I
IN THE; HIGH CGURT OF KARNATAKA AT BANGALORE
DATED THIS THE 269' DAY C)? MAY 2009 V.
BEFORE:
THE HUMBLE MR. JUSTICE ANAND BYR;é§R§iI:Bj*5 Q
WRIT PETITION 149.5593 c;F%%29:<<::2»i+:§%§,3;
BETWEEN :
1. Kulaic Mahindra Bank Ltd
15' Floor, Ceebmas Centrfs
39, Muniicih R9365
Chennai-600 008 T A
2. Siatc£v;Ban3eof}'1n-iisi'. -- '
Rep:*e'aien{cd'hj« its _
Assistan1.Gencrai Nianagey '
Bangaioreflity Branch, " "
5C§R¢ad, "
**** PETITIQNER
, Advuuah: fur M/'s. Khaitasz & Co.)
g
' M k2% . A S9i::.:zia}.A '*ra1»..--;1d.-mg
Kamamka Silk. Marketing
' r B-*.\.':i{d Lid,
§Mysug:1r Bi<ig.,
' " 52nd Floor, JC Heat;
Bangaiorc
1".)
2. Deputy Commissimier,
Urban District,
Bangalore
Kamataka Siik Markcting
Baard Ltd,
Represented by its
Managing Director,
M St} 31' Bid .,
}CyR0%,d, g
Bangaiorcs
5.5.}
4. Sri K Sycd Rafi « if V
S31) late Syed:AE1xr1'§:d, 3:
Major, = "
Residing a£'I~I()_. 1'%§,V"
Aga Abdg11a%%s%:me:5L%
Richmond 'I"é:a*.=§*;1,
Bangaipraflfi V ' " -~ V
3. D128}-'t:d AA '
(Fat£;ef"3.Namé' mt krzmvn)
, Agra N;1r's§::gf'I:¥ome,
__'N};._ $14», Ruad,
2~:g:asipg§:;am,%%~TL;
Bmzgaiqrad RESPONDENT
‘”C ;’fl{_ByAShri.(3;Gowri:s§2anka:*, Advmzakt {hr Rssgundtsni No.3 & 3,,
‘Smt.AAL.LR.,ASharadamba, Additéanai Giwemmcni Advecate far
Re::.;5on5§e;;i No-29 Shri. M.G.}aver:<i Ahmed Khan? 15xdvuca.it: for
V' __'R=esp§mdent Nmi, and Shri.Ta;1vee:" Pasha, Advecatc for Mfg.
j Assuciales for'Rcspundt:nt No.5)
$*#$*
%
petitioner on 23'02.20o2 and a2.09_20G3, I'£.*:.*,ipt:c.:ii-q';.:3§.':.4}_f'
{he pciiliuncr had then taken steps fisr bringing V'
was oflfxzrtzd as sesuriiy, fur 33}: to rcciégvcri-£31g:fivdé:~r.:r-323.23? éitzit-.x_t;n£:f£.A
3. During ihc: pmndcncy <,ii7.;.'a£ri:h prucgefings, ii transpires
ihai the respondent no.3; <whic?1 mi's" :~3 {3r£5v.§:rnmt:rii évbmpazzy as
dcfizwd under provision ofKamaiiilia??u§.tl§c–»M§_$$;ics (Recovery uf
Dues) Aci, 19753; 4§":?§17££ :£*3¥.::*jp 'ih.-:Vz§mc1un£ daze: in ii in '4
man {if ix§1i£V:'=r<:::~;E {harvest and initiated
prut:ecdi.;2gs_ utxkizitr i€C;;Li11:¢_1ia.i<;_1 Fubiic Muzxies {Recover}! 9}?
