Back
TELANGANA HIGH COURT
Moushumi Bhattacharya and Gadi Praveen Kumar, JJ.
Gade Sreenivas Reddy – Petitioner
versus
State Bank of India and Ors. – Respondents
Writ Petition No.12395 of 2025
Decided on 28.8.2025
Counsel for the Parties:
For the Appellant: Sri V. Murali Manohar.
For the Respondent No.1: Ms. V.L.V. Devi, learned counsel representing Sri G. Prabhakar Sarma
IMPORTANT POINT
Appeal – Requirement of pre-deposit can be waived where it is a non-substantive appeal.
Headnote:
Recovery of Debts and Bankruptcy Act, 1993 – Sections 21 and 22 – Civil Procedure Code, 1908 – Order XLI Rules 3 and 5 – Appeal – Requirement of pre-deposit – Appeal filed by petitioner before DRAT is not a substantive appeal, but is rather a ‘procedural appeal’ – Petitioner has gone before DRAT not from a final adjudication of debt but from an order rejecting petitioner’s application for setting aside ex-parte order of DRT – Appeal filed by petitioner before DRAT is not a substantive appeal from adjudication of debt but appeal for restoration of principles of natural justice from an ex-parte order excluding petitioner from presenting his case – Imposing mandatory condition for a non-substantive appeal to be entertained by Appellate Tribunal would render statutory right under Section 22(2)(g) illusory, harsh and burdensome – Petitioner’s appeal cannot be brought within stranglehold of deposit requirement under Section 21 of RDB Act – Impugned order set aside. (Paras 15, 31, 38, 40, 41 and 42)
Result: Writ Petition allowed.
ORDER
Moushumi Bhattacharya, J.—The petitioner prays for quashing of an order dated 06.03.2025 passed by the Debts Recovery Appellate Tribunal at Kolkata (‘DRAT’) in I.A.No.567 of 2024 in Miscellaneous Appeal Diary No.972 of 2024.
2. The impugned order was passed in an Interlocutory Application (I.A.No.567 of 2024) filed by the petitioner (the appellant in the I.A.) for exemption from making any deposit for the purpose of hearing the petitioner’s Appeal on merits under section 21 of The Recovery of Debts and Bankruptcy Act, 1993 (‘RDB Act’). By the impugned order dated 06.03.2025, the DRAT disposed of the petitioner’s I.A. by directing the petitioner to make a pre-deposit of 25% of Rs.66,86,20,751/- within four weeks.
3. For understanding of the factual context, the brief facts leading to the impugned order are stated below.
4. The respondent No.1/State Bank of India (SBI) filed an Original Application (O.A.No.625 of 2019) in the Debts Recovery Tribunal-I at Hyderabad, against the respondent Nos.2 to 5 and the petitioner herein for recovery of a sum of Rs.47,13,93,098.80 ps. By an order dated 31.01.2020, the DRT-I held that the defendant Nos.1 to 4 were jointly and severally liable to pay the said amount and that the applicant/Bank is entitled to proceed against the person and properties of the defendant Nos.1 to 4 towards realization of the debt due. The order dated 31.01.2020 records that the defendant Nos.1 to 5 were set ex parte on 08.11.2019.
5. The petitioner (defendant No.4 in the O.A) filed an application (MAIR No.171 of 2024) in O.A.No.625 of 2019, under section 22(h) of the RDB Act, for setting aside the ex parte order dated 31.01.2020. The petitioner filed I.A.No.736 of 2024 under section 5 of The Limitation Act, 1963, for condoning the delay since there was a delay of 1484 days in filing the application for setting aside the ex parte order. By the docket order dated 01.10.2024, the DRT-I dismissed the petitioner’s I.A. holding, inter alia, that the petitioner had failed to establish sufficient cause for condoning the delay of 1484 days in filing the petition to set aside the ex parte order dated 31.01.2020.
6. The petitioner challenged the said order before the DRAT which was numbered as Miscellaneous Appeal Diary No.972 of 2024. The petitioner filed I.A.No.567 of 2024 for exempting the petitioner from making any deposit for the purpose of hearing the Appeal on merits under section 21 of the RDB Act. By the impugned order dated 06.03.2025, the DRAT disposed of the said I.A. by directing the petitioner to pre-deposit 25% of Rs.66,86,20,751/- within a period of four weeks.
7. The petitioner has challenged the impugned order on the ground that the requirement of making a pre-deposit of 25% would not apply to the facts of the case since the Appeal before the DRAT was directed against an order refusing to condone the delay in recalling the ex parte order of the DRT.
Submissions made on behalf of the Parties.
8. The primary submission of learned counsel appearing for the petitioner is that the Appeal filed before the DRAT arose out of an order passed in an Interlocutory Application, by which the DRT had rejected the petitioner’s application for condonation of delay in filing a petition for setting aside an ex parte order. Counsel submits that the petitioner’s challenge to the order dated 01.10.2024 but was confined only to the rejection of the petitioner’s application for condonation of delay in filing the setting aside petition. Counsel urges that the Appeal before the DRAT was not against a determination of disputes on merits but was only for giving an opportunity to the petitioner to contest O.A.No.625 of 2019 filed by the respondent No.1/SBI. Counsel seeks to draw a distinction between an Appeal against a judgment and decree passed on merits and an Appeal against an order refusing to recall an ex parte decree.
9. Learned counsel appearing for the respondent No.1/Bank submits that the petitioner cannot circumvent the
