A guarantor challenged a bank's communication about completion of an e-auction of his property under the SARFAESI Act. The court held quashing the mere communication served no purpose, no writ lay against it without assailing the SARFAESI proceedings or joining the purchaser, and dismissed relief.
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NC: 2026:KHC:11441 WP No. 27683 of 2024
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 27683 OF 2024 (GM-DRT)
BETWEEN:
H. CHANDRASHEKAR, S/O. LATE K. HANUMAIAH, AGED ABOUT 54 YEARS, NO.341, 3RD MAIN, 1ST STAGE, 1ST PHASE, MANJUNATHNAGAR, BENGALURU – 560 010.
…PETITIONER
(BY SRI. T. DADAKHALANDAR, ADVOCATE)
AND:
Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA
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AND ENFORCEMENT OF SECURITY INTEREST, ASHOKNAGAR, CO-OPERATIVE BANK, NO.1380/B, 6TH CROSS, ASHOK NAGAR, BSK 1ST STAGE, 2ND BLOCK, BENGALURU – 560 050.
…RESPONDENTS
(BY SRI. RAMESHA M.S., ADVOCATE FOR R1)
THIS W.P. IS FILED UNDER ARTICLE 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE COMMUNICATION LETTER BEARING NO.ACBL/124/2024-25 DTD. 20.09.2024 ISSUED BY THE R-2 VIDE ANNX-M AND ETC.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
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CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
ORAL ORDER
The present writ petition is filed seeking the following
prayer:
“WHEREFORE the petitioner pray that this Hon’ble Authority be pleased to:-
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approached the Debt Recovery Tribunal. Initially, the stay was granted by an order dated 18.08.2023 on the condition that the petitioner shall pay a sum of 25% within one month in three installments. By virtue of that, he was constrained to pay an amount of Rs.7,00,000/- on 21.08.2023, 30.08.2023 and 15.09.2023. Thereby, the order of the DRT was fully complied. By virtue of the interim order, the auction sale of the property came to an end. Thereafter, respondent No.1/bank had approached the jurisdictional Magistrate and filed Crl.Misc.No.2502/2023 and an order was passed under Section 14 of the SARFAESI Act on 13.06.2022. The petitioner, by letter dated 08.04.2024 had expressed that he is ready to clear the entire amount. Then a legal notice was sent on 17.08.2023 to respondent No.1/bank to take action against the principal borrower and return the original documents pertaining to the petitioner. When respondent No.1/bank proceeded to conduct e-auction on 04.07.2024, the petitioner had raised a dispute before the Additional Registrar of Co-operative Societies and sought stay of the proposed e-auction. With the consent of respondent No.1/bank, the said e-auction was not proceeded. The petitioner paid an amount of Rs.10,00,000/- by way of a
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demand draft. It is the grievance of the petitioner that as per the OTS letter dated 26.08.2024, the petitioner has paid the entire amount and in spite of the same, respondent No.1/bank had proceeded with the auction and he has filed the instant writ petition.
bank submits that as proceedings are pending before the Additional Registrar of Co-operative Societies and pursuant to the directions issued therein, the petitioner submitted a request to respondent No.1/bank seeking one time settlement of the outstanding loan amount. Accordingly, in compliance with the said direction and without prejudice to its rights and conditions, respondent No.1/bank had issued a letter dated 26.08.2024 communicating the OTS amount of Rs.17,50,241/-. Being the amount due as on the relevant date, excluding the payments already made, the one time settlement proposal was not accepted by the petitioner. Then respondent No.1/bank proceeded to conduct the e-auction on 20.09.2024 and the highest bidder had paid the entire amount. It is submitted that the present writ petition is not maintainable and the petitioner
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has an efficacious remedy under Section 17 of the SARFAESI Act.
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30.09.2024. Nothing is forthcoming to show that he has paid
an amount of Rs.17,00,000/- and odd between 26.08.2024 and 30.09.2024. According to the petitioner, the respondents have not deducted the said amount. If that is the case, the petitioner ought to have communicated the same to respondent No.1/bank. When they have addressed a letter on 26.08.2024, the petitioner had kept quiet till 30.09.2024 and then has come up before this Court raising all these grounds. The writ petition cannot be entertained by this Court. Further, on 06.11.2024, a Co-ordinate Bench of this Court had directed the matter to be listed on 15.11.2024. Till then, respondent Nos.1 and 2 shall not issue sale certificate in favour of the auction purchaser. Then that interim order has been extended from time to time. The petitioner is not entitled for any relief from this Court and he cannot file a writ petition questioning a communication without even assailing any of the proceedings that are initiated by the bank under the SARFAESI Act. In that view of the matter, this Court is passing the following:
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ORDER
SD/(LALITHA KANNEGANTI) JUDGE
BN List No.: 1 Sl No.: 3
2 issues framed by the court
Whether a writ petition lies to quash a communication intimating that the e-auction was completed without challenging the auction itself or joining the auction purchaser.
Whether the petitioner complied with the one-time settlement amount communicated by the bank.
4 provisions across 2 enactments
H. Chandrashekar
Ashok Nagar Co-operative Bank Ltd., rep. by its Chief Executive Officer
Authorized Officer under the SARFAESI Act, Ashoknagar Co-operative Bank
B.H. Nagahanumegowda
Lalitha Kanneganti
As recorded by the court registry
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