{"id":76050,"date":"2008-11-26T00:00:00","date_gmt":"2008-11-25T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/smt-d-vijayalakshmi-wo-d-vs-the-managing-director-the-on-26-november-2008"},"modified":"2015-10-13T11:43:53","modified_gmt":"2015-10-13T06:13:53","slug":"smt-d-vijayalakshmi-wo-d-vs-the-managing-director-the-on-26-november-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/smt-d-vijayalakshmi-wo-d-vs-the-managing-director-the-on-26-november-2008","title":{"rendered":"Smt D Vijayalakshmi W\/O D … vs The Managing Director The … on 26 November, 2008"},"content":{"rendered":"
Karnataka High Court<\/div>\n
Smt D Vijayalakshmi W\/O D … vs The Managing Director The … on 26 November, 2008<\/div>\n
Author: Ram Mohan Reddy<\/div>\n
1\n\n111 Tim HIGH COURT OF KARHATAKA, \n\nDATED THIS THE 26TH DAY 09' NOVEMBER   _\n\nBEFORE  \n\nTHE HON'BLI3 MR. JUSTICE  !!}I(5Ei}K\u00a7'\u00abf:'fQ'EV\u00a35I3)j?\u00bb?v_:.\n\nWRIT PETYPION NO. s;=}227_ or  (G\u00a7\ufb01\u00a5K_\u00a7FC}\u00a7\nBETWEEN  A  C C\n\nSMI' D VIJAYALAKSHIVH  _ \nW\/O D DANDAPANI   ~\nAGED ABOUT S()_YEARS--  _  '\nRESIDENT 0E14o.'--17o,; I \nMURPHY To\u00a7\u00a7(N,;5'LsooR'  V V\nBANGALORE       PETITIONER\n\n(By sxim  &.A*rMCCAi%s;-)' \nAND:C\"v_ ''   4'   CC\n\n1 THE'L2\\aA.~:Ai;1_1\u00a7iG% D1}ie'EcToR\n_ -THE KEiRNRTAi{A. STATE\n..  FINANCIAL-CORPORATION.\n\n'H-EA!) .OFF'ICE, TI-IIMMFLIAH ROAD\n\n   C BANe6h0RE\n\n  GENERAL MANAGER\n\n KARNATAKA WATE FINANCEAL CORPORATION\n IVE-.A(3'r.R\"OAD BRANCH, NOA8, I FLOOR\nCHURCH STREET, BANGALORE 560 001\n\nC if 3' '@;M\/s NODES TECHNOLOGIES\n\n\"  REGiSTERE{) OFFICE AT 390.6\/18\nFIRST FLOOR, II CROSS,\nCAMBRIDGE LAYOUT\nULSOGR, BANGALORE 8\n\n4 SR! D JAYACHANDRAN\nS\/O DANAPAL NAIDU\nAGED ABOUT 49 YEARS\nRESIDING AT rm. 19,\nSHAKTHINAGAR, T.'i'. K. COMPOUND SIDE\n\n\n\n\n\nDOORAVANINAGAR POST\nBANGALORE\u00bb 16\n\n(By Sxi: B RUDRAGOWDA, ADV FOR R1 &--R2 If )3: ~ _ \n(BY SMT. K GAYATHRI MALLYA, ADV FOR R3), %  _ V  :\n(BY PR 65 PR A\/S. FOR R4) 2    I .   \n\n  \n\nTHIS WRIT PETITION Is FILEI5' .1._J N'DER  22:?' \u00bb\nAND 227 01? THE CONSTITUTION op INi3IA~,PRAY'IIIcI T0 '\n\nQUASH ANX-E EXECUTED BY*'I!_'HE R1 ENDI '2 IPLFAVOUR\nOF THE R4 85 VIBE NO, 151 OF.I-SOOK. I DATEDAFRIL 2006\nAND DIRECT THE RE' 'AND72 T9.' SETTLE THEIR CLAIM\nAGAINST THE PETI'I'i0NEF\u20ac--_ EN ; COMPLIANCE OF THE\nORDER PASSED BY THIS HON\"~BLE H.IG.I~'i.CQURT IN ANX~A.\n\nTHIS ?E%2iIf1*IoNI coLI1NGI'r3N %EfoR PRELIMINARY\nHEARING I4N)V'B';II;IGR0UP;:.'I'I-11$ ji'1)AY' THE comm' MADE\nTHE        ,'  \n\n ow W\n\nThe\" p;\u00a2I:ti\u00a2xIer,I  owner of certain immovable\n\n    for the \ufb01nancial assistance\n\n  3rd respondent by the Karnataka State<\/pre>\n
  for short ‘KSFC’ – respondents 1<\/p>\n
 S&;v:”A’;.Rospondent 3 having become a dc-faulter in<\/p>\n
A 5 of monies, KSFC initiated action under Section<\/p>\n
V’   of the State Financial Corporation Act 1951, for<\/p>\n
 . u short the ‘Act’ and issuodnotioe for sale of the secured<\/p>\n
