As per case facts, an auction purchaser and a bank filed writ petitions challenging DRAT orders. The respondent borrower's loan was a Non-Performing Asset, leading to secured asset mortgages. After ...
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 2851 OF 2026
Aloukik Construwell LLP, through its
Authorized Representative … Petitioner
vs.
Pradeep Gordhandas Vora & Anr. … Respondents
WITH
WRIT PETITION NO. 3233 OF 2026
HDFC Bank Limited, through its
Authorized Representative Trupti Surve … Petitioner
vs.
Pradeep Gordhandas Vora & Anr. … Respondents
Mr. Ankit Lohia a/w Ms. Saloni Sulakhe and Ms. Krushika Udeshi, i/b.
Dhaval Vussonji and Associates for petitioner in WP/2851/2026 and
for respondent No. 2 in WP/3233/2026.
Mr. Charles DeSouza a/w Mr. Rupa Sawangikar, Ms. Pragati Gothi, Ms.
Manaswi Agrawal, i/b. Meraki Chambers for petitioner in
WP/3233/2026 and for respondent No. 2 in WP/2851/2026.
Mr. Girish Godbole, Senior Advocate, a/w Mr. S. S. Kanetkar, Ms.
Bharti Bhansali and Farzeen Pardiwala, i/b. FZB & Associates for the
respondent No. 1 in both petitions.
CORAM : MANISH PITALE &
SHREERAM V. SHIRSAT, JJ.
Reserved on : 10
th
APRIL, 2026
Pronounced on : 08
th
JUNE, 2026
Judgment (Per Manish Pitale, J.) :
. An auction purchaser and a bank (secured creditor) have filed
these two writ petitions, challenging orders dated 18.11.2025 and
PRIYA
KAMBLI
Digitally signed
by PRIYA
KAMBLI
Date:
2026.06.08
18:14:32
+0530
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08.12.2025 passed by the Debts Recovery Appellate Tribunal, Mumbai
(DRAT). By order dated 18.11.2025, the DRAT, while adjourning
hearing on an application for waiver of pre-deposit filed by
respondent-borrower, directed the parties to maintain
status quo. By
order dated 08.12.2025, the DRAT allowed the application for waiver
of pre-deposit and directed the appeal filed by the respondent-
borrower and the application for stay, to be registered, for further
consideration. According to the petitioners, both the impugned orders
are not sustainable.
2. The respondent - borrower i.e. proprietor of M/s. Vora
Enterprises availed credit facilities from the petitioner-bank. These
facilities were secured by mortgaging a flat and a piece of land,
forming the secured assets. On 01.05.2020, the account of the
respondent - borrower was classified as Non-Performing Asset (NPA).
In this backdrop, on 04.09.2020, the petitioner - bank issued notice
under Section 13(2) of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
(hereinafter referred to as ‘the said Act’).
3. On 16.12.2020, the respondent - borrower filed Securitisation
Application No. 52 of 2020 before the Debts Recovery Tribunal-I,
Mumbai (DRT-I). An interim application was also filed, but the same
was rejected by DRT-I by an order dated 30.11.2021. The respondent -
borrower filed Writ Petition No. 1610 of 2022 before this Court. On
02.12.2021, this Court directed the respondent - borrower to pay 1₹
crore to the petitioner - bank by 04.12.2021 and further directed that
in the meanwhile, taking over of possession of the mortgaged land
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would be deferred, although the petitioner - bank was permitted to
take physical possession of the mortgaged flat. The respondent -
borrower complied with the said condition of payment of 1 crore.₹
But, no further steps were taken for hearing of the writ petition or for
payment of further dues and therefore, on 15.03.2022, the said writ
petition was disposed of with liberty to the respondent - borrower to
approach the DRAT. Ad-interim relief granted by this Court on
02.12.2021 was continued only for a period of two weeks.
4. On 28.03.2022, the respondent - borrower filed Miscellaneous
Appeal No. 15 of 2022 before the DRAT to challenge the aforesaid
order dated 30.11.2021 passed by DRT-I. On 06.04.2022, the DRAT
directed respondent - borrower to make pre-deposit in two
installments, as per proviso to Section 18(1) of the said Act. These
deposits were made and thereupon, the DRAT, on 15.07.2022, passed
an order, remanding the matter back to the DRT-I for hearing on the
securitisation application itself on merits and it was directed to
dispose of the same within a period of two months. Interim stay
granted by order dated 06.04.2022 was continued till final disposal of
the said application.
5. On 12.05.2023, the DRT-I dismissed the said securitisation
application on merits by a reasoned order. The respondent - borrower
filed Appeal (D) No. 950 of 2023 on 10.06.2023 before the DRAT. By
order dated 07.12.2023, the DRAT directed the respondent – borrower
to deposit an amount of 12 crores as pre-deposit, under proviso to₹
Section 18 of the said Act. Since the respondent - borrower failed to
comply with the said direction, the aforementioned appeal was
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dismissed. Thereafter, on 07.01.2025, the petitioner - bank took
possession of the mortgaged land, in accordance with an order passed
by a Competent Magistrate, under Section 14 of the said Act. In April
2025, the respondent - borrower approached the DRAT for
withdrawal/refund of the amount deposited in Miscellaneous Appeal
No. 15 of 2022. Although, the petitioner - bank opposed the said
prayer, on 04.06.2025, the DRAT allowed the respondent - borrower
to withdraw the said amount.
6. On 09.05.2025, the petitioner - bank issued an e-auction notice
in respect of the mortgaged land and it was served upon the borrower
on 10.05.2025. The auction was held on 19.06.2025, wherein the
petitioner - auction purchaser was the successful bidder. At this point
in time, on 26.06.2025, the respondent - borrower filed its second
Securitisation application, this time before the DRT-II bearing
Securitisation Application (D) No. 1068 of 2025. Since the said
application was filed beyond the period of limitation, it was
accompanied by an application, bearing Miscellaneous Application No.
81 of 2025, for condonation of delay. On 15.09.2025, DRT-II dismissed
the application for condonation of delay. On 16.09.2025, the
petitioner - auction purchaser deposited the entire bid amount with
the petitioner-bank.
7. At this stage, on 22.09.2025, the respondent - borrower filed
Writ Petition (Lodging) No. 30370 of 2025 before this Court, to
challenge the order dated 15.09.2025 passed by DRT-II, rejecting the
application for condonation of delay. On 26.09.2025, the respondent -
borrower withdrew the said writ petition and all rights and
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contentions of the parties were kept open. In the meantime, on
23.09.2025, the petitioner - bank issued sale certificate in favour of
the petitioner - auction purchaser in respect of the mortgaged land
and it was duly registered in the office of the Sub-Registrar. On
01.10.2025, the petitioner - bank handed over physical possession of
the mortgaged land to the petitioner - auction purchaser and
addressed communications to the respondent - borrower to remove its
movable assets lying in the mortgaged land and also intimated it that
the petitioner - bank intended to refund the surplus sale proceeds
upon the respondent - borrower accepting the sale. As a matter of fact,
the petitioner - bank deposited the surplus sale proceeds in a fixed
deposit and intimated the respondent - borrower about the same.
8. At this stage, on 14.10.2025, the respondent-borrower filed
Appeal (D) No. 1711 of 2025 before the DRAT, to challenge the said
order dated 15.09.2025 passed by the DRT-II, dismissing the
application for condonation of delay and consequently, the
securitisation application of the respondent - borrower. The
respondent - borrower filed Interim Application No. 718 of 2025 for
waiver of pre-deposit and also Interim Application (D) No. 1712 of
2025 for interim relief. It is relevant to note that on 04.11.2025, the
respondent-borrower filed Securitisation Application No. 491 of 2025
before the DRT-II, for setting aside the sale certificate. The same is
pending.
9. On 18.11.2025, preliminary arguments were heard on the said
waiver application when the DRAT passed an order, directing the
parties to maintain
status quo. The petitioners have impugned the said
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order, particularly on the ground that it was passed in an application
seeking waiver, which could not have been done and secondly, that
there was no discussion in the said order justifying the order of
status
quo
.
