Facts of the Case

The petitioner, an advocate practising in Bangalore, along with a co-petitioner in a connected writ petition, challenged a sale intimation/notice dated 19.01.2021 issued under Rule 8(6) of the Security Interest (Enforcement) Rules by Sri Subramanyeshwara Co-operative Bank Ltd, seeking to restrain the bank from auctioning mortgaged property securing a defaulted loan. This is purely a banking recovery dispute under the SARFAESI framework and has no connection whatsoever to GST law; it is being covered here only because the site owner has directed that this judgment, though not GST-related, be written up honestly.

Issues Involved

  1. Whether the bank's sale intimation/notice dated 19.01.2021, issued under Rule 8(6) of the Security Interest (Enforcement) Rules, was liable to be quashed.
  2. Whether the petitioner, a defaulting borrower, had shown sufficient bona fide efforts towards repayment or sale of the mortgaged property to warrant the Court's interference with the recovery process.

Petitioner's Arguments

  • The sale intimation/notice under Rule 8(6) was illegal and ought to be quashed.
  • The bank should be restrained from auctioning the scheduled mortgaged property.

Respondent's Arguments

  • The bank (represented by senior counsel) opposed any indulgence, pointing to the petitioner's long history of promises to repay or sell the property that were never honoured despite repeated opportunities.
  • The Reserve Bank of India and other respondents were served but remained unrepresented or only formally noticed.

Court Order / Findings

  • The Court found that despite repeated opportunities over an extended period, the petitioner had not demonstrated any genuine effort to dispose of the mortgaged property or clear the dues.
  • The Court held that a borrower is a borrower regardless of profession, and loan-recovery law does not entitle a practising advocate to more favourable treatment than any other defaulting borrower.
  • The writ petition was found devoid of merit and dismissed, with costs made 'easy' (effectively waived).
  • The bank was held at liberty to proceed with coercive recovery in accordance with law without further delay.

Important Clarification

This case has nothing to do with GST — it is a straightforward SARFAESI recovery matter. It is a useful reminder, however, that courts scrutinise a borrower's actual conduct (repeated broken promises to repay) closely before granting equitable relief against enforcement action, regardless of the borrower's professional standing.

Sections Involved

  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) — the parent statute governing the bank's recovery action.
  • Security Interest (Enforcement) Rules, 2002 — Rule 8(6), under which the impugned sale intimation/notice was issued.
  • Constitution of India, 1950 — Articles 226 and 227, under which the writ petitions were filed.

Decision – In Favour of

Decided in favour of the respondent bank — the writ petitions were dismissed as devoid of merit, and the bank was permitted to proceed with coercive recovery.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case Numbers: Writ Petition No. 3791 of 2021 (GM-RES) with Writ Petition No. 1 of 2023 (GM-RES)
  • Neutral Citation: 2023:KHC:27721
  • Coram: Hon'ble Mr. Justice Krishna S. Dixit
  • Date of Order: 07.08.2023

Link to Download the Order

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