Mrs Sheela G v Vs L and T Finance Limited — Banking and Recovery | Karnataka HC (2025)

Mrs Sheela G v Vs L and T Finance Limited — Banking and Recovery | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

Issue for consideration

Whether the sale auction notice dated 28.02.2025 (auction scheduled 20.03.2025) issued by the respondent could be challenged and quashed in this writ petition under Article 226. +2 more

Court's answer

As the auction purchaser (successful bidder) was not arrayed as a party, it would not be appropriate to pass any order without the said auction purchaser being made a party.

Ratio / Principle

Remedy against the auction notice, raising any illegalities, is permissible before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act; in light of the grievance redressal mechanism contained under the Act, entertaining a writ petition sidestepping such statutory scheme is impermissible.

Key takeaways

The court found no reason to continue the present proceedings, taking note that the petitioner had not demonstrated bona fides by adhering to the conditions imposed for payment as per the interim order dated 25.04.2025.ratio¶41

Detailed headnote1 paragraphs

Writ petition under Article 226 by the borrower (Mrs Sheela G V) against L and T Finance Limited challenging the sale auction notice dated 28.02.2025 fixing the auction for 20.03.2025. Counsel for the respondent submitted that the auction was in fact conducted on 20.03.2025. Interim orders dated 02.04.2025 and 25.04.2025 restrained issuance of the sale certificate, the latter conditional on the petitioner depositing Rs.5,00,000 into the loan account, a condition the petitioner admittedly did not fulfil. The auction purchaser (successful bidder) was not arrayed as a party, making it inappropriate to pass any order. Held: remedy against the auction notice lies before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act, and entertaining a writ petition sidestepping that statutory grievance redressal mechanism is impermissible; as the petitioner failed to demonstrate bona fides by adhering to the interim-order payment conditions, the court found no reason to continue the proceedings and the petition was dismissed, with all contentions kept open to be raised before the appropriate forum. Reference was noted to the Apex Court decision in CELIR LLP v. Bafna Motors (Mumbai) Pvt.Ltd., Civil Appeal Nos.5542-5543/2023, on which counsel relied regarding loss of the right of redemption.

1 - NC: 2025:KHC:18837 WP No. 9744 of 2025

HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 4^TH DAY OF JUNE, 2025

BEFORE

THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV

WRIT PETITION NO. 9744 OF 2025 (GM-RES)

BETWEEN:

MRS SHEELA G V W/O SRI. SRINIVAS MANGALORE, AGED ABOUT 48 YEARS, R/A NO.88, 5^TH CROSS, MARUHI NAGARA, ITTAMADU BSK 3^RD STAGE, BANGALORE-560 085 AADHAR NO: 8732 3295 3301 PAN NO: CCQPS5549N

… PETITIONER

(BY SRI. ANISH ACHARYA., ADVOCATE)

Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA

AND:

L AND T FINANCE LIMITED BRINDAVAN BUILDING, PLOT NO. 177, KALINA, CST ROAD SANTACRUZ (EAST) MUMBAI-400 098

… RESPONDENT

(BY SRI. VASUDEVAN H N., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT QUASHING THE SALE AUCTION NOTICE ISSUED BY THE RESPONDENT DTD 28.02.2025 SCHEDULING THE SALE ON 20.03.2025 AND ETC.

2 - NC: 2025:KHC:18837 WP No. 9744 of 2025

HC-KAR

THIS PETITION COMING ON FOR FRESH MATTERS LIST THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV

ORAL ORDER

The petitioner has challenged the auction notice

dated 28.02.2025 whereby the date for auction was fixed as 20.03.2025.

Various contentions have been raised regarding

reasons for default.

Petitioner further asserts that she was not informed about the auction nor provided an opportunity to challenge the same.

Learned counsel for respondent submits that the auction was conducted on 20.03.2025.

This court by order dated 02.04.2025 had directed that sale certificate if not issued as on that date, shall not be issued till the next date of hearing. The interim order granted was extended from time to time.

3 -

NC: 2025:KHC:18837 WP No. 9744 of 2025

HC-KAR

By order dated 25.04.2025, the interim order earlier granted was extended till the next date subject to condition that the petitioner would deposit Rs.5,00,000/into the loan account.

Admittedly, subsequent to order of 25.04.2025, petitioner has not deposited any amount to the loan account.

Taking note of the law laid down by the Apex Court in the case of CELIR LLP v. Bafna Motors (Mumbai) Pvt.Ltd. and Others in Civil Appeal Nos.5542-5543/2023, it is submitted by the learned counsel for respondent-Bank that the right of redemption has been lost.

It is noticed that as the auction purchaser who was the successful bidder has not been arrayed as a party, it would not be appropriate to pass any order without the said auction purchaser being made a party.

4 -

NC: 2025:KHC:18837 WP No. 9744 of 2025

HC-KAR

Even otherwise, remedy against such auction notice raising illegalities of the same, if any, is permissible before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act. In light of the grievance redressal mechanism contained under the Act, the question of entertaining a writ petition sidestepping such statutory scheme is impermissible.

Accordingly, this court finds no reason to continue the present proceedings taking note that the petitioner has not demonstrated bonafides by adhering to the conditions imposed for payment as per the interim order dated 25.04.2025.

All contentions of the petitioner are kept open to

be raised before the appropriate Forum as is permissible in law.

Sd/(S SUNIL DUTT YADAV) JUDGE

NP