331165) Am,'1979,giaeraégpgggjkéig/erredgo as she ma; Ac,-i' fm
V £}reaI1:g_§?)'Vpursuani whifih {he prupcrly was brought {(3 gait: in
prccszgzéizggt; fQr"~–reuovcry uf arrears uf iand Revenue under the
;$:1*Lagq§.i.1~:i~{3ri$: Revcnut: Act 1964, by respundczni mzxi'
_ _ ht: predcccssea' of the present gciiiioncr fwd rdiscd
by Ieilsr tiaied 29.i0,2f30-4, at Annexum – G in lhxz wrii
pafitiuzi. Nulwiihsianding the: ubjecmzns raised, the prupcriy
V having been auciiened gursuani in nuiicc dated Q4'{)2.2é'3-84 at
'Z
Anmzxurc -~ H to the writ pciiiiwnfi fixes wliiiuncr is b;§:ii3_1'j?r':T._1§1is
C0321.
5. The cuuntsczri fur tile: ptciiliuncr wuuid ..
that that properly in qucstiun its the subject-Amév£iér.bf’£he’ ‘1::V2§:~1f.ig*:;Vg;£3
by way uf deptxsit of {ii}: deeds’Ti1r;«…§E:\e*t.>:}3;*..c§§f the ‘§:£EAi;Ii{)I1′;;VI’ *
the two loan inansaciions afumsai§:–.V_ w*as~,ii*1 mzgalion cf the
uircumsf:inci.§”£h:$§i._v thtV:*-?;3re.=~_li’i’i’.1.-;’r’t~*.=:” waé a secured creditor and had
cufurctxd £he 1§21»!iV’E!{2A;¥;S.£5§};’i33′<3(i for rcpayzntmi Lari" the luau
amuurfis and .1316' 'vprmziaznaiiun having been pursued is
A'iii:::i':fufcE" i}§.t§' ~21} andwin viuiaiimm of the ciecrcc, which the
of the subject pmpcriy, which [wk
V _ prt:c.é£icnc:%::.ev"£§n IT Eizcrt: were any dc2¥3£s due iu the Staic or ii:-;
VV " «i;:{raH;enLéi§iiic:;.
6. The cmznsci for the pciiiioncr wemid submit {hai Seuiitm
” 4 of the KPM Act provides that where the prupmriy is sukjeci is
8
mortgage, it is unify the interest of the defauttcr that t_;:.)_tI§dV:b3:.s:g§§£j
fur rtscuvery and it was the tint}: of the T¢’zfIi’I.’t$ii(‘.{..’g:i”I””.”¥L€;},.
circumstance that the property was sgsbjcgqtjtttvn fj:§i’:3r “:;:u1_ft’g52;gc;;
and that the sate prexciaxnatiun wa::4__uniyV”inv fespc{;’i”{;f iz§;t¢I’Ve:::t’°
of the dtfiffltlhfif.
7. The counsel wuutd I67 :’c.at;:Va'<é:"§_\;,_ £5 attached uzzdcr Sectivn 165, the
-Revenue had enquiry intu the: claim and if is
t)1ziy.,ssfi’t”tx$rt*.seuc§2 vétzzzgztnviry, may admit or reject and further slaps
cmfid the in tcrcst cf the dcfaulkar.
A V_3′}2¢§’i§)t§titiuncr in the first instamm has pointud amt i,§1.e1¥.
Vt};-3: Vfirsst. wzépundsnt 3122:; fafiicd in his duty $2; asumpiying with tits:
huiziing an czrzcgtziry as to the ad§ud£i.:at:.–:t§ tpiaém :2? the
pvegtitiuncr as dcierxnincd by the TribunaL Thereibre, there was 3
@
3′
fiiifiurc on {he part uf that resspundcnl Eu uompiy with the Eegai
provision and hence (ht: saie is rendered iilcgai.
