Disposed¶56

Sri. Champa v. the State of Karnataka

Karnataka HC10 Jun 2026WP/27952/2023

Case brief

AI extract

What is this about?

WP No. 27952 of 2023 (CS-RES), High Court of Karnataka, order dated 10.06.2026 by M.I. Arun, J. Keywords: recovery proceedings by co-operative society bank; BDA site allotted by public auction; failure to hand over possession; loan repayment; privity of contract between borrower and BDA; one-time settlement; writ of mandamus against BDA for refund of Rs. 69,55,200 with interest and damages; Articles 226 & 227; petition disposed of with observations.

What did the court decide?

None; the writ petition was disposed of with observations - the petitioner remains free to work out a one-time settlement with the Bank and to pursue remedies against BDA independently. ¶56

Sri. Champa Vs the State of Karnataka — Writ and Judicial Review | Karnataka HC (2026)

What the court decided

AI extract

Outcome

None; the writ petition was disposed of with observations - the petitioner remains free to work out a one-time settlement with the Bank and to pursue remedies against BDA independently.

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Issue for consideration

Whether the recovery proceedings and order dated 13.10.2023 issued by Respondent No.7 against the petitioner are without authority of law and liable to be quashed. +1 more

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Court's answer

The Bank (respondent no.5) is not a privy to the contract between the petitioner and BDA and is entitled to recover the amounts due from the petitioner in accordance with the agreed terms and conditions of the contract.

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Ratio / Principle

Whether BDA erred in discharging its duties has no implication on the rights of the Bank; no remedy can be granted to the petitioner against the Bank's right to recover the loan amount along with due interest.

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Key takeaways

The observation will not come in the way of the petitioner working out a one time settlement with the Bank, if the law provides for the same.obiter¶54
As regards her rights against BDA, the petitioner is at liberty to pursue the remedies available to her by way of writ petition or by instituting a necessary original suit for recovery of damages; the court did not settle the petitioner-BDA dispute.obiter¶55

Detailed headnote1 paragraphs

High Court of Karnataka (M.I. Arun, J.) disposed of a writ petition under Articles 226 & 227 of the Constitution filed by a purchaser of a BDA site bought in public auction with a loan from respondent no.5-Bank (Tumkur Merchants Souhardha Credit Cooperative Ltd.), challenging recovery proceedings initiated by Respondent No.7 (Recovery Officer) after BDA failed to deliver possession of the site. The court held that the Bank is not a privy to the contract between the petitioner and BDA and is entitled to recover the loan dues with interest per the agreed terms, irrespective of any default by BDA; no remedy was granted against the Bank's recovery rights. The petitioner was left free to negotiate a one-time settlement with the Bank, if permitted by law, and to pursue remedies against BDA by way of writ petition or an original suit for damages.

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NC: 2026:KHC:27818 WP No. 27952 of 2023

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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 10^TH DAY OF JUNE, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE M.I.ARUN WRIT PETITION NO. 27952 OF 2023 (CS-RES)

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BETWEEN:

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SRI. CHAMPA W/O M.NAGARAJ AGED ABOUT 51 YEARS R/AT NO.1386, "SUKIRTHI" SOUTH END 'A' MAIN ROAD 9^TH BLOCK, JAYANAGAR BANGALORE - 560 074.

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…PETITIONER

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(BY SRI. M.SHIVAPRAKASH, ADVOCATE)

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AND:

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Digitally signed by V MANJUSHA BAI Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA REP. BY THE CHIEF SECRETARY VIDHANA SOUDHA BANGALORE - 560 001.

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THE PRINCIPAL SECRETARY DEPARTMENT OF CO-OPERATION STATE OF KARNATAKA M.S.BUILDING BANGALORE - 560 001.

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THE REGISTRAR OF CO-OPERATIVE SOCIETIES STATE OF KARNATAKA ALI ASKAR ROAD BANGALORE - 560 001.

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NC: 2026:KHC:27818 WP No. 27952 of 2023

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HC-KAR

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THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES NORTH DIVISION (NORTH CIRCLE) MARGOSA ROAD, MALLESHWARAM BANGALORE - 560 005.

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M/S. TUMKUR MERCHANTS SOUHARDHA CREDIT COOPERATIVE LTD. # 68, BETWEEN 17 AND 18^TH CROSS MARGOSA ROAD, MALLESHWARAM BANGALORE - 560 055

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REP. BY ITS CHIEF EXECUTIVE OFFICER.

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BANGALORE DEVELOPMENT AUTHORITY REPRESENTED BY ITS COMMISSIONER KUMARA PARK WEST

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BANGALORE - 560 020.

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RECOVERY OFFICER (Ni.441) AND ASSISTANTS REGISTRAR CO-OPERATIVE SOCIETIES MARGOSA ROAD, MALLESHWARAM BANGALORE-560 005.