asset; belongng to the petitioner which was called in<\/p>\n
question in WP 51925\/O3. In the said petition, the
\n‘”\\_
\nM<\/p>\n
3<\/span><\/p>\n
KSFC arraigned as party respondents 1 <\/p>\n
represented by Sri.B Rudragowda,    <\/p>\n
whose statement that the   1 <\/p>\n
was not gven effect to, was  andtV.’by’..oriief’; <\/p>\n
15.03.2006 Annexure—A, wasagsposea  that
\nas the petitioner   tne KSFC,
\npermitting the
\nwithin six H    ‘KSt\u00a7C for one \ufb01me
\nsettlement   to the KSFC to
\n   precipitate the matter<\/p>\n
unti1tl’A1’en,4′ . t’ A’ <\/p>\n
2,t:11;%  that by letter dtd.25.02.2006<\/p>\n
  “fiuring the pendency of Writ Petition<\/p>\n
51925 \/03′; tieie KSFC informed the petitioner that the<\/p>\n
‘I-oifered as collateral security was taken over on<\/p>\n
“ii invoking section 29 of the Act and was<\/p>\n
‘ V.  to sale by advertisement in “The Hindu” and<\/p>\n
 ‘Vijaya Karnataka” on 14.0 1.2006 which was responded<\/p>\n
to, by two offers to purchase the property and in the<\/p>\n
sale negotiated on 16.02.2006, received the highest o\ufb01’er<\/p>\n
ti.\n<\/p>\n
\\<\/p>\n
of Rs.32.6O Lakhs, while calling upon the petition? to
\nso<\/p>\n
inter alia contending that despite giant of <\/p>\n
opportunity to the petitioner calling upon her’<\/p>\n
one-line ors facility, having not done  ‘V  <\/p>\n
le\ufb01: with no other option but  <\/p>\n
favour of the 431 respengienf’  Ca   u<\/p>\n
con\ufb01rmation letter   I’n  it is
\ncontended that RP;  e%1eg4 \ufb01roeeoy  KSFC to
\nrecall the ordeljdtd.   was
\nallowed by Anxiexm-e–R4 and the
\nwrit    liberty to the
\n the sale in the present writ
\npeuuoo’e3{  12.2006. It is further stated<\/p>\n
thaxt_;then.4*h eeepoodem deposited Rs.32.601akhs as sale<\/p>\n
which was adjusted towards the amounts<\/p>\n
 ‘eVx’oess of Rs.14.28 Iakhs is lying with the<\/p>\n
\u00a7 A .k K815i} ,,j M’iec. case 370\/05 \ufb01led by KSFC invokmg<\/p>\n
 to enforce the security was withdrawn<\/p>\n
   o;o%1i.o7.2ooo, in the light of the loan having been fully<\/p>\n
  up by adjustments out of the sale proceeds. In<\/p>\n
paragaphu\u00e9 of the statement of objections, it is stated
\nthat the Indian Overseas Bank \ufb01led OS No. 16941\/O6<\/p>\n
7<\/span><\/p>\n
before the City cm: Court, Mayo Hail, <\/p>\n
again’ st the petitioner and KSFC, with   ”  <\/p>\n
restrain KSFC from ref1mding”fhe’ o excess  of  <\/p>\n
Rs.14.00 lakhs and also for   “o1_*zdcr <\/p>\n
injunction. The City Chm’   ”  of V’<\/p>\n
temporary injunction’:  z A .Cof’fjor:ii\ufb01on from
\nrefunding the   the Indian
\nOverseas Ba.f1k:’\u00abA;.is said  211\/O6 before
\nthe Debt.’    Bangalore against
\n V was disposed off on
\nl7.04.\u00a7O(\u00a78 “the amount due to the bank<\/p>\n
is lyi11g”iiI2\u00e9: h:21:i1d?.\u00a7’of’.the KSFC and an order under<\/p>\n
% k% \u00b0*Rg1e’:’2\u00e9:~”(c):”o3f._the mom Tax Act, is passed prohibiting<\/p>\n
    handing over the amounts to the<\/p>\n
dofa1\ufb02t\u00a2r’af\u00a7d that the sale itself being subject matter of<\/p>\n
