SRI C VENKATESHALU vs KARNATAKA STATE FINANCIAL CORPORATION

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 29 DAY OF OCTOBER, 2026

PRESENT

THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE

AND

THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA

WRIT APPEAL NO. 1119 OF 2026 (GM-KSFC)

BETWEEN:











1. SRI C. VENKATESHALU
S/O LATE VENKATAPPA
AGE ABOUT 82 YEARS
RETIRED DEPUTY CHIEF ENGINEER RAILWAYS
RD
RESIDING AT NO. 5A, 3 CROSS
TH
4 MAIN, HRBR LAYOUT
RD
3 BLOCK, KALYAN NAGAR
BANGALORE – 560 043
…APPELLANT
(BY SMT. S. SUSHEELA, SENIOR ADVOCATE A/W
SRI SWAMY N.B.N., ADVOCATE)







Digitally
signed by
AMBIKA H B
Location:
High Court
of Karnataka
AND:

1. KARNATAKA STATE FINANCIAL CORPORATION
ESTABLISHED UNDER THE STATE FINANCIAL
CORPORATION ACT, 1951
HEAD OFFICE: KSFC BHAVAN
NO.1/1, THIMMAIAH ROAD
BANGALORE – 560 052
BY ITS MANAGING DIRECTOR

2. SRI GANESH KODANDARAM
FATHER’S NAME NOT KNOWN TO APELLANT
MAJOR BY AGE
TH ST
NO.729, 4 MAIN ROAD, 1 BLOCK

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


GEETHANJALI LAYOUT
RD
HAL 3 STAGE
BANGALORE – 560 075
…RESPONDENTS

THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO CALL FOR THE
RECORDS IN W.P. No.23099/2023 AND SET ASIDE THE ORDER
PASSED ON 21.02.2026 IN W.P. No.23099/2023 BY THE LEARNED
SINGLE JUDGE & ALLOW THE RELEIFS CLAIMED IN W.P.
No.23099/2023 AND ETC.

THIS APPEAL, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MRS. JUSTICE K.S. HEMALEKHA

ORAL JUDGMENT

(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The appellant has filed the present appeal impugning an
order dated 21.02.2026 passed by the learned Single Judge in Writ
Petition No.23099/2023 (GM-KSFC). The appellant had filed the
said petition, inter alia, praying that directions be issued to
respondent No.1 [ KSFC ] to forthwith handover vacant possession
th st
of house No.729 situated at 4 Main Road, 1 Block, Geethanjali
Layout, HAL, 3rd Stage, Bengaluru - 560 075 [ subject property ]

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


free from encumbrances and attachments. The appellant also
sought a declaration to the effect that the sale deed dated
30.08.2013 executed by KSFC in favour of respondent No.2 be
declared as void. Additionally, the appellant sought damages
quantified at ` 26,37,30,000/- (Rupees Twenty Six Crore Thirty
Seven Lakh and Thirty Thousand only) for what he described as
illegal acts committed by KSFC.

2. The appellant is aggrieved by KSFC enforcing its security
interest in the subject property.

3. The appellant availed a loan of ` 25 lakh from KSFC on
17.03.1997 for his borewell business. He mortgaged certain
movable assets for securing the said loan.

4. Smt. Susheela, learned Senior Counsel appearing for the
appellant submits that the appellant had not mortgaged the subject
property to secure the said loan but, had done so in the capacity of
a guarantor to secure repayment obligations under another
transaction where the appellant was not a borrower.

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


5. The appellant defaulted in his repayment obligations and on
15.10.1998, KSFC issued a demand notice for the outstanding
amount. On 13.01.1999, KSFC issued a statutory notice calling
upon the appellant to pay a sum of Rs.29,89,163/- with interest at
20% from 10.12.1998. Thereafter, on 15.03.2002, KSFC sold the
assets that were hypothecated to secure the loan of ` 25 lakh.

6. On 23.02.2006, KSFC filed a petition under Section 31(1) of
the State Financial Act, 1951 (Civil Misc. No.2/2006 in the Court of
inter alia
District and Sessions Judge, Chamarajnagar) seeking
`
recovery of a sum of 96,86,566.66 with interest.

7. The learned District Court dismissed the said petition by an
order dated 15.11.2011 on the ground that the claim was barred by
time. KSFC appealed the order dated 15.11.2011 before this Court
(MFA No.221/2012). However, this court dismissed the said
appeal by an order dated 04.02.2014 and confirmed the order
passed by the learned District Court in Civil Misc. Petition
No.2/2006.

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


8. KSFC preferred a civil appeal (Civil Appeal No.10825/2016)
before the Supreme Court impugning the order dated 04.02.2014
passed by this court in MFA No.221/2012. The Supreme Court
dismissed the said appeal by an order dated 11.11.2016.
However, the court permitted KSFC to file a review petition in this
court. Availing the said liberty, KSFC filed a review petition
(Review Petition No.140/2017) seeking review of the order dated
04.02.2014 passed by this Court in MFA No.221/2012. However,
this Court found no merit in the same and dismissed the review
petition by an order dated 24.08.2023. KSFC filed Special Leave
inter alia,
Petition (SLP) Nos. 925-926/2024, challenging the order
dated 24.08.2023 passed by this Court dismissing the KSFC's
review petition (Review Petition No. 140/2017). The Supreme
Court dismissed the said petition on 18.12.2024.

