Karnataka High Court
M/S Duo Properties vs State Bank Of India on 17 November, 2015
Author: Anand Byrareddy
Bench: Anand Byrareddy
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IN THE HIGH COURT OF KARNATAKA AT
BENGALURU
DATED THIS THE 17TH DAY OF NOVEMBER, 2015
BEFORE
THE HON'BLE MR. JUSTICE ANAND BYRAREDDY
WRIT PETITION Nos.49353 AND 49606-49611 OF 2015
(GM- RES)
BETWEEN:
M/s. Duo Properties Private Limited,
No.1, Royal Heritage Apartments,
Magarath Road,
Bangalore 560 025,
Represented by its Managing Director
Sri. A.M.Sharath Chandra.
...PETITIONER
(By Shri Dwarakanath, Advocate)
AND:
1. State Bank of India,
Stressed Assets Management Branch,
II Floor, Office Complex Building,
LHO Campus, #65,
St. Mark's Road,
Bangalore 560 001,
Represented by its
Authorized Officer and
2
Chief Manager.
2. M/s. Mother India Logisstics and
Minerals Private Limited,
Malk's Embassy, No.9,
I Floor, Union Street,
Shivajinagar,
Bengaluru 560 001,
Represented by its
Managing Director,
Sri. D. Ravi Kumar.
3. Sri. D. Ravi Kumar,
Son of Late M.G.Diwakar,
Aged about 50 years,
4. Sri. D. Anil Kumar,
Son of Late M.G.Diwakar,
Aged about 47 years,
5. Sri. D. Ajit Kumar,
Son of Late M.G.Diwakar,
Aged about 43 years,
Respondents 3 to 5
At No.422, Jyothi Nivas,
4th Main Road,
OMBR Layout,
Bangalore 560 043.
...RESPONDENTS
*****
These Writ Petitions filed under Articles 226 and 227 of
the Constitution of India praying to quash the reserved price in
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Annexure-A and B the E-auction sale notice issued by the first
respondent dated 9.10.2015 in "Samyuktha Karnataka" dated
13.10.2015 and in "New Indian Express" dated 13.10.2015
respectively and for a writ of mandamus that if sale is
conducted it should be for a minimum reserved price of
Government valuation.
These Writ Petitions coming on for Orders this day, the
court made the following:
ORDER
The petitioner is before this Court in a circumstance which shocks the conscience of this Court.
2. It is noticed that the petitioner's properties are brought to sale under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the SARFAESI Act', for brevity). It is demonstrated that the properties of the petitioner have been brought to sale more than once.
In that, there are seven properties, all of which are brought to sale and there were three notifications issued time 4 and again in respect of the properties. It is noticed that the valuation of the properties has steadily decreased and has not increased. This apparently is without any explanation. It would appear that in issuing the first notification, the respondent - Bank has taken the measure of having the properties valued before bringing them to sale. It is inexplicable that the value stands reduced progressively with each notification. The present notification which is the third notification has progressively reduced the price of the respective properties as could be plainly seen from the comparative table that is part of the writ petitions.
3. The learned counsel appearing for the petitioner would seek to urge that though the law laid down by the Apex Court in United Bank of India vs. Satyawati Tondon and Ors in AIR 2010 SC 341 is to the effect that a civil court or even a High Court in exercise of power under Article 226 of the Constitution of India would be unable to intervene in proceedings instituted under the SARFAESI Act, he would also 5 point out that the Supreme Court has carved out exceptions as laid down in the case of Harbanslal Sahnia and Anr. Vs. Indian Oil Corporation Ltd. and Ors. in AIR 2003 SC 2120 to the following effect namely, that in an appropriate case in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies:
(i) where the writ petition seeks enforcement of any of the Fundamental Rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged.
In this regard, he points out that Rule 8(5) of the Security Interest (Enforcement) Rules, 2002, has been violated and it would be without the jurisdiction of the respondents to bring the properties to sale.
In that, if there was an initial valuation of the properties at a particular price, there was no jurisdiction to progressively reduce the same, no matter the circumstances which may be cited and this results in a grave miscarriage of justice, in the 6 valuable properties of the petitioner being sold out for a song. It is in this desperate situation that the petitioner is before this Court to salvage from the properties being frittered away to the prejudice and at the expense of the petitioner.
4. However, it is to be noticed that the petitioner seeking to urge that the proceedings are without jurisdiction for violation of the rule as stated above, can necessarily be traced to the measures that are undertaken by seeking to enforce the SARFAESI Act in terms of Section 13(4) of the SARFAESI Act.
There is a remedy provided to the petitioner under Section 17 of the SARFAESI Act by way of an appeal before the Debts Recovery Tribunal. However, the learned counsel would submit that the petitioner is before this court out of desperation, as there is little likelihood of the Tribunal interfering with these proceedings notwithstanding the glaring circumstance which is demonstrated.
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This Court however, would not agree with this contention since the petitioner has not approached the Tribunal. It is the belief of this Court that in such a grave circumstance where there is a glaring infraction of the rule by the respondent - Bank as is plainly demonstrated by the petitioner, the Tribunal would exercise its jurisdiction in granting appropriate relief. Therefore, it is for the petitioner to approach the Tribunal and seek appropriate relief to prevent miscarriage of justice, which is apparent on the face of the record in the light of the law laid down by the Supreme Court.
This Court has stayed its hand from granting any relief. It is expected that the petitioner would receive his just due before the Tribunal, if he should approach the Tribunal with expedition. The petitions stand disposed of accordingly.
Sd/-
JUDGE KS