Sri v Thulasi Ram Vs Canara Bank — Banking and Recovery | Karnataka HC (2025)

Sri v Thulasi Ram Vs Canara Bank — Banking and Recovery | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

Issue for consideration

Whether, under Section 13(4) of the SARFAESI Act, 2002, the right to securitisation accrues and crystallises in favour of the secured creditor only upon classification of the account as substandard, loss asset or doubtful in terms of Section 2(1)(o), subject to compliance with para 4 of the RBI Master Circular, and not in terms of Section 2(1)(j). +4 more

Ratio / Principle

Accepting the memo dated 02.04.2025 signed by the learned counsel for the petitioners and his submissions, the writ petition is dismissed as not pressed; no relief claimed in the petition is granted or adjudicated.

Key takeaways

Pending I.A.No.1/2024 does not survive for consideration and stands disposed of accordingly.ratio¶41

Detailed headnote1 paragraphs

HIGH COURT OF KARNATAKA AT BENGALURU (Suraj Govindaraj J.) | WP No. 12356 of 2024 (GM-RES) | decided 02.04.2025 | NC: 2025:KHC:13756 | V Thulasi Ram & anr. v. Canara Bank, Magadi Road II Branch (Authorised Officer under SARFAESI Act, 2002). Petition under Article 226 sought declarations that the right of securitisation under S.13(4) SARFAESI Act, 2002 crystallises only on classification of the account as substandard/loss/doubtful asset under S.2(1)(o) read with para 4 of RBI Master Circular DBR No.BPBE 2/21.0.048 dt.01.07.2015 and not under S.2(1)(j); that provisos (iv) and (v) to S.14 have no precedence over Ss.2(1)(o), 13(2) and 13(4); and certiorari to quash the ACMM (Mayo Hall, Bengaluru) order dt.20-04-2024 in Crl.Misc.No.50231/2021 ('ANNEXUREL') inter alia for omission of the 'act of satisfaction' under the second proviso to S.14. Coming on for orders, the Court accepted a memo dt.02.04.2025 of petitioners' counsel and dismissed the petition as not pressed; pending I.A.No.1/2024 does not survive. No contention was adjudicated on merits; the order carries no precedent value on the SARFAESI constructions canvassed. D.K. Trivedi (1986 Suppl SCC 20) is only referred in the prayer.

1 - NC: 2025:KHC:13756 WP No. 12356 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 2^ND DAY OF APRIL, 2025

BEFORE

THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 12356 OF 2024 (GM-RES)

BETWEEN:

SRI V THULASI RAM

SON OF SRI. VISHWANATH, AGED ABOUT 53 YEARS, RESIDENT OF HOUSE NO. 3208, 6TH MAIN ROAD, 13TH CROSS, HAL 2ND STAGE, INDIRA NAGAR, BENGALURU-560 008.

Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

SMT. BHUVANESHWARI WIFE OF SHRI. THULASI RAM, AGED ABOUT 44 YEARS, RESIDENT OF HOUSE NO. 3208, 6TH MAIN ROAD, 13TH CROSS, HAL 2ND STAGE, INDIRA NAGAR, BENGALURU-560 008.

…PETITIONERS

(BY SRI. X M JOSEPH, ADVOCATE)

AND:

CANARA BANK MAGADI ROAD II BRANCH, NO. 46, MAGADI MAIN ROAD, BESIDE ANJAN CINEMAS, BENGALURU-560 023,

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NC: 2025:KHC:13756 WP No. 12356 of 2024

REPRESENTED BY ITS AUTHORISED OFFICER UNDER SARFAESI ACT, 2002.