10. The waiver application was heard on 08.12.2025, when the
DRAT allowed the same and granted complete waiver to the
respondent - borrower. As a consequence, it was directed that the
appeal shall be registered. It is a matter of record that thereafter, the
proceedings were listed on various dates before the DRAT, when the
ad-interim order of
status quo was continued. The petitioners are
seriously aggrieved by the aforesaid two impugned orders dated
18.11.2025 and 08.12.2025.
11. Mr. Ankit Lohia, the learned counsel appearing for the petitioner
- auction purchaser submitted that the DRAT erred in allowing the
waiver application by relying upon judgment of this Court in the case
of
M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another vs.
Canara Bank and another
, (
order dated 03.09.2024 passed in Writ
Petition No. 12028 of 2022), for the reason that in the appeal before
the DRAT, the respondent - borrower had prayed for substantial reliefs
on merits, apart from challenging dismissal of the application for
condonation of delay by DRT-II.
12. In that context, attention of this Court was invited to the
prayers in the pending appeal, which included direction to restrain the
petitioners from taking further steps upon confirmation of sale,
restraining the petitioner - auction purchaser from creating third party
rights in the subject land and also, a challenge was raised with respect
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to the sale certificate dated 23.09.2025. It was submitted that in the
face of such substantive prayers made in the appeal before the DRAT,
the respondent - borrower could not be permitted to rely upon the
order passed by this Court in the case of M/s. Gadekar Ginning and
Pressing Pvt. Ltd. and another vs. Canara Bank and another (supra).
In the said case, this Court was concerned with an appeal filed before
the DRAT, which
simplicitor challenged dismissal of application for
condonation of delay by the concerned DRT.
13. It was further submitted that the approach adopted by the DRAT
is erroneous, in the light of the recent judgment of Division Bench of
this Court in the case of
M/s. Sunshine Builders and Developers vs.
HDFC Bank Limited and others
, (
judgment and order dated
04.02.2026 passed in Writ Petition No. 3929 of 2024). It was
submitted that in the said judgment, the relevant proviso to Section 18
of the said Act, pertaining to the requirement of pre-deposit, was
interpreted in detail and after referring to judgments of the Supreme
Court and this Court, it was held that any order of the DRT, when
made subject matter of challenge before the DRAT at the behest of a
borrower, required pre-deposit in terms of the said proviso. It was
submitted that in the said recent judgement, even the order passed in
the case of M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another
vs. Canara Bank and another (supra) was referred to in the discussion.
On this basis, it was submitted that in the facts of the present case, the
waiver application ought not to have been allowed.
14. It was further submitted that thereafter, this Court, in a recent
order passed in the case of
M/s. D Corp Agro Foods Pvt. Ltd. and
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another vs. Bank of Baroda and others, (
order dated 27.03.2026
passed in Writ Petition No. 10869 of 2025), followed the position of
law clarified by the said judgment of this Court in the case of M/s.
Sunshine Builders and Developers vs. HDFC Bank Limited and others
(
supra).
15. It was further submitted that the petitioner - auction purchaser
clearly has locus to maintain challenge against the impugned orders,
for the reason that the sale certificate is already issued in its favour,
which has been registered and the said petitioner is also put in
physical possession of the subject land. Any order passed in the
proceedings before the DRAT, would affect the interest of the said
petitioner and therefore, it is entitled to maintain the challenge in the
present writ petition.
16. It was further submitted that the respondent - borrower cannot
rely upon orders passed by the DRAT subsequent to 18.11.2025,
merely continuing the ad-interim order, for the reason that if the
impugned order dated 18.11.2025 is set aside, the effect of the
subsequent orders merely continuing the ad-interim order, would
stand nullified. It was submitted that the contentions raised on behalf
of the respondent - borrower, as regards alleged fraud and collusion
between the petitioner - bank and petitioner - auction purchaser, are
matters to be agitated before the DRAT, if at all, and therefore, the
said contentions do not deserve any consideration before this Court.
17. It was emphasized that while passing the order dated
18.11.2025, the DRAT did not make reference to any of the three
parameters for considering interim relief i.e.
prima facie case, balance
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of convenience and grave and irreparable loss. This was apart from
the fact that the order of
status quo was passed in the waiver
application and not in the application seeking interim relief. On this
basis, it was submitted that both the impugned orders deserve to be
set aside and the respondent - borrower has to be put to terms with
regard to pre-deposit, as per the mandatory proviso to Section 18 of
the said Act.
18. Mr. Charles DeSouza, learned counsel appearing for the
petitioner – HDFC Bank in Writ Petition No.3233 of 2023 supported
the submissions made by the learned counsel appearing for the
petitioner in Writ Petition No.2851 of 2026. Additionally, he submitted
that the order of this Court in the case of
M/s. Gadekar Ginning and
Pressing Pvt. Ltd. and another vs. Canara Bank and another (supra), is
rendered
per incuriam, as it was pronounced ignoring the binding
precedents of the Supreme Court and a Division Bench of this Court
on the point in issue. It was submitted that although the Division
Bench of this Court, which rendered the order in the case of
M/s.
Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank
and another (supra), did refer to the relevant provision i.e. Section 18
of the said Act, the judgements rendered by the Supreme Court and a
Division Bench of this Court were not brought to the notice of the said
Division Bench.
19. In this context, reference was made to the judgement of the
Supreme Court in the case of
Narayan Chandra Ghosh vs. UCO Bank
and others
,
(2011) 4 SCC 548. It was submitted that the Supreme
Court categorically held that the condition of pre-deposit, under
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proviso to Section 18(1) of the said Act was mandatory and therefore,
a complete waiver was beyond the provisions of the said Act and the
DRAT would not have any power to grant such complete waiver. It was
emphasized that the Supreme Court, in the case of
Union Bank of
India vs. Rajat Infrastructure Private Limited and others
,
(2020) 3 SCC
770, followed the aforesaid earlier judgement in the case of Narayan
Chandra Ghosh vs. UCO Bank and others (supra).
20. Much emphasis was placed on judgement of a Division Bench of
this Court in the case of
Vinay Container Services Pvt. Ltd., Navi
Mumbai and others vs. Axis Bank, Mumbai
[
2011(1) Mh.L.J. 882],
particularly paragraph Nos.8 and 9 thereof. It was contended that in
the said judgement, the Division Bench of this Court categorically held
that where the amount of debt is yet to be determined by DRT and
appeal is preferred before the DRAT, the condition of pre-deposit
would continue to apply, as the borrower would be liable to deposit
50% of debt due from him, even when there is no determination by
the DRT. This was based on the interpretation of plain language of
Section 18(1) of the said Act.
21. It was submitted that in the case of M/s. Gadekar Ginning and
Pressing Pvt. Ltd. and another vs. Canara Bank and another (supra),
the Division Bench of this Court referred to Section 18 of the said Act.
But, no reference was made to the said binding precedents of the
Supreme Court and Division Bench of this Court. Instead, reliance was
placed on an order of a learned Single Judge of this Court in the case
of
Dilawar Hakim Shah vs. Special Recovery Officer, Chiplun Urban
Co-operative Bank Ltd. and others,
[
2006(3) Mh.L.J. 256], in the
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context of a completely different provision i.e. Section 154 of the
Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to
as the MCS Act).
22. It was submitted that sub-section (2A) of Section 154 of the
MCS Act necessarily pertains to a situation, where the debt due from
the borrower, was specifically determined in the form of recovery
certificate issued by the Registrar under Section 101 or 154B-29
thereof. In contrast, under proviso to Section 18(1) of the said Act, the
borrower is mandatorily required to deposit 50% of the amount due,
as determined by DRT or as claimed by the secured creditor,
whichever is less. This aspect was completely ignored by the Division
Bench of this Court, while rendering its order in the case of M/s.
Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank
and another (supra) and hence, the said order is rendered per
incuriam
.