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…RESPONDENTS

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(BY SRI. YOGESH D.NAIK, AGA FOR R1 TO R4 & R7; SRI. AKKI MANJUNATH GOWDA K., ADVOCATE FOR R5; SRI. K.KRISHNA, ADVOCATE FOR R6)

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THIS PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE PROCEEDINGS AND ORDER ISSUED BY RESPONDENT NO.7 ORDER EP NO.KA.RA.SOW.SUM/SA.NI/SA.SUM.SA.NI/VA. AA/665/2020-23 DATED 13.10.2023 AT ANNEXURE-M AND CONSEQUENTLY, TO DECLARE THAT THE PROCEEDINGS INITIATED ARE WITHOUT AUTHORITY OF LAW, ARBITRARY, MORE SO THE ACCOUNT OF NON FULFILLMENT OF THE OBLIGATOIN BY THE 6^TH RESPONDENT BDA AND ETC.

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3 - NC: 2026:KHC:27818 WP No. 27952 of 2023

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HC-KAR

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THIS PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THROUGH PHYSICAL HEARING/VIDEO CONFERENCING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE M.I.ARUN

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ORAL ORDER

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The case of the petitioner is that, she was allotted a site by Bangalore Development Authority (BDA) by way of a public auction. The petitioner, to pay the consideration amount, raised loan from respondent no.5-Bank and paid the amount to BDA. However, BDA failed to give possession of the property in favour of the petitioner as the same was under litigation. However, the Bank initiated recovery proceedings against the petitioner. Aggrieved by the same, the present writ petition is filed with the following prayers:

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"a. Call for the entire records in the matter in sanction of loan, allotment of site by Public Auction and payment made by the petitioner and his wife towards the loan amount.

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b. To issue Writ of Certiorari and quash the proceedings and order issued by Respondent No.7. order EP No.KA.RA.SOW.SUM/SA.NI/SA.SUM.SA.NI/VA.AA/665/20 22-23 at dated 13/10/2023, at ANNEXURE-M. and

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NC: 2026:KHC:27818 WP No. 27952 of 2023

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HC-KAR

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consequently, to declare that the proceedings initiated are without authority of law, arbitrary, more so the account of non fulfillment of the obligation by the 6^th Respondent BDA.

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c. Issue Writ of Mandamus against Respondent No.6 to transfer the amount of Rs. 69,55,200/0(Rupees Sixty Nine Lakhs Fifty Five Thousand Two Hundred only) in the account of BDA paid towards site value in public auction by the Petitioner along with the interest accrued since 2010, till the date of realization and damages for having caused by the arbitrary decision of the Respondent No.6 BDA

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d. Pass such other order/s as this Hon'ble Court deems fit and proper in the circumstances of the case."

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It is the case of the Bank that their right is independent

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of whether the site is allotted in favour of the petitioner or not by the BDA. He submits that the petitioner borrowed loan from them which she is liable to repay along with interest as per the agreed terms and conditions. It is further submitted that, if BDA does not put the petitioner in possession of the property as agreed upon, petitioner is always at liberty to sue the BDA in the manner known to law, but that cannot be a ground to thwart the Bank from recovering the dues from the petitioner, which it is legitimately entitled to do so.

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NC: 2026:KHC:27818 WP No. 27952 of 2023

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HC-KAR

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Learned counsel for the BDA upon instructions, submits

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that, BDA has not committed any mistake and the possession of the site has not been handed over to the petitioner due to her own fault and on the said ground he prays for dismissal of the petition. It is further submitted that, if the petitioner is not desirous of taking the site, BDA is also willing to repay the money to the petitioner.

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The writ petition primarily pertains to the action initiated by the Bank against the petitioner and not with regard to settling the dispute between the petitioner and the BDA. Under the circumstances, it has to be held that Bank is not a privy to the contract between petitioner and BDA and the Bank is entitled to recover the amounts due to it from the petitioner in accordance with the agreed terms and conditions of the contract. The fact whether BDA erred in discharging its duties in favour of the petitioner or not, it does not have any implication upon the rights of the Bank in the instant case. Hence, no remedy can be granted in favour of the petitioner insofar as it relates to the rights of the Bank to recover the loan amount along with due interest from the petitioner. However,

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6 - NC: 2026:KHC:27818 WP No. 27952 of 2023

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HC-KAR

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this observation will not come in the way of petitioner working

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out a one time settlement with the Bank, if the law provides for the same.

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Insofar as it relates to the rights of the petitioner with regard to BDA, she is always at liberty to pursue the remedies available to her by way of writ petition or by instituting necessary original suit for recovery of damages, if so advised. This observation will also not come in the way of petitioner and BDA working out their remedies independently.

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The writ petition stands disposed of subject to the aforementioned observations.

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Sd/(M.I.ARUN) JUDGE

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PGG

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List No.: 1 Sl No.: 28

Sri. Champa v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

Sri. Champa v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

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