1. Appeal against DRT order — Waiver of pre-deposit under Section 18, SARFAESI Act sought by borrower. (Para 1 , 4 , 6 )
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2026 Supreme(Online)(DRAT) 952
DEBT RECOVERY APPELLATE TRIBUNAL
Vivek Bharti Sharma, Chairperson
Animish Mishra – Appellant
Versus
Punjab National Bank – Respondent
I.A. No. 557/2026 | Regular Appeal Diary No. 1605/2026
Important Points
Mandatory pre-deposit under Section 18 of the SARFAESI Act is a condition precedent for the registration of an appeal; consequently, no interim stay or interlocutory application can be entertained until the appeal is formally registered upon payment of such deposit.
Subject
Banking & Finance - Debt Recovery
Act Referred
SARFAESI Act: S.18, S.13(4), S.13(2)
Bankers’ Book Evidence Act
Bankers’ Book Evidence Act
Headnote
(A) SARFAESI Act, 2002 - Section 18 - Mandatory pre-deposit for registration of appeal - Application for waiver - The Appellate Tribunal may reduce the pre-deposit amount but not less than 25% of the debt due - Where the debt due is identified as Rs. 1,95,00,000/-, the mandatory pre-deposit is reduced to 45% (Rs. 87,75,000/-) in the interest of justice. (Paras 9, 11)
(B) Registration of Appeal - Procedural requirement - Interim stay on impugned order - An appeal and application for interim relief can only be heard and decided after the registration of the appeal upon payment of the mandatory pre-deposit under Section 18 of the SARFAESI Act; no interim stay can be granted at the stage prior to registration. (Paras 20, 22, 23)
Facts of the case:
The Applicant/Borrower filed I.A. No. 557/2026 seeking a waiver of the mandatory 50% pre-deposit required under Section 18 of the SARFAESI Act to register an appeal. The Respondent Bank claimed a total debt of approximately Rs. 1.95 crore and opposed the waiver, highlighting that the Applicant's income tax returns indicated a significant annual income, contrary to the claim of financial hardship. It was further noted that Rs. 60,00,000/- had previously been deposited by the Applicant in another appeal (Misc. Appeal No. 3/2024) and was still lying with the Tribunal.
Findings of Court:
The Tribunal found that the Applicant did not merit a full waiver of the pre-deposit. However, it decided to reduce the pre-deposit to 45% of the debt due (Rs. 87,75,000/-). The existing deposit of Rs. 60,00,000/- was appropriated, and the Applicant was directed to deposit the balance of Rs. 27,75,000/- by 12.10.2026.
Issues: Whether the mandatory pre-deposit under Section 18 of the SARFAESI Act could be waived or reduced, and whether an interim stay could be granted before the registration of the appeal.
Ratio Decidendi: The court held that the pre-deposit under Section 18 is a condition precedent for the registration and entertainment of an appeal. Based on the precedent set by the High Court of Bombay, no interlocutory application for stay can be entertained until the appeal is formally registered upon the deposit of the mandatory amount.
Result: Waiver application disposed of with a direction to deposit the balance amount; stay refused until registration.
(B) Registration of Appeal - Procedural requirement - Interim stay on impugned order - An appeal and application for interim relief can only be heard and decided after the registration of the appeal upon payment of the mandatory pre-deposit under Section 18 of the SARFAESI Act; no interim stay can be granted at the stage prior to registration. (Paras 20, 22, 23)
Facts of the case:
The Applicant/Borrower filed I.A. No. 557/2026 seeking a waiver of the mandatory 50% pre-deposit required under Section 18 of the SARFAESI Act to register an appeal. The Respondent Bank claimed a total debt of approximately Rs. 1.95 crore and opposed the waiver, highlighting that the Applicant's income tax returns indicated a significant annual income, contrary to the claim of financial hardship. It was further noted that Rs. 60,00,000/- had previously been deposited by the Applicant in another appeal (Misc. Appeal No. 3/2024) and was still lying with the Tribunal.
Findings of Court:
The Tribunal found that the Applicant did not merit a full waiver of the pre-deposit. However, it decided to reduce the pre-deposit to 45% of the debt due (Rs. 87,75,000/-). The existing deposit of Rs. 60,00,000/- was appropriated, and the Applicant was directed to deposit the balance of Rs. 27,75,000/- by 12.10.2026.
Issues: Whether the mandatory pre-deposit under Section 18 of the SARFAESI Act could be waived or reduced, and whether an interim stay could be granted before the registration of the appeal.
Ratio Decidendi: The court held that the pre-deposit under Section 18 is a condition precedent for the registration and entertainment of an appeal. Based on the precedent set by the High Court of Bombay, no interlocutory application for stay can be entertained until the appeal is formally registered upon the deposit of the mandatory amount.
Result: Waiver application disposed of with a direction to deposit the balance amount; stay refused until registration.
Legal Category Hierarchy
- banking and finance
- practice and procedure
Advocates:
For the Appellants/Petitioners: Sanjana Ghogare
For the Respondents: Savita Nangre, Disha Shah, Mohit S.
For the Appellants/Petitioners: Sanjana Ghogare
For the Respondents: Savita Nangre, Disha Shah, Mohit S.
