Sri. Ramesh Babu. v Vs M/S State Bank of India

SMT R. UMA RAMESH, W/O RAMESH BABU V, AGED ABOUT 48 YEARS, BOTH ARE RESIDING AT #9/4, HEALTH LAYOUT, VISHWANEEDAM POST, SRIGANDAKAVAL, SUNKADAKATTE, BENGALURU-560 091.

¶11

Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

¶12

(BY SRI. MALIPATIL P S., ADVOCATE)

¶13

AND:

¶14

…PETITIONERS

¶15

M/S. STATE BANK OF INDIA, ASSET RECOVERY MANAGEMENT BRANCH, MYSORE BANK BUILDING, BKG COMPLEX, A BLOCK, 2ND FLOOR, AVENUE ROAD, BENGALURU-560 009.

¶16

2 -

¶17

NC: 2025:KHC:24021 WP No. 8674 of 2022

¶18

HC-KAR

¶19

REPRESENTED BY ITS AUTHORIZED OFFICER.

¶20

…RESPONDENT

¶21

(BY SRI. LOKESH MURTHY. G, ADVOCATE FOR C/R)

¶22

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF

¶23

THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 17-02-2022 PASSED BY THE XXIV ADDL. CMM COURT BENGALURU IN C.MISC NO.594/2022 VIDE ANNEXURE-C AND

¶24

ALSO TO QUASH THE IMPUGNED NOTICE DTD 11.04.2022 ISSUED BY THE RESPONDENTS BANK VIDE ANNEXURE-D AND ETC.,

¶25

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

¶26

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

¶27

ORAL ORDER

¶28

Learned counsel for the petitioners have sought for setting aside of the order passed under Section 14 of the SARFAESI Act at Annexure - C as well as the notice dated 11.04.2022 issued by the respondent - Bank at Annexure - D.

¶29

3 -

¶30

NC: 2025:KHC:24021 WP No. 8674 of 2022

¶31

HC-KAR

¶32

Learned counsel for the petitioners submits that

¶33

without prejudice to the contentions raised, they intend to settle the dues and have made a request to the respondent - Bank on 30.06.2025 for a one time settlement (OTS).

¶34

Learned counsel for the respondent - Bank submits that the earlier offer for One Time Settlement has been rejected as petitioners have not complied with the undertakings made.

¶35

It is further submitted that as O.A.No.266/2020 has been disposed off on 29.05.2025 whereby O.A has been allowed and the Bank has been permitted to recover amounts as mentioned in the order. There is a further direction that recovery certificate to be issued. Accordingly, it is submitted that the remedy of the petitioners is before the DRAT under Section 18 of the SARFAESI Act.

¶36

In light of the facts and developments as noticed above, it would be appropriate to relegate the petitioners to avail of substantive remedy before the DRAT.

¶37

4 - NC: 2025:KHC:24021 WP No. 8674 of 2022

¶38

HC-KAR

¶39

Learned counsel for the respondent relied on the

¶40

order of the Hon'ble Supreme Court in the case of Varimadugu Obireddy v. B.Sreenivasulu and Others - (2023) 2 SCC 168 and submits that the petitioner is required to avail of the substantive remedy under Section 18 of the SARFAESI Act.

¶41

Observations of the Apex Court in the case of Varimadugu Obireddy' s case (supra) reads as follows:

¶42

"34. The order of the Tribunal dated 1-8-2019 was an appealable order under Section 18 of the SARFAESI Act, 2002 and in the ordinary course of business, the borrowers/person aggrieved was supposed to avail the statutory remedy of appeal which the law provides under Section 18 of the SARFAESI Act, 2002. In the absence of efficacious alternative remedy being availed, there was no reasonable justification tendered by the respondent borrowers in approaching the High Court and filing writ application assailing order of the Tribunal dated 1-8-2019 under its jurisdiction under Article 226 of the Constitution without exhausting the statutory right of appeal available at its command.

¶43

5 -

¶44

NC: 2025:KHC:24021 WP No. 8674 of 2022

¶45

HC-KAR

¶46

35. This Court in the judgment in United Bank of India v. Satyawati Tondon, was concerned with the argument of alternative remedy provided under the SARFAESI Act, 2002 and dealing with the argument of alternative remedy, this Court had observed that where an effective remedy is available to an aggrieved person, the High Court ordinarily must insist that before availing the remedy under Article 226 of the Constitution, the alternative remedy available under the relevant statute must be exhausted. Paras 43, 44 and 45 of the said judgment are relevant for the purpose and are extracted below: (SCC p. 123)

¶47

"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 mo 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 contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any

¶48

6 -

¶49

NC: 2025:KHC:24021 WP No. 8674 of 2022

¶50

HC-KAR

¶51

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.

¶52

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 selfimposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.

¶53

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 g any reason why the High Court should entertain a 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."

¶54

36. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the SARFAESI Act, 2002, but the order of the

¶55

7 -

¶56

NC: 2025:KHC:24021 WP No. 8674 of 2022

¶57

HC-KAR

¶58

Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of predeposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under 2nd proviso to Section 18 of the 2002 Act."

¶59

In light of the observations made by the Apex Court, it can be noticed that several factual contention raised by the petitioners are the matters that cannot be adjudicated in the present proceedings.

¶60

Accordingly, the petition is disposed off relegating the petitioners to avail of the substantive remedy as regards the impugned proceedings. All contentions of both the sides are kept open.

¶61

8 -

¶62

NC: 2025:KHC:24021 WP No. 8674 of 2022

¶63

HC-KAR

¶64

In light of disposal of writ petition, it would meet

¶65

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

¶66

The interim protection granted under this order is only to enable the petitioners to avail of his 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 operate and the authorities before whom petitioners may approach are to look at the matter afresh uninfluenced by the observations made herein.

¶67

Needless to state that while considering the aspect of limitation, in the event the proceedings are instituted before the DRAT, time spent before this Court may be raised, which may be taken note of appropriately.

¶68

In the interregnum, in case the petitioners might approach the Bank for settlement, the same will be considered at the end of the Bank as per its rules and procedures.

¶69