Bengaluru: In a significant ruling reinforcing the authority of constitutional courts, the Karnataka High Court has held that orders issued by constitutional courts including the Supreme Court of India and various high courts are binding on executive and statutory authorities even beyond the territorial jurisdiction of the issuing court.
The observation came while the court was hearing a petition filed by Kotak Mahindra Bank, which sought enforcement of directions issued by the Bombay High Court in a high-value loan default case involving Electrex (India).
Case Background
According to the petition, Kotak Mahindra Bank had extended loans to Electrex (India), which later defaulted on repayment. The bank issued a demand notice amounting to ₹896.4 crore and initiated proceedings under the SARFAESI Act, enabling financial institutions to recover dues through auctioning secured assets.
During the recovery process, the bank took symbolic possession of the company’s secured properties. Meanwhile, insolvency proceedings before the Bombay High Court resulted in the adjudication of the company’s managing director, Anant V Hegde, and another individual, D.V. Sathe, as insolvent.
Allegations of Property Alienation
Despite the insolvency ruling, the bank alleged that Hegde travelled to Bengaluru and executed sale deeds and agreements involving key immovable assets, including a factory property located in Yeshwanthpur, transferring them to third parties.
Taking note of these developments, the Bombay High Court issued explicit directions to sub-registrars in Vijayanagar, Rajajinagar, and Nagarbhavi to declare such transactions null and void. It also instructed authorities not to entertain any further dealings concerning the mortgaged properties.
Delay in Implementation
However, despite formal communication of these directions, the concerned authorities in Karnataka failed to act. This prompted Kotak Mahindra Bank to approach the Karnataka High Court seeking enforcement.
Hearing the matter, Justice Sachin Shankar Magadum observed that the directions issued by the Bombay High Court were “fully binding” on the registering authorities in Karnataka, leaving no room for discretion or delay.
Court’s Observations
The court underscored that authorities have a “clear constitutional and statutory obligation” to implement such orders, regardless of geographical jurisdiction. It emphasized that failure to comply not only undermines judicial authority but also delays justice.
In a key observation, the court highlighted the importance of Article 226 of the Constitution of India, stating that it acts as a mechanism to ensure that judicial remedies remain effective and enforceable across territorial boundaries.
The judge remarked that the present case illustrates the necessity of such constitutional provisions in maintaining the integrity of judicial processes nationwide.
Directions and Penalty
Taking a stern view of the inaction, the Karnataka High Court imposed a cost of ₹25,000 on the state’s Department of Stamps and Registration. It further directed the department to consider and act upon the bank’s representation within a four-week timeframe.
Broader Implications
The ruling sets a strong precedent by reaffirming that constitutional court orders are not confined by state borders. It reinforces the principle that judicial authority in India operates as a unified system, ensuring consistency and enforceability across jurisdictions.
Legal experts believe this judgment will have far reaching implications, particularly in cases involving financial recoveries, insolvency proceedings, and inter-state enforcement of court directives. It also sends a clear message to administrative bodies that delays or non-compliance with judicial orders will invite strict scrutiny and corrective action.