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IN THE HIGH COURT OF KARNATAKA, BANGA1.0R'*E
DATED THIS THE 25TH DAY OF NovEMaE1§2fz3t)é§%%%:'%.i '2.
BEFORE
THE HOWBLE MR. JUSTICE wxivz 4MQifIA§:"
wrerr PE'FIT!Or€ NO. 6674 V.}__
AND :
KARNATAKA STATE FINANCIALCQRPQRATIONAA
N0 1/ 1 THIMMAIAH ROAD --_ . "
NEAR CANTONMENT RA1i_._wA*1, :s'm'1fIe_N,, .
BANGALORE, BRANCH,Q_FF!CE_ AT DEVARM
URS COMME1?2(11AL_ CQ'MPLEX,4NF$H_RU ROAD
SEEN;€\PPA.A 'A3*.CiRI(3L__E: 1 I
SHIMO(}A.,_BY IT'SV"BRA]_'{C1I{ MANAGER
_ RESPONDENT
(13y5r.:,I_s. r<i's:'«f{(_:,' 'sID.)"-
V. mls WRIT 'PETITION IS FILED UNDER ARTICLES 226
' 22'? OPVTHE CONSFITUTION OF INDIA PRAYING TO
QfUAS§'}*TfiE"T~T_ENDER CUM NEGOTIATION NOTIFICATION
PU'£¥£LISI~iEI) VIJAYA KARNATAKA KANNADA DAILY
NNWSRAEER' (PAGE No.9) DT.7.5.2006 AS PER ANN-A.
IITHIS PETITION, COMING ON FOR PRELIMINARY
= I HEARING IN 'B' GROUP, THIS DAY THE COURT MADE THE
SQEILOWING:
ORDER
The petitioners having defaulted in the matter of
repayment of dams to the respondent — Karnataka State
Financial Corporatkm, the respondent invoked Section 29 of
M
_ .,’.”9E–‘ifITICN£R9;O: I “N
the State Financial Corporation Act, 1951 (for short fiat’) to
recover the monies due by issuing a notificafzioiz-.._4»titd.
07.05.2006, for salt of the properties
bormwcrs, by way of tender-cum«I_n;Agqtiatif;t1;’ =
which is assailed in this writ pcfitién. . T1 ‘
2. It is admitted that theféspontient V
loan for Rs.15,60,00€},I._- loan of
Rs.6,00,000/« with a -31′ eight years, in
£avour’ofP»fij partnership flan of which
the who, by way of security,
mortgaggnhe1§ag§::;¢1§i..’nghts of the land and building of
M; “-E3r,:,_._v_;:_’:r13;s, while that 5*” petitioner ofiemd his
hc11se–,_ at Lakshmipura Extension, Kallahalli,
H Shimoga City, as a collateral security. it is
that the petitioners could not profitably
“m’.’i1_i.’scvvihc Hotel and Resort Imlustxy as a result of which
suficmd heavy Bosses and turned dcfaultcrs. it appears
‘ V’ ” the mspondent filed Miscelhncous Peiitinn No.1/2005
befon: the District Judge, Shimoga invoking Sections 31(1)[a)
and 31[1)(aa) of the Act to recover Rs.2?,62,632/ – by
arxaigning the petitianers as party-reapondcnts therein. It is
the assertion of th:: petitioners that during the pcndency of
36K
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under Section 29 of the Act dtning the pendeneyVV’oi1″e.the
proceedings under Section 31 of the _
3. The petition is opposed by””fi1ingfio.o 511 VA
undated Statement of objections ,
contending that the 3′:11(‘i)’ of’ V L’
the Act is to enforce the the. surety-whiile Section
29 is to recover the amounts due.
According of proceedings
under from the borrowers
are distfinot’ initiation of pmceedm gs
unda§.%%se¢tg§fi’V»:{;§%1;om enforce liability of the suxety.
What the by invoking Section 29 is the
leazigflhoid atidteftee-‘titold rights over the property hearing
,A I-2″-beIong’ng to the finn. Reliance is placed upon
tie?}_isiot§””‘.of a Division Bench of this Court in
sonvsms PVT. I..’l’D., vs. Karo! wherein it
to is_ he1ti that proceedings under Section 29 and 31(1)(aa) axe
‘ Vetrtigotj improper. in addition, it is stated that pursuant to the
tzotification Annexuze-‘A’ dated 7-542006, no action has
been taken to hold the sale of the property.
M
1 AIR 2003 KAI? 221
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4. I-Iavifig heard the kaanaed counsel for the parties,
perused the pleadings and examined the
A11ncxu1t»”A”, in my opinion, in the _
action the KSFC in invoking Section 29 of = ..
properties of the firm, the dcfauilggr,
either illegal or arbitrary so céiitvfor ,
not the case of the petitione:;VL”fi.i;£at _ tho” involtm g
Secfion 29 of the Vos by the
respondent — C-o133o1ab’;ox;v;T’ the matter, the
notification Am~.,¥,Lo~-i.,E,;gA» _;;-,a.n’:nc.£::t§’é’*sa1d. to be illegal. Writ
pctiticega is gaccomingty, rejected. It is
open u the approach the KSFC, with
nec<:s2.s;a13r the baiancc amounts due, and
done é"iovrt111'ght from today, the respondent is
the same, and pass appropriate orders
Sd/_
Judge
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