23. It was further submitted that in any case, a Division Bench of
this Court, in a recent judgement in the case of
M/s. Sunshine Builders
and Developers vs. HDFC Bank Limited and others (supra), considered
the aforesaid provision i.e. Section 18 of the said Act in detail and
upon detailed reasoning, rendered a finding that the words ‘any order’
used in Section 18(1) of the said Act included all orders without
exception. It was brought to the notice of this Court that the said
judgement was further followed in the aforesaid recent order of this
Court in the case of M/s. D Corp Agro Foods Pvt. Ltd. and another vs.
Bank of Baroda and others (supra). On this basis, it was submitted
that the impugned order, allowing the application for waiver of pre-
deposit, deserves to be set aside.
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24. It was further submitted that the recoveries made through sale
by the petitioner – bank i.e. the secured creditor, cannot be considered
for the statutory pre-deposit under Section 18(1) of the said Act, as
laid down by the Supreme Court in its judgement in the case of
Sidha
Neelkanth Paper Industries P. Ltd. and another vs. Prudent ARC Ltd.
and others
,
2023 SCC OnLine SC 12. On this basis, it was submitted
that even though the auction proceeding had been completed and the
auction purchaser i.e. the petitioner in the companion petition had
deposited the entire amount, with the sale certificate also being issued
and registered, the same cannot be a factor while deciding the
application filed by the respondent for waiver of pre-deposit under
Section 18(1) of the said Act. On this basis, it was submitted that the
writ petition deserves to be allowed.
25. On the other hand, Mr. Godbole, learned senior counsel
appearing for the respondent – borrower in both the petitions
submitted that no interference was warranted in the impugned orders.
As regards the impugned order dated 18.11.2025, it was submitted
that the petitioners are not justified in contending that the order of
status quo was passed in the application for waiver of pre-deposit, for
the reason that the record would show that the application for interim
relief was also listed along with application for waiver of pre-deposit
before the DRAT, when the impugned order dated 18.11.2025 was
passed.
26. The learned senior counsel referred to the said impugned order
and submitted that although brief, reasoning was indeed recorded in
the said order before the direction of
status quo was issued. It was not
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as if the said impugned order was bereft of any reasoning, while
granting the direction of
status quo. On this basis, it was submitted
that the said order could be treated as an ad-interim order and that
the DRAT could be directed to hear the parties on confirmation of the
ad-interim order. On this basis, it was submitted that no interference is
warranted in the impugned order dated 18.11.2025.
27. As regards the impugned order dated 08.12.2025, whereby
DRAT allowed the application granting waiver of pre-deposit under
Section 18(1) of the said Act, it was submitted that an existing
precedent was duly followed by the DRAT. This Court, in the case of
M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara
Bank and another (supra), has clearly laid down that the requirement
for depositing the amount as engrafted in the statute as a pre-
condition, would not be applicable while dealing with an order
rejecting an application for condonation of delay. Hence, no fault
could be found with the said impugned order.
28. It was further submitted that the appeal filed by the respondent
before the DRAT, challenged the order passed by the DRT, refusing to
condone the delay and therefore, the only question for consideration
before the DRAT in the pending appeal is, as to whether delay in
approaching the DRT could have been condoned.
29. It was conceded that in the appeal memo filed before the DRAT,
diverse prayers were made, apart from seeking quashing and setting
aside of the order of DRT, refusing to condone the delay. But, such
prayers could be ignored and the DRAT could certainly be directed to
decide the appeal on the aforesaid question pertaining to condonation
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of delay, in an expeditious manner. It was submitted that even if the
appeal was obviously to be restricted to the question of correctness or
otherwise of the order of DRT, refusing to condone the delay, the
respondent was clearly entitled to pursue its prayer for interim
relief/
status quo. On this basis, it was submitted that the petitions
deserve to be dismissed.
30. It was further submitted that the despite the order of
status quo
granted on 18.11.2025, being subsequently continued on various
dates and even on the last date of listing before the DRAT, none of the
said orders have been challenged by the petitioners, thereby indicating
the lacuna in the challenge raised in the writ petitions.
31. On the question of order of the Division Bench of this Court in
the case of
M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another
vs. Canara Bank and another (supra) being per incuriam, it was
submitted that the said contention is fallacious, for the reason that the
judgements of the Supreme Court and the Division Bench of this Court
relied upon by the petitioners, concerned interim orders passed by the
DRT. None of the cases concerned a situation of disposal of application
filed under Section 17 of the said Act, as a consequence of dismissal of
application for condonation of delay. The argument of
per incuriam
could have been made only if the factual background in which the
cases arose before the Supreme Court and the Division Bench of this
Court, was similar/identical to the factual position in the present case.
32. Reliance was placed on judgement of the Supreme Court in the
case of
Dr. Shah Faesal and others vs. Union of India and another,
(2020) 4 SCC 1, to contend that the argument of per incuriam cannot
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be entertained in a casual manner. It is an exception to the rule of
precedent i.e.
stare decisis and it is only within a narrow compass that
the said principle can be invoked for ignoring precedents. On this
basis, it was submitted that the writ petitions deserve to be dismissed.
33. We have considered the rival submissions in the light of the
documents placed on record and the judgements brought to our
notice. By the impugned order dated 08.12.2025, the DRAT allowed
the application for waiver of pre-deposit filed by the respondent –
borrower, primarily relying upon the order of the Division Bench of
this Court in the case of
M/s. Gadekar Ginning and Pressing Pvt. Ltd.
and another vs. Canara Bank and another (supra).
34. The petitioner in Writ Petition No.2851 of 2026 has challenged
the same on the ground that the appeal filed before the DRAT not only
seeks quashing and setting aside of the order passed by the DRT,
refusing to condone the delay, but it also seeks further reliefs in the
form of direction to restrain the petitioners from taking further steps
upon confirmation of sale, restraining the petitioner – auction
purchaser from creating third party rights in the subject land and a
challenge is raised even to the sale certificate dated 23.09.2025.
35. We indeed find that the appeal filed by the respondent –
borrower is not restricted to seeking quashing and setting aside of the
order of the DRT, refusing to condone the delay and that substantive
reliefs have been sought. If such reliefs are taken into consideration, it
can be said that the order passed by the Division Bench of this Court
in the case of M/s. Gadekar Ginning and Pressing Pvt. Ltd. and
another vs. Canara Bank and another (supra), may not apply.
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Consequently, it could be said that the proviso to Section 18(1) of the
said Act, mandatorily requiring pre-deposit, would come into
operation.
36. But, we find that since the appeal filed before the DRAT arises
purely from the order of DRT, refusing to condone delay, the only
question that can be considered in the appeal is, as to whether delay
could have been condoned. If the appeal is to be allowed, the DRAT
would obviously have to send the matter back to DRT for
consideration of application of the respondent – borrower filed under
Section 17 of the said Act, on its own merits. It is only at this stage
that the question of considering substantive prayers would arise. Thus,
even if the respondent – borrower may have prayed for reliefs beyond
the only question that could arise in the appeal before the DRAT, it
cannot be said that the DRAT could act as the forum of first instance,
to consider the substantive prayers. Consequently, if the appeal filed
before the DRAT is to be considered for the only question arising
before it i.e. the correctness or otherwise of the order of the DRT,
refusing to condone the delay, the order of the Division Bench of this
Court, in the case of M/s. Gadekar Ginning and Pressing Pvt. Ltd. and
another vs. Canara Bank and another (supra), assumes significance.
37. It is for this reason that the argument invoking the principle of
per incuriam raised on behalf of the petitioner – bank (secured
creditor) needs to be considered. A perusal of the order passed by the
Division Bench of this Court in the case of
M/s. Gadekar Ginning and
Pressing Pvt. Ltd. and another vs. Canara Bank and another (supra)
shows that the relevant provision i.e. Section 18 of the said Act has
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been referred to and relied upon. As a matter of fact, the said
provision has been quoted in the said order. Hence, it cannot be said
that the said order was rendered in ignorance of the relevant statutory
provision. But, the principle of
per incuriam has been invoked on the
ground that binding precedents concerning that very provision i.e.
