WP/33741/2025 of The Bank of Maharashtra, Vs M/s. Kotak Mahindra Bank Limited, on 1 April 2026

COMMON ORDER

LISA GILL, J.

1. This order shall dispose of W.P.Nos 33590 and 33741 of 2025 as both writ petitions arise out of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “SARFAESI Act’) proceedings initiated in respect to the same property. Both the writ petitions have been taken up together for consideration and adjudication, at request and with consent of learned counsel for parties.

2. WP No. 33590 of 2025 has been filed by Kotak Mahindra Bank Ltd., being aggrieved of proceedings initiated by Bank of Maharashtra (respondent No. 2 in the said writ petition & petitioner in 33741 of 2025) in respect to the property as detailed in the writ petition.

3. It is pleaded therein that Kotak Mahindra Bank afforded loan facility for a sum of Rs.1,50,00,000/- to 3rd respondent, who offered property in question, for mortgage. Title deeds thereof were duly deposited vide agreement dated 01.03.2017. Thereafter, petitioner / Kotak Mahindra Bank registered the said mortgage with Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) on 14.03.2017. On account of financial indiscipline on the part of 3rd respondent, loan account was declared NPA and proceedings under SARFAESI Act were initiated, ultimately leading to passing of order dated 03.11.2025 by learned Chief Metropolitan Magistrate, Vijayawada, under Section 14 of SARFAESI Act, appointing Advocate Commissioner to take physical possession of secured asset. Matter was adjourned to 19.12.2025.

4. It is stated that when representatives of Kotak Mahindra Bank visited the secured asset, it came to light that Bank of Maharashtra had affixed notices proclaiming its claim over the said property. Notice dated 19.09.2025 in this respect was issued by Kotak Mahindra Bank to Bank of Maharashtra, which was rebutted by said Bank on the premise that a mortgage was created by one Vatsavai Sai Venkata Subramanyam Varma, in the year 2022 and that mortgage in favour of Kotak Mahindra Bank is not registered in accordance with Registration Act, and no charge is reflected in favour of petitioner as per records of CERSAI, which in any case cannot substitute registration under Registration Act, 1908. Bank of Maharashtra, having undertaken separate proceedings under SARFAESI Act, published sale notice dated 29.10.2025 in respect to the secured asset, scheduling the auction on 14.11.2025.

5. Aggrieved therefrom, WP No.33590 of 2025 was filed by Kotak Mahindra Bank for setting aside proceedings undertaken by Bank of Maharashtra under SARFAESI Act in respect to secured asset in question.

6. W.P. No. 33741 of 2025 has been filed by Bank of Maharashtra, being aggrieved of appointment of Advocate Commissioner by learned Chief Judicial Magistrate, Vijayawada, vide order dated 27.11.2025 passed under Section 14 SARFAESI Act.

7. It is pleaded by Bank of Maharashtra that credit facilities aggregating to Rs.3,00,00,000/- were afforded to one M/s. Surya Aqua Traders, a partnership firm, vide sanction letter dated 15.02.2022. One of the partners of firm and owner of the schedule property namely Vathsavayi Sai Venkata Subramanya Varma executed a registered mortgage deed dated 28.02.2022 infavour of Bank of Maharashtra creating equitable mortgage over the scheduled property. Due diligence was conducted by Bank of Maharashtra by obtaining encumbrance certificate from Sub-Registrar Office, Vijayawada, which reflected property to be free from all encumbrances, with no prior charge or mortgage registered against this property. Bank of Maharashtra registered its mortgage with CERSAI on 01.03.2022 and also issued public notice of its security interest. On account of default on the part of borrower, its account was classified NPA on 30.09.2024 and proceedings under SARFAESI Act were initiated with notice dated 15.10.2024 being issued under Section 13(2) of SARFAESI Act, notice under Section 13(4) of SARFAESI Act was issued on 20.12.2024. Petition under Section 14 of the SARFAESI Act was filed,

Advocate Commissioner was appointed vide order dated 18.06.2025 and physical possession of scheduled property was taken on 18.07.2025.

8. It is further stated that in view of facts and circumstances, order dated 27.11.2025 has been incorrectly passed by Chief Judicial Magistrate, Vijayawada, in Criminal M.P. No. 3207 of 2025, filed on behalf of Kotak Mahindra Bank. Aggrieved therefrom, W.P.No.33741 of 2025 was filed by Bank of Maharashtra.

9. It is the case of Kotak Mahindra Bank that during subsistence of the first mortgage, which is prior in time, second mortgage was created by borrower namely Vathsavayi Sai Venkata Subramanya Varma in an illegal in favour of second (2nd) respondent bank i.e., Bank of Maharashtra.

10. Notice was issued in WP No. 33590 of 2025 on 02.12.2025 while observing that prima-facie mortgage in favour of Kotak Mahindra Bank was prior in point of time. All further proceedings pursuant to sale notice dated 29.10.2020 issued by Bank of Maharashtra were stayed.

11. In view of availability of efficacious alternative remedy to petitioners in both writ petitions, besides disputed question of fact being involved, learned counsel for parties were afforded sometime on the last date of hearing to seek instructions in this regard. Learned counsel for petitioners in both writ petitions, on instructions, submit that liberty may be afforded to petitioners to avail remedy(ies) available to them in accordance with law. It is submitted that necessary petitions/applications before appropriate forum shall be filed immediately.

12. However, learned counsel for petitioner in WP No. 33590 of 2025 submits that vide order dated 02.12.2025 passed by this High Court in the said writ petition, all further proceedings pursuant to sale notice dated 29.10.2020 had been stayed. Therefore, said order may be directed to continue till decision of learned Tribunal on the application(s)/petition(s), which shall be filed by petitioner.

13. Keeping in view facts and circumstances as above, both petitioners are relegated to avail the remedy available to them in accordance with the statutory provisions within a period of ten (10) working days from receipt of certified copy of the order. Interim order granted on 02.12.2025 shall enure for the said period. Thereafter, it is for learned Tribunal to take necessary decision in regard to continuation of the same or otherwise on appropriate applications being filed by concerned applicant. It is clarified that said interim order shall not continue beyond this period automatically, without a dispensation thereon by learned Tribunal. Period spent by parties in pursuing present petitions needless to say be excluded. There is no expression of any opinion on merits of the matter.

14. Both writ petitions are disposed of, accordingly, in the above terms.

15. Pending applications, if any, stand(s) disposed of, accordingly.

(LISA GILL) JUDGE

(NINALA JAYASURYA) JUDGE Date: 02.04.2026 MS

THE HONOURABLE MRS. JUSTICE LISA GILL THE HONOURABLE Mr. JUSTICE NINALA JAYASURYA

Writ Petition Nos: 33590 & 33741 of 2025 Date: 02.04.2026

MS