Allowed

Guru Siddeshwara Co-Op. Bank Ltd. v. Smt Sumangala

Karnataka HC3 Jan 2024WP/60738/2010

Case brief

AI extract

What is this about?

A co-operative bank challenged a revisional order reopening mutation of property sold to an auction purchaser under the SARFAESI Act, founded on a compromise decree in a collusive partition suit. The High Court held the sale certificate's validity cannot be questioned in revenue proceedings and quashed the impugned order.

What did the court decide?

Impugned order dated 19.11.2009 in Case No.REV.Sr.06-09 (Annexure-E) quashed.

Guru Siddeshwara Co-Op. Bank Ltd. Vs Smt Sumangala — Banking and Recovery | Karnataka HC (2024)

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NC: 2024:KHC-D:135 WP No. 60738 of 2010

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 3^RD DAY OF JANUARY, 2024

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 60738 OF 2010 (KLR-RR/SUR)

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BETWEEN:

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GURU SIDDESHWARA CO-OPERATIVE

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BANK LTD., DAJIBANPETH,

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HUBLI – 580020 REPRESENTED

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BY ITS BRANCH MANAGER

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SRI RAJA P NAIK, AGED 49 YEARS R/O HUBLI, DIST

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DHARWAD

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…PETITIONER

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(BY SMT. JYOTHI P DESAI & SRI M C VANTI, ADVOCATES)

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AND:

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SMT SUMANGALA

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W/O MAHANTESH ATTIGERI, AGED MAJOR, OCC HOUSEHOLD WORK,

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R/AT KORI ONI, HUBLI – 580020, DIST DHARWAD.

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SUJATA SUBHASH PAMMAR

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Digitally signed by SUJATA SUBHASH PAMMAR Date: 2024.01.06 13:01:56 +0530

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SMT SHIVALEELA, W/O SIDDALINGAPPA HUBLI AGED MAJOR, OCC HOUSEHOLD WORK, R/O HUBLI, DIST DHARWAD.

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THE TAHSILDAR, HUBLI TQ, DHARWAD DIST

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THE ASSISTANT DIRECTOR OF LAND RECORDS CITY SURVEY OFFICE, HUBLI – 580020, DIST DHARWAD.

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THE DEPUTY DIRECTOR OF LAND RECORDS DHARWAD DIST, DHARWAD.

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THE JOINT DIRECTOR OF LAND RECORDS BELGAUM DIVISION, BELGAUM

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NC: 2024:KHC-D:135 WP No. 60738 of 2010

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SRI GANGADHAR S/O RACHAPPA JANGAMANI AGED MAJOR, OCC BUSINESS, R/O BHUNESHWARI NAGAR, OLD HUBLI – 580030, DIST DHARWAD.

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…RESPONDENTS

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(BY SRI V S KALSURMATH, HCGP FOR R3-R6,

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SRI RAJASHREE AND SRI PRAMOD S BHAT, FOR R1 & R2; R7 SERVED)

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THIS WP FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA PRAYING TO: (a) CALL FOR RECORDS ON THE FILE OF THE JOINT DIRECTOR OF LAND RECORDS, BELGAUM DIVISION, BELGAUM, IN CASE NO.REV.SR.06-09.

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(b) ISSUE WRIT OF CERTIORARI TO QUASH THE ORDER PASSED BY THE JOINT DIRECTOR OF LAND RECORDS NORTH RANGE, BELGAUM IN CASE NO.REV.SR.06-09 BELGAUM DATED 19.11.2009 VIDE ANNEXURE-E BY ALLOWING THIS WRIT PETITION IN THE INTEREST OF JUSTICE AND EQUITY.

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

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ORDER

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The impugned order dated 19.11.2009 passed by the Joint Director of Land Records, Belgavi, at Annexure-E, by which, the order passed by the Deputy Director of Land Records dismissing the appeal filed by the respondents No.1 and 2.

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2. Brief facts of the case are as follows:

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The father and brother of the respondents No.1 and 2 had borrowed the loan from the petitioner, and the property bearing CTS No.1526, measuring 420 sq. yards situated at Ward No.II, Hubli City was mortgaged towards security for repayment of loan. Since the borrower defaulted the repayment of loan, the petitioner – Bank initiated the proceedings under the provisions

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NC: 2024:KHC-D:135 WP No. 60738 of 2010

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of Securitization Act, and after following the procedure as contemplated under the Act conveyed the property to the highest bidder, and the sale certificate was issued in favour of the successful bidder on 17.5.2006. In terms of the sale certificate, the name of the successful bidder was mutated in the revenue records, against which, the respondents No.1 and 2 filed an appeal under Section 136(2) of Karnataka Land Revenue Act stating that in the compromise decree, the subject property has been allotted to the share of the respondents No.1 and 2. The respondent No.4 dismissed the appeal, against which, a revision petition was filed before the respondent No.6. The respondent No.6 by the impugned order allowed the appeal, and set aside the order passed by the respondent No.4, and remitted the matter to the respondent No.4 to reconsider the appeal afresh. Taking exception to the same, this petition is filed.

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Heard the learned counsel for the parties.

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It is undisputed that the subject property was mortgaged with the petitioner – Bank towards security for repayment of loan, and the borrower having failed to repay the amount, the subject property was conveyed to the successful bidder under the provisions of the SARFAESI Act and has attained finality. Such being the case, the respondents No.1 and 2 and family members entered into a compromise decree in OS No.295/2005, and in terms of the compromise, the subject property was allotted to the share of respondents No.1

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4 - NC: 2024:KHC-D:135 WP No. 60738 of 2010

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and 2. The petitioner – Bank nor the successful bidder were parties to the original suit.

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To overcome the sale certificate issued in favour of the successful bidder, the respondents No.1 and 2 and family members filed a collusive suit and obtained compromise decree, and the same is not binding on the petitioner – Bank. The validity of the sale certificate issued in favour of the successful bidder cannot be gone into in a revenue proceedings. Therefore, the impugned order passed by the respondent No.6 stating that the sale certificate was issued in violation of procedure prescribed under the provisions of the SARFAESI Act is not sustainable in law. Accordingly, I pass the following:

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ORDER

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i) The petition is allowed.

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ii) The impugned order dated 19.11.2009 in case bearing No.REV.Sr.06-09 at Annexure-E passed by the respondent No.6 stands quashed.

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Sd/JUDGE

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BKM

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List No.: 1 Sl No.: 59