 o’%oom>%3c$277\/05 and that the prohibitoxy order is subject to<\/p>\n
  ‘ the’ docision in the said writ petition. Liberty was<\/p>\n
VT  -“mfserved to the bank as an interested party to implmd<\/p>\n
themselves in the Writ petition. It is lastly contended<\/p>\n
that the Division Bench of this court in the case of<\/p>\n
Karnataka State Financial Corporation wvs-T H’<\/p>\n
ov9;;<\ufb02<\/p>\n
Narasimahaiah & Others reported in 2008 (5) SCC{ 1'i?6,<\/p>\n
held that collateral security cannot be " <\/p>\n
Section 29 of the Act, which is subjet'-.t.   H  <\/p>\n
challenge before the Apex Court   <\/p>\n
by an interim order, the Apex  in osL;\u00e9'e%1'54;23~e <\/p>\n
427\/zoos permitted the KSF(;u'::s\u00a2e1_I the  other
\nthan that of the n new  having
\nthus permitted the  Section
\n29 of the     respondent is<\/p>\n
  fhe petitioner at the very<\/p>\n
threshold   dismissal of writ pe\ufb01tion,<\/p>\n
eeenonsxez\u00e9s\/Q3 _by I'evies.vi11g the order am. 15.o3.2m<\/p>\n
  "iea subsequent event during the paldency<\/p>\n
of   and that has not been brought on<\/p>\n
  emendment of the pleadings. According to<\/p>\n
'    counsel, the contention that the sale deed<\/p>\n
.    is in viola\ufb01on of the order dtd. 15.03.2006<\/p>\n
 \u00bb '4 Annexure—A, is no more availabkz to the petitioner. The<\/p>\n
learned counsel for the petitioner places reliance upon<\/p>\n
the decision of the Apex (hurt in Narasimahaiah's case<\/p>\n
5': 1\u00bb<\/p>\n
11<\/span><\/p>\n
9. Having heard the learned counsel for<\/p>\n
and perused the plwdings, what is    <\/p>\n
fact that the petitioner being on”e”Aoi”i:he”~.$uretiesV <\/p>\n
\ufb01nancial assistance ‘extended   A<\/p>\n
3111 resp\ufb02ndent, has    of V’<\/p>\n
b\ufb01\ufb02\ufb01ng to sale the 1. Vviilhhvvquestion,
\noffered as security by  tioubt true that
\nSee. 29 of the’   ‘it:  Book was
\nfor the    opinion in
\n that the said
\nsectioztdtd ‘ixivestillg a jurisdiction in<\/p>\n
the State  .hCoi’pora1:ion to proceed against a<\/p>\n
   if  properties were mortgaged or<\/p>\n
  it and that the right of the KSFC in<\/p>\n
terms of  29 of the Act, was to be exercised only on<\/p>\n
t W H  ma d.efat1it’1I1g party. Therefore, a surety or guarantor not<\/p>\n
   a defaulting party, liability of the said surety or<\/p>\n
Vt   to repay the loan of the principal debtor<\/p>\n
arises only when a default is made by the latter. Thus,
\nSection 29 did not empower the KSFC to put up for sale,<\/p>\n
by public auction, the property belonging to the surety<\/p>\n
M<\/p>\n
3.2<\/p>\n
or guarantor. The Apex Court having considere:\u00e9it.the<\/p>\n
effect of Sec.31 of the Act, more appropI’i,gte}3f,’_~ _<\/p>\n
(aa; of sub-Sec.(1) of Sec.31 of the  ‘V <\/p>\n
No.43 of 85, heid that it provides ta <\/p>\n
Apex Court further observed”    Actgf o<\/p>\n
consists of properties of  Sec.31
\ntakes within its    and
\nthat of the surety   provisions
\ncontrol   Z:  of the reported
\nopinioI1_,_.__it .3\u00a7 into force of See.
