Disposed¶53

B Kanagachalam v. Authorized Officer /Agm

Karnataka HC6 Mar 2026WP/2335/2026

Case brief

AI extract

What is this about?

SARFAESI Act Section 13(2); Section 13(4); e-auction notice dated 25-12-2025; auction dated 28-01-2026; IDBI Bank Authorized Officer; writ of certiorari; full repayment of outstanding dues; loan account closed; auction cancelled; auction purchaser remedy left open; writ petition disposed without adjudication; Karnataka High Court; GM-DRT; Lalitha Kanneganti J.; 2026.

What did the court decide?

No substantive relief to the petitioner; the writ petition was disposed of as nothing remained for adjudication after full payment and closure of the loan account, with liberty reserved to the auction purchaser to question the cancellation of the auction in accordance with law, and all pending IAs closed. ¶53

B Kanagachalam Vs Authorized Officer /Agm — Banking and Recovery | Karnataka HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the auction/sale certificate proceedings pursuant to the e-auction notice dated 25-12-2025 (auction dated 28-01-2026) issued by respondent No.1 Bank under Sections 13(2) and 13(4) of the SARFAESI Act are contrary to law and liable to be quashed as void and unenforceable.

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Court's answer

In view of the settlement arrived at, the payment of the entire outstanding amount by the petitioner, acceptance thereof by the Bank and closure of the loan account, nothing remains to be adjudicated in the writ petition.

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Ratio / Principle

If the auction purchaser is aggrieved by the action of the Bank in closing the account by cancelling the auction, he must avail his appropriate remedy in accordance with law; the auction purchaser is at liberty to question the action of the respondents in cancelling the auction in accordance with law.

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Detailed headnote1 paragraphs

Karnataka High Court (Lalitha Kanneganti, J.) — Writ Petition (GM-DRT) under Articles 226 and 227 of the Constitution challenging the e-auction advertised in Indian Express on 25-12-2025 (auction dated 28-01-2026) conducted by the Authorized Officer/AGM of IDBI Bank pursuant to notices under Sections 13(2) and 13(4) of the SARFAESI Act (Annexures E and G). By interim order dated 03.02.2026 the Co-ordinate Bench directed the Bank to accept two demand drafts totalling Rs.2,63,02,018.05 and not to confirm the sale meanwhile. The Bank accepted the amount, the entire outstanding was paid and the loan account stood closed. Holding that, in light of the settlement and full payment, nothing remained to be adjudicated, the Court disposed of the writ petition without deciding the legality of the auction, expressly leaving the auction purchaser (respondent No.2) at liberty to question the cancellation of the auction in accordance with law; all pending interlocutory applications were closed.

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NC: 2026:KHC:13930 WP No. 2335 of 2026

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6^TH DAY OF MARCH, 2026

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BEFORE

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THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 2335 OF 2026 (GM-DRT) BETWEEN:

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B KANAGACHALAM

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S/O U P BALASUBRAMANIAM AGED ABOUT 56 YEARS

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FLAT NO.108, IHFD APARTMENT NO.11, VASAVI TEMPLE ROAD

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BANGALORE-560004.

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…PETITIONER

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(BY SRI. PRAVEEN R., ADVOCATE)

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AND:

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Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA

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AUTHORIZED OFFICER /AGM IDBI BANK, RETAIL RECOVERY 2ND FLOOR, IDBI HOUSE, MISSION ROAD BRANCH NO.58, MISSION ROAD, BANGALORE-560027.

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M/S KAVI POULTRIE SMT GUIIAPRIYA PROPRIETRIX: M/S KAVI POULTRIE NO.26, 1S5T CROSS, SINDHI COLONY JC ROAD, BANGALORE - 560002 ALSO S.F NO. 165/2 OLD 165/2A NEW 818 DEVANURPUDHUR ROAD, KANJAMPATTI VILLAGE AND PANCHAYAT

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2 - NC: 2026:KHC:13930 WP No. 2335 of 2026

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HC-KAR

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POLLACHI TALUK COIMBATORE DISTRICT AND SF. NO. 258, 259, 260 PATTA NO. 643 NEAR, NEGMAM ROAD KOVIL PALAYAM. KINATHUKKADAVU TALUK COIMBATORE DISTRICT.

