Constitutional court orders binding on all executive, statutory authorities: Karnataka High Court

The High Court also imposed a cost of Rs 25,000 on the Department of Stamps with direction to consider the representation submitted by the bank within four weeks.

The high court of Karnataka said that orders of the constitutional courts carry binding force on all executive and statutory authorities, and such authorities cannot evade compliance on the ground that they are situated outside the territorial limits of the issuing court. Justice Sachin Shankar Magadum said this while directing the Department of Stamps and Registration, Karnataka, as well as the jurisdictional Sub-Registrars, to forthwith give effect to the directions issued by the High Court of Bombay, including recording appropriate entries in the registration records declaring the sale deeds and agreements executed by directors of Electrex (India) Limited as null and void.

Kotak Mahindra Bank filed before the Karnataka high court seeking directions to registration authorities in the state of Karnataka to give effect to the December 17, 2024, orders passed by the High Court of Bombay. In insolvency proceedings, the Bombay High Court had adjudicated Anant V Hegde, managing director of the borrower company, and one DV Sathe as insolvent.

The petitioner contended that despite this order, Anant Hegde travelled to Bengaluru and alienated certain immovable properties, including factory premises situated at Yeshwanthpur, in favour of third parties. Upon plea by Kotak Mahindra Bank, the High Court of Bombay issued specific directions restraining Anant from acting as chief executive officer and further directed the jurisdictional Sub-Registrars at Vijayanagar, Rajajinagar and Nagarbhavi to declare all agreements and registered sale deeds executed by him as null and void and to desist from entertaining any further transactions in respect of the mortgaged properties.

The bank moved the Karnataka high court as no steps were initiated despite communication of the orders of the High Court of Bombay. Justice Magadum has noted that the insolvency proceedings before the High Court of Bombay and the subsequent alienation of secured assets in Bengaluru form part of the same cause of action, thereby rendering the directions issued by the Bombay High Court fully binding on the registering authorities in Karnataka.

“Consequently, this Court holds that the respondent authorities are under a constitutional and statutory obligation to give full effect to the directions issued by the High Court of Bombay and cannot evade compliance on any ground whatsoever. 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,” the court said.

The court also imposed a cost of Rs 25,000 on the Department of Stamps with direction to consider the representation submitted by the bank within four weeks. Any further noncompliance shall be viewed seriously and may invite appropriate proceedings in accordance with law, the court said.