Back
J. B. PARDIWALA, K. V. VISWANATHAN
Sunshine Builders And Developers – Appellant
Versus
HDFC Bank Limited Through The Branch Manager – Respondent
What is the definition of "borrower" under the SARFAESI Act, 2002, and does it include a mortgagor? What is the applicability of the pre-deposit requirement under Section 18 of the SARFAESI Act to orders other than those determining liability? How should the High Court interpret Section 18 of the SARFAESI Act concerning pre-deposits for appeals against interim or procedural orders?
Key Points: - The appeal arises from the High Court's rejection of the appellant's Writ Petition, affirming the DRAT's order for a pre-deposit of Rs.125 Crore (!) (!) . - The High Court found that the appellant's consent to the mortgage was not perverse and that a mortgagor falls within the definition of "borrower" under Section 2(1)(f) of the SARFAESI Act (!) . - Section 2(1)(f) of the SARFAESI Act, 2002, defines "borrower" to include any person who has given a guarantee or created a mortgage as security for financial assistance (!) . - The DRAT arrived at the pre-deposit figure of Rs.125 crores based on the debt due being approximately Rs.259 crores as indicated in the sale notice (!) . - The Supreme Court questioned whether Section 18's pre-deposit requirement applies to orders that are procedural, such as declining to implead auction purchasers in pending proceedings before the DRT (!) (!) . - The Court emphasized the need for a meaningful interpretation of the expression "any order" in Section 18 of the SARFAESI Act (!) . - The Supreme Court set aside the High Court's impugned order and remitted the matter to the High Court for reconsideration (!) . - The High Court is to rehear the Writ Petition and decide it afresh in accordance with the law (!) . - If an adverse order is passed by the High Court, the appellant can approach the Supreme Court again (!) . - The appeal is disposed of, and pending applications are also disposed of (!) (!) .
| Table of Content |
|---|
| 1. condonation of delay and granting leave. (Para 1 , 2) |
| 2. high court's order on pre-deposit. (Para 3 , 4) |
| 3. counsel heard; appeal basis acknowledged. (Para 5 , 6) |
| 4. high court's interpretation of mortgage consent. (Para 7 , 8 , 9) |
| 5. pre-deposit requirement under sarfaesi act. (Para 10 , 11 , 12 , 13) |
| 6. interpretation of appellate provisions. (Para 14 , 15 , 16) |
| 7. remand for reconsideration of the petition. (Para 17 , 18 , 19 , 20 , 21) |
ORDER
2. Leave granted.
4. The impugned order passed by the DRAT which was made subject matter of challenge before the High Court was one directing the appellant - herein to deposit a sum of Rs.125 Crore as a pre-deposit under Section 18 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the "SARFAESI" Act).
6. We are inclined to dispose of this appeal by a short order as we have looked into something which goes to the root of the matter.
The main legal point established in the judgment is that the provision relating to pre-deposit under Section 18 of the SARFAESI Act applies to both interlocutory and main application orders, and ther....
Non-borrowers cannot be subjected to pre-deposit requirements under Section 18 of the SARFAESI Act, confirming strict adherence to statutory definitions.
A mortgagor is included in the definition of borrower under the SARFAESI Act, and the pre-deposit amount must consider all relevant communications and documents.
Appeal – Requirement of statutory pre-deposit – In a case where borrower challenges auction sale, thereafter it will not be open for borrower to pray to use sale proceeds received from sale of secure....
Pre-deposit under Section 18 of the SARFAESI Act is a mandatory requirement for maintaining an appeal before the Appellate Tribunal, and it cannot be completely waived even in the face of financial h....
The obligation to make a pre-deposit under the SARFAESI Act is strictly on the borrower, and amounts paid by others cannot be appropriated towards this requirement unless the borrower accepts the sal....
The statutory remedy of appeal under the SARFAESI Act can be invoked only upon making a certain pre-deposit, as per the clear language of Section 18, and the High Court cannot give directions contrar....
The court ruled on the interpretation of pre-deposit requirements for co-sharers under the SARFAESI Act, determining that the issue of limitation warrants fresh consideration by the Debts Recovery Tr....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
