at Bengaluru (" Impugned Sale Proclamation "), and other relief.

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5. The Petitioners purchased the Schedule A Property for value from one late Mr. Mangilal Shah, son of Saremal Shah through an Absolute Sale Deed dated 05.04.2012, registered as Document No. RRN-1-00093-2012-13 stored in CD No. RRND75 (Book 1) before the Sub-Registrar, Rajarajeswari Nagar, Bengaluru, ("Sale Deed") for a sum of Rs. 60,00,000/- without the notice of mortgage created in favour of Respondent No. 1 Bank and they are in possession and enjoyment of the Schedule A Property as an absolute owner thereof. When the Petitioners became aware of the said proceedings and the mortgage relating to Schedule A Property created in favour of Respondent No. 1 Bank, appeared before the Recovery Officer and filed their statement of objection and contesting the matter on merit and also initiated the criminal proceedings against Late Mr. Magilal Shah and the Respondent No. 4 in CC No. 10675/2017.

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6. In the interregnum, during the pendency of the Writ Petition, as the Petitioners an absolute owner thereof, without the notice purchased the mortgaged Schedule A Property for value has a right to redeem the same in accordance with law and thus, approached the Respondent No. 1 Bank to redeem the Schedule A property by way of settlement vide their representation dated 13/9/2023 and 27/9/2023.

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7. Considering the representation of the Petitioners, and as the Petitioners have offered a sum of Rs. 75,00,000/-(Rupees Seventy- Five Lakhs) Only towards full and final settlement, upon negotiation, the Respondent No. 1 Bank agreed and accepted the offer of the Petitioners towards full and final settlement to discharge the mortgage relating to Schedule A Property.

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8. Pursuant to such acceptance, the Petitioners have made payment of a sum of Rs. 75,00,000/- in favour of the Respondent No. 1 Bank in the below manner:

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(i) Rs. 50,00,000/- paid by the Petitioner No. 1 through RTGS dated

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30.09.2023 bearing UTR number HDFCR52023093091776676; and

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NC: 2023:KHC:35897 WP No. 416 of 2020

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(ii) Rs. 25,00,000/- paid by the Petitioner No. 2 through RTGS dated 30.09.2023 bearing UTR number UTIBR52023093000351786.

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9. In view of the payments as aforesaid, the Respondent No. 1 Bank has no manner of right, title or interest over the Schedule A Property and the mortgage in respect of the Schedule A Property stand discharged immediately in the records of Respondent No. 1 Bank.

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10. The Respondent No. 1 shall, within a period of 7 days from the date of receipt of certified copy of the order of the settlement shall provide a Certificate of Discharge of the mortgage relating to Schedule A Property.

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11. The Petitioners and the Respondent No. 1 Bank confirm that they shall have no claim or counter claim against each other relating to the Schedule A Property.

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12. The present settlement does not affect the rights of the Respondent No. 1 Bank to proceed against the Schedule B Property to recover their due in accordance with law.

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13. The present settlement as aforesaid, shall not come in the way of the Petitioners to pursue

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8 - NC: 2023:KHC:35897 WP No. 416 of 2020

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with the criminal proceedings pending in CC No. 10675/2017 or any other proceedings initiated or to be initiated by the Petitioners against Respondent Nos. 3/4/ the legal representatives of Late Sri. Mangilal Shah.

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14. The Respondent No. 1 is also having no objection to release a sum of Rs. 5,00,000/(Rupees Five Lakhs Only) deposited by the Petitioners with the registry of this Hon'ble Court in favour of the Petitioners or any one of the Petitioners.

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A representative of the respondent No.1 namely Mr.Ravi Prakash H. V., Chief Manager, SBI, Mysore Bank Circle, Bangalore, is present and he admits the terms of the compromise and he also admits that the petitioners have deposited a sum of Rs.75,00,000/- (Rupees Seventy Five Lakhs only) as stated in the compromise petition and consequently, the respondent No.1 has no objection for release of the schedule 'A' property from the mortgage in the books of the respondent No.1.

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The petitioners are also present and in token of their acceptance of the terms and conditions of the compromise, the petitioners as well as the authorized

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NC: 2023:KHC:35897 WP No. 416 of 2020

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representative of the respondent No.1 bank have affixed their

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signature to the order sheet of this Court.

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Since the compromise arrived at between the

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parties is just and proper, the same is accepted.

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The Writ Petition stands disposed off in terms of

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the compromise.

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The amount of Rs.5,00,000/- (Rupees Five Lakh only) deposited by the petitioners before this Court in this petition is ordered to be released in the name of petitioner No.1.

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Sd/JUDGE

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LDC

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List No.: 1 Sl No.: 41

Sri. Narendra Kumar J N v. State Bank of India

Case brief

What is this about?

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Sri. Narendra Kumar J N v. State Bank of India

Case brief

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