Pre-deposit is mandatory for appeals against interim orders under SARFAESI Act, irrespective of the order's nature.

JUDGMENT

(Dated this the 11^th day of November 2025)

The petitioners filed MA (SA) 8 of 2025 before the Debt Recovery Appellate Tribunal, Chennai against the dismissal of I.A.No.2652 of 2023 in TSA No.32 of 2017 on the files of the Debt Recovery Tribunal – II, Ernakulam. The said I.A. is filed to receive additional documents. The petitioners purchased a land having an extent of 60.29 ares of agricultural property in Sy. No. 1/1 of Kalkoonthal village of Udumbanchola taluk by 2 separate deeds in 2011 and 2012. Only after the execution, they came to know that the predecessor-in-interest had availed a loan from the respondent bank mortgaging the property. Challenging the recovery proceedings on the ground that the property is an agricultural land and in view of the protection under Section 31(i) of the SARFAESI Act , the petitioners filed T.S.A. No.32 of 2017 before the DRAT – II, Ernakulam.

2. The bank also filed O.A.No. 449 of 2015. In order to prove that the secured asset is an agricultural land, the petitioners filed an application to appoint an Advocate Commissioner for local inspection and to report the nature of the land. But the same was dismissed, against which O.P.(DRT) No. 214 of 2023 was filed, which also ended in dismissal. Thereafter, additional documents were filed to prove that the secured asset is an agricultural land, with an application to accept the same before the DRAT and the said application was dismissed by order dated 8.11.2023. The petitioners challenged the same before this court in O.P. (DRT) No.496 of 2023, which was disposed of directing the DRT – II, Ernakulam – II to issue certified copy of order dated 8.11.2023 in I.A.No.2652 of 2023 in T.S.A.No.32 of 2017 to enable the petitioners to approach the DRAT and coercive proceedings were deferred for a month.

3. The petitioners, thereafter, filed I.A.No.427 of 2025 in M. A. (S.A.) No.8 of 2025 for waiver of the statutory deposit under Section of 18 of the SARFAESI Act . The tribunal considered the application of pre deposit and passed Ext.P4 on 25.8.2025 holding that for entertaining the appeal, the petitioners have to make a deposit of 25% of the sale consideration which comes to ₹6,25,000/- within a period of 7 days, otherwise the appeal would stand rejected. Taking note of the fact that the said direction was not complied with, the appeal was dismissed on 1.9.2025 by Ext.P5 order.

Challenging Ext.Nos.P4 and P5, this Writ Petition is filed.

4. The counsel for the petitioners submitted that the secured asset was sold by way of a sale and therefore, the bank has received the entire amounts and so, the question of pre-

deposit for entertaining the appeal by the appellants does not arise. He relied on the judgment of the hon’ble apex court in Sunshine Builders and Developers (M/s.) v. HDFC Bank Limited (2025 KHC 7279). That was a case in which, in a pending proceedings before DRT, two interim applications were filed for impleading the auction purchaser and for condonation of delay in preferring the application. Those 2 applications were dismissed, against which appeals were filed and the question that arose was whether pre deposit is necessary to entertain the appeal against the dismissal of interim applications. The hon’ble apex court, after observing the statutory mandate under Section 18 of the Act, was of the opinion that the words ‘any order’ in the said section should be given some meaningful interpretation. It was also observed as follows:

“One can understand that if any final order is passed by the DRT, determining the liability of the borrower or any other liability of any person, and an appeal is preferred under Section 18 of the SARFAESI Act to the appellate tribunal, the provision of pre -