A party must exhaust statutory remedies before seeking intervention under Article 227 when an effective alternative exists.

JUDGMENT

(Dated this the 5^th day of November 2025)

The petitioner, a builder, constructed a multi-storied building named 'Alliance Empire' under a joint agreement with the landowners. The 3rd and 4th respondents sought to purchase apartments in the building by availing a loan from the 1st and 2nd respondents, the Bank, for which tri-partite agreements were entered into between the 3^rd and 4^th respondents as borrowers, 1^st and 2^nd respondents as bank, and petitioner as builder. Following a default in loan repayment, the Bank initiated recovery proceedings against the property, in which the petitioner has also been arrayed as a party. The petitioner challenged these proceedings in W.P. (C) No. 8880/2023, arguing that the Bank could not institute SARFAESI proceedings because no security interest or equitable mortgage was created in favour of the Bank. According to the petitioner, a balance amount of Rs.17,83,510/- of the total purchase cost, including taxes and other statutory charges as on the date of completion, remained unpaid by respondent nos.3 and 4, even after the complete construction of the apartment. Consequently, the petitioner did not register the undivided share of land and the apartment in their favour. This Court, by Ext.P1 judgment dated 09/09/2025, dismissed W.P.(C) No. 8880/2023, and relegated the petitioner to avail the statutory remedy of appeal against the impugned SARFAESI proceedings.

2. The petitioner subsequently challenged the Section

14 proceedings initiated by the respondents Bank by filing Ext P2 S.A.No. 699/2025 along with a stay petition as Ext P3, I.A.No.3870/2025 before the DRT-1, Ernakulam. The prime contention was that the impugned SARFAESI proceedings constituted an abuse of process because the purchasers who are the 3^rd and 4^th respondents had not created a security interest in favour of the Bank, and the petitioner had not registered the title deeds for the land and apartment in their names due to a pending balance payment of the purchase price. According to the petitioner, they were justified in retaining the title deed as collateral security, as permitted under the tri-partite agreement. However, the Tribunal passed Ext.P4, a conditional order in the S.A, directing the petitioner to deposit Rs.20 lakhs with the 1^st respondent Bank on or before 03/11/2025.

3. The petitioner, who is neither a borrower nor a guarantor, and having completed the construction of apartment, under which the balance amount is yet to be paid to the petitioner, argues that the Tribunal's Ext P4 conditional order is unjustifiable. The matters