Section 18 of the said Act, were not brought to the notice of the
Division Bench, when the case of
M/s. Gadekar Ginning and Pressing
Pvt. Ltd. and another vs. Canara Bank and another (supra) was
decided. As a consequence, the said order was passed in ignorance of
the binding precendents.
38. In this context, it would be appropriate to refer to Section 18 of
the said Act, which reads as follows:
“18. Appeal to Appellate Tribunal.—
(1) Any person aggrieved, by any order made by the
Debts Recovery Tribunal [under section 17, may
prefer an appeal along with such fee, as may be
prescribed] to the Appellate Tribunal within thirty
days from the date of receipt of the order of Debts
Recovery Tribunal.
Provided that different fees may be prescribed for
filing an appeal by the borrower or by the person
other than the borrower:
Provided further that no appeal shall be entertained
unless the borrower has deposited with the
Appellate Tribunal fifty per cent. of the amount of
debt due from him, as claimed by the secured
creditors or determined by the Debts Recovery
Tribunal, whichever is less:
Provided also that the Appellate Tribunal may, for
the reasons to be recorded in writing, reduce the
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amount to not less than twenty-five per cent. of
debt referred to in the second proviso.
(2) Save as otherwise provided in this Act, the
Appellate Tribunal shall, as far as may be, dispose
of the appeal in accordance with the provisions of
the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (51 of 1993) and rules made
thereunder.
39. The Supreme Court, in the case of Narayan Chandra Ghosh vs.
UCO Bank and others (supra), in the context of mandatory nature of
pre-deposit under proviso to Section 18(1) of the said Act, held as
follows:
“7. Section 18(1) of the Act confers a statutory right on a
person aggrieved by any order made by the Debts
Recovery Tribunal under Section 17 of the Act to
prefer an appeal to the Appellate Tribunal. However,
the right conferred under Section 18(1) is subject to
the condition laid down in the second proviso thereto.
The second proviso postulates that no appeal shall be
entertained unless the borrower has deposited with
the Appellate Tribunal fifty per cent of the amount of
debt due from him, as claimed by the secured
creditors or determined by the Debts Recovery
Tribunal, whichever is less. However, under the third
proviso to the sub-section, the Appellate Tribunal has
the power to reduce the amount, for the reasons to be
recorded in writing, to not less than twenty-five per
cent of the debt, referred to in the second proviso.
Thus, there is an absolute bar to the entertainment of
an appeal under Section 18 of the Act unless the
condition precedent, as stipulated, is fulfilled. Unless
the borrower makes, with the Appellate Tribunal, a
pre-deposit of fifty per cent of the debt due from him
or determined, an appeal under the said provision
cannot be entertained by the Appellate Tribunal. The
language of the said proviso is clear and admits of no
ambiguity.
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8. It is well-settled that when a statute confers a right of
appeal, while granting the right, the legislature can
impose conditions for the exercise of such right, so
long as the conditions are not so onerous as to amount
to unreasonable restrictions, rendering the right
almost illusory. Bearing in mind the object of the Act,
the conditions hedged in the said proviso cannot be
said to be onerous. Thus, we hold that the
requirement of pre-deposit under sub-section (1) of
Section 18 of the Act is mandatory and there is no
reason whatsoever for not giving full effect to the
provisions contained in Section 18 of the Act. In that
view of the matter, no court, much less the Appellate
Tribunal, a creature of the Act itself, can refuse to give
full effect to the provisions of the statute. We have no
hesitation in holding that deposit under the second
proviso to Section 18(1) of the Act being a condition
precedent for preferring an appeal under the said
section, the Appellate Tribunal had erred in law in
entertaining the appeal without directing the
appellant to comply with the said mandatory
requirement.
9. The argument of the learned counsel for the appellant
that as the amount of debt due had not been
determined by the Debts Recovery Tribunal, the
appeal could be entertained by the Appellate Tribunal
without insisting on pre-deposit, is equally fallacious.
Under the second proviso to sub-section (1) of Section
18 of the Act the amount of fifty per cent, which is
required to be deposited by the borrower, is computed
either with reference to the debt due from him as
claimed by the secured creditors or as determined by
the Debts Recovery Tribunal, whichever is less.
Obviously, where the amount of debt is yet to be
determined by the Debts Recovery Tribunal, the
borrower, while preferring an appeal, would be liable
to deposit fifty per cent of the debt due from him as
claimed by the secured creditors. Therefore, the
condition of pre-deposit being mandatory, a complete
waiver of deposit by the appellant with the Appellate
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Tribunal, was beyond the provisions of the Act, as is
evident from the second and third provisos to the said
section. At best, the Appellate Tribunal could have,
after recording the reasons, reduced the amount of
deposit of fifty per cent to an amount not less than
twenty-five per cent of the debt referred to in the
second proviso. We are convinced that the order of the
Appellate Tribunal, entertaining the appellant's appeal
without insisting on pre-deposit was clearly
unsustainable and, therefore, the decision of the High
Court in setting aside the same cannot be flawed.
(Emphasis supplied)”
40. Subsequently, in the case of Union Bank of India vs. Rajat
Infrastructure Private Limited and others (supra), the Supreme Court
followed the said earlier judgement in the case of Narayan Chandra
Ghosh vs. UCO Bank and others (supra).
41. It is crucial to note that a Division Bench of this Court, in its
judgement rendered as far back as on 16.11.2010, in the case of Vinay
Container Services Pvt. Ltd., Navi Mumbai and others vs. Axis Bank,
Mumbai (supra), held that where the amount of debt due from the
borrower was yet to be determined by the DRT, the borrower would
still be liable to deposit 50% of the amount of debt due, in terms of
second proviso to Section 18(1) of the said Act. This was based on
plain words used in proviso to Section 18(1) thereof i.e. ‘provided
further that no appeal shall be entertained unless the borrower has
deposited with the Appellate Tribunal fifty per cent of the amount of
debt due from him, as claimed by the secured creditors or determined
by the Debts Recovery Tribunal, whichever is less’.
42. The said judgement of the Division Bench of this Court in the
case of Vinay Container Services Pvt. Ltd., Navi Mumbai and others vs.
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Axis Bank, Mumbai (supra), arose from an order passed by the DRT in
an application seeking interim relief in pending proceedings under
Section 17 of the said Act. The relevant portion of the aforesaid
judgement of the Division Bench of this Court in the case of Vinay
Container Services Pvt. Ltd., Navi Mumbai and others vs. Axis Bank,
Mumbai (supra), reads as follows:
“8. Section 18 provides a right of appeal to a person
aggrieved by any order made by the Debts Recovery
Tribunal under section 17. The right of appeal under
section 18 arises in respect of "
any order made by the
Debts Recovery Tribunal" albeit under section 17. The
section refers to any order and those words are
comprehensive enough to include a final as well as an
interlocutory order. There is no reason or justification
for this Court to exclude an interlocutory order from
the purview of sub-section (1) of section 18. The plain
language of section 18 must be interpreted and given
effect to. A restriction not envisaged cannot be read
into section 18. The Court cannot rewrite legislation.
An order under section 17 of the Act undoubtedly
includes an order finally disposing of the proceeding.
on a proceeding questioning the measures taken by
the secured creditor under sub-section (4) of section
13. But, equally, the Tribunal while exercising its
power in an Appeal under section 17 has the
jurisdiction to pass interlocutory orders which are in
aid of and ancillary to the exercise of the jurisdiction.
That the Tribunal's jurisdiction under section 17
encompasses the passing of an interlocutory order as
well is no longer res integra, but is now well settled by
the judgment of the Supreme Court in Mardia
Chemicals Limited vs. Union of India (
supra). While
summarizing its conclusion, the Supreme Court
observed as follows:
‘That the Tribunal in exercise of its ancillary powers
shall have jurisdiction to pass any stay/interim order
22
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subject to the condition as it may deem fit and proper
to impose.’