9. It is furihcr conicndcd that Scuiion 35 {pf the Rccuycry uf
Debts Due lo Banks and Financial Insiiltziions Act?
dawn (ha! the Act would have an mmrriding cffctaf tin
any other law? nuiwilhsizmding the lhiiif 331 b
mgan of the State Govesmmcni and stzéiggict s’:£¢i{t:’–~
axnouni due {:3 it as being a cmxfifzz. iii:-.3131. ‘l”h¢_§_ pe§i1E.io’i;erVVVbcing as V
secured in ligiu Qf this judgcmcni
of the SuA[f3’1″!,.’51f’l-G Cask! vs. Camtra Bari}: — AIR 2030
SC 1 ks ¢_§i3 in .Z)c;mz Bamfe vs. Bkikizaévhai Praéhmizas
VAIR SCC 155? and weuld submit that the
:§a1_::”i§ vv §i3i’.infirzniiécs and would require 14.: be sci-aside.
IQ. ‘:.Tht: wunsel for time respondent on the uthar hand,
V”}$}grt31;»I_€}:”‘A.«subrni£ {hm the third respundcnl is 21 State: Gnvemmeni
_p§.;_Ii::pany. The fourth respundtznl had obtained raw malcriai frum
the ihirzi respondent and was due in $1 sum of Rs.}3gi16§867_OG.
6
9
same’ The conieaiions as regards the pctiiiancr huiéing 2: prior
charge or oiilcrwise was 1-§£3pt3I’l}£3Ul1S.
12. In any czwsnl, the counsel wuuid subnxii lhatihg sale
having been compiulcd am} the present petition
allowed ihcreafitstr ami having regard 19 {he ir:i_s:;Vr__i.1 i1’~–..{..>1’¢.:iA_n;;f’1′ ifxis
Court slaying {he ¢.:<.2:2firIna£ion of £5; .s.;:»:1:ircA,';T,« _i§1§;:_
any claim in excess of {he amms.;3i-.;_nrcr "abuv:;"[§';i;:'a1_nc.}:2_§§2iiiazg';
in respondent 230.3, could very Wei} E3-ave z*t:t.§uv::rz1::r is able [£3 make {mi
any infifnliiy i::sdi’:2.i”‘~.as;-L}ia:_§gru1:ccding,s iniiiaicd by the third
resp<3n_d_t:n£ ii} t;i':zzt;;§,;rncéL_l. 'I'hc wunsei wuuld submit ihai tin:
"'vpciiiiui': zrxisgconceiviéeii' as the remedy uf iht: pstiiioncr is under
L-£hé.&.pfe::i$i::;ri::%Vjihc Kamataka Lami Revenue Aci, ¥.m£.i{3I' which _
siaiuig, v_§}xc_ i21{311iss due in the third rcspuzzdtmi have been
'I1'::;s:gvctre'e5.–." Thtsrczfure, ihfi peiiéitm docs 111.11 rncfii cuzzsiziczmiimi,
–.”-f°3_£)§’%E’ii§XSiHflLiifig ihe is-ga} e;onicniiL’3z::s uiged ins¢;f::;:’ as the shim
” “i;)f the pciiiiuner as $1 astszzurcd crcdilar fielding prccredcnuc eve: {he
crown debt, ht: wouhi submit that {he pa-liiiuza be dismisscéi. Whiic
Z
ii}
incidentaily {he cuunscl wuuiai point (mi ifxai £§i1§.._€L:3,§i:€’i .$§:&:i.§:
ammmi Ehai has burst: recovered is 3 sum uf R:s.’?”3_ia.3}§i:s§’ .-5×1′:m~ V’
taking iniu account {he axnuuni dam §*¢s§§§1ngi1;§z§E;§§ri£:
amount recovered in excess ha:~;.i>gt:I3 dégxosiiczd ;._?I’;V”Vii~}’vN’L’z!{.iL’}I£’!:¥§L£§3’L.i”
Bank and has accrusd interest as “<.'}.L'¢.vi:lt':,VV'
13. The . suppii::mcx}i files:
cunientiuns tmmpicicd, it would be 3 V. C-ummfisiontzr wuuid be in a such a. mzzusurc is warranttfidf :~1_1 'i§1Ai:.<
is n(>”a§i;gp;;i.-3 as to fiat sesquemxc sf the events. it is a.
