Case Note & Summary
The petitioner, M/s Sri Guru Raghavendra Agro Foods Rice Mill, a partnership firm represented by its partner Y. Sharanappa Shetty, filed a writ petition under Articles 226 and 227 of the Constitution of India before the Karnataka High Court. The petition challenged a sale notice dated 28-05-2020 published in the New Indian Express on 29-05-2020, issued by the second respondent, Canara Bank, Karatagi Branch, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioner sought to quash the sale notice and also sought consideration of its objections to a demand notice dated 03-02-2020 issued under Section 13(2) of the SARFAESI Act. During the hearing, the petitioner's counsel submitted that due to subsequent developments, the sale had not been effected and the sale notice had become redundant, rendering the writ petition infructuous. The petitioner further submitted that it had filed objections to the demand notice dated 03-02-2020 and requested that the petition be disposed of with a direction to the bank to consider those objections. However, the respondent bank's counsel produced Annexure-R1, which showed that the bank had already replied to the objections. The reply pointed out that the objection letter was addressed by Y. Sharanappa Shetty but signed by Karthikeyan Patil, and thus was not acceptable. The bank also noted that the shareholding of Y. Sharanappa Shetty in the firm was only 10%, and the loan was taken by the firm, not by him individually. The court, after hearing both sides, observed that since the sale notice had become redundant and the objections had already been replied to, no further direction was required. The writ petition was dismissed as having become infructuous, with no order as to costs.
Headnote
A) SARFAESI Act - Sale Notice - Infructuous Petition - The petitioner challenged a sale notice dated 28-05-2020 issued under the SARFAESI Act, 2002. The court held that since the sale was not effected and the notice became redundant, the petition was infructuous. Additionally, the petitioner's objections to the demand notice under Section 13(2) had already been replied to by the bank, leaving no further relief to be granted. (Paras 2-4)
Issue of Consideration
Whether the writ petition challenging a sale notice under SARFAESI Act is maintainable when the sale notice has become redundant and the petitioner's objections to the demand notice have already been replied to by the bank.
Final Decision
The writ petition is dismissed as having become infructuous. No order as to costs.
Law Points
- Writ petition becomes infructuous when sale notice is not acted upon
- objections to demand notice already replied by bank
- no further direction required
