B. RAVISHANKAR Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) Petitioners in this writ petition have challenged the Notification dtd. 22/6/2007 (Annexure-A) issued by the respondent No.1 under Sec. 3(2) of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (for short hereinafter referred to as the "KPID Act").

(2.) Relevant facts for adjudication of this writ petition are that the petitioner No.1 has purchased agriculture lands in various survey numbers for valuable consideration by way of six sale deeds dtd. 5/8/2005; 9/8/2005; and 15/9/2005 to an extent of 36.01 acres from various third parties and claims to be the absolute owner of the said properties. Petitioners 2 and 3 have purchased a residential property bearing No.97, 3rd Cross, BTM I Stage, Dollars Colony, Bengaluru vide sale deed dtd. 27/7/2013, by raising loan from the respondent No.4-Bank. The residential property was mortgaged in favour of the respondent No.4-Bank and in this regard, respondent No.4-Bank has initiated proceedings under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (for brevity, hereinafter referred to as " SARFAESI Act "). It is further stated in the writ petition that the petitioner No.1 has entered into a Joint Development Agreement (for brevity hereinafter referred to as "JDA") with the respondent No.3 (Agrigold Projects Limited) on 20/10/2012 in relation to the agriculture land to an extent of 18.34 acres. The Joint Development Agreement stipulates that the respondent No.3 was to develop the residential layout within a period of two years from the date of sanction/approval from the competent authorities. Petitioners and the respondent No.3 have resolved to have 60:40 share in the developed sites. It is further stated in the petition that there were certain allegations against the respondent No.3 and its sister concern with regard to irregularities and illegalities and as such, the respondent No.3 failed to obtain required sanctions from the competent authority and therefore, the Joint Development Agreement was not acted upon by the parties and in that view of the matter, the land remains with the petitioners. When things stood thus, respondents 1 and 2 attached the residential property of petitioners 2 and 3 on the ground that the respondent No.3- Company had defrauded several depositors who had invested in the respondent No.3-Company, which led to filing of several criminal proceedings and proceedings before the other High Courts. In this regard, the petitioners have lodged complaint with the Madiwala Police Station, which came to be registered as Crime No.850 of 2015 against the respondent No.3- Company and its Directors for having illegally trespassed into petitioners' residential property. In the meanwhile, proceedings were initiated against the sister concern of the respondent No.3 in the State of Andhra Pradesh under the provisions of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1990. When things stood thus, an employee of the respondent No.3-Company lodged a complaint before the Jayanagar Police Station, which came to be registered as Crime No.241 of 2015 for the offences punishable under Ss. 506 and 420 read with Sec. 34 of Indian Penal Code. The petitioners further contended that as the respondent No.3-Company having failed to comply with its obligation under JDA dtd. 20/10/2012, petitioners were constrained to issue legal Notice, seeking appointment of sole Arbitrator in terms of Clause 15 of the JDA, for which the respondent No.3-Company did not respond and as such, the petitioners filed CMP No.23 of 2016 before this Court. In the meanwhile, the respondent No.3-Company addressed letter to the petitioners and sought to withdraw from the JDA dtd. 20/10/2012 and decided to refund Rs.15.00 crore advanced as refundable security deposit on the ground that they failed to comply with the terms and conditions of the JDA. In the midst of this situation, the respondent-Government has issued Notification under Sec. 3(2) of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (Annexure-A) and sought to attach all the properties of the respondent No.3-Company, including the properties of the petitioners herein. Feeling aggrieved by the same, the petitioners have presented this writ petition.

(3.) The respondent-State has filed statement of objection and additional statement of objection raising several grounds for dismissal of the writ petition. It is the specific defence of the respondent-State that Special Court has been constituted to enquire into the illegalities committed by the respondent No.3-Company herein and therefore, the petitioners have to be relegated to approach the said Special Court for redressal of their grievance and accordingly, sought for dismissal of the petition on the ground of maintainability.