Mahabala Shetty Vs the Authorized Officer Bank of… — Banking and Recovery | Karnataka HC (2026)

Mahabala Shetty Vs the Authorized Officer Bank of… — Banking and Recovery | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Respondent Bank restrained from interfering with petitioners' property in Sy.No.39/1B2 (0.15.50 cents); Bank to get the land surveyed and proceed per the survey report if identity or demarcation is disputed; petitioners at liberty to avail remedy before the DRT; all pending I.As. in the writ petition closed.

Issue for consideration

Whether the respondent Bank can take possession of, or interfere with, the petitioners' property in Sy.No.39/1B2 (0.15.50 cents) under the guise of an order passed under Section 14 of the SARFAESI Act which relates to a different secured property.

Court's answer

There is no dispute that the secured property and the property of the petitioners are two different and distinct properties.

Ratio / Principle

The respondent Bank is restrained from interfering with the petitioners' property in Sy.No.39/1B2 to an extent of 0.15.50 cents.

Key takeaways

If there is any dispute with regard to identity or demarcation of the property, the respondent Bank shall get the land surveyed and proceed as per the survey report.ratio¶49
The petitioners are at liberty to avail appropriate remedy before the DRT if aggrieved by any further steps taken by the Bank.ratio¶50

Detailed headnote1 paragraphs

SARFAESI Act, 2002 — Section 14 — Order of Magistrate in Crl.Mis.Case.No.182/2023 for taking possession related to secured property of borrower (Respondent No.3) in Sy.No.39/13 and other survey numbers at Hosadu village, Kundapura Taluk — Bank taking possession of petitioners' property in Sy.No.39/1B2 measuring 0.15.50 cents (Schedule A), a distinct property — Held, there is no dispute that the secured property and the petitioners' property are two different and distinct properties; respondent Bank restrained from interfering with the petitioners' property; if there is any dispute as to identity or demarcation of the property, the Bank to get the land surveyed and proceed as per the survey report; petitioners at liberty to avail appropriate remedy before the DRT if aggrieved by further steps of the Bank — Writ petition under Articles 226 and 227 disposed of; pending I.As. closed.

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NC: 2026:KHC:22013 WP No. 28871 of 2023

HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 22^ND DAY OF APRIL, 2026

BEFORE

THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 28871 OF 2023 (GM-DRT)

BETWEEN:

MAHABALA SHETTY AGED ABOUT 77 YEARS, S/O THIMMAPPA SHETTY

PREMALATHA SHETTY AGED ABOUT 47 YEARS, D/O MAHABALA SHETTY,

BOTH ARE R/AT SY NO.39/12 AND 39/IB2, HOSADU VILLAGE, KUNDAPURA TALUK- 576 247

…PETITIONERS

(BY SRI. GOVINDRAYA KAMATH K., ADVOCATE)

AND:

Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA

THE AUTHORIZED OFFICER BANK OF BARODA NADA BRANCH, KUNDAPUR TALUK, UDUPI DISTRICT- 576 262

M/S ASHIRWADA CASHEWS INDUSTRIES REP. BY ITS PROPRIETOR PRABHAKAR SHETTY, AGED ABOUT 45 YEARS, S/O SRI MAHABALA SHETTY LOCATED AT HEGDE MAKKI, HOSADU POST VILLAGE KUNDAPURA KARNATAKA-576 427

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MR.PRABHAKAR SHETTY AGED ABOUT 46 YEARS, S/O SRI MAHABALA SHETTY, R/AT HEGDE MAKKI, HOSADU POST AND VILLAGE, KUNDAPURA,

KARNATAKA -576 247

MRS.GIDDAMMA SHETTY AGED ABOUT 66 YEARS, W/O SRI MAHABALA SHETTY, R/AT HEGDE MAKKI, HOSADU POST AND VILLAGE, KUNDAPURA, KARNATAKA -576 247

THE STATION OFFICER SUB INSPECTOR OF GANGOLLI POLICE STATION TRASI, KUNDAPURA, UDUPI DISTRICT -576 235 REP. BY STATE PUBLIC PROSECUTOR, HIGH COURT BUILDING, BENGALURU -560 001

…RESPONDENTS (BY SRI.VIGNESH SHETTY, ADVOCATE FOR R1 SRI.KRISHNA GILDA, ADVOCATE FOR SRI.M.A.RAJENDRA, ADVOCATE FOR R2 TO R4 SRI.MANJUNATH K.H., HCGP FOR R5)

THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECTING THE RESPONDENT BANK NOT TO TAKE ANY ACTION AGAINST THE B SCHEDULE PROPERTY, THROUGH A SCHEDULE PROPERTY, SINCE THE PETITIONERS BORROWERS / GUARANTOR / MORTGAGERS.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

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NC: 2026:KHC:22013 WP No. 28871 of 2023

HC-KAR

ORAL ORDER

The present writ petition is filed seeking the following

prayer.

a. “It is respectfully prayed that this Hon’ble Court be pleased to pass appropriate orders directing the respondent Bank not to take any action against the “B” schedule property through “A” schedule property, since the petitioners borrowers /guarantor/ mortgagers.

b. Grant such other relief that this Hon’ble Court may deem fit and proper under the circumstances of this case.”

It is the case of the petitioners that the petitioners

are neither borrowers nor guarantors. Respondent No.3 has borrowed money from the Bank and as he failed to pay the amount, the bank has initiated the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’). It is submitted that an order was passed under Section 14 of the Act by the Magistrate in Crl.Mis.Case.No.182/2023. It is the contention of the petitioners that as per the order passed under Section 14 of the Act, the Bank is taking possession of the property of the petitioners, which is mentioned as Schedule A in this writ petition i.e. Sy.No.39/1B2 to an extent of 0.15.50

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NC: 2026:KHC:22013 WP No. 28871 of 2023

HC-KAR

cents. The order was passed by the Magistrate in respect of Sy.No.39/13 measuring 0.43 acres (0.38 acres converted as industrial land) and land and Buildings under Sy.Nos.36/10A, 39/14, 39/1B4 measuring 1 acre 28 guntas (0.41 acres converted as industrial land) at Hosadu village, Kundapura Taluk, Udupi District. It is submitted by learned counsel that the petitioners have nothing to do with the property where an order under Section 14 of the Act is passed. The respondent/Bank has no authority to interfere with the land of the petitioners under the guise of an order passed under Section 14 of the Act by the Magistrate, which is in respect of a different property.

Learned counsel appearing for the respondent/Bank submits that the Bank has nothing to do with the petitioners’ land and they are taking possession strictly in accordance with the order passed by the Magistrate.

Having heard the learned counsels on either side, perused the material on record. There is no dispute about the fact that the secured property and the property of the petitioners are two different and distinct properties. According

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HC-KAR

to the petitioners, the respondents are interfering with the petitioners’ possession in respect of a property which has nothing to do with property in respect of which an order was passed under Section 14 of the Act. In that view of the matter, this Court is passing in the following:

ORDER

i. The respondent/Bank is restrained from interfering with the petitioners’ property in Sy.No.39/1B2 to an extent of 0.15.50 cents.

ii. If in case there is any dispute with regard to identity of the property or demarcation of the property, the respondent/Bank shall get the land surveyed and as per the survey report, they shall proceed.

iii. The petitioners are at liberty to avail appropriate remedy before the DRT, if they are aggrieved by any further steps taken by the Bank.

iv. Accordingly, the writ petition is disposed of .

v. All pending I.As., in the writ petition shall stand closed.

SD/(LALITHA KANNEGANTI) JUDGE

PKNList No.: 1 Sl No.: 46