Karnataka High Court
Kotak Mahindra Bank vs Gopal Kamath And Co on 8 December, 2021
Author: Ritu Raj Awasthi
Bench: Ritu Raj Awasthi
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF DECEMBER, 2021
PRESENT
THE HON'BLE MR. RITU RAJ AWASTHI, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE SACHIN SHANKAR MAGADUM
WRIT APPEAL NO.1235 OF 2021 (GM-DRT)
BETWEEN:
KOTAK MAHINDRA BANK
ABHIMAN COMMERCIAL COMPLEX,
GROUND FLOOR, PVS JUNCTION
KODIALBAIL,
MANGALURU - 575 001
REPRESENTED BY ITS
AUTHORISED SIGNATORY
MR. SHEEBU M.K.
S/O MR. M.K. SOMAN
AGED ABOUT 35 YEARS
... APPELLANT
(BY SRI SRINIVAS RAGHAVAN, SENIOR ADVOCATE FOR
SRI ACHAL ANAND V, ADVOCATE)
AND:
1. GOPAL KAMATH AND CO.
A PARTNERSHIP FIRM WITH ITS
PLACE OF BUSINESS AT:
NO. 4-6-576, 'SRIDHAR',
KUDMAL RANGA RAO ROAD
KARANGALPADY
MANGALURU - 575 003
REPRESENTED BY ITS
MANAGING PARTNER
MR. SRIDHAR L KAMATH
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2. MR. SRIDHAR L. KAMATH
S/O LATE S. LAKSHMAN KAMATH
AGED ABOUT 67 YEARS
RESIDING AT NO.15-7-349/2
'SULAKSHAN', PLANTERS LANE
KODIABAIL
MANGALURU - 575 003.
3. MR. SANJAY S. KAMATH
S/O MR. SRIDHAR L. KAMATH
AGED ABOUT 34 YEARS
RESIDING AT NO.15-7-349/2
'SULAKSHAN' PLANTERS LANE
KODIABAIL
MANGALURU - 575 003.
4. MR. SANTHOSH S KAMATH
S/O MR. SRIDHAR L KAMATH
AGED 37 YEARS
RESIDING AT NO.15-7-349/2
'SULAKSHAN' PLANTERS LANE
KODIABAIL
MANGALURU - 575 003.
... RESPONDENTS
(BY SRI SANATH KUMAR SHETTY K., ADVOCATE)
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THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO SET ASIDE
THE IMPUGNED ORDER DATED 9TH NOVEMEBER 2021, PASSED
BY THE LEARNED SINGLE JUDGE IN W.P. NO. 16958/2021
(GM-DRT) AND CONSEQUENTLY ALLOW THE WRIT APPEAL
AND ETC.
THIS APPEAL COMING ON FOR ORDERS THIS DAY, CHIEF
JUSTICE DELIVERED THE FOLLOWING:
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JUDGMENT
This writ appeal has been filed against the interim order dated 09.11.2021 passed in Writ Petition No.16958/2021 by learned Single Judge. The said order reads as under:-
"Call after four weeks. In the meanwhile, auctions proceedings shall not be held."
2. Learned counsel for the appellant-Bank submits that the respondents/petitioners have filed the writ petition in order to circumvent the proceedings before the Debts Recovery Tribunal (for short, 'DRT'). Moreover, the relief granted by the interim order dated 09.11.2021 was neither prayed as main relief nor as interim relief. The case of the respondents/petitioners before the writ Court was that they have not been granted the benefits of Credit Guarantee Scheme for Subordinate Debt (CGSSD) for Stressed/NPA MSMEs (for short, 'Credit Guarantee Scheme'). The appellant-Bank, in their objection statement dated 25.08.2021, have denied the entitlement of the respondents/petitioners to avail the benefits as per the guidelines for Credit Guarantee Scheme. -4-
3. Learned counsel for the respondents/petitioners submits that the appellant-Bank might have initiated recovery proceedings against the respondents/petitioners before the DRT under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 which could have been contested by the respondents/petitioners. Since it was brought to the knowledge of the respondents/petitioners that the appellant-Bank has denied the benefits to the respondents/petitioners under Credit Guarantee Scheme, they approached the writ Court. Since after filing of the writ petition, the auction was fixed, as such, the writ Court, on the request of the respondents- petitioners, has granted interim order. It is submitted that the DRT could have considered the grievance of the respondents/petitioners regarding denial of the benefits of the Credit Guarantee Scheme.
4. We have considered the submissions made by learned counsel for the appellant-Bank and learned counsel for the respondents/petitioners.
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5. With the consent of learned counsel for the parties, we proceed to decide the appeal at the admission stage.
6. The questions involved in this appeal are as to whether the writ petition itself preferred by the respondents/petitioners was maintainable or not and as to whether the interim order granted by the writ Court was within the scope of the writ petition.
7. So far as the first question is concerned, we are of the considered view that in view of the law laid down by the Apex Court in the case of United Bank India vs. Satyawati Tondon and Others reported in (2010) 8 SCC 110, while interpreting the scope of remedy under Section 17(1) has held that the expression 'any person' used in Section 17(1) is of wide import. The Apex Court was of the view that it takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action under Section 13(4) or Section 14. In the very same judgment, the Hon'ble Apex Court has come down heavily on High Courts entertaining the writ petitions -6- ignoring the availability of statutory remedy under the DRT Act and the SARFAESI Act.
8. The Hon'ble Apex Court in the case of Authorized Officer, State Bank of Travancore and Another vs. Mathew K.C. reported in (2018) 3 SCC 85, reiterating the principles laid down by the Apex Court in the case of Commissioner of Income Tax and Others vs. Chhabil Dass Agarwal reported in (2014) 1 SCC 603, was of the view that the High Courts should not entertain a writ petition under Article 226, if alternative statutory remedies are available, except in cases falling within the well-defined exceptions carved out in the judgment cited supra. Therefore, in the light of the principles laid down by the Hon'ble Apex Court, the High Court shall not interfere in matters which are cognizable by DRT. In the present case, it is an admitted position that the DRT was seized with the recovery proceedings initiated by the appellant-Bank against the respondents/petitioners and the respondents/petitioners had already appeared before the DRT and were contesting the said proceedings. -7-
9. It was incumbent upon the respondents/petitioners to have moved appropriate application before the DRT on the grounds based on the benefits applicable to them as per the guidelines of Credit Guarantee Scheme. It was for the DRT to have considered the said application and pass appropriate orders. The respondents/petitioners on their own could not have presumed that the relief claimed before the writ Court could not have been granted by the DRT and therefore, filed the said writ petition. In the given facts, we are of the considered view that the writ petition preferred by the respondents/petitioners is not maintainable and deserves to be dismissed.
10. So far the second question is concerned, it is to be noted that in the writ petition, the respondents/petitioners have not challenged the auction proceedings. In the interim prayer also, they have not claimed any such relief to restrain the appellant-Bank from proceeding with the auction. However, the learned Single Judge has surpassed beyond the scope of the writ petition to grant the interim relief vide impugned order dated 09.11.2021 which is under challenge.
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11. In view of the above, we are of the considered view that the impugned order is liable to be set aside. Accordingly, the impugned order dated 09.11.2021 passed in W.P.No.16958/2021 by learned Single Judge is hereby set aside. The writ appeal is allowed. Consequently, W.P.No.16958/2021 stands dismissed.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE KPS