9. The second proviso to section 18 postulates that no
appeal shall be entertained unless the borrower has
deposited with the Appellate Tribunal fifty percent of
the amount of debt due from him as claimed by the
secured creditors or determined by the Debts Recovery
Tribunal, whichever is less. The Appellate Tribunal has
the power to reduce the amount, for reasons to be
recorded in writing, to not less than twenty-five
percent of the debt referred to in the second proviso.
Under the second proviso, the amount of fifty per cent
which is required to be deposited by the borrower, is
computed either with reference to (i) the amount of
debt due from him as claimed by the secured creditors
or (ii) the amount of debt due from him as
determined by the Debts Recovery Tribunal. The lesser
of the two amounts has to be deposited as a condition
precedent to. the appeal being entertained. In a
situation where the amount of the debt is yet to be
determined by the Debts Recovery Tribunal, obviously,
the second limb can have no application. As already
noted earlier, the scope of an appeal under section 17,
where a measure has been adopted by the secured
creditor under section 13(4) is the determination as to
whether the measure has been adopted in accordance
with the provisions of the Act and the rules. Where the
amount of the debt is yet to be determined by the
Tribunal and an appeal is preferred before the
Appellate Tribunal by the borrower, the condition of
pre-deposit would continue to apply by virtue of sub-
section (1) of section 18. In such a situation, the
borrower would be liable to deposit fifty per cent of
the amount of debt due from him inasmuch as there is
no determination at that stage by the Tribunal of the
amount of the debt.
(Emphasis supplied)”
43. It is to be noted that when the Division Bench of this Court, on
03.09.2024, passed its order in the case of M/s. Gadekar Ginning and
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Pressing Pvt. Ltd. and another vs. Canara Bank and another (supra),
the aforementioned two judgements of the Supreme Court in the cases
of Narayan Chandra Ghosh vs. UCO Bank and others (supra) and
Union Bank of India vs. Rajat Infrastructure Private Limited and others
(
supra); and judgement of Division Bench of this Court in the case of Vinay Container Services Pvt. Ltd., Navi Mumbai and others vs. Axis
Bank, Mumbai (supra), were clearly holding the field. As a matter of
fact, the said judgements still continue to hold the field.
44. Yet, the said order dated 03.09.2024 passed by the Division
Bench of this Court at Aurangabad Bench, makes no reference to the
said judgements of the Supreme Court and the Division Bench of this
Court. The said judgements were clearly not brought to the notice of
the Division Bench of this Court that rendered the order in the case of
M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara
Bank and another (supra).
45. As a matter of fact, only the order of a learned Single Judge of
this Court, in the case of Dilawar Hakim Shah vs. Special Recovery
Officer, Chiplun Urban Co-operative Bank Ltd. and others (supra), was
brought to the notice of the Division Bench of this Court. The said
order of the learned Single Judge of this Court concerns a completely
different statutory provision i.e. Section 154 of the MCS Act. The said
provision concerns revisionary powers that can be exercised by the
State Government or Registrar of Co-operative Societies. Sub-section
(2A) of the said Section specifically provides that no application for
revision shall be entertained against the recovery certificate issued by
the Registrar under Section 101 or Section 154B-29, unless the
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revision applicant deposits with the concerned society fifty per cent of
the amount of dues recoverable. It is clear from the said statutory
provision that it necessarily concerns challenge to a recovery
certificate, under which the Registrar has already determined the
amount recoverable.
46. It is in the context of such a statutory provision that the learned
Single Judge of this Court in the case of Dilawar Hakim Shah vs.
Special Recovery Officer, Chiplun Urban Co-operative Bank Ltd. and
others (supra) proceeded to hold that when only an application for
condonation of delay in filing revision application under Section 154
of the MCS Act, was being considered by the revisionary authority, the
requirement of depositing 50% of recoverable amount was not
applicable. It was only when the revision application was to be
considered on merits that Section 154(2A) thereof, mandatorily
requiring 50% deposit, would come into play.
47. The Division Bench of this Court, in the case of M/s. Gadekar
Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank and
another (supra), proceeded to hold as follows:
“6. The language used u/s 18 is quite similar to the
language u/s 154 of the M.C.S. Act. Entertaining an
Appeal on the merits is the main limb of the
litigation. That stage would arrive only if the delay
is condoned. The Petitioner before us stands on a
better footing. It’s delay application was rejected by
the learned Tribunal on it’s merits, purely on the
issue of limitation. There was no occasion to touch
the merits in the proceeding initiated by the
Petitioner u/s 17 of the SARFAESI Act. Unless the
delay is condoned, the proceedings would not be
registered, much less, be taken up for adjudication
25
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by the DRT. Having suffered a rejection order on the
Application for condonation of delay, the Petitioner
approached the Appellate Tribunal (DRAT).
7. In our view, mistakenly, the Petitioner has preferred
an application for waiver of pre-deposit, when the
issue was purely on whether the delay application
was rightly rejected or not. This Application for
waiver was not required to be filed, much less to be
considered, since the only issue before the DRAT
was as regards the condonation of delay. If the said
proceedings before the DRAT would have been
allowed, the Application for condonation of delay,
filed before the DRT, would have stood allowed.
Thereafter, the main proceedings before the DRT u/s
17 would have been registered and the DRT would
have then commenced the hearing on the merits of
the application filed u/s 17. The DRAT only had to
consider whether the order of the DRT can be
construed to be perverse and erroneous so as to
cause interference.
8. In view thereof and considering the law as is settled
by this Court in Dilawar Hakim(supra), the DRAT
could not have directed the Petitioner to deposit
50% of the amount due from him keeping in view
that an auction sale had already occurred and the
DRT had not determined any amount to be
recovered from the Petitioner. Moreover, the
Petitioner has deposited Rs. 50,00,000/- with the
DRAT.
9. We, therefore, conclude that in the matters of
condonation of delay, unless the delay is condoned,
the main proceedings would not be taken up for
hearing. Hence the stage of depositing the amount
as may be prescribed / engrafted in any statute as a
pre-condition for entertaining a substantive
proceeding, would not be applicable for dealing
with applications for condonation of delay.
(Emphasis supplied)”
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48. We find that the Division Bench of this Court, in the case of M/s.
Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank
and another (supra), ignored the binding precedent of this Court in
the form of the judgement of the Division Bench rendered as far back
as in the year 2010 in the case of Vinay Container Services Pvt. Ltd.,
Navi Mumbai and others vs. Axis Bank, Mumbai (supra). In the above-
quoted portion of the said judgement, particularly the portion
emphasized upon in paragraph No.9 shows that the said Division
Bench of this Court had categorically held that where the amount of
debt is yet to be determined by the tribunal and an appeal is preferred
before the DRAT by the borrower, the condition of pre-deposit would
continue to apply, as the borrower would be liable to deposit 50% of
the amount due. This was based on the specific words used in second
proviso to Section 18(1) of the said Act, which clearly stipulates that
the mandatory deposit of 50% before the DRAT is with reference to
the amount either determined by the DRT or the amount of debt
claimed by the secured creditor.
49. This shows that the Division Bench of this Court, in the case of
M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara
Bank and another (supra) remained ignorant of the specific binding
precedent of the earlier Division Bench of this Court in the case of
Vinay Container Services Pvt. Ltd., Navi Mumbai and others vs. Axis
Bank, Mumbai (supra), particularly the position of law determined as
a ratio of the said judgement in paragraph No.9 quoted and
emphasized hereinabove.
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50. The mandatory nature of pre-deposit, emphasized upon by the
Supreme Court in the aforementioned judgments in the cases of
Narayan Chandra Ghosh vs. UCO Bank and others (supra) and Union
Bank of India vs. Rajat Infrastructure Private Limited and others
(
supra), was also not brought to the notice of the Division Bench of
this Court, when the order was passed in the case of
M/s. Gadekar
Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank and
another (supra).