Table of Contents
2. Borrower argued defective notice and financial incapacity; Bank contended frivolous appeals and mandatory pre-deposit condition. (Para 6 , 7 )
3. Income tax return contradicted borrower's claim of financial incapacity; grounds of defective notice were matters of merit. (Para 7 , 10 )
4. Appeal cannot be entertained or interim relief granted before registration of appeal upon deposit under Section 18, SARFAESI Act. (Para 23 )
5. Waiver granted reducing pre-deposit to 45% of debt due, with credit for prior deposit; balance to be deposited by specified date. (Para 15 , 17 , 24 )
6. Can an appeal or interim application be heard before registration of the appeal under Section 18 of SARFAESI Act?
No, the appeal and any interim application can only be heard after registration, which requires deposit of the mandatory pre-deposit under Section 18. (Para 22 , 23 )
7. What is the extent of the Appellate Tribunal's power to waive the pre-deposit under Section 18 of SARFAESI Act?
The Appellate Tribunal may, for reasons recorded in writing, reduce the pre-deposit amount from 50% to not less than 25% of the debt due. (Para 9 , 15 )
8. Can grounds challenging the validity of the demand notice be considered during a pre-deposit waiver application?
No, such grounds relate to the merits of the appeal and are to be heard only at final disposal, not during the waiver application stage. (Para 7 )
##PAGE1##
BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Justice Vivek Bharti Sharma, Chairperson I.A. No. 557/2026 In Regular Appeal Diary No. 1605/2026 Between Animesh Mishra & Anr. … Appellant/s V/s.
Punjab National Bank & Ors. …Respondent/s -: Order dated: 05/10/2026: -
1. Present as under:
Ms. Sanjana Ghogare, Counsel for Applicants.
Ms. Savita Nangare along with Ms. Disha Shah i/b M/s. Law Focus, Counsel for Respondent No. 1/Bank.
Mr. Mohit S., Counsel for Respondent Nos. 2 & 3.
2. The Learned Counsel for Respondent No. 1, Ms. Savita Nangre, would submit that she has got instructions to appear on behalf of Respondent No. 1/Bank. She places her Vakalatnama with reply to the Waiver Application that is taken on record.
3. The Learned Counsel for Respondent Nos. 2 & 3, Mr. Mohit, would submit that he has got instructions to appear on behalf of Respondent Nos. 2 & 3. He places his Vakalatnama that is taken on record.
##PAGE2##4. The Learned Counsel for the Applicant/Borrower would submit that the Hon’ble High Court vide its order dated 28.09.2026 passed in Writ Petition No. 12753/2026 has directed this Appellate Tribunal to take up the Waiver Application I.A. No. 557/2026 and application which is at Diary No. 1694/2026 for seeking the stay of the impugned order.
The Learned Counsel for the Applicant/Borrower would submit that before this Appellate Tribunal could hear and decide application, for interim relief Diary No. 1694/2026, the Waiver Application I.A.
No. 557/2026 has to be heard and decided.
5. Heard on I.A No. 557/2026.
6. The Learned Counsel for the Applicant/Borrower, Ms. Sanjana Ghogare, would submit that the amount on which the 50 % has to be deposited as pre-condition for the appeal of the Applicant/Borrower to be registered and entertained under section 18 of the SARFAESI Act is Rs. 1,66,26,000/- as stated in the notice under section 13 (4) of the SARFAESI Act, served by Respondent No. 1/Bank to the Applicant/Borrower.
The Learned Counsel for the Applicant/Borrower would further submit that the demand notice was defective as there was no bifurcation of the principal amount and the interest separately ; that , this notice was not sent to the mortgagor ; that , the sale notice is also defective and no redemption notice was served upon the Applicant/Borrower.
##PAGE3##7. The Counsel for the Respondent No. 1/Bank would controvert the submission made by the Appellant/Borrower.
The Counsel for the Respondent would submit that the grounds submitted and stated in the application for waiver as per third proviso of the section 18 of the SARFAESI Act are manufactured and convocated ; that , though it is stated in the application that the Applicant/Borrower is a housewife, however, she has filed the income tax return which says that she is the proprietor of some business wherefrom she is earning an annual income of Rs. 30,00,000/- approximately ; that , the other grounds submitted by the Applicant/Borrower that the notice under section 18 (4) is defective, there is no bifurcation, and the same was not served upon the mortgagor are the matter of merits which has to be heard and decided at the time of the final disposal of appeal and not at the stage of decision of the application for the waiver as per third proviso to the section 18 of the SARFAESI Act.
She would further submit that a long period of five years has been spent and the Respondent No. 1/Bank is still fighting to take the physical possession of the property notwithstanding with the fact that a huge amount is due from the Applicant/Borrower ; that , the Applicant/Borrower has been filing frivolous appeal repeatedly to avoid the repayment of the dues against the loan taken up by him from Respondent No. 1/Bank.
##PAGE4##She would further submit that the Ld. Tribunal has specifically dealt with the issues concerning limitation, the original challenge to the unsuccessful auction, subsequent successful auction, the sale certificate and only then dismiss the Se
