Y LALITHA HOLLA Vs. RECOVERY OFFICER

JUDGEMENT

(1.) PETITIONERS in this writ petition are persons who had stood as guarantors, guaranteeing repayment of a loan borrowed by M/s. Mushti Designs Pvt. Ltd. , represented by the managing director, M. Arunkumar, who had borrowed certain sums from the first respondent - Bangalore district and Bangalore rural District Co-operative Central Bank ltd. , Chamajpet, Bangalore.

(2.) THE borrowers having failed to repay the amouat with interest etc. , the bank had raised a dispute, the matter went before the arbitrator and resulted in passing an award in favour of the bank, jointly against the borrower and the petitioner-guarantors.

(3.) THE first respondent bank which had levied execution for realising the awarded amount, initially against the assets of the borrower by attaching the plant and machinery, which had been secured in favour of the bank for repayment of the loan, and on noticing that the offers by the bidders to purchase the machinery part, the best offer being for a sum of rs. 35. 00 lakh, being of the opinion that this amount was not sufficient to satisfy the award amount in full, it appears did not pursue further action for realizing the amount as against the attached properties of the borrower, but instead later on proceeded against the property belonging to the petitioners, who had mortgaged the subject property in favour of the bank guaranteeing repayment of the loan. The property in question is an immoveable property bearing Corporation Nos. 42 and 42/ 1, Bull Temple Road, Bangalore-4. , wherein it appears, a hotel by name Dwaraka Hotel/ dwarka Lodge was being run and which was sought to be sold in public auction. The auction sale in itself was conducted through the recovery officer of the bank, who is an official of the State Government in the rank of an assistant registrar and who is deputed to the bank and who would function and remain in the bank as the recovery officer of the bank. The recovery officer in fact conducted the auction on 16-2-2004, in which auction, the fifth respondent to this writ petition - a private individual - appears to have purchased the property by offering a price of rs. 41,04,000. 00.