…RESPONDENT

(BY SRI. SHETTY VIGNESH SHIVARAM, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO A) ORDER / DIRECTION TO HOLD THAT UNDER SECTION 13(4) OF THE SARFAESI ACT, 2002, VIDE ANNEXURE-A, THE RIGHT TO SECURITISATION ACCRUES AND CRYSTALIZES IN FAVOUR OF SECURED CREDITOR-RESPONDENT BANK ONLY UPON CLASSIFICATION OF ACCOUNT AS SUBSTANDARD, LOSS ASSET OR DOUBTFUL IN TERMS OF SECTION 2(1)(o) OF SAID ACT 2002 SUBJECT TO COMPLIANCE WITH PARA NO. 4 OF THE RBI MASTER CIRCULAR ANNEXURE-B RBI/2015-16/101/DBR NO.BPBE 2/21.0.048 2015 DTD 01.07.2015 AND NOT IN TERMS OF SECTION 2(1)(j) OF SARFAESI ACT, 2002; B) ORDER/DIRECTION TO HOLD THAT PROVISO (iv) AND (v) TO SECTION 14 OF SARFAESI ACT, 2002 VIDE ANNEXURE-A, HAS NO PRECEDENCE OVER SECTIONS 2(1)(o), 13(2) AND 13(4) OF SARFAESI ACT, 2002, ETC.

THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

The petitioners are before this Court seeking for

the following reliefs:

"A. Issue an appropriate WRIT order/direction to hold that under section 13(4) of the SARFAESI Act, 2002, vide Annexure-A, the right to

3 - NC: 2025:KHC:13756 WP No. 12356 of 2024

Securitisation accrues and crystalizes in favour of secured creditor-respondent Bank only upon classification of account as substandard, loss asset or doubtful in terms of Section 2(1)(o) of said Act 2002 subject to compliance with para no. 4 of the RBI master circular Annexure-B RBI/2015-16/101/DBR No.BPBE 2/21.0.048 2015 dtd 01.07.2015 and not in terms of section 2(1)(j) of SARFAESI ACT, 2002;

B. Issue an appropriate WRIT order/direction to hold that proviso (iv) and (v) to section 14 of SARFAESI ACT, 2002 vide Annexure-A, has no precedence over Sections 2(1)(o), 13(2) and 13(4) of SARFAESI ACT, 2002;

C. Issue a writ of certiorari to quash ANNEXUREL, the order dated 20-04-2024 in Crl.Misc.No.50231/2021, passed by the Learned Additional Chief Metropolitan Magistrate, Mayo Hall Court complex, Bengaluru as arbitrary for omission of mandatory compliance with "act of satisfaction" contemplated in 2^nd Proviso to Section 14 of SARFAESI Act, 2002;

D. Issue a Writ of certiorari to quash ANNEXUREL, the order dated 20-0-2024 in Crl.Misc.No.50231/2021, passed by the Learned X Additional Chief Metropolitan magistrate, Mayo Hall Court Complex, Bengaluru as over reaching, the determination in W.P.No.19289/2021 by this Hon'ble Court, inter alia, the validity of the statutory demand notice which denies the petitioners, their entitlement to relief of Rs.90 lakhs under GECL, their entitlement of COVID-19 reliefs announced by Government of India and Reserve Bank of India;

E. Issue a Writ of certiorari to quash ANNEXUREL, the order dated 20-0-2024 in Crl.Misc.No.50231/2021,passed by the X Additional Chief Metropolitan Magistrate, Mayo Hall Court Complex, Bengaluru as overrides the judicial procedures suggested by the Hon'ble Supreme Court in D.K. Trivedi:1986 Suppl.SCC 20@ Para 83, to the effect that when an issue

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touching the issue before lower court, is in subjudice, pending determination in Higher Court, the lower Court shall stay its hand;

F. Issue any other order/direction as deem fit and proper in the circumstances of the present case and to allow this writ petition with costs."

A memo dated 02.04.2025, signed by the learned

counsel for the petitioners has been filed.

Accepting the said memo and the submission of the learned counsel for the petitioners, the petition is dismissed as not pressed.

Pending I.A.No.1/2024 does not survive for consideration.

SD/(SURAJ GOVINDARAJ) JUDGE

BMV* List No.: 1 Sl No.: 8.3