IMPORTANT POINT
A guarantor or a mortgagor stands on same footing as a borrower and if he wants to file appeal, he must comply with terms of Section 18 of SARFAESI Act.

JUDGMENT

Deepak Gupta, J.

Leave granted.

2. These appeals were initially directed against the order dated 25.11.2019 of the Bombay High Court. By the said impugned order the High Court had relegated the appellant before it i.e. respondent no. 1 herein to avail the statutory remedy of appeal before the Debt Recovery Appellate Tribunal (for short 'the DRAT).

3. The short question which arises for determination is whether the High Court was right in directing that pre-deposit was not required for entertaining an appeal before the DRAT as mandated by Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act').

4. It is not necessary to set out the facts of the case in detail in view of the decision which we propose to take. The basic facts are that the respondent no. 1 stood guarantee and mortgaged its property for repayment of loan availed by respondent nos. 4 and 5. The property was put to auction and respondent nos. 2 and 3 who are the alleged leaseholders in possession of the property are the highest bidders for a sum of Rs.65.52 crores. The main objection of the respondent no.1 to the sale is that it is for a low amount and there is collusion between the officers of the Bank and the auction purchaser. The petitioner challenged the order of the DRAT dated 11.11.2019 before the High Court and the High Court passed the following order dated 25.11.2019:

"2. Relegating the Petitioner to the appellate remedy on account of a orenoted facts and holding that the Petitioner has an efficacious alternate remedy of appeal before the learned DRAT where no pre-deposit is required, the Petition is rejected without making any observation on the merits of the disputes between the parties."

5. It appears that the successful bidders filed review petitions before the High Court praying that the High Court could not have issued directions that no pre-deposit was required. Vide order dated 16.12.2019 the High Court dismissed the review petition and the relevant observations of the High Court are as under:

"7. Suffice it to state that where a proposed sale notice is questioned with reference to the reserve price fixed and the argument takes the form of considering valuation report, such order, if challenged before DRAT, would not require any pre-deposit being made for the reason under the impugned order, no decree has been passed or liability fixed. It would depend on the nature of the order whether before the appeal there against is entertained, should a pre-deposit be made."

6. Mr. O.P. Gaggar, learned counsel for the appellant submitted that the order of the High Court is not only against the provisions of the Act but also against the law laid down by this Court. Mr. Dushyant A. Dave, learned senior counsel for the auction purchasers, respondent nos. 2 and 3, supported the case of the appellant and submitted that the no appeal on behalf of respondent no. 1 can lie without complying with the provisions of Section 18 of the SARFAESI Act which mandates the deposit of 50% or at least 25% of the amount due, as claimed by the secured creditor or determined by the Debt Recovery Tribunal (DRT). On the other hand, Mr. Vikram Chaudhri, learned senior counsel appearing for the respondent no. 1 urged that the High Court has exercised its discretionary jurisdiction under Article 226 of the Constitution of India while holding that it is not required to make pre-deposit. He also submits that the respondent no. 1 is not a borrower and finally submits that the main ground is that since the amount offered by the highest bidder is below the value of the property, the DRAT is entitled to entertain the appeal without deposit of any amount. It is submitted that the value of the property is about Rs.160 crores and even the value as per the circle rate is about Rs.120 crores, but the same has been sold for a pittance of Rs.65.52 crores. He also submitted that there is collusion between t