51. Although the learned senior counsel appearing for the
respondent – borrower contended that the aforesaid judgements of the
Supreme Court and the judgement of the Division Bench of this Court
in the case of Vinay Container Services Pvt. Ltd., Navi Mumbai and
others vs. Axis Bank, Mumbai (supra), did not consider a situation of
an appeal challenging an order passed by DRT, refusing to condone
the delay, we are of the opinion that the ratio of the said judgements
clearly does not depend on the nature of application disposed of by
DRT and that the Division Bench of this Court, in the case of M/s.
Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank
and another (supra), passed the order in ignorance of binding
precedents. Hence, it is rendered
per incuriam.
52. In the case of
Dr. Shah Faesal and others vs. Union of India and
another (supra), while dealing with the concept of per incuriam, the
Supreme Court indeed cautioned that the rule of
stare decisis and
binding precedents has to be followed and that
per incuriam is indeed
an exception, which can be resorted to only in rare circumstances. It is
also indicated that if there is a difference of opinion with a co-ordinate
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Bench, generally a reference is to be made to a larger Bench, except in
situations where the principle of
per incuriam applies. In the said
judgement of the Supreme Court in the case of
Dr. Shah Faesal and
others vs. Union of India and another (supra), it was held as follows:
“25. In this line, further enquiry requires us to examine,
to what extent does a ruling of coordinate Bench
bind the subsequent Bench. A judgment of this
Court can be distinguished into two parts : ratio
decidendi and the obiter dictum. The ratio is the
basic essence of the judgment, and the same must
be understood in the context of the relevant facts of
the case. The principal difference between the ratio
of a case, and the obiter, has been elucidated by a
three-Judge Bench decision of this Court in
Union
of India v. Dhanwanti Devi
, wherein this Court held
that : (SCC pp. 51-52, para 9)
‘9. … It is not everything said by a Judge while
giving judgment that constitutes a precedent.
The
only thing in a Judge's decision binding a party is
the principle upon which the case is decided and for
this reason it is important to analyse a decision and
isolate from it the ratio decidendi. … A decision is
only an authority for what it actually decides.
…
The concrete decision alone is binding between the
parties to it, but it is the abstract ratio decidendi,
ascertained on a consideration of the judgment in
relation to the subject-matter of the decision, which
alone has the force of law and which, when it is
clear what it was, is binding.
It is only the principle
laid down in the judgment that is binding law
under Article 141 of the Constitution
.’
(emphasis supplied)
26. The aforesaid principle has been concisely stated by
Lord Halsbury in
Quinn v. Leathem in the following
terms : (AC p. 506)
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“… that every judgment must be read as applicable
to the particular facts proved, or assumed to be
proved, since the generality of the expressions
which may be found there are not intended to be
expositions of the whole law, but governed and
qualified by the particular facts of the case in which
such expressions are to be found. The other is that
a
case is only an authority for what it actually
decides
.”
(emphasis supplied)
27. Having discussed the aspect of the doctrine of
precedent, we need to consider another ground on
which the reference is sought i.e. the relevance of
non-consideration of the earlier decision of a
coordinate Bench. In the case at hand, one of the
main submissions adopted by those who are seeking
reference is that, the case of
Sampat Prakash did
not consider the earlier ruling in
Prem Nath Kaul .
28. The rule of per incuriam has been developed as an
exception to the doctrine of judicial precedent.
Literally, it means a judgment passed in ignorance
of a relevant statute or any other binding authority
[see Young v. Bristol Aeroplane Co. Ltd. [see
Young
v. Bristol Aeroplane Co. Ltd.
]. The aforesaid rule is
well elucidated in
Halsbury's Laws of England in the
following manner:
“1687. … the court is not bound to follow a
decision of its own if given per incuriam.
A decision
is given per incuriam when the court has acted in
ignorance of a previous decision of its own or of a
court of a coordinate jurisdiction which covered the
case before it, or when it has acted in ignorance of a
decision of the House of Lords
. In the former case it
must decide which decision to follow, and in the
latter it is bound by the decision of the House of
Lords.”
(emphasis supplied)”
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53. In a Constitution Bench judgement in the case of
Bajaj Alliance
General Insurance Company Limited vs. Rambha Devi and others
,
(2025) 3 SCC 95, the Supreme Court held as follows:
“159.In Sundeep Kumar Bafna v. State of Maharashtra
[Sundeep Kumar Bafna v. State of Maharashtra, the
Court expanded the definition of per incuriam in the
Indian context and noted that : (SCC p. 642, para
19)
“19. … A decision or judgment can also be per
incuriam if it is not possible to reconcile its ratio
with that of a previously pronounced judgment of a
co-equal or larger Bench; or if the decision of a High
Court is not in consonance with the views of this
Court. It must immediately be clarified that the per
incuriam rule is strictly and correctly applicable to
the ratio decidendi and not to obiter dicta.”
(emphasis in original)
160. In a recent decision in
Shah Faesal v. Union of India
[Shah Faesal v. Union of India], a five-Judge Bench
of this Court reiterated that the principle of per
incuriam only applies on the ratio of the case.
161. After having examined the above decisions, when
dealing with the ignorance of a statutory provision,
we may bear in mind the following principles. These
may not however be exhaustive:
161.1. A decision is per incuriam only when the
overlooked statutory provision or legal precedent is
central to the legal issue in question and might have
led to a different outcome if those overlooked
provisions were considered. It must be an
inconsistent provision and a glaring case of
obtrusive omission.
161.2. The doctrine of per incuriam applies strictly to the
ratio decidendi and does not apply to obiter dicta.
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161.3. If a court doubts the correctness of a precedent,
the appropriate step is to either follow the decision
or refer it to a larger Bench for reconsideration.
161.4. It has to be shown that some part of the decision
was based on a reasoning which was demonstrably
wrong, for applying the principle of per incuriam. In
exceptional instances, where by obvious
inadvertence or oversight, a judgment fails to notice
a plain statutory provision or obligatory authority
running counter to the reasoning and result
reached, the principle of
per incuriam may apply.”
54. Applying the aforementioned position of law, we find that the
order passed by the Division Bench of this Court in the case of
M/s.
Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank
and another (supra) on the central legal issue, was inconsistent with
the position of law already laid down by the Division Bench of this
Court way back in the year 2010 in the case of Vinay Container
Services Pvt. Ltd., Navi Mumbai and others vs. Axis Bank, Mumbai
(
supra). The ratio of earlier judgement clearly lays down the position
of law, which was ignored in the aforesaid subsequent order of the
Division Bench of this Court dated 03.09.2024 in the case of
M/s.
Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank
and another (supra). As a matter of fact, it appears that the said
earlier judgement of the Division Bench of this Court was not brought
to the notice of the Division Bench that rendered the order in M/s.
Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank
and another (supra).
55. There was also no reference to the aforementioned judgements
of the Supreme Court rendered squarely on the very same provision
i.e. Section 18 of the said Act. Therefore, we are constrained to hold
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that the order passed by the Division Bench of this Court in the case of
M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara
Bank and another (supra) is rendered per incuriam and hence, the
impugned order dated 08.12.2025, allowing complete waiver of pre-
deposit, deserves to be set aside.
56. Moreover, in the aforesaid recent judgement of a Division Bench
of this Court in the case of M/s. Sunshine Builders and Developers vs.
HDFC Bank Limited and others (supra), a detailed discussion had
been undertaken on the interpretation of Section 18(1) of the said
Act, particularly with reference to the true meaning of the expression
‘any order’ found in the said Section. A specific reference is made to
the said judgement of the Division Bench in the case of Vinay
Container Services Pvt. Ltd., Navi Mumbai and others vs. Axis Bank,
Mumbai (supra). Even the order passed by the Division Bench of this
Court in the case of M/s. Gadekar Ginning and Pressing Pvt. Ltd. and
another vs. Canara Bank and another (supra) is also taken note of and
it has been authoritatively reiterated that when the borrower
challenges any order passed by the DRT, the proviso to Section 18(1)
of the said Act, mandating pre-deposit, clearly applies.
