K. Virupaksha & Anr. V. The State of Karnataka & Anr.

K. Virupaksha & Anr. V. The State of Karnataka & Anr.


(Arising out of SLP (Criminal) No.5701 of 2019)


The RECOVERY OF DEBTS AND BANKRUPTCY ACT (RDB ACT), 1993 provides law for the establishment of Debts Recovery Board (DRTs) with original jurisdiction and Debts Recovery Appellant Board (DRATs) with appellant jurisdiction, for the purpose of expeditious adjudication and recovery of debts because of banks and financial institutions, insolvency resolution and bankruptcy of people and partnership firms and connected matters, etc therewith. The Act aims to prevent the interest of banks and financial institutions as lenders, while not discouraging borrowers. The Board hasn’t yet commenced taking on insolvency resolution and bankruptcy matters because the related provisions don’t seem to be yet operative. The Act applies to cases where the quantity of debt because of any bank or establishment defined under the Act or a consortium of banks or financial institutions is Rs.20 lakh or more.


  • The brief facts of this case are present the situation that the respondent herein filed a Complainant that had approached the Canara Bank at Hubballi pursuant to which credit facilities were sanctioned on 16 March 2009. The total credit facility sanctioned amounted to Rs.2.68 crores. The property bearing Survey Number is 213/2002 which was situated at Anchatageri Village, Hubballi, and there the measuring of the land is 3 acres 2 Guntas(measuring unit) was offered as security for the loan and a charge was created.
  • The property is hereinafter referred to as the ‘Secured Asset’. As per the case of Canara Bank, the Complainant had not repaid the loan amount and in the view, it seems that there was committed default, the account of the complainant was classified as ‘NonPerforming Asset’ on 15 January 2013. The Canara Bank has invoked the power under Section 13(2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (‘SARFAESI Act’ ) and had issued appropriate notices and ultimately the possession of the secured asset as contemplated under Section 14 of the SARFAESI Act was taken on 22 March 2013. The secured asset was thereafter evaluated and was brought to the auction through the public notice dated 13 December 2013 indicating the date of the auction as 15 November 2013. The reserve price of the secured asset was fixed at Rs.2,28,51,000/.
  • Though publication was made, no amount was received in the auction proposed on 15 November 2013 and since the same was a public holiday declared in the State of Karnataka the auction was postponed to 04 December 2013.


  • The petitioner filed the case against the accused for the invoking of section482 of cr.p.c and for disrespecting the order on 20 May 2016 which was gone by the civil judge.
  • The fir was filled on the bases of the Hubballi Sub­Urban police headquarters for the alleged offenses punishable under Sections 511, 109, 34, 120­B, 406, 409, 420, 405, 417 and 426 of IPC.


As per the statement given by the Canara Bank, they revised the correct valuation, indicating the reserve price as Rs.1.10 Crore since the sooner reserve price at a better rate had not attracted purchasers and issued the fresh auction notice on 30 December 2013. The Complainant claiming that such action, assailed the auction notice during a Writ Petition filed before the judicature of Karnataka, Dharwad Bench in Writ Petition. The Judge has considered the matter, and from paying attention to the contentions put forth by the Complainant had also taken into consideration the alternate remedy available to the Complainant under the SARFAESI Act and accordingly dismissed the writ petition with the price of Rs.10,000/­, on 22 January 2014.

The Complainant said that the order by filing a Writ Appeal before the Division Bench in WA No. 100349/2014. The Division Bench through the order dated 19 august 2014 dismissed the Writ Appeal. The Complainant thereafter availed the remedy under Section 17(1) of the SARFAESI Act by applying and also accompanying the identical with an application under Section 5 of the Limitation Act. the appliance seeking delay and consequently the most application was dismissed by the Debts Recovery Tribunal (‘DRT’) and this order is passed on 12 June 2015. The Complainant is stated to own filed an Appeal before the Debts Recovery Appellate Tribunal, Chennai (‘DRAT’ ) which is additionally stated to be dismissed.

