IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 16TH DAY OF APRIL, 2019 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE S. G. PANDIT WRIT APPEAL No.3173 OF 2018 (GM-RES) BETWEEN:
1. SRI. MAMBALLI K. PAPEGOWDA, SON OF LATE KARIGE GOWDA, AGED ABOUT 67 YEARS, 2. SMT. SAROJAMMA PAPEGOWDA, WIFE OF MAMBALLI K. PAPEGOWDA, AGED ABOUT 64 YEARS, PETITIONER NOS.1 AND 2 ARE RESIDING AT NO.488, 6TH CROSS, 2ND STAGE, SIDDARATHA NAGAR, MYSURU – 570 011.
3. SRI. GURURAJ KUMAR, SON OF MAMBALLI K. PAPEGOWDA, AGED ABOUT 46 YEARS, 4. SMT. INCHARA GURURAJ KUMAR, WIFE OF GURURAJ KUMAR, AGED ABOUT 43 YEARS, PETITIONER NOS.3 & 4 ARE RESIDING AT NO.138 AND 139, K.C.LAYOUT, NAZARBAD MOHALLA, MYSURU – 570 011.
….APPELLANTS (BY SRI. CHANDRAKANTH R.PATEL, ADVOCATE) AND:
THE NATIONAL CO-OPERATIVE BANK LIMITED, MYSURU BRANCH, #.1335/A, G and H BLOCK, PANCHAMANTRA ROAD, OPPOSITE GNANAGANGA SCHOOL, KUVEMPU NAGAR, MYSURU – 570 023. REPRESENTED BY ITS MANAGER/ AUTHORIZED OFFICER.
...RESPONDENT THIS APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE APPEAL, BY SETTING ASIDE THE ORDER DATED 04/10/2018 IN WRIT PETITION NO.32880/2018 BY THE LEARNED SINGLE JUDGE AND GRANT THE PRAYERS AS PRAYED FOR IN THE WRIT PETITION NO.32880/2018.
THIS APPEAL COMING ON FOR ORDERS THIS DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING:
JUDGMENT Aggrieved by the impugned order dated 04.10.2018 passed by the learned Single Judge in W.P.No.32880 of 2018, by which the petition was dismissed, the writ petitioners are in appeal.
2. The petitioners filed writ petition under Articles 226 and 227 of the Constitution of India, assailing the notice dated 03.11.2017 issued by the respondent-Bank under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) and to quash the order dated 28.06.2018 in No.MAG (3) Mis-136/2018 passed by the Deputy Commissioner and District Magistrate, Mysuru District at Annexures–C and C1. It is stated that the petitioners were sanctioned loan of Rs.2,65,00,000/- (Rupees Two Crores Sixty-five lakhs only) on 02.11.2014 by the respondent-Bank and as security the petitioners mortgaged the property in question. The loan account of the petitioners was treated as Non-Performing Asset (NPA) on 01.09.2016. On 3.11.2017 notice was issued under Section 13(2) of the SARFAESI Act. Thereafter, the respondent-Bank applied under section 14 of the SARFAESI Act seeking possession before the District Magistrate and the District Magistrate passed orders on 28.06.2018. Aggrieved by the same the petitioners filed the instant writ petition contending that the respondent is a Co-operative Bank and provision of the SARFAESI Act would not apply to Co-operative Bank. The learned Single Judge considering the contention of the petitioners, relying on the decision of the Division Bench of this Court, rejected the writ petition holding that the provisions of the SARFAESI Act would apply to the Co-operative Bank also. Aggrieved by the order of the learned Single Judge, the petitioners are in appeal.
3. Heard the learned counsel for the appellants.
Perused the appeal papers.
4. Learned counsel for the appellants would submit that the learned Single Judge committed an error in rejecting the writ petition holding that the provisions of the SARFAESI Act would apply to respondent-Co-operative Bank. It is his further contended that the matter with regard to application of the provisions of the SARFAESI Act is pending before the Hon'ble Apex Court. Hence, the learned Single Judge is not right in rejecting the writ petition. Thus, he prays for allowing the appeal.
5. On perusal of the detailed order passed by the learned Single Judge relying upon the decision of the Division Bench of this court in the case of THE AUTHORISED OFFICER/GENERAL MANAGER, SRI BASAVESHWAR CO-OPERATIVE BANK LTD VS. SRI BALAPPA FAKKIRAPPA GURIAHOSUR reported in ILR 2010 KAR 752, we are of the view that the order of the learned Single Judge would not suffer from any perversity or erroneousness. Moreover, the learned Single Judge has reserved liberty to the petitioners to avail the alternate remedy and has also observed that if there is any delay in approaching Debts Recovery Tribunal, pendency of this petition may be taken note of. Section 2(1)(c) defines Bank, which reads as follows:
“bank” means-
(i) a banking company; or (ii) a corresponding new bank; or (iii) the State Bank of India; or (iv) a subsidiary bank; or [(iva) a multi-State co-operative bank; or] (v) such other bank which the Central Government may, by notification*, specify for the purposes of this Act;
6. The above provision empowers the Central Government by notification specifying any subsidiary bank, or multi-State co-operative bank or such other bank for the purpose of the Act. The Central Government in exercise of its power has issued notification dated 28.01.2003 describing the Co-operative Bank as Bank. The Division Bench of this Court had an occasion to consider the definition of Bank with regard to Co-operative Bank and taking note of the various decisions of the Hon'ble Apex Court has held that the provisions of SARFAESI Act would have application to Co-operative Bank also. The said decision reported in ILR 2010 KAR 752 is relied on by the learned Single Judge and relevant portion is also extracted in the order of the learned Single Judge which need not be extracted in this order. With regard to the contention that the matter as to whether the provisions of the SARFAESI Act would have application to Co-operative Bank is pending before the Hon'ble Apex Court and as such, the learned Single Judge could not have rejected the writ petition, it is to be noted that as on this date the law prevailing is that the provisions of the SARFAESI Act would have application to the Co-operative Bank and the cooperative Bank would fall under the definition of ‘Bank' under the provisions of the SARFAESI Act. Hence, we are of the view that as observed by the learned Single Judge, it is open for the petitioners to avail alternate remedy of appeal.
7. No ground is made out to interfere with the order of the learned Single Judge. Accordingly, the writ appeal is dismissed.
Sd/- Sd/-
JUDGE JUDGE SMJ