57. The relevant portion of the said judgement of the Division
Bench of this Court in the case of M/s. Sunshine Builders and
Developers vs. HDFC Bank Limited and others (supra) reads as
follows:
“45. In any event, as more particularly held by the
Division Bench of this Court in Vinay Container
Services (supra), the requirement of pre-deposit
under sub-section (1) of Section 18 of the SARFAESI
Act would also apply where an appeal is filed before
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the DRAT against an interlocutory order passed by
the DRT under Section 17 of the Act since the power
of the DRT to pass an interlocutory order in ancillary
to its jurisdiction under Section 17 and the
provisions of Section 18(2) cannot be so interpreted
to mean that an interlocutory order passed by the
DRT is not referrable to the provisions of Section 17.
A similar view has also been taken by the Division
Bench of the Delhi High Court in Satnam Agri
Products (supra), which goes on to hold that there is
no reason to exempt the appeals arising out of the
orders passed by the DRT on interlocutory
applications merely on the ground that the said
orders do not have the effect of staying the action or
measures taken by the secured creditor under sub-
section (4) of Section 13 of the SARFAESI Act for
enforcement of security interest. In Rajat
Infrastructure (supra), the Supreme Court after
relying on past judicial pronouncements has held
that the right of appeal under Section 18(1) is only
subject to the condition of deposit laid down in the
second proviso therein.
46. Moreover, the provisions of sub-section (1) of
Section 18 are very clear inasmuch as, they clearly
include the words, “
Any person aggrieved, by any
order made by the Debts Recovery Tribunal under
Section 17, may prefer an appeal
…”. There is no
qualification provided by the legislature restricting
the applicability of this sub-section to only some
class or category of orders, whether a procedural
one or otherwise, a final order which determines the
liability of the borrower or any other person.
Instead, the only prescribed requirement is that the
order must be one that is passed by the DRT under
Section 17 of the SARFAESI Act and as discussed
above, if any person is aggrieved with the measures
undertaken by a secured creditor under Sections 13
and 14 of the SARFAESI Act, an application can be
made to the DRT challenging the same and the
various provisions relating thereto, are contained in
Section 17 of the Act. Here again, there is no
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qualification provided by the legislature restricting
the applicability of invoking this Section only
against some class or category of measures that may
be undertaken under Sections 13, 14 and instead,
Section 17 can be availed by any person, not merely
a borrower, to challenge any and all measures
undertaken by the secured creditor.
47. In this background, when we consider the words,
“any order” found in sub-section (1) of Section 17, it
is difficult to restrict its applicability to only a final
order which determines the liability of the borrower
or other person, as urged by Mr. Purohit. There are
several judicial pronouncements which have been
relied upon by the Respondents, including inter alia
Lucknow Development Authority (supra), Man
Global (supra) and Raj Kumar Shivhare (supra)
which interpret the word, ‘any’ as contained in
several statutes to mean the word, ‘
all’. Similarly,
even the Black’s Law Dictionary does not restrict the
meaning of the word ‘any’ and describes it thus –
“
Any does not necessarily mean only one person, but
may have reference to more than one or to many
”.
Merrium Webster’s Dictionary explains the pronoun
‘
any’ to be either, singular or plural in construction.
48. Upon consideration of the discussion above, we are
unable to accept the submission of Mr. Purohit that
the provision of pre-deposit cannot be attracted to
the common order passed by the DRT and his
reliance on the decision of the Supreme Court in
Gade Sreenivas Reddy (supra) which came to be
passed whilst interpreting certain provisions of the
RDB Act, is wholly misconceived and cannot be
applied to the facts of the present case. So also, his
reliance on the decision of the Division Bench of this
Court in Gadekar Ginning and Pressing (supra) does
not take his case further, inasmuch as, the said
decision holds that the DRAT could not have passed
the order of pre-deposit when the appeal before it
merely challenged an order which rejected an
Interlocutory Application which sought condonation
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of delay. Further, the contents of the said
Interlocutory Application and the exact nature of the
reliefs sought therein are not clearly spelt out in the
said judgment.”
58. It is an admitted position that the special leave petition filed
against the said judgement and order of the Division Bench of this
Court, was dismissed, thereby confirming the same. The said
judgement of the Division Bench was recently followed by this Court
in the case of M/s. D Corp Agro Foods Pvt. Ltd. and another vs. Bank
of Baroda and others (supra), wherein it was observed as follows:
“13. We find that since a Coordinate Division Bench of this
Court has laid down the law specifically with regard to
the interpretation of Section 18(1) of the
Securitisation Act and particularly in the light of the
requirement of pre-deposit specified therein, the said
position of law would be binding on us. It is also
relevant to note that the Special Leave Petition (Civil)
No. 9823 of 2026 filed to challenge the said recent
judgment and order of the Division Bench of this
Court was dismissed by the order dated 20/03/2026
passed by the Supreme Court.
14. We are unable to agree with the learned counsel
appearing for the Petitioners that the above-quoted
observations in the case of M/s Sunshine Builders and
Developers V/s HDFC Bank Limited through the
Branch Manager and Ors (supra) were made in the
peculiar facts of the said case, inasmuch as there was
inordinate delay on the part of the Petitioners in
taking recourse to remedies under the Securitisation
Act.
15. We find that the dictum laid down in the above-
quoted paragraphs of the judgment of the Coordinate
Bench of this Court in the case of M/s Sunshine
Builders and Developers V/s HDFC Bank Limited
through the Branch Manager and Ors (supra) is based
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on interpretation of the language and words used
since under Section 18(1) of the Securitisation Act. It
cannot be said that the interpretation of the provision
was necessarily coloured by any factual position.
xxx xxx xxx xxx
17. We are of the opinion that the Coordinate Bench of
this Court in the case of M/s Sunshine Builders and
Developers V/s HDFC Bank Limited through the
Branch Manager and Ors (supra) has considered the
question and answered it in a particular manner.
xxx xxx xxx xxx
20. In the light of the said position of law laid down by
this Court, we do not find any error committed by the
DRAT in passing the impugned order. As per Section
18(1) of the Securitisation Act pre-deposit of amount
between 25% to 50% of the debt due can be imposed
as a pre-condition for entertaining the appeal.”
59. The admitted position on facts also needs to be noted, as it
brings to the fore an anomaly. It is undisputed that the respondent –
borrower filed Securitisation Application No.52 of 2020 before the
DRT as far back as on 16.12.2020, in the light of the action
undertaken by the petitioner – bank (secured creditor) under the
provisions of the said Act. The said application was dismissed on
merits by the DRT on 12.05.2023 by a reasoned order.
60. The respondent – borrower filed an appeal before the DRAT and
by an order dated 07.12.2023, the DRAT directed the respondent –
borrower to deposit an amount of 12 crores as pre-deposit under the₹
proviso to Section 18 of the said Act. As the respondent – borrower
failed to make such pre-deposit, the appeal was dismissed. Thereafter,
the petitioner – bank took possession of the mortgaged land, followed
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by its auction, in which the petitioner – auction purchaser was a
successful bidder. As on today, the auction purchaser has a registered
sale certificate in its favour and physical possession is also with the
petitioner – auction purchaser.
61. Thereafter, the respondent – borrower filed Securitisation
Application (D) No.1068 of 2025 on 26.06.2025, being the second
such application before the DRT, after the auction was already
conducted. In the said second application, an application for
condonation of delay was moved, which stood dismissed by an order
dated 15.09.2025 passed by the DRT. It is this order that is the subject
matter of challenge in the appeal filed by the respondent – borrower
before the DRAT.
62. Thus, if the contentions raised on behalf of the respondent –
borrower are to be accepted and the reasoning adopted by the DRAT is
to be confirmed, a borrower, who files an application under Section 17
of the said Act before the DRT, which suffers from delay, would be in a
better position that a borrower, who files such an application within
the period of limitation. As a matter of fact, the respondent – borrower
itself had to mandatorily make pre-deposit of amounts in the appeal
challenging dismissal of the first securitisation application, when the
same was filed within limitation. On failure to make pre-deposit, the
appeal stood dismissed.
