Dismissed

M/S Vasavi Dall Mill v. Canara Bank Head Office

Karnataka HC15 Apr 2024WP/101586/2024

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a writ petition seeking to quash a sale auction notice issued by a bank under the SARFAESI Act. The court relied on the Apex Court judgment in Phoenix ARC Pvt. Ltd., holding that the writ proceedings were not tenable as the statutory alternative remedy before the Debt Recovery Tribunal under Section 17 existed.

What did the court decide?

Writ petition for quashing of sale auction notice under Section 13(4) of SARFAESI Act was dismissed.

M/S Vasavi Dall Mill Vs Canara Bank Head Office — Specific Performance | Karnataka HC (2024)

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NC: 2024:KHC-D:6399 WP No. 101586 of 2024

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 15^TH DAY OF APRIL, 2024 BEFORE

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THE HON'BLE MR JUSTICE RAVI V.HOSMANI WRIT PETITION NO. 101586 OF 2024 (GM-RES)

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BETWEEN:

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M/S. VASAVI DALL MILL, OFFICE AT: BESIDE HCL, MUNDARAGI VILLAGE, INDUSTRIAL AREA, BANGALORE ROAD, BALLARI-583 101, REPRESENTED BY ITS PROPRIETOR, SHRI S.S. RAGHUNATH, DOOR NO.11, WARD BI 20, 4^TH CROSS, NEHRU COLONY, BALLARI-583 101.

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…PETITIONER

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(BY SRI SHIVARAJ S. BALLOLI, SRI ROSHAN SAHEB CHABBI & SRI SAURABH R. MIRJE, ADVOCATES)

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AND:

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CANARA BANK HEAD OFFICE, NO.112, J.C. ROAD, BENGALURU-560 002, REPRESENTED BY ITS MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER.

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CHANDRASHEKAR LAXMAN KATTIMANI Digitally signed byCHANDRASHEKAR LAXMAN KATTIMANI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2024.04.18 15:31:53 +0530

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THE CANARA BANK, MAIN BRANCH , K.C. ROAD, BALLARY, DIST: BALLARY-583 101, REPRESENTED BY ITS MANAGER.

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…RESPONDENTS

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(BY SRI SURESH S. GUNDI, ADVOCATE FOR R1 & R2)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI QUASHING THE IMPUGNED SALE AUCTION NOTICE DATED 24/01/2024, ISSUED BY THE RESPONDENT NO.2 VIDE ANNEXURE-C.

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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2 - NC: 2024:KHC-D:6399 WP No. 101586 of 2024

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ORDER

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This writ petition is filed seeking for following relief:

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“Issue a writ of certiorari quashing the impugned sale auction notice dated 24/01/2024, issued by the respondent no.2 vide Annexure-C.”

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Sri Shivraj S.Ballolli, learned counsel for petitioner s ubmitted that for purpose of its business, petitioner had borrowed overdraft facility of Rs.2,41,00,000/- from Canara Bank main branch, Ballari, under sanction letter dated 16.10.2018. It was submitted petitioner was regular in payment of installments. However, due to pandemic there was slowing down of business.

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Respondents without justification initiated

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proceedings for recovery against petitioner. On 24.01.2024, it issued sale notice under Section 13(4) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (‘SARFAESI Act’ for short). It was submitted that same was without declaration as Non-Performing Asset and therefore, illegal. Even rate of interest charged was exorbitant etc.

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3 - NC: 2024:KHC-D:6399 WP No. 101586 of 2024

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Sri S.S. Gundi, learned counsel for respondentsBank sought to oppose writ petition. It was submitted that impugned sale notice was issued for recovery of unpaid amount due to bank, which was not disputed. It was submitted writ petition was filed without exhausting efficacious alternative remedy before Debt Recovery Tribunal under Section 17 of SARFEESI Act. It was also submitted that petitioner had failed to comply with conditional interim order and therefore, there was no bonafides in writ petition and sought for dismissal of writ petition.

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Heard learned counsel for petitioner and perused writ petition record.

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On 07.03.2024, taking note of petitioner’s submission that if breathing time is given, petitioner would deposit partial amount and offer terms of settlement, conditional interim order was granted by this Court against confirmation of sale without leave of Court, in case, petitioner deposits Rs.10,00,000/- by 11.03.2024 and total of 25% of outstanding amount within four weeks. It is however, submitted that conditional interim order is not complied.

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4 - NC: 2024:KHC-D:6399 WP No. 101586 of 2024

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Admittedly, impugned notice at Annexure-C was issued under Section 13(4) of SARFAESI Act for recovery of dues to Bank. Hon’ble Supreme Court in Phoenix ARC Pvt.

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Ltd. v. Bharati Vidyamandir and another reported in 2022 SCC OnLine SC 44 has held in above circumstances,that

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petitioner would have to avail remedies before Debt Recovery Tribunal and writ petition would not be tenable.

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Following said ratio, writ petition is dismissed.

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Sd/JUDGE

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VMB

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List No.: 1 Sl No.: 19

M/S Vasavi Dall Mill v. Canara Bank Head Office

Case brief

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M/S Vasavi Dall Mill v. Canara Bank Head Office

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