IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF FEBRUARY 2017 BEFORE THE HON’BLE MR.JUSTICE A.S. BOPANNA WRIT PETITION NO. 27502 OF 2011 (GM-RES) BETWEEN:
C. HUCHANNA, S/O LATE CHIKKANNA, AGED ABOUT 47 YEARS, R/AT NO.7, 12TH BLOCK, SBM, SRIRAMPURA MYSORE …PETITIONER (BY SRI. N.R. GIRISHA, ADVOCATE) AND:
1. ORIENTAL BANK OF COMMERCE NO.2566, HIG BUS STAND ROAD, YALAHANKA NEW TOWN, BENGALURU – 560064 REPRESENTED BY ITS MANAGER 2. THE AUTHORIZED OFFICER, ORIENTAL BANK OF COMMERCE, NO.2566, HIG BUS STAND ROAD, YALAHANKA NEW TOWN, BENGALURU – 560064 3. K. SUBRAMANYA, R/AT NO.7, 7TH CROSS, HIMAGIRI LAYOUT, CHIKKALASANDRA, BANGALORE – 560061 4. THE AUTHORIZED SIGNATORY STATE BANK OF MYSORE, YALAHANKA BRANCH, YALAHANKA, BANGALORE – 560064 5. STATE BANK OF MYSORE, YALAHANKA BRANCH, YALAHANKA, BANGALORE – 560064 REPRESENTED BY ITS MANAGER ... RESPONDENTS (BY SRI. M. MOHAMMED IBRAHIM FOR M/S. IBRAHIM ASSTS FOR R-1 AND R-2; SRI S. CHANDRASHEKARAIAH FOR R-3; SMT. UJWALA WALWADIKAR FOR R-4 AND R-5) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH ANNEXURE-C THE POSSESSION CERTIFICATE ISSUED BY THE RESPONDENT NO.2 DATED 29.05.2011, DIRECT THE RESPONDENT NOS.1 AND 2 NOT TO TAKE COHESIVE STEPS EITHER AGAINST THE PETITIONER OR AGAINS THE SCHEDULE PROPERTY IN ANY MANNER.
THIS WRIT PETITION IS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R The petitioner is before this Court assailing the possession certificate dated 29.05.2011 at Annexure-C to the Petition. The petitioner is further seeking issue of mandamus to direct the respondent Nos.1 and 2 not to take coercive steps either against the petitioner or against the petition schedule property.
2. The respondent No.3 herein who is the owner of the site bearing No.854 measuring 45x35 feet situated at 4th main, 24th cross, I phase at Vidyaranyapura Industrial Suburb, Mysore, had executed a mortgage in respect of the said property as guarantor in respect of loan availed by one Sri. Parag H Parekh. The mortgage was made in favour of the respondent Nos.4 and 5 – Bank in the year 2001. A similar mortgage is thereafter said to have been made in favor of the respondent Nos.1 and 2, which was subsequent to the said mortgage. Since the amount advanced by respondent Nos.4 and 5 had not repaid by the borrower, respondent Nos.4 and 5 initiated action in respect of the said property, which is shown as petition schedule property, for recovery of the amount.
3. The petitioner herein having participated in the auction proceedings, is the successful purchaser for a sum of Rs.20,11,000/-. The transaction between the petitioner and respondent Nos.4 and 5 in that regard has been completed. When this was the position, since the loan amount due to respondent Nos.1 and 2 had not been discharged, the respondent Nos.1 and 2 have initiated action against the respondent No.3 and in the said process the possession certificate dated 29.05.2011 was issued by invoking the provisions of the SARFAESI Act. The petitioner in that regard claiming to be aggrieved by such action is before this Court.
4. The respondents have filed their objection statement to the petition. Insofar as, the factual position as noticed above, there is no serious dispute inasmuch as the very same property, which is the petition schedule property herein has been offered as security by the respondent No.3 herein to both the respondent Nos.4 and 5 as also to respondent Nos.1 and 2. In respect of the security as created in favor of respondent Nos.4 and 5, the auction in accordance with law had been initiated for recovery of amount and in the said process the petitioner having participated in bid and being successful, had purchased the property. In that circumstances, when the mortgage created in favour of the respondent Nos.4 and 5 was prior to the charge created in favour of the respondent Nos.1 and 2 and the auction has been initiated by them, at this juncture, the interest of the petitioner cannot be defeated by the possession notice that is issued by respondent Nos.1 and 2. Therefore, to that extent the possession notice as issued would not be justified.
6. Having arrived at the above conclusion, what is also to be noticed is that the amount realized by the respondent Nos.4 and 5 through the auction proceedings is in a sum of Rs.20,11,000/-. As at the point when a notice had been issued, the amount due to the respondent Nos.4 and 5 was in a sum of Rs.10,46,200/-. The said due is indicated as on 31.05.2009. However, at the point when the amount was realized through the same, the exact amount which was due to the respondent Nos.4 and 5 shall be taken note by them and the additional sum, if any, available with them, if claimed by the respondent Nos.1 and 2 shall be paid to the respondent Nos.1 and 2, which could be adjusted towards the part of their dues. In addition, if further amounts are due from the respondent No.3, certainly respondent Nos.1 and 2 would avail their remedy in accordance with law.
7. In view of the above, the possession certificate dated 29.05.2011 at Annexure-C is quashed with the liberty as indicated above.
8. The petition is disposed of accordingly.
SD/- JUDGE DR/MDS