Karnataka High Court
B M Kumarswamy S/O Late. Basaiah vs The Chairman on 17 January, 2012
Bench: K. Sreedhar Rao, A.S. Bopanna
IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT DHAR WAD
DATED THIS THE IV" DAY OF JANUARY 2012
PRESENT
THE HON'BLE MR.JUSTICE K. SREEDHAR RAO
AND
THE HON'BLE MR.JUSTICE A.S.BOPANNA
W.A.No.61 181201 1@I4--KSPcfj
BETWEEN:
Sri.B.M kumaraswamy,
.
S/o.Late Basaiah,
Age 72 years, 0cc.: Nil,
Add: Kurugod village,
Bellary District- I
Appellant
(By Sri.M.Prabhavathi, Advocate)
AND:
1. The Chairman,
Karnataka State Financial Corporation,
No. I / 1, Timmaiah Road,
Bangalore-52.
2. The Managing Director.
Karnataka Stale Financial Corporation,
No.1/I, Timmaiah Road,
Bang a lore -52.
3. Venkatadri Cotton Mills (P) Ltd.,
No.643/C, Roopanagudi Road,
Bellary- 1, By its Director,
Sri.Narayana Shetty.
Respondents
(By Sri.Hcmant R. Chandanagouidar, Advocate, for Ri
&R2.)
(Sri.C. N .Nagashetty, Advocate, for R3)
This Writ Appeal is filed under Section 4 of the
Karnataka High Court Act, 1961 praying to set aside
the order dated 01.03.2011 passed by the learned
single Judge in W.P.No.66721/2009 (QM-KSFC) and
allow prayer (N in the writ petition.
This appeal coming for preliminary hearing this
day, A.S.Bopanna, J, delivered the following judgment:
JUDGMENT
The petitioner is before us in this intra-Court appeal claiming to be aggrieved by the order dated 1.3.2011 passed in W.P.No.66721/2009. By the said order the learned single Judge has rejected the writ petition reserving liberty to the petitioner to initiate such legal action as is permissible in law to recover the amount from the respondents.
2. The brief facts are that; the appellant herein is the auction purchaser in respect of thc property put to auction by the KSFC which had been possessed by them from their borrower exercising the power under Section 29 of the SFC Act. The appellant herein beirLg the successful bidder in the auction was required to deposit the remaining amount in addition to the 25%, which had been deposited. In this regard the appellant has deposited a sum of ?.16,00,000/- in addition to the sum EMD of ?.5O,000/- which was lying with the KSFC. Subsequently the appellant in view of certain personal difficulties could not pay the entire amount. It is in that view the KSFC did not proceed to finalisc the transaction with the auction purchaser-appellant. Thereafter the borrower of the KSFC-respondent has settled the matter with KSFC by availing the benefit under one time settlement scheme. Despite the KSPC having received their entire dues, they have proceeded further to forfeit th amount of t16,00,000/- as wcll as t50.000; - which was available with them as EMD. The petitioner was therefore before the learned singlc Judge assailing the action of the KSFC and seeking for a direction to refund the amount.
I 4
3. The learned single Judge while taking note of these aspects has however held that the petitioner should approach the Civil Court seeking such relief.
4. At this stage itself it is necessary to clarify that the question of approaching the Civil Court would arise only in a case where there are disputed facts which arc to be resolved by tendering evidence.
5. In the instant case the very objection statement filed by the KSFC before the learned single Judge would disclose that the KSFC has recovered the entire amount from the borrower. This would lead to the situation that the KSFC has not suffered any financial loss in view of the non deposit of the entire amount by the appellant-auction purchaser and in not concluding the contract. At best KSFC has only lost some amount since they had to once again retrace their steps from the transaction with the appellant-auction purchaser and thereafter take steps for initiating action with the borrower and finalizing the entire transaction for receiving the entire amount though tlic htd :iset.rrtd expenses for uclertisenient k .,. Ir order in c IeaH indicate that the entire amount has bet ta ret en cii. it w ould he nee' sScI r' t', refer to pa ra ?so 9 f thc ob ections statcment whc rein tht KSFC has acimi:ted the pnsition that the amount due to them has been settled In the KSFC with the borrower and if the ctgrt cd amount is not > et paid by the borrow er it would be their prerogative to proceed against the borrower.
h. Therefore, keeping in 'dew the principle of law thai the forfeiture could be made onl to the extent of loss and in the instant case since there is no loss as such suffered except for certain expenses vhieh has been incurred b the KSFC towards paper publication etc.. and towards the same the KSFC would be entitled to retain the EM D of ?.3O.OtJO . -. Howet er they would not be entitled to forfeit the entire sum of !. I ',.UWt'OO which had been deposited b the appt Lati' auct ion purchaser Hence the caid action is held bad in law and the KSFC respondent is directed to refund the sum of ?. 1 ''.00.000 to the appellant as a 4. 6 expeditiously as possible but not later than the period of six weeks from the date of receipt of a copy of this order.
7. It is made clear that if the said amount is not refunded within the time stipulated above, the said amount shall carry interest at the rate of 12% p.a. on the expiry of six weeks till the date of payment. The appeul is allowed in the above terms.
Sd!
3UDGE
Mrk/- Self-
JUDGE