Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Section 18 – Pre-deposit Requirement – Mandatory Nature – Writ Jurisdiction under Article 226 – Supervisory Jurisdiction under Article 227 – Maintainability of Writ Appeal.
2025 KER 46809
Kerala High Court, Division Bench
Judges: Anil K. Narendran, Muralee Krishna S.
W.A. No. 1514 of 2025
The appellants, Union Bank of India, challenged the interim order dated 16.06.2025 passed by the learned Single Judge in O.P.(DRT) No. 173 of 2025, directing the Bank to keep coercive proceedings under the SARFAESI Act in abeyance until the Debts Recovery Appellate Tribunal (DRAT), Chennai, passed orders on the respondents’ stay and pre-deposit waiver applications in their appeal against the Debts Recovery Tribunal’s (DRT) order dated 17.04.2025 in S.A. No. 404 of 2024. The DRT had dismissed the respondents’ securitisation application challenging the Bank’s demand notice of Rs.3,01,59,964.99 and possession measures under Section 13(2) and Section 14 of the SARFAESI Act, imposing costs of Rs.30,000 for causing delay. The respondents sought relief in the High Court under Articles 226 and 227, invoking writ and supervisory jurisdictions, to stay dispossession and expedite the DRAT appeal.
The Division Bench held that the interim order, granted under Article 226, was maintainable for challenge in a writ appeal under Section 5(i) of the Kerala High Court Act, 1958, relying on State Bank of India v. M/s. Kinship Services (India) (P) Ltd. [2013 (4) KHC 21]. The Court further held that the requirement of pre-deposit under the second proviso to Section 18(1) of the SARFAESI Act is mandatory, as established in Narayan Chandra Ghosh [(2011) 4 SCC 548]. The Appellate Tribunal cannot entertain an appeal without a minimum deposit of 25% of the debt, even when accompanied by a waiver application under the third proviso to Section 18(1). A complete waiver of pre-deposit is beyond the Tribunal’s powers. Consequently, the Single Judge erred in directing the Bank to stay coercive steps pending the DRAT’s orders on the respondents’ applications, as the appeal was not maintainable without the mandatory pre-deposit.
Held: The writ appeal was allowed, setting aside the Single Judge’s direction to keep coercive steps in abeyance. The Debts Recovery Appellate Tribunal was directed to pass appropriate orders on the respondents’ applications, subject to compliance with the mandatory pre-deposit requirement under Section 18(1) of the SARFAESI Act.
For Appellants: Advs. ASP Kurup, Sadchith P. Kurup, C.P. Anil Raj, Siva Suresh, Athira Vijayan & B. Sreedevi
LAWYERS DIRECTORY
KURUP A S P |
SADCHITH P KURUP |
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ANIL RAJ C P K/872/2007 |
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SIVA SURESH K/2688/2022 9072047460 |
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ATHIRA VIJAYAN K/199/2024 9746826627 |
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B SREEDEVI K/169/2024 7025790626 |
