Disposed¶53

M/S Simin Trading Company v. M/S Union Bank of India

Karnataka HC7 Jul 2025WP/5889/2022

Case brief

AI extract

What is this about?

SARFAESI Act 2002 Section 14; District Magistrate order dated 12.10.2018; writ petition disposed; alternative/statutory remedy; Debts Recovery Tribunal; Articles 226 and 227; Union Bank of India v. Satyawati Tondon (2010) 8 SCC 110; exhaustion of remedies before Article 226; two-week restraint on precipitative steps by bank; interim protection not on merits; Simin Trading Company; Union Bank of India Mangalore; Karnataka High Court 2025.

What did the court decide?

Petitioner relegated to avail of the substantive remedy before the Debts Recovery Tribunal; respondent Bank directed not to take precipitative steps for two weeks; all contentions kept open. ¶53

M/S Simin Trading Company Vs M/S Union Bank of India — Banking and Recovery | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Petitioner relegated to avail of the substantive remedy before the Debts Recovery Tribunal; respondent Bank directed not to take precipitative steps for two weeks; all contentions kept open.

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Issue for consideration

Whether the entire recovery proceedings initiated by the respondent Bank against the schedule property are legally invalid and in violation of the SARFAESI Act, 2002, warranting quashing of the impugned Section 14 order. +1 more

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Ratio / Principle

Several factual contentions raised by the petitioner are matters that cannot be adjudicated in the present writ proceedings.

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Key takeaways

The petition is disposed of, relegating the petitioner to avail of the substantive remedy (before the Debts Recovery Tribunal); all contentions of both sides are kept open.ratio¶54
The respondent Bank is directed not to take any precipitative steps for a period of two weeks.ratio¶61
The interim protection is not an order passed on the basis of adjudication on merits and ceases to operate upon lapse of the stipulated time.ratio

Detailed headnote1 paragraphs

Karnataka HC (S Sunil Dutt Yadav J), 07-07-2025, WP No. 5889 of 2022 (GM-RES): Writ petition challenging the District Magistrate's Section 14 SARFAESI Act, 2002 order dated 12.10.2018 (Annexure-B) disposed of without adjudication on merits; petitioner relegated to the substantive remedy before the Debts Recovery Tribunal, relying on the Apex Court's observations in Union Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 on exhaustion of statutory remedies before invoking Article 226; respondent Bank directed not to take precipitative steps for two weeks; interim protection expressly not a merits-based adjudication and ceases on lapse of the stipulated time; authorities before whom petitioners may approach to look at the matter afresh uninfluenced by these observations; time spent before the High Court to be excluded for DRT purposes, while the time from 12.10.2018 to filing of the writ petition is to be explained; all contentions kept open.

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NC: 2025:KHC:24559 WP No. 5889 of 2022

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 7^TH DAY OF JULY, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 5889 OF 2022 (GM-RES)

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BETWEEN:

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M/S SIMIN TRADING COMPANY REP BY MOHAMMED SHAMMER AGED ABOUT 50 YEARS S/O U YAKOOB, R/AT NO 13-98 NEAR MADANI, JUNIOR COLLEGE ALEKAL, ULLAL MANGALORE 560091.

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…PETITIONER

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(BY SRI. KAVITHA D., ADVOCATE)

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AND:

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Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA

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M/S UNION BANK OF INDIA BALMATTA MANGALORE BRANCH SARSWATHI COMMERCIAL COMPLEX UPPER BENDOOR MANGALORE 575002 THE AUTHORIZED OFFICER MR. NITIN MAROTHRAO MAHESHKAR.

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(BY SRI. VIJAYA KUMAR P L., ADVOCATE)

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…RESPONDENT

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER IN SECTION 14 ORDER IN MAG (2) CR723/2018/54742/C4 ON 12.10.2018 PASSED BY THE LEARNED DISTRICT MAGISTRATE VIDE ANNX-B ISSUED UNDER THE PROVISIONS OF THE SARFAESI ACT, 2002 OBTAINED BY THE RESPONDENT BANK AND DECLARE THAT THE ENTIRE RECOVERY PROCEEDINGS INITIATED BY THE RESPONDENT BANK AND ITS RULES AGAINST THE SCHEDULE

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NC: 2025:KHC:24559 WP No. 5889 of 2022

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HC-KAR

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PROPERTY ARE LEGALLY INVALID AND IN VIOLATION OF SARFAESI ACT, 2002.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

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ORAL ORDER

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Petitioner has called in question the correctness of

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the order passed under Section 14 of the Securitisation

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and Reconstruction of Financial Assets and Enforcement of

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Security Interest Act, 2002 by the District Magistrate.

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It is to be noticed that several contentions have

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been raised regarding the irregularity in the procedure to be followed.

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Learned counsel for respondent - Bank submits that the substantive remedy is before the Debts Recovery Tribunal.

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It is noticed that the conditions imposed while granting interim order, in its entirety has not been

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HC-KAR

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complied with. The matter relates to the year 2022 while

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the order of the District Magistrate is dated 12.10.2018.

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It is relevant to take note of the observations of

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the Apex Court in the case of Union Bank of India v. Satyawati Tondon and Others - (2010) 8 SCC 110 that the appropriate remedy would be to relegate the petitioner to seek for substantive remedy before the Debt Recovery Tribunal. The relevant observations of the Apex Court are as follows:

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"43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only

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NC: 2025:KHC:24559 WP No. 5889 of 2022

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HC-KAR

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contain comprehensive procedure for recovery of the dues but also envisage constitution of quasijudicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.

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44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.

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45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a

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NC: 2025:KHC:24559 WP No. 5889 of 2022

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HC-KAR

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petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance.

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55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the Sarfaesi Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection."

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In light of the observations made by the Apex

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Court, it can be noticed that several factual contentions raised by the petitioner are the matters that cannot be adjudicated in the present proceedings.

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Accordingly, the petition is disposed off

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relegating the petitioner to avail of the substantive remedy

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NC: 2025:KHC:24559 WP No. 5889 of 2022

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HC-KAR

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as regards the impugned proceedings. All contentions of

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both the sides are kept open.

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In light of disposal of writ petition, it would

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meet the ends of justice by directing the respondent - Bank not to take any precipitative steps for a period of two weeks from today.

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The interim protection granted under this order is only to enable the petitioners to avail of the substantive remedy and must not be considered to be an order passed on the basis of adjudication on merits. Upon the lapse of the time stipulated, the protection granted would cease to

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operate and the authorities before whom petitioners may approach are to look at the matter afresh uninfluenced by the observations made herein.

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It is clarified that in the event the petitioner were to approach the Debts Recovery Tribunal, it is only the time that spent before this Court may be excluded

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HC-KAR

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while the time between 12.10.2018 and the date of filing

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of writ petition is a matter to be explained.

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