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2026 Supreme(Online)(DRAT) 506

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI
Vivek Bharti Sharma, Chairperson
MS K V CORPORATION THROUGHT ITS PARTNERS – Appellant
Versus
IDBI BANK – Respondent
I.A. No. 119/2026(WoD) | Misc. Appeal Diary No. 229/2026

Advocates:
For the Appellants/Petitioners: Radhe Agarwal
For the Respondents: Sachin Koli

An appeal and application for interim relief under the SARFAESI Act can only be entertained after the appeal is registered, which is contingent upon the payment of the mandatory pre-deposit as prescribed under Section 18.

Headnote:(A) SARFAESI Act - Pre-deposit - Waiver - The Appellate Tribunal has the discretion under the third proviso to Section 18(1) to reduce the mandatory pre-deposit from 50% to a minimum of 25% based on the facts of the case. (Para 5)

(B) Procedural Compliance - Adjustment of Deposits - Adjustment of deposits from a previous appeal cannot be granted without a specific application supported by an affidavit and verification of UTR numbers to ensure the funds were actually deposited. (Para 8, 9, 13)

(C) Registration of Appeal - Interim Stay - Pre-condition - An appeal and any interlocutory application for interim relief cannot be entertained or decided until the appeal is formally registered, which occurs only after the mandatory pre-deposit under Section 18 is paid. (Para 18, 21)

Issues: Whether the mandatory pre-deposit under Section 18 of the SARFAESI Act could be waived/reduced and whether interim stay can be granted before the registration of the appeal.

Table of Content
1. discretionary reduction of mandatory pre-deposit under section 18 of the sarfaesi act. (Para 2 , 3 , 4 , 5)
2. requirement of procedural verification and formal application for adjustment of previous deposits. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. interim relief is impermissible until the appeal is registered following the mandatory pre-deposit. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21)
4. administrative directions for fund investment and scheduling of the appeal. (Para 22 , 24 , 25 , 26)

2. Heard the Application I.A. No. 119/2026 of the Applicants/Borrowers with prayer, inter alia to waive the condition of the deposit under third proviso of Section 18 (1) of the Act to the minimum for entertaining the Appeal

3. The Learned Counsel for the Applicants/Borrowers would submit that the Applicants/Borrowers are facing financial hardships, therefore, the mandatory pre-deposit as per Section 18 be waived to the extent of the 25% as per proviso to Section 18 of the SARFAESI Act .

4. The Learned Counsel for the Respondent/Bank would vehemently oppose the application for waiver on the grounds that the averments made in the application are vague and concocted and the same is not supported by any Income Tax Returns to substantiate the arguments ; that, the Respondent /Bank issued the Demand Notice under Section 13 (2) of the SARFAESI Act on 07.05.2025 calling upon the Applicants/Borrowers to pay an amount of ₹3,56,09,587.09p plus interest.

The Learned Counsel for the Respondent/Bank would further submit that as on 25.02.2026 the amount of ₹4,01,76,786/- is due and payable, therefore, the said amount ought to be taken as the threshold amount for the purpose of calculating the mandatory pre-deposit .

The Learned Counsel for the Respondent/Bank would further submit that the symbolic possession of the secured asset has already been taken by the Respondent/ Bank and the possession notice has also been published on 23.07.2025 ; that, initially, the possession was taken on 29.10.2025 but the Applicants/Borrowers filed the Securitisation Application No. 230/2025 for staying the same, therefore, the possession could not be taken ; that, in this Securitisation Application No. 230/2025, the I.A. No. 201/2026 has been dismissed by the impugned order assailed by the Applicants/Borrowers in the present Appeal in which the present wavier is being heard, therefore, no waiver can be granted to the Applicant/Borrowers.

He would further submit that the Applicants/Borrowers, as per Section 18 of SARFAESI Act , has to deposit 50% of ₹4,01,76,786/- as stated in para 20 of reply of Respondent/Bank.

5. In view of the above, without going into merits of the Appeal, this Appellate Tribunal is of the considered view that ends of justice would be served if the amount of the mandatory pre-deposit is waived to 45% instead of 50% in accordance with third proviso to Section 18 of the SARFAESI Act .

The Appellants/Borrowers have not stated any amount in the application, therefore, the amount of ₹4,01,76,786/- mentioned in the para 20 of reply filed by the Respondent/Bank is taken as threshold amount for purpose of calculating the pre-deposit amount.

Therefore, the Applicants/Borrowers are directed to deposit 45% of ₹4,01,76,786/- which comes to ₹1,80,79,553.70p as pre-deposit on or before 19.08.2026.

6. At this stage, the Learned Counsel for the Applicants/Borrowers would submit that in accordance with order dated 06.03.2026 passed by the Hon’ble High Court of Bombay at Nagpur Bench in Writ Petition No. 1943/2026 filed by the Applicants/Borrowers, they were directed to deposit ₹40 Lakhs within a week from 06.03.2026 ; that, the Applicants/Borrowers have deposited two instalments ₹5.00 Lakhs and ₹10.00 Lakhs respectively on 13.03.2026 i.e. within a week .

The Learned Counsel for the Applicants/Borrowers would further submit that ₹25.00 Lakhs was deposited accordance with Section 18 of the SARFAESI Act as condit

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2026 Supreme(Online)(DRAT) 506

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAIVivek Bharti Sharma, ChairpersonMS K V CORPORATION THROUGHT ITS PARTNERS – AppellantVersusIDBI BANK – RespondentI.A. No. 119/2026(WoD) | Misc. Appeal Diary No. 229/2026

An appeal and application for interim relief under the SARFAESI Act can only be entertained after the appeal is registered, which is contingent upon the payment of the mandatory pre-deposit as prescribed under Section 18.

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI
Vivek Bharti Sharma, Chairperson
MS K V CORPORATION THROUGHT ITS PARTNERS – Appellant
Versus
IDBI BANK – Respondent
I.A. No. 119/2026(WoD) | Misc. Appeal Diary No. 229/2026