1. Application seeking waiver of mandatory pre-deposit under Section 18, third proviso, SARFAESI Act. (Para 3 )
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2026 Supreme(Online)(DRAT) 936
DEBT RECOVERY APPELLATE TRIBUNAL
Vivek Bharti Sharma, Chairperson
Subhash Navratanmal Shah – Appellant
Versus
Saraswat Co-operative Bank Ltd. – Respondent
I.A. No. 191/2026|Regular Appeal Diary No. 434/2026
Important Points
An appeal and any interlocutory application for interim relief under the SARFAESI Act cannot be entertained or decided until the appeal is formally registered, which requires the prior payment of the mandatory pre-deposit as prescribed under Section 18.
Subject
Banking and Finance - Debt Recovery
Act Referred
SARFAESI Act: S.18, S.13(2)
Headnote
(A) SARFAESI Act - Section 18 - Mandatory Pre-deposit - Waiver of deposit - The Appellate Tribunal may, for reasons recorded in writing, reduce the mandatory pre-deposit amount to not less than 25% of the debt due. (Para 8)
(B) Procedural Requirements - Registration of Appeal - Interim Stay - An appeal and application for interim relief can only be entertained and decided after the registration of the appeal, which is contingent upon the mandatory pre-deposit under Section 18 of the SARFAESI Act. Granting stay before registration is procedurally unsustainable. (Para 14, 17)
Issues: Whether an interlocutory application for stay can be entertained before the registration of an appeal and payment of the mandatory pre-deposit under Section 18 of the SARFAESI Act.
(B) Procedural Requirements - Registration of Appeal - Interim Stay - An appeal and application for interim relief can only be entertained and decided after the registration of the appeal, which is contingent upon the mandatory pre-deposit under Section 18 of the SARFAESI Act. Granting stay before registration is procedurally unsustainable. (Para 14, 17)
Issues: Whether an interlocutory application for stay can be entertained before the registration of an appeal and payment of the mandatory pre-deposit under Section 18 of the SARFAESI Act.
Legal Category Hierarchy
Advocates:
For the Appellants/Petitioners: Sunil Humbre, Mumtaz Khan, Ritesh Patadia
For the Respondents: Ayush Kothari, Nikhil Rajani, V. Deshpande & Co.
For the Appellants/Petitioners: Sunil Humbre, Mumtaz Khan, Ritesh Patadia
For the Respondents: Ayush Kothari, Nikhil Rajani, V. Deshpande & Co.
Table of Contents
2. Borrower sought waiver citing financial deterioration; Bank contested amount due and opposed waiver. (Para 4 , 5 , 6 , 7 )
3. Appellate Tribunal found waiver of mandatory pre-deposit to 35% appropriate; no interim stay before appeal registration. (Para 8 , 14 , 15 , 16 , 17 )
4. Appeal and interim relief can only be entertained after registration on pre-deposit under Section 18. (Para 17 )
5. Directed deposit of 35% of debt due by specified date; failure to deposit leads to automatic dismissal. (Para 8 , 18 )
6. Can an Appellate Tribunal grant interim stay before registration of an appeal under Section 18 of the SARFAESI Act?
No; an appeal and interim application can only be heard after registration upon deposit of the mandatory pre-deposit amount. (Para 14 , 15 , 16 , 17 )
7. What is the requirement for entertaining an appeal under Section 18 of the SARFAESI Act?
The borrower must deposit 50% of the debt due, which the Tribunal may reduce to a minimum of 25%. (Para 3 , 8 , 16 )
8. Can the Appellate Tribunal reduce the mandatory pre-deposit amount under the third proviso to Section 18?
Yes, for reasons recorded in writing, the Tribunal may reduce the amount to not less than 25% of the debt. (Para 3 , 8 , 16 )
1. Present as under:
Mr. Sunil Humbre along with Ms. Mumtaz Khan i/b Mr. Ritesh Patadia, Counsel for Applicants.
Mr. Ayush Kothari along with Mr. Nikhil Rajani i/b M/s. V. Deshpande & Co., Counsel for Respondent.
2. Heard on Application I.A. No. 191/2026.
3. This Application has been filed seeking waiver of the mandatory pre-deposit to the extent of 25% of the debt due in terms of the third proviso to Section 18 of the SARFAESI Act .
4. The Learned Counsel for the Appellant would submit that waiver to the extent of 25% may be granted to the Applicant/Borrower as the financial position of the Applicant/Borrower has deteriorated after availing the loan from the Respondent Bank.
He would further submit that the deteriorated financial condition is reflected in the Income Tax Returns annexed with the Application at pages 14 to 29.
He would further submit that the annual income of the Applicant/Borrower is ₹13,93,920/-.
He would further submit that the debt due, on which the mandatory pre-deposit is required to be made, is ₹1,22,64,594.26/- as on 18.12.2025.
5. The Learned Counsel for the Applicant/Borrower would further submit that the Applicant/Borrower has been making sincere efforts to repay the loan availed from the Respondent Bank and has already paid a sum of ₹9,13,00,000/- after issuance of notice of under section 13(2) of the Act.
He would submit that, as per the Applicant/Borrower, a sum of ₹1,22,64,594.26/- remains due and payable.
6. Per contra, the Learned Counsel for the Respondent would submit that the amount payable as on today is ₹4,70,27,183/-. He would further submit that although the Applicant/Borrower had paid a sum of ₹9,13,00,000/-, interest at the rate of 11% per annum is chargeable on the outstanding amount.
7. In reply, the Learned Counsel for the Applicant/Borrower would submit that the aforesaid submission made by the Learned Counsel for the Respondent is factually incorrect. He would submit that, in the affidavit dated 29.12.2025 filed by the Respondent before the Learned CMM, the amount stated to be payable is only ₹1,22,64,594.26/-.
8. Considered and perused the record.
In view of the submissions made by the parties above, this Appellate Tribunal is of the considered opinion that the ends of justice would be served if the mandatory pre-deposit in accordance with section 18 of the SARFAESI Act be waived to the extent of 35% under the third proviso to the section. Accordingly, this Appellate Tribunal directs the Applicants/Borrowers to deposit 35 % of ₹1,22,64,594.26/-, which comes to ₹42,92,608/-, on or before 25.09.2026.
9. With this observation, the I.A. No. 191/2026 is disposed of.
The Respondent Bank is at liberty to file a reply to the grounds of the Appeal with an advance copy to the other sides.
On deposit of the amount, the Registry is directed to register this appeal and interlocutory application, if otherwise in order under the rules.
10. The amount shall be deposited in the form of a Demand Draft with the Registrar of this Appellate Tribunal.
11. As and when the said amounts are deposited, the same shall be invested in term deposits in the name of the Registrar, DRAT, Mumbai with any nationalised Bank, initially for 13 months, and thereafter to be renewed periodically.
12. At this stage, the Learned Counsel for the Applicant/Borrower would pray for Application Diary No. 436/2026 for staying the order passed by the Ld. Presiding Officer, DRT-I, Ahmedabad.
13. The Learned Counsel for the Respondent opposes for grant of any stay on the ground that the Appeal is not yet registered due to non-payment of mandatory pre-deposit.
14. The Learned Counsel for the Respondent relied upon the judgment dated 04.03.2026 in Writ Petition No. 15718/2025 in Anil Kumar Pawar & Anr V/s The Authorised Officer, Union Bank of India & Ors, the Hon'ble High Court of Bombay observed that after depositing the pre-deposit amount under section 18 of the SARFAESI Act within time, the matter be sent before the Ld. Regis