9. While KSFC was pursuing its petition (Civil Misc. Petition
No.2/2006) before the Civil Court, it issued a notice dated
08.07.2009 under Section 13(2) of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 [ SARFAESI Act ]. This is followed by a notice

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


dated 19.11.2009 issued under Section 13(4) of the SARFAESI Act
to take possession of the subject property.

10. The appellant filed a petition (S.A No.46/2011) under Section
17 of the SARFAESI Act impugning the sale notice dated
04.11.2011. The said petition (S.A No. 46/2011) was partly
allowed by an order dated 22.08.2012. The sale notice dated
04.01.2011 was set aside. However, the relief of possession of the
subject property was rejected. The said order indicates that the
appellant's wife had also preferred an appeal under Section 17 of
the SARFAESI Act before the DRT being S.A No.235/2010 which
was dismissed by an order dated 08.12.2010. The appellant was
also the respondent in the said petition.

11. The appellant filed a writ petition, being W.P No.9335/2013
impugning the order dated 22.08.2012 passed by the learned DRT.
However, this court declined to entertain the said appeal with
liberty to the appellant to avail of its appellate remedy.

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


12. KSFC sold the subject property to respondent No.2 under a
sale deed dated 30.08.2013, which the appellant had impugned in
the writ petition (W.P. No.23099/2023).

13. The appellant preferred an appeal (Appeal No.544/2013)
before the Debts Recovery Appellate Tribunal [ DRAT ], against the
order dated 22.08.2012 passed by the DRT. However, the said
appeal was dismissed on 07.07.2017 on the ground of non-
prosecution. The appellant filed an application seeking restoration
of its appeal (Appeal No.544/2013) before the DRAT. That too was
dismissed by an order dated 02.01.2018 on the ground of delay.
The appellant filed a writ petition, being W.P No.26271/2018,
challenging the order dated 02.01.2018 passed by the learned
DRAT whereby the appellant's application for restoration of its
appeal was rejected. This Court passed an order dated
26.09.2019 allowing the said petition. This court set aside the
order dated 02.01.2018 passed by the learned DRAT and
remanded the matter for consideration afresh subject to the
appellant depositing a sum of ` 50 lakh before the learned DRAT
within a period of one month from the said date. This Court also

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HC-KAR
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WA No. 1119 of 2026


CNR: KAHC010251222026


clarified that if the appellant failed to deposit the said amount within
a period of thirty days, it would not be entitled to the benefit of the
said order.

`
14. Concededly, the appellant failed to deposit the sum of 50
lakh in compliance of the condition for restoration of his appeal.
Thus, the order passed by the learned DRAT rejecting the
appellant's appeal No.544/2013 became final. It also follows that
the order dated 22.08.2012 passed by the learned DRT declining
the appellant's prayer for handing over possession of the subject
property also attained finality.

15. The appellant filed a writ appeal (W.A No.3980/2019)
impugning the order dated 26.09.2019 passed by the Division
Bench of this Court in W.P No.26271/2018. The said appeal was
dismissed as not maintainable. Notwithstanding that DRT's order
dated 22.08.2012 had attained finality, the appellant once again
filed a writ petition which was dismissed by the impugned order.

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


16. The learned Single Judge had rightly held that since the
appellant's challenge to the proceedings under SARFAESI Act had
attained finality, the relief as sought for could not be granted.

17. The said petition which is filed almost after more than a
decade is also liable to be rejected on the ground of delay.

18. Smt.Susheela, learned Senior Counsel appearing for the
appellant, submitted that the appellant's cause to file a writ petition
arose only after the recovery proceedings instituted by KSFC
became final, with the Supreme Court dismissing the SLP on
18.12.2024. We find no merit in this contention. The appellant's
cause of action to challenge KSFC's action to take over possession
of the subject property arose on 19.10.2011 when the appellant
was admittedly dispossessed of the subject property. The cause of
action to challenge the sale deed dated 30.08.2018 also arose on
the said date; that is on 30.08.2018.

19. It is material to note that the learned District Court had
rejected KSFC's Civil Misc. Petition No.2/2006 on 23.02.2006,
which was prior to the appellant being dispossessed of the subject

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HC-KAR
NC: 2026:KHC:60586-DB
WA No. 1119 of 2026


CNR: KAHC010251222026


property. KSFC’s pursuit of its appellate remedies would not defer
the cause of action, for which the appellant seeks redressal by
filing the writ petition.

20. In any view of the matter since the appellant's challenge to
KSFC's action for enforcement of the security interest under
SARFAESI Act had failed and the orders passed by the learned
DRT and DRAT had become final, the relief as sought for by the
appellant could not be granted. The learned Single Judge had
rightly rejected the same.

21. The appeal is accordingly dismissed.


Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE


Sd/-
(K.S. HEMALEKHA)
JUDGE






AHB
List No.: 1 Sl No.: 6