‘£}1§::i’ i¥;Aa'{v.V4l§1£::v’p§:’ii!.imner[§s::§d decrees passed by tin: Baht Recgzvcry
mbmga; &;;iV1″j{;1;;«;x§m in 0.13.. N<3.294;'2i'}{.}i and ;2{>:.1:
._datcd ~13;::}2-20<}2 and <32.09_2<m% mspm;a;ve;;,a The peéiiiener
V"*V'_A1}:e;;"eaf:)rc has established the circumstance {hat Chi: pciiiiunm" was
VA __h§31ding the subjact pruperly as security far {he due rcpayancni £3?
the Ia-an uunsaction, which the rcspondczni 139.4 had inward wiih
CZ»
11
the: pc£iiimmr-Bzmk and aiso established that f:.2rlhr:r
lu mcovcr {he c3¢:a;rt:c§ai amount, Ii. is an rccurd i§§3.’:::;.£
paint iimt: that the respondent neg.” ‘l”1″.u.:§« .£;;i’§.§ai£:¢§ TV’f3brL§<§t:r:£;%§;$Lg:s
under the KPM Act.
14. I1 is further Qicar nut the
respondent no.3 have in prumedings in
1″3°’~’V’5T 3~*110’ini$;.:V”‘?;’§iU}3:””V$3;*a:s:’¥ [£3 them. The
conimvcrsy, .i.§.:_’:.x%.%i:g§§:~é§:::f_§i§xg;V ?;Lrl§1t3:iiy cuuid have:
;,*$jé61ii>ns raisczi by ii»: peiiliencr
as per igsjafitsxufc’ iv the wrié pciéécrxx. Frags; zi
rcac§£:;g;..:>f {H5 QIi.3VviSi(}I 2-25 61′ fin: Karnaiaka Lanci Revenue Aarfa,
“whiish }:aE1″i.ivi€li«:.-a fur mcuvzsry of arrears Of imzd revenue? umicr
wispongicni had iniiiaimi pmwadings in:-sc»Ea:* as
L;iaiI i”:– of.__'{hir<§"'rcspund£mt is cunccrnczi, from Ehe very reading (3?
h . SecT*.i__:.2n ii is clear that uniy a person uihczr than um: ciaimfing
. {::;&er"a dcfauitcr cuuid misc ubjeutien 211 that siagc. The; pciiiiuner
" Hiziairning that the ubjtsciiun mixed at Anmsxurc ~«~« G warranied an
enquiry under Secfiun 36'? cmmoi be aucepieé.
‘€
12
15. The pctiiioncr was uniy cigizning under
an date {:5 the ubjtzciinn. H:::1c;t:., Sccfigggj ‘E69 ._”3h l}’£’§.£}’£:§ ”
pcsiiiiumzr from raising any ubjcc{iun.7..Th§’ “pE:1iiic;$::£:r_.'”ax:-i1i£€fl§§iT:1g’
that the Tahsiidar is required luVV_¢:nqA1i’iry ;Ii lVVf’;’«’3″‘?z’I§”c.’~.’:v{‘.’)§;\~~S{f:»’£.§ii1_}}’i”‘ V
167 of {he KLR Act, cannel be stz,~,25zz§:Iit:£i. ‘_
16. Ii is further an {Em peliiitsmzr
has nut taken furthgir g£ep:;’ Lir§:§£ei:: Vilegifivénue Act insofar as
the gI*i¢\.!2£:’i£:;:.._L§f- ihé :fi§’:»e:iii’i:;):2cf E¥f£ii”‘i1;}i\1§’i§i1SiaI}£§¥§g; a dcxsrce in
respect c,V3Vi’_i}”1c:_ ‘T’qg¥/czzliun {he rcspundctnl 119.3 having
iniiiaic;}_v przfiacdings. the Kamataka Pubiic Munies
V’ nf”I};xe5} A¢'{,f’I979. It is nu£i:.;cd {hai tsn¢3::;r Scciiran W6
is’ p ro_xvi:;iV(:z;V’_i:’nadc to sat-aside a gain. Perssuns such as fiat;
pciiiia3ncrV_va3′:: tesguircd misc ubjcciiun as to any infirmity in such
:§al!:;VTunder~ Stnciitm £75 before [ht Dcpaiy Commissioner and it is
_’ -_ihr_:V ‘%pu£y Cummissitmcr who might it: acfiuciicaic an such 3.
