An order rejecting a request to enforce a financial settlement scheme is substantive, not procedural. Therefore, the mandatory statutory requirement for pre-deposit by a borrower remains an absolute condition precedent for initiating an appeal before the appellate tribunal, permitting no total waiver.

JUDGMENT :

OM NARAYAN RAI, J.

1. This revisional application under Article 227 of the Constitution of India is directed against an order dated July 11, 2025 passed by the learned Debts Recovery Appellate Tribunal (hereafter “DRAT”) at Kolkata in Misc. Appeal Diary No. 494 of 2025. By the said order the petitioner’s application praying for waiver of the pre-deposit required to be made under Section 18 (1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter “SARFAESI Act, 2002”) was disposed of by directing the petitioner to make a pre-deposit of 50 per cent of Rs. 4.95 crore which is stated to be debt due as on the date of the order.

2. The petitioner had availed of certain credit facilities from the opposite party no. 1. Upon the petitioner defaulting on repayment of the said credit facilities, the petitioner’s loan account was classified as a Non-Performing Asset. Thereafter, the opposite party no. 2 initiated action under SARFAESI Act, 2002. Assailing such action of the opposite party nos. 1 and 2 the petitioner has approached the Debts Recovery Tribunal, Kolkata (hereafter “DRAT”) by filing SA 109 of 2019 (hereafter SA).

3. In the said SA, the petitioner filed two interlocutory applications being IA 725 of 2025 and IA 726 of 2025. IA 725 of 2025 was an application praying for setting aside an auction sale notice.

4. IA 726 of 2025 was an application seeking the following directions:-

“a) For direction on the bank to send or issue the principal OTS Approval annexed with the said Circular being No. HO Circular No. CHO/RCR/09/21-2022 or implement the said circular dated 27/07/2021 towards settlement and in compliance of solemn order of the Ld. Tribunal as well as in compliance of the said directive to settle the account under the said circular under which the applicant has many times applied for settlement of the account;

b) To keep the upfront amount of Rs. 70 Lacs in FD account without any lien until refund the same to the petitioner along with upto date interest;

c) And to pass such other order orders as the Hon'ble Tribunal may deem fit and proper.”

5. IA 726 of 2025 was disposed of by the DRT by an order dated March 20, 2025 observing that proposal for OTS and settlement were matters between the borrower and bank where DRT had “nothing to do”. By the said order the DRT left the matter to the bank to take a decision.

6. Assailing the said order, the petitioner approached the DRAT by filing the aforesaid appeal. In the said appeal, the petitioner filed an application praying for waiver of the condition of pre-deposit under the second proviso to Section 18 (1) of the SARFAESI Act, 2002 which was disposed of by the order impugned.

SUBMISSIONS OF THE PETITIONER:

7. Mr. Banerjee, learned advocate appearing for the petitioner submits that since the order dated March 20, 2025 passed by the DRT is a procedural order therefore, the petitioner could not have been directed to make any pre-deposit in terms of the second proviso to Section 18 of the SARFAESI Act, 2002.

8. In support of his contention, he relies on a judgment of the Hon’ble Supreme Court in the case of Sunshine Builders and Developers vs. HDFC Bank Limited & Others, Civil Appeal No. 5290/2025, Special Leave Petition (Civil) No. 10875/2025, Diary No. 13444/2025, decided on April 17, 2025.

SUBMISSIONS OF THE OPPOSITE PARTY NOS 1 & 2:

9. Mr. Nayak, learned advocate appearing for the opposite party nos. 1 and 2 submits that the order dat