Petitioner challenged confiscation of property under SARFAESI Act via writ petition. Court held SARFAESI Act is a self-contained code and dispute must be resolved in statutory forum, not via Article 226. Petition dismissed.
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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 23RD DAY OF OCTOBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR
WRIT PETITION NO. 102105 OF 2024 (GM-RES)
BETWEEN:
SMT. GIRIJAWWA W/O. MANJUNATH HAVALDAR, AGE: 40 YEARS, OCC: HOUSEHOLD WORK, R/O. SATTIGERI, TQ: SAVADATTI, DIST: BELAGAVI-591126.
…PETITIONER
(BY SRI. I.Y. PATIL, ADVOCATE)
AND:
MALLIKARJUN RUDRAYYA KALMATH
Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA DHARWAD BENCH
…RESPONDENTS
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR)
2. This petition is filed by the petitioner seeking to quash the impugned order of confiscation and panchanama report dated 06.03.2024 vide Annexure-E and for a writ of mandamus directing respondent authorities to clear the wrongful confiscation and to consider their representation dated 18.03.2024 filed by the petitioner.
3. It is the case of petitioner that she is the daughter
of one late Panchappa S/o. Somappa Vatnal @ Kumbar. The house property bearing Sy.No.787 is in the name of petitioner's father and his brother, namely Basappa S/o. Somappa Vatnal @ Kumbar. The house property No.796 was inherited from the grandmother of petitioner, namely Smt.Rudrawwa W/o.Basavantappa Hosakoti @ Kumbar. It is contended that father of petitioner died on 14.12.2014 leaving behind three sons (respondents No.6 to 8) and four daughters (respondents No.9 to 11) along with petitioner and after the death of father of the petitioner, property bearing Sy.No.787 fell to the share of petitioner along with three daughters and property bearing Sy.No.796 fell to the share of respondents No.6 to 8. It is also contended that property bearing Sy.No.787 by inadvertence, the name of petitioner and other sisters have not been entered in the record of rights and the names of father of petitioner and his brother continued in the record of rights. This being the state of affairs, respondents No.6 to 8 had taken loan of Rs.4,00,000/-
from respondent No.5, the Karnataka Vikas Grameena Bank, Gokak branch (herein after referred to as ‘bank’) by
mortgaging the house property bearing Sy.No.796.
4. In view of non-payment of loan amount to the bank, respondent No.5/bank issued notice to respondents No.6 to 8 under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’),. Thereafter, respondent No.5/bank issued notice under Section 14 of the SARFAESI Act and addressed a letter requesting respondent No.2 to order physical possession of the property under Section 14 of the SARFAESI Act to foreclose the mortgaged property. In pursuance to this, respondent No.2 passed an order on 31.10.2022 directing the Assistant Commissioner, Bailhongal stating that in view to protect the interest of financial institution directed to confiscate the mortgaged property and hand it over to the bank. On 06.03.2024, the panchas along with the Village Accountant, Munavalli, the Bank Manager Gokak, the Tahasildar Gokak and Town Municipal Officers visited
the property bearing Sy.No.796 and confiscated it in accordance with the orders passed by the respondent No.2.
5. It is contended by learned counsel for the petitioner that in the guise of confiscating the property bearing Sy.No.796, the authorities have wrongly confiscated the property bearing Sy.No.787, which has fallen to the share of petitioner. It is further contended by petitioner that she is neither the borrower nor the guarantor in respect of the loan availed by respondents No.6 to 8 from the 5th respondent/bank, but in order to
cause wrongful loss to the petitioner or trying to wrongfully confiscate the property belonging to the petitioner, which is not the subject matter of mortgage or security or guarantee provided to the bank. Hence, the petitioner contends that the process and proceedings initiated by the respondents in confiscating the property pursuant to the proceedings under the SARFAESI Act is illegal and void ab initio, the same requires to be set aside.
6. It is further contended by learned counsel for the petitioner that she made a representation to respondent No.4 submitting the same facts with regard to wrongful confiscation and not to initiate any proceedings of illegal act to take over the property of the petitioner, but the same was not answered or not considered. Hence, the petitioner is before this Court.
7. Per Contra, learned counsel representing respondent No.5/bank along with learned AGA vehemently contend that there is no illegality or perversity or arbitrariness in initiation of the further proceedings under Section 14 of the SARFAESI Act pursuant to Section 13 of the SARFAESI Act, therefore there is no illegality committed. The claim so made by the petitioner with regard to the boundaries being wrongly mentioned while confiscating the property bearing Sy.No.796, which is a subject matter of the mortgage provided to the bank, is not correct, as the bank along with the State authorities have taken into consideration the mortgaged document provided to the bank at the time of obtaining the loan and
on the basis of said document, they have initiated the confiscation proceedings keeping in mind the schedule and boundaries provided in the said document. Therefore, he contends that there is no illegality committed by the bank as well as the statutory authorities.
8. It is also vehemently contended by learned counsel for the bank that the petitioner does not have the locus to approach this Court under Article 226 of the Constitution of India to raise any claim or grievance against the proceedings initiated under the SARFAESI Act. It is also contended by him that once the proceedings are initiated under the SARFAESI Act, which is a code by itself and once the proceedings are initiated under the SARFAESI Act, the petitioner will have to approach the proper forum to set aside or make any claim or grievance under the relevant provisions of the Act and not approach this court under Article 226 of the Constitution of India.
9. Having heard learned counsel for the petitioner and the respondents and having perused the documents and the original records produced by the learned counsel
for the bank. It is apparently seen that the mortgaged document of property bearing Sy.No.796, the schedule and the boundaries shown reflects what is initiated by the respondent-bank along with the authorities, which is though disputed by the petitioner, this Court cannot go into these factual aspects in the proceedings under Article 226 of the Constitution of India. I am in agreement with learned counsel for the respondent-bank and learned AGA that the SARFAESI Act is a code by itself and any proceedings that is initiated against any of the provisions of the Act, will have to be agitated under the said Act itself
and not approach this Court to invoke the writ jurisdiction under Article 226 of the Constitution of India. Therefore, the present petition would not be maintainable. The petitioner would have to approach the relevant forum to redress his grievance. Accordingly, this aspect of the matter has been fortified by the judgment of the Hon’ble Apex Court in the case of K.Virupaksha and Another vs.
State of Karnataka and Another, reported in (2020) 4 SCC 440. Under the circumstances, I pass the following :
ORDER
(ii) However, liberty is reserved to the petitioner to approach the appropriate forum for redressal of her grievance and if any such thing is filed, the same would be considered by the concerned authorities in accordance with law.
Sd/(PRADEEP SINGH YERUR) JUDGE
CKK CT-MCK List No.: 1 Sl No.: 7
2 issues framed by the court
Whether a writ petition filed under Article 226 of the Constitution of India is maintainable to challenge proceedings initiated under the SARFAESI Act.
Whether the petitioner has locus standi to approach this Court regarding grievance against the confiscation process under SARFAESI Act.
Colour shows how this judgement treated each authority
K. Virupaksha and Another vs. State of Karnataka and AnotherFollowed¶58
K. Virupaksha and Another vs. State of Karnataka and Another, (2020) 4 SCC 440 · Who else cites this
3 provisions across 2 enactments
Sm. Girijawwa W/o. Manjunath Havaldar
The State of Karnataka, Revenue Department
Mallikarjuna Rudrayya Kalmath
The Deputy Commissioner, Belagavi
The Tahashildar, Savadatti
The Karnataka Vikas Grameen Bank
Pradeep Singh Yerur
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