\n33(g)   is Ieit with four
\n  to (2) to take recourse to<\/p>\n
 29 ;V(3’}~  recourse to Sec.31 and (4)110 take<\/p>\n
  ‘V  Sec.32(g) of the Act.\n<\/p>\n
 10; \u00e9 II”1″.the instant case, the KSFC initiated action<\/p>\n
  31(1)(a), (aa) of the Act, by \ufb011mg’ Misc.<\/p>\n
%  ptgtitien 370\/05 before the City civil Court to enforce<\/p>\n
  ‘  ”  of the petitioner ~– surety and in View of zmvexy<\/p>\n
of amount by sale of the immovable property in<\/p>\n
question, withdraw the same, which, that action of the<\/p>\n
I3<\/p>\n
KSFC is necessarily to be held invalid in the the<\/p>\n
law laid down by the Apex Court in  <\/p>\n
case. In other words the KSFC is entitlezi~\u00bbto: 2 <\/p>\n
proceeding before the Civi} Couirt.   i <\/p>\n
11. The action of  ih’b_fingihugd’:.VtoV’f3sub1icVV<\/p>\n
auction the sale of the   the
\noffer of 4th respondentdthe’  acceptance of
\n431 mspondenfs  of the sale
\ndeed     possession of the
\n   Vtdespondent, cannot but<\/p>\n
be hexdm be am void.\n<\/p>\n
  a’vt-eonseejiieiice the KSFC is directed to repay<\/p>\n
   together with the stamp duty and<\/p>\n
 ‘charges on the document Annexure–E<\/p>\n
:with interest at 6% 13.3., from the date of<\/p>\n
   of the said sum upto the date of payment in any<\/p>\n
   ..e:*}ent within a period of four weeks \ufb01om today to the 4″!<\/p>\n
 ‘  respondent, who in tmn is ditectxad to return the<\/p>\n
orignals of all the documents (title deeds) to the KSFC<\/p>\n
and deliver vacant possession of the propel?’ in
\n3%<\/p>\n
14<\/span><\/p>\n
question to the petitioner within two weeks <\/p>\n
In addition the KSFC and the 4*  _<\/p>\n
execute necessary deed of cance1lation_.c.f    ‘V <\/p>\n
which the KSFC shall bear the  T23<\/p>\n
reserved to KSFC to seek’ are-ope\ufb01xg of v<\/p>\n
No.870\/O5 before the City  com,  for
\nwhich the   and persue its
\nremedy to  to  jithe  question, in<\/p>\n
accordanee_V\\\u00ab%?;it1\u00a7;;1\u00a7ei\u00e9\u00a7,f;=s2′..  :. ‘
\nin the thcifwxat -‘petition is allowed, in the
\nlight of   “j, ‘ “ens.\n<\/p>\n
IV …..\n<\/p>\n
Judge<\/p>\n","protected":false},"excerpt":{"rendered":"
Karnataka High Court Smt D Vijayalakshmi W\/O D … vs The Managing Director The … on 26 November, 2008 Author: Ram Mohan Reddy 1 111 Tim HIGH COURT OF KARHATAKA, DATED THIS THE 26TH DAY 09′ NOVEMBER _ BEFORE THE HON’BLI3 MR. JUSTICE !!}I(5Ei}K\u00a7’\u00abf:’fQ’EV\u00a35I3)j?\u00bb?v_:. WRIT PETYPION NO. s;=}227_ or (G\u00a7\ufb01\u00a5K_\u00a7FC}\u00a7 BETWEEN A C C SMI’ […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-76050","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"\nSmt D Vijayalakshmi W\/O D ... vs The Managing Director The ... on 26 November, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/smt-d-vijayalakshmi-wo-d-vs-the-managing-director-the-on-26-november-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Smt D Vijayalakshmi W\/O D ... vs The Managing Director The ... on 26 November, 2008 - 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