(Prayer: This writ appeal is filed u/s 4 of the Karnataka High Court Act, 1961, praying to set aside the order passed in the writ petition No 33276 of 2013 dated 23-11-2015.)
ORDER ON IA-I OF 2016
1. There is a delay of 239 days in preferring this appeal.
After hearing Mr Y V Parthasarathy, learned advocate appearing in support of the application for condonation of delay, Mr M Srikanth, learned advocate appearing for the respondent and considering the averments contained in the affidavit annexed to the application for condonation of delay, we are satisfied that the appellant was prevented by sufficient cause from presenting the memorandum of writ appeal in time. Therefore, the delay in filing the writ appeal is condoned.
The application for condonation of delay stands allowed.
We make no order as to costs.
With the consent of the parties, the writ appeal is taken up for preliminary hearing.
JUDGMENT IN THE WRIT APPEAL
2. The respondent-writ petitioner was an employee of the appellant Karnataka Bank Limited, a schedule bank. The respondent borrowed loans from the appellant-bank for construction of his house. Two term loans were sanctioned in his favour and he was regularly paying the instalments.
3. There were certain allegations of misconduct against the respondent-employee. A disciplinary proceeding was initiated, which resulted in his dismissal from service. After dismissal from service, he was unable to pay the instalments.
4. A proceeding under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short, the Act] was initiated. A summary notice of possession was issued under the sub-section (4) of Section 13 of the Act on November 2, 2010. The bank, thereafter, took possession of the property in question.
5. The writ petition was filed against the bank before this court. During the pendency of the writ petition, the respondent-writ petitioner gathered funds and repaid the entire loan amount due to the bank. After closure of the loan account, the respondent-writ petitioner demanded return of the original documents of title from the bank. The bank was not inclined to return the said documents, citing its right under Section 171 of the Indian Contract Act, 1872.
6. The Hon ble Single Judge, although, did not grant the prayer in favour of the respondent-writ petitioner, but made certain observations that the writ petitioner would do well to file a civil suit and that the civil court could pass a decree even on the admissions made by the learned advocate appearing for the bank in the writ petition.
7. Such observations were unnecessary, as the writ petition itself was not maintainable against a schedule bank. The Karnataka Bank Limited is not an authority within the meaning of Article 12 of the Constitution of India. As such, the writ petition was not maintainable.
8. Moreover, the dispute between a schedule bank and its employee is a matter which has to be considered before the appropriate forum in accordance with law. The Hon ble Single Judge was not correct in making the observation that if a civil suit be filed by the writ petitioner, the plaintiff-writ petitioner would be entitled to a decree even on the admission made before the court by the learned advocate appearing for the bank.
9. The law is settled that in the mercantile system, the bank has a general lean over all forms of securities or negotiable instruments deposited by its customers or on behalf of its customers, in the normal course of banking business.
10. Therefore, this appeal is allowed. The writ petition is dismissed. All observations of the Hon ble Single Judge are set aside. It shall be open to the parties to approach the civil court for redressal of their disputes. We, however, express no opinion on the merits of the matter.
11. We make no order as to costs.