M/S Sri Shankar Plywood vs. Karur Vyasa Bank LTD

Facts

The petitioners, M/s Sri Shankar Plywood and Board Industries and three other entities, filed a writ petition before the High Court of Karnataka. They sought directions to consider their representation dated 08.03.2025 for the closure of a loan account with Karur Vyasa Bank Ltd. The bank is the respondent. The petitioners also sought to challenge sale proceedings initiated by the respondent bank under the SARFAESI Act, 2002. They specifically wished to challenge an auction notice dated 04.12.2024 and subsequent actions, including a sale certificate dated 29.03.2025. The petitioners requested that the period spent before the High Court be excluded for the purpose of calculating the limitation period for filing an appeal or application before the Debt Recovery Tribunal (DRT).

Held

The Court held that the petitioners should be permitted to approach the Debt Recovery Tribunal (DRT) for addressing their grievances challenging the sale proceedings by the Respondent Bank under the SARFAESI Act, 2002. The Court directed that the time spent by the petitioners in the writ proceedings before the High Court should be placed before the DRT for appropriate consideration when objections regarding limitation are being considered. The Court explicitly stated that all contentions are kept open, meaning the DRT would have the liberty to decide on the merits of the case and the limitation period without prejudice. The primary relief granted was the liberty to approach the DRT and a direction for the DRT to consider the period spent in writ proceedings for limitation purposes.

Key Issues

1. Whether the petitioners should be permitted to approach the Debt Recovery Tribunal (DRT) for redressal of their grievances concerning the sale proceedings initiated by the Respondent Bank under the SARFAESI Act, 2002? 2. Whether the period spent by the petitioners before the High Court in the instant writ petition and W.P.32600/2024 should be considered for the purpose of calculating the limitation period for filing an appeal or application before the DRT under Section 17 of the SARFAESI Act? Petitioner's arguments: The petitioners argued that they should be allowed to approach the DRT to challenge the auction notice and subsequent sale proceedings. They contended that the time spent pursuing their grievances before the High Court should be excluded when considering the limitation period for their application before the DRT. They sought liberty to proceed under Section 17 of the SARFAESI Act if the bank took further measures under Section 13. Revenue/State's arguments: The judgment does not record any specific arguments from the revenue or state. The respondent bank's role is primarily as the entity against whom the petitioners sought relief.