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.

JUDGMENT :

M.M. Sathaye, J.

1. Rule. Rule made returnable forthwith. Learned counsel for Respondents waive service. Taken up for final disposal by consent of the learned counsel for the parties.

2. In this Judgment, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is referred to as ‘SARFAESI Act’. The Recovery of Debts and Bankruptcy Act, 1993 is referred to as ‘RDB Act’. Debts Recovery Tribunal is referred to as ‘DRT’ and Debts Recovery Appellate Tribunal is referred to as ‘DRAT’. Securitisation Application is referred to as ‘SA’, Interim Application is referred to as ‘IA’. Non Performing Asset is referred to as ‘NPA’.

3. The Petitioner is challenging the order dated 30.01.2025 passed in I.A. No.118 of 2022 in Misc. Appeal No. 40 of 2022 passed by DRAT- Mumbai. By the said impugned order, the DRAT has directed the Petitioner at a pre-deposit stage under Section 18 of the SARFAESI Act to deposit an amount of Rs.248,45,08,646/- in three equal installments as a condition for entertaining the appeal against the order dated 22.07.2021 passed in I.A. Nos.429 & 578 of 2021 in S.A No.46 of 2021 by DRT-II, Mumbai. The impugned order is passed under the exercise of power under 2^nd proviso to Section 18(1) of the SARFAESI Act.

4. Few facts necessary for the disposal of this writ petition, are as under.

4.1 Respondent No.1 is an Asset Reconstruction Company operating through its authorised officer-Respondent No.2. The loan in question was intially given by Respondent No.4 - Yes Bank which turned NPA and which account was then assigned to Respondent No.3 which in turn assigned it to Respondent No.1.

4.2 Admittedly, the Petitioner has not executed the Loan Agreement dated 28.11.2018.

4.3 The Petitioner has executed a Deed of Mortgage registered on 30.11.2018 in favour of Respondent No.4 - Yes Bank. The said Mortgage Deed describes the Petitioner as ‘Mortgagor-I’ whose details are given distinctly apart from Respondent No. 5 who is described as ‘Borrower or Mortgaor-II’ under Scheduled-I to the said deed. The said Mortgage Deed contains the following clause.

“2 - BENEFIT OF THIS DEED

(i) xxx

(ii) The Mortgagee shall hold the Security Interest created by the Mortgagor in its favour under this Deed over the Mortgaged Properties, including the convenants and mortgages given by the Mortgagor pursuant hereto, upon trust for the benefit of the Secured Parties subject to the powers and provisions contained in the Security Trustee Agreement, this Deed and the other Financing Documents. The Parties confirm that the Mortgagor - I shall not be responsible for repayment of the Facilities or any related interest, costs, charges etc. thereon howsoever and under any circumstances whatsoever and that Mortgagor - I will be responsible under this Deed only to the extent of providing its respective Mortgaged Properties as set out in Part-A of Schedule-II herein as a security for the Mortgage Debt.”

[Emphasis supplied]

4.4 As the loan account became NPA, the Respondent No.4 sent notice under Section 13(2) of SARFAESI Act dated 29.01.2020. It is the contention of the Petitioner that though in this notice the Petitioner’s name is stated as Noticee No.2, the reference to the word ‘you’ is only to Noticee No.1 – Respondent No.5.

4.5 The Petitioner being Mortgagor-I sent a reply dated 14.02.2020 under the provisions of Section 13(3A) of the SARFAESI Act, contending inter alia that under Development Agreement dated 25.10.2011 and supplemental Developmental Agreement dated 01.11.2018, the project land belonging to the Petitioner was given for development to Respondent No.5, subject to condition that the loan/finance is utilized by Respondent No.5 only for the purpose of meeting construction cost, purchase of TDR - FSI and payment of premium to concerned authorities for implementation of the development project and the loan is serviced and discharged by Respondent No.5 in timely manner without making the Petitioner liable for repa