M/S Shashi Mining Solutions, Partnership Firm, Ramanand Residency vs Karnataka Bank Ltd & Ors

R. Nataraj, J

The petitioner has sought a writ in the nature of certiorari to quash the E-auction proceedings initiated by the respondent-Bank under sale notice dated 02.12.2025. The petitioner has also sought a writ in the nature of mandamus directing the respondent-Bank to reschedule the payment of the outstanding amount of the term loan, over draft loan, and the outstanding amount in the PSOD account by considering the representations dated 20.01.2025, 31.01.2025, and 04.02.2025.

It appears from the facts pleaded in the writ petition that the petitioner had availed certain financial assistance from the respondent-Bank. The respondents, after classifying the petitioner's account as a Non-Performing Asset, initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the SARFAESI Act') and passed an order under Section 13(4) of the SARFAESI Act, taking symbolic possession of the secured asset. Thereafter, an E-auction notice dated 02.12.2025 was issued under Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002. Aggrieved by the said notice, the petitioner has approached this Court.

Learned counsel for the petitioner submitted that the E-auction notice has been purportedly issued under Section 13(4) of the SARFAESI Act, without following the procedure prescribed under Section 13 of the said Act. He specifically contended that no notice under Section 13(2) of the SARFAESI Act was issued to the petitioner and that no valid order under Section 13(4) of the SARFAESI Act was passed. He therefore submitted that the impugned notice, purportedly issued under Section 13(4) of the SARFAESI Act, is liable to be interfered with as it is not in accordance with the provisions of the SARFAESI Act, 2002.

I have perused the documents enclosed with the writ petition.

It appears from the impugned E-auction notice that symbolic possession of the secured asset was taken on 04.08.2025. Symbolic possession of a secured asset is taken under the provisions of Section 13(4) of the SARFAESI Act, 2002. What is now challenged is the E-auction initiated pursuant to taking symbolic possession of the property. Therefore, the appropriate remedy available to the petitioner is to approach the Tribunal under Section 17 of the SARFAESI Act, 2002.

As a matter of fact, under Sections 17(2) and 17(3) of the SARFAESI Act, the Tribunal is empowered to decide whether the proceedings initiated by the respondents are in accordance with the provisions of the SARFAESI Act, 2002, or not and to pass consequential orders, including re-delivery of possession of the property to the borrower or any other person entitled thereto. Therefore, this Court cannot sit in appeal over the entitlement of the respondents nor go into disputed questions of fact, including the liability of the petitioner to the respondents. In view of the above, no interference is warranted with the impugned E-auction notice.

It is open to the petitioner to approach the Tribunal in accordance with law and seek appropriate reliefs.

If the petitioner files an application before the Tribunal under Section 17 of the SARFAESI Act, 2002 within one month from today, the auction scheduled on 05.01.2026 shall not be confirmed until such time.

It is made clear that if the application is not filed before the Tribunal within the time stipulated as above, the respondents are at liberty to confirm the auction and proceed further in accordance with law.