~ éiiziim’ This pctéiiuntzr has nut when recourse in stash at maasure.
The pfcscni peiiliun having been {$3343 and an interim ganicr having
§
13
been granted staying the cunfinnaiion of safe, has {mzcn i§_1§_: rigixi
:31′ the pcliiiuncr from further adjudicaiiun”
17. In view of the pezzdzsncy mi’ this wri1.V;3s;_§'[£–§§£.§:§A_T.’2:tn;d ihi::
pctiitiurmar uni having pursuttd the
Cummissimxlcr within the pcrioci gsi’ days as; a;u:3£sr3;:piv.§:£cd ignzizzf’ ,
the KLR Aug can huwcvur ” £§3§; prcscni.
uireumslmwcs. Thcr¢:£rt’.,V ~%.E ?.=’..~s_ ::1’«;_3p1:s;3};ri:;:1i.;~.. £’ii,s:_’f. the petimxntsr be:
pt::*mi£Eed.in [kc fi3’3.’.xiflS£HI1’$t3″{{J:’h2:{3v’3′ Eh: bargéiii {ref iii:-3 amuzmi in
excess utéér 3116 _c4:’i:.1§’:’1: of ihii third rcsspundtml am} which
is said {(3 in dc:p:._:g~.iii.:in 13″-I_\_R1§ii>naiiz:a:d Bank, subject to further
adj utiicai-isggz.
» 18…, aspect of {he uuzzirvwrsy thus raised namely
wfxciirxfer :i.}V1cu– ‘pt:£i1i§;mncr-bani: is cnfiiicci ta; ciaim iht: pmpcriy,
Cwhic:i1″ is ti§.}£*:V subjuci matier mi’ deurcas pazsrsmi by ihe: {}¢::§:)i
Tribunai cutfld nu! have been brzmghi, in salt: ‘B34 Cat:
nu} zindsr the pmvizsimzs of 232:: K?M Act, 19?? and
.”lh:: consctgucncc (sf the scope of the dtzasrcsezs. by the Debi. ivicumzcry
£
34
Tribunai viswwvis the I-{PM Act 29%}, and fix
precedence of ihe ciaiin of respondent ms}: is _ist:E. .V
the pciiliuncr to approach {ha Dtzpfiiy ‘F,’-_:£)§I’5’éII1’3:.,Sh;;i£..}”IV)’€:3I” “‘wvi_§_h;;~s:i
appropriate appiicafiion, which ‘if,_’,I_IVf.lt:3″_f s§1ai§. >
consider, nulwi£hslanc§ing;_{he ‘iififltfi i%¢é:§\g-jA’f¢#%ar& is ihc
fact that ihis Court had and ii izs oniy
new on disposalv gyf ivfiigccliuns, §i1::r¢:: is
scope fur i’uri§3e; ‘
39. TH’; c0nlt:nIv1{i{;::as_»i:§’ are Icfé. Lapin; and ié is ii};
that pcliiieyncsr lea urge l§1é”sz::i3c»–béi}3m the Deputy Cmzmzizsasiuncr,
why shafl wit}: Cné ‘safilc in accaarfiancc wifih }a.w_
L__’l”?:3.:_ “}3:::£iv£i§;i1:<§2*A.T_V$};all 131: such an appiicaiion if E: is so
"'§¥i£31il1t3£i wiihin V3i}'(i;;;§*:s from luciay.
:…4 .
sag
Efiéga