The Complainant filed the complaint under Section 200 of the Cr.P.C within the Court of the Principal Civil Judge of Junior Division and JMFC, Hubballi alleging that the Officers of the Canara Bank in connivance with the auction purchaser had caused wrongful loss to the Complainant. The complaint from the Canara Bank is extremely placed officials and also the appellants, the valuers, and therefore the auction purchaser was shown because of the accused. The learned Magistrate has referred the identical for investigation under Section 156(3) of Cr.P.C. and to submit a report. supported such direction the FIR No.0152/2016 is registered. The appellant claiming to be aggrieved had preferred the Criminal Petition under Section 482 of Cr.P.C in Criminal Petition which was dismissed by the tribunal through the order dated 21 January 2019.


  • The complaint bearing P.C. No.389/2016 and also the order dated 20.05.2016 passed therein as also the FIR No.0152/2016 to the extent that because the appellants herein are concerned stand quashed.
  • To the extent that because the grievance of the Complainant at the freedom to avail remedies so as with law, chooses to assail the order dated 12 June 2015 passed in I.R. No.3044/2014, and therefore the order dated 3 may 2017 passed in Appeal No.523/2015 by the DRT and DRAT respectively under law.
  • The appeal is accordingly allowed with no order on costs.
  • if there are any Pending applications, then it’ll be disposed of.


In this case, the action taken by the Banks under the SARFAESI Act is neither unquestionable nor treated under all circumstances but if there’s a discrepancy within the manner the Bank has proceeded it’ll always be receptive assail it within the forum provided. Though within the instant case the appliance filed by the Complainant before the DRT has been dismissed before the DRAT is additionally stated to be dismissed the appellants should have availed the remedy diligently. in this direction, the further remedy by approaching the judicature to assail the order of DRT and DRAT is additionally available in appropriate cases. Instead, the petitioner after the dismissal of the application before the DRT filed the impugned complaint which appears to be an intimidatory tactic and an afterthought which is an abuse of the method of the law. within the matter of present nature if the grievance as put forth is taken note and if the identical is allowed to be agitated through a complaint filed at this time and if the investigation is allowed to continue it might amount to permitting the jurisdictional police to redo the method which might be like reviewing the order gone along the learned Single Judge and therefore the Division Bench within the writ proceedings by the state supreme court and also the orders lapsed the competent Court under the SARFAESI Act which is neither desirable nor permissible and also the industry can’t be allowed to be held to ransom by such intimidation. Therefore, the given case could be a fit case wherein the extraordinary power is critical to be invoked and exercised.

Here, appellants herein had also stated the availability as contained in Section 32 of the SARFAESI Act which provides for the immunity from prosecution since protection is provided thereunder for the action taken in honestness. The learned senior counsel for the Complainant has in this regard cited the choice of this Court within the case of commissioned military officer Commanding, Rashtriya Rifles vs. Central Bureau of Investigation & Anr. (2012) 6 SCC 228 to contend that the defense referring to straightness and public good are questions of fact and that they are required to be proved by adducing evidence. Though on the proposition of law as enunciated therein that aspect of the matter is additionally a side which might be examined within the proceedings provided under the SARFAESI Act. in an exceedingly circumstance where we’ve got already indicated that a criminal proceeding wouldn’t be sustainable in a very matter of this nature, exposing the appellants even on it count to the proceedings before the Investigating Officer or the judicature wouldn’t be justified.


Works Cited

case mine. (n.d.). casemine.com. Retrieved june 11, 2020, from www.casemine.com: https://www.casemine.com/judgement/in/56b48efa607dba348fff69f1#:~:text=Section%2017%20(1)%20of%20the%20SARFAESI%20Act%2C%20prescribes%20a,(4)%20of%20the%20Act.

drt. (n.d.). drt.gov. Retrieved july 11, 2020, from drt.gov.in: https://drt.gov.in/front/actrules.php

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