Couple Claiming They Bought Property Before Bank Mortgage Already Had DRT Case Pending; Karnataka HC Declines Parallel Writ Challenge to Bank’s Possession Bid

Petitioner No. 2 claimed to have purchased the property from respondent No. 3 under a registered sale deed dated 5 March 2015.

Following litigation and a compromise with respondents 3–5, petitioner No. 2 later executed a registered gift deed in favour of petitioner No. 1.

Respondent No. 3 had obtained a ₹10 lakh loan from respondent No. 1-Bank, which asserted that the property had been mortgaged in its favour.

After default and classification of the account as an NPA, the Bank initiated proceedings under the SARFAESI Act and obtained an order under Section 14 from the XLI Additional Chief Metropolitan Magistrate, Bengaluru, authorising assistance to take physical possession.

The petitioners challenged that order under Articles 226 and 227, asserting an independent title predating the alleged mortgage.

They had also filed S.A. No. 298/2023 before the DRT, which was pending.

Whether a third party claiming an independent right, title, or interest in property proceeded against under the SARFAESI Act may seek relief under Section 17 of that Act.

Whether the High Court should entertain a parallel writ challenge to the Section 14 order when the petitioners had already invoked the statutory remedy before the DRT.

Section 17(1) of the SARFAESI Act permits “any person” aggrieved by a measure under Section 13(4) to apply to the DRT; the expression is broad enough to include a third party asserting an independent right, title, or interest in the secured property, not merely a borrower or guarantor.

Where such a statutory remedy has already been invoked and is pending, the High Court found no justification to entertain a parallel challenge under Article 226.

The petitioners’ claim that they acquired title before the Bank’s alleged security interest, and the Bank’s assertion that the property was mortgaged to it, raised disputes falling within the DRT’s jurisdiction under Section 17.

Because the petitioners had already filed S.A. No. 298/2023, the Court declined to consider the same dispute through a parallel writ proceeding.

It left the competing claims undecided.

It expressed no opinion on the parties’ rival claims.