Authorities Where Immovable Properties Are Located Duty-Bound To Enforce Other High Court Orders: Karnataka High Court

The Karnataka High Court has held that when a Constitutional Court issues directions concerning immovable properties situated in another State, authorities where such properties are located are duty-bound to implement them.

Justice Sachin Shankar Magadum was hearing a petition filed by Kotak Mahindra Bank Limited, a secured creditor of Electrex (India) Limited, seeking implementation of directions issued by the Bombay High Court concerning certain sale transactions involving mortgaged properties in Bengaluru.

“This Court is of the considered view that when a Constitutional Court issues directions touching upon immovable properties and statutory records situated in another State, the executive authorities within whose jurisdiction such properties are located are duty-bound to implement the same in letter and spirit. Any failure to do so would render the administration of justice ineffective.”

Kotak Mahindra Bank had initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 after a default in repayment, issuing a demand notice for recovery of Rs 896.42 crore. Upon failure to comply, symbolic possession of the secured assets was taken in 2015.

In parallel insolvency proceedings, the Bombay High Court had adjudicated the borrower's Managing Director, Anant V. Hegde, along with another individual, as insolvent. Despite such adjudication, Hegde allegedly executed and registered sale deeds in respect of mortgaged properties situated in Bengaluru in favour of third parties.

On being apprised of these transactions, the bank informed the Office of the Official Assignee, which led to the filing of a report before the Bombay High Court. Acting on the report, the Court directed that the agreements and sale deeds executed by the insolvent be treated as null and void and instructed the jurisdictional Sub-Registrars in Bengaluru to take consequential steps and refrain from entertaining further transactions in respect of the properties.

Despite communication of these directions and a subsequent representation dated April 11, 2025 by the bank, the registering authorities failed to act, prompting the present writ petition before the Karnataka High Court.

Referring to the Bombay High Court's order, the Court noted that it had not been stayed, modified, or set aside by any competent forum and continued to operate in the field.

The Court emphasised that under Article 226(2) of the Constitution, once a High Court validly exercises jurisdiction, its directions bind all concerned authorities irrespective of their physical location, so long as the subject matter or its consequences fall within their domain. It held that the efficacy of such orders cannot be confined within territorial limits, particularly where the cause of action extends across States.

“The constitutional scheme does not contemplate a situation where executive authorities located in one State can ignore or refuse to act upon binding judicial orders passed by a Constitutional Court merely on the ground of territorial location. Such an approach would strike at the very root of the rule of law and the supremacy of judicial orders ”

The court further held that registering authorities, being statutory functionaries under the Registration Act, 1908, are bound to give effect to binding judicial orders and cannot sit in judgment over their correctness.

“The registering authority, functioning under the Registration Act, 1908 performs a statutory and largely ministerial duty in maintaining public records of transactions, and once a competent Constitutional Court has declared certain transactions to be null and void and has issued specific directions to give effect to such declaration, the authority is left with no discretion in the matter”

Holding that the inaction of the authorities amounted to wilful disobedience of a binding judicial order, the Court said compliance with such directions is mandatory and cannot be evaded on the ground of territorial limitations.

Allowing the petition, the court issued a writ of mandamus directing the registering authorities and jurisdictional Sub-Registrars to forthwith give effect to the Bombay High Court's directions, including recording appropriate entries in the registration records declaring the subject sale deeds and agreements as null and void.

The authorities were also directed to consider the bank's representation within four weeks. The court imposed costs of Rs 25,000 on the authorities for their inaction, warning that any further non-compliance would invite appropriate proceedings in accordance with law.

For Petitioner: Senior Advocate D.R Ravishankar and Advocate V.J Achalanand

For Respondents: Advocate Navya Shekar, AGA