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PUVI KUMAR S S/O SUGAKUMAR AGED ABOUT 45 YEARS NO.26, 1S5T CROSS, SINDHI COLONY, JC ROAD, BANGALORE - 560002

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…RESPONDENTS

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(BY SRI. T.P. MUTHANNA, ADVOCATE)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND STAY THE AUCTION/SALE CERTIFICATE PROCEEDINGS IDBI ADVERTISEMENT IN INDIAN EXPRESS NOTICE/E-AUCTION DATED 25-12-2025 (AUCTION DATED 28-01-2026) UNDER SECTION 13(2) OF SARFAESI ACT, AS PER ANNEXURE-E AND UNDER SECTION 13(4) OF SARFAESI ACT, AS PER ANNEXUREG ISSUED BY THE RESPONDENT NO.1 AS CONTRARY TO LAW AND UNENFORCEABLE AND VOID.

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

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NC: 2026:KHC:13930 WP No. 2335 of 2026

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HC-KAR

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CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

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ORAL ORDER

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The present writ petition is filed seeking the following

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prayers:

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“WHEREFORE, the petitioners most humbly prays that this Hon’ble Court be pleased to grant/order the following relief:

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i) Issue writ of certiorari quashing and stay the auction/sale certificate proceedings IDBI advertisement in Indian Express notice/e-auction dated 25-12-2025 (auction dated 28-01-2026) under Section 13(2) of SARFAESI Act, as per Annexure E and under Section 13(4) of SARFAESI Act, as per Annexure-G issued by the Respondent no.1 as contrary to Law and unenforceable and void.

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ii) Issue writ of certiorari quashing all further proceedings initiated by the Respondent No.1 Bank pursuance to under Section 13(2) as per Annexure E and notice under Section 13(4) of the Act, as per Annexure-G as being all consequential action initiated pursuance to a notice without authority of Law as being void and not binding on the Petitioner

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iii) Pass such other order or orders as this Hon'ble Court deems fit to grant under the facts and circumstances of the case, in the interest of justice and equity."

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The Co-ordinate Bench of this Court has passed

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order on 03.02.2026, which reads as follows:

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"Sri.Nagaraj Damodar, learned counsel, accepts notice for respondent No.1.

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4 - NC: 2026:KHC:13930 WP No. 2335 of 2026

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HC-KAR

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Issue emergent notice to respondent Nos.2 and 3 returnable by 24.02.2026.

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The petitioner has filed this writ petition challenging the auction/sale certificate proceedings dated 25.12.2025. The petitioner in order to show his bona fide has produced two demand drafts (i) bearing No.004111 dated 03.02.2026 for a sum of Rs.1,75,42,01805 drawn on HDFC Bank and (ii) bearing No.515349 dated 03.02.2026 for a sum of Rs.87,60,000/-, drawn on ICICI Bank, in favour of respondent No.1. Thus, the petitioner has deposited a sum of Rs.2,63,02,018-05.

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Respondent No.1 is directed to accept both demand drafts forthwith.

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Thus, the petitioner has made out a prima facie case for grant of an ad interim order.

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Accordingly, respondent No.1 is directed not to confirm the sale, if not already confirmed, till the next date of hearing."

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It is submitted by the learned counsel appearing for

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the respondent that the petitioner has paid the entire amount and the loan account is closed. In the light of the orders passed by the Co-ordinate Bench this Court, the respondent/Bank has accepted the said amount.

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Learned counsel appearing for the auction purchaser seeks time stating that the learned Senior Counsel, who is engaged, is unwell.

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5 - NC: 2026:KHC:13930 WP No. 2335 of 2026

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HC-KAR

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The writ petition is filed questioning the auction

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proceedings. Then the Co-ordinate Bench of his Court has passed an order directing the respondent/Bank to accept the amount. The entire outstanding amount is paid by the petitioner and the loan account is closed.

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In these circumstances, if the auction purchaser is aggrieved by the any action of the Bank in closing the account by cancelling the auction, he has to avail the appropriate remedy in accordance with law. In the light of the settlement arrived at and as the entire amount has been paid, nothing remains to be adjudicated in this writ petition.

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