63. Thus, the anomalous situation is that this very respondent –
borrower filed the second securitisation application which suffered
from delay and upon the application for condonation of delay being
dismissed, the respondent – borrower claims that the mandatory
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requirement of pre-deposit cannot apply. The respondent – borrower
cannot be in a better position while approaching the DRT, after the
period of limitation has expired, apart from the fact that the claims
made by the respondent – borrower, seeking complete waiver, are in
the teeth of the binding position of law laid down by the Supreme
Court in the aforementioned judgements and the Division Bench of
this Court in the case of Vinay Container Services Pvt. Ltd., Navi
Mumbai and others vs. Axis Bank, Mumbai (supra). Therefore, the
impugned order dated 08.12.2025 is wholly unsustainable and it
deserves to be set aside.
64. There can also be no quarrel with the position of law clarified
by the Supreme Court in the case of Sidha Neelkanth Paper Industries
P. Ltd. and another vs. Prudent ARC Ltd. and others (supra), that even
if there is recovery from auction sale, the amount so recovered is not
relevant for the purpose of mandatory pre-deposit, as per proviso to
Section 18(1) of the said Act. Therefore, the fact that the petitioner –
auction purchaser deposited the entire bid amount, the sale certificate
was issued and registered and possession of secured asset was handed
over to the petitioner – auction purchaser, cannot be said to be
circumstances relevant for deciding the question of pre-deposit to be
made by the respondent – borrower, in terms of proviso to Section
18(1) of the said Act.
65. As regards the impugned order dated 18.11.2025, a bare
perusal of the same shows that the application for waiver of pre-
deposit was being heard by the DRAT. There is no reference to the
application for interim relief/stay in the said impugned order. Even if
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the contention raised on behalf of the respondent – borrower that the
application for interim relief was also listed, is to be accepted, there is
clearly no reference to such an application in the impugned order
dated 18.11.2025.
66. The impugned order dated 18.11.2025 shows that the DRAT,
while considering the application for waiver of pre-deposit, proceeded
to grant the direction of
status quo, while observing as follows:
“It is seen from the Appeal Cause Title the auction
purchaser Aloukik Construwell LLP is also shown as
Additional Respondent. Both Respondents want to file
objections to the stay application and other applications.
It is claimed by the Learned Counsel for the auction
purchaser on the ground that no application was allowed
for impleadment of the auction purchaser as Respondent
before the Tribunal. Be that as it may. Now the auction
purchaser is shown as a party and there is apprehension
raised that there may be possibility of creation of third-
party interest and alteration of features of the property.
In order to facilitate filing the reply by Respondents, post
the matter on 28.11.2025.
Wavier Application will also be heard along with Stay
Application.
Meanwhile, parties are directed to maintain
status quo
as on today.”
67. We are of the opinion that the only semblance of reasoning,
while granting the order of
status quo, pertains to the auction
purchaser having come into picture and the possibility of creating
third party interest. We are unable to agree with the respondent –
borrower that such cursory observation satisfies the requirement on
the part of the DRAT, of giving reasoning on the well-known
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parameters for granting ad-interim/interim relief. There is no
discussion on how the respondent – borrower had made out a
prima
facie
case, if any, in its favour, as to whether the balance of
convenience was in its favour and what was the irreparable loss that
the respondent – borrower would suffer in the event the
ad-interim/interim relief was not granted. We find that the DRAT
completely failed to apply its mind to examine as to whether the said
mandatory parameters for granting ad-interim/interim relief were at
all satisfied by the respondent – borrower. The impugned order dated
18.11.2025, granting
status quo, was passed in a most casual and
cavalier manner.
68. In a recent order dated 04.03.2026 passed in Writ Petition
No.15718 of 2025 (
Anil Ankush Pawar and another vs. The
Authorized Officer, Union Bank of India and others), this Court
observed as follows:
“8. We find on perusal of the impugned order that it
suffers from a serious procedural infirmity. The
Application considered and decided in the impugned
order dated 14
th
May 2025 was only the Application
seeking waiver of pre-deposit under Section 18 of
the Securitisation Act. The only prayer made on
behalf of Respondent Nos. 2 and 3 before the DRAT
was for such waiver on the basis of statements made
in the said Application. While considering the said
Application the DRAT discussed the rival
submissions, made certain observations and
thereupon found that the Respondent Nos.2 and 3
were required to deposit 40% of the amount due
and that complete waiver from pre-deposit was not
warranted. Having reached the said conclusion the
DRAT was expected to issue a positive direction to
Respondent Nos.2 and 3 to deposit such 40%
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amount towards pre-deposit so that the Appeal
could be registered and then take up the Application
for interim relief and the Appeal for further
consideration.
9. Instead, we find that after issuing such a positive
direction to Respondent Nos.2 and 3 to deposit 40%
of the amount due, failing which the Appeal would
stand rejected, in the next paragraph, without any
discussion on the reasons for giving the blanket
interim direction, it was observed as follows :
“On deposit of Rs.75,83,600/- on or before
21.5.2025, respondents are restrained from creating
3rd party interest effecting change in revenue
records with regard to ownership of the property
from the date of deposit till next date of hearing”.
10. We find that the aforesaid approach adopted by the
DRAT suffers from serious procedural irregularity
and infirmity. It appears that the DRAT proceeded on
an assumption that the moment a pre-deposit
direction was issued in an Application seeking
waiver thereof, the interim relief would follow as a
matter of course upon the amount so directed to be
deposited, in fact being deposited by the Appellants
(Respondent Nos.2 and 3 herein). We find that the
approach of the DRAT is unsustainable.
xxx xxx xxx xxx
13. We are of the opinion that the DRAT should have
considered the aspect of interim relief by hearing
parties on the pending application for interim relief
filed by the Respondent Nos. 2 and 3. All the
required parameters ought to be considered
including the factors pertaining to prima facie case,
balance of convenience and irreparable loss being
suffered by the applicants, in the event interim
reliefs are not granted. No such consideration is
found in the impugned order and therefore, we are
inclined to interfere to the limited extent indicated
herein above.”
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69. Therefore, we find that the impugned order dated 18.11.2025
also deserves to be set aside. We do not find any substance in the
contention raised on behalf of the respondent – borrower that the
impugned order dated 18.11.2025 may be treated as an ad-interim
order and further that the petitioners ought to have challenged the
subsequent orders continuing the said order of
status quo. There is no
question of treating the order dated 18.11.2025 as an ad-interim
order, for the reasons stated hereinabove. We are of the opinion that
the subsequent orders merely continuing the direction of
status quo
granted in the order dated 18.11.2025, not being challenged, cannot
go against the petitioners. Once the basic order dated 18.11.2025 is
set aside, the edifice of the subsequent orders merely continuing the
direction of
status quo, would obviously collapse.
70. In view of the above, the writ petitions are allowed. The
impugned orders dated 18.11.2025 and 08.12.2025 are quashed and
set aside. The application seeking waiver of pre-deposit shall now be
decided afresh by the DRAT, as there is no question of complete waiver
being granted to the respondent – borrower, for the reasons recorded
hereinabove. The subsequent orders merely continuing the impugned
order of
status quo dated 18.11.2025 stand consequently vacated.
71. The appeal shall stand de-registered in view of the impugned
orders being set aside. Since the DRAT has discretion to direct pre-
deposit between 25% to 50% of the amount due, it would be for the
DRAT to decide as to what would be the percentage of pre-deposit to
be made by the respondent – borrower, after hearing the rival parties.
This Court is not expressing any opinion on the said aspect of the
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matter. The DRAT is also at liberty to consider the application for
interim reliefs filed by the respondent – borrower on its own merits,
after hearing the rival parties. All contentions of the parties in that
regard are also kept open.
72. Pending applications in these writ petitions, if any, are also
disposed of.
(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)
Bipin / Priya
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