Statutory deposit under SARFAESI Act is mandatory for appeals; High Court should not intervene if effective remedies exist.

JUDGMENT :

Muralee Krishna, J.

This intra-court appeal is filed under Section 5(i) of the Kerala High Court Act, 1958, by the 3^rd respondent in W.P.(C)No.18071 of 2025, challenging the judgment dated 17.06.2025 passed by the learned Single Judge, whereby the writ petition filed by respondents 1 and 2 herein was disposed of by directing the Debts Recovery Appellate Tribunal to pass orders on the stay petition filed by respondents 1 and 2 within three weeks from the date of that judgment, if the application preferred by them is otherwise in order. It was further directed in that judgment that till orders are passed as directed, further coercive steps against respondents 1 and 2 shall be deferred.

2. Going by the averments in the writ petition, respondents 1 and 2 availed two loans, the first one is for Rs.3/- crores and the second one is for Rs.79/- Lakhs from the 3^rd respondent Bank. When respondents 1 and 2 defaulted repayment of the loan, the Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ for short). Two items of properties offered as security, viz, 6.77 Ares and 7.79 Ares with a commercial building thereon situated in survey No.1136/1 of Marathakkara Village of Thrissur Taluk was put in auction on 19.09.2024 by the 4^th respondent, Authorised Officer, in pursuance to the steps taken for recovery of the amount by selling the secured asset. The appellant participated in the auction proceedings and was declared the successful bidder for an amount of Rs.3,32,00,000/-. He remitted 25% of the bid amount on the day of auction, and the balance 75% before 15 days as mandated under the Security Interest (Enforcement) Rules 2002. Challenging the sale, respondents 1 and 2 approached the Debts Recovery Tribunal by filing S.A. No. 117 of 2021 under Section 17 of the SARFAESI Act. During the pendency of the proceedings, the Bank sold the third item of the secured asset, having an extent of 53 cents in survey No.1434 of Amballur Village. Before the Debts Recovery Tribunal, respondents 1 and 2 contended that the total market value of three items of the property would come to more than Rs.13/- crores and the reserve price fixed is very meagre. However, the securitisation application was dismissed by the Debts Recovery Tribunal by virtue of Ext.P2 order dated 08.05.2025. At that stage, respondents 1 and 2 approached this court with the writ petition filed under Article 226 of the Constitution of India, seeking the following reliefs:

“I) To issue a writ in the nature of Mandamus, directing the 1^st and 2^nd respondent not to proceed with the taking of physical possession of the immovable properties subjected in the Exhibit P1 application, till the filing of the statutory appeal before the Debt Recovery Appellate Tribunal as against the Exhibit P1 final order, and upon the time that may be fixed by this Honouarable Court to secure justice.

II) To issue a writ in the nature of Mandamus, directing the Respondents 1 and 2 to keep in abeyance all further proceedings pursuant to Exhibit P2 order for a period of one month from today”.

3. In the writ petition, respondents 1 and 2 herein-writ petitioners contend that they intend to challenge Ext.P2 order before the Debts Recovery Appellate Tribunal under Section 18 of the SARFAESI Act. They have 30 days' time to challenge Ext.P2 order. But, meanwhile, the Bank may proceed with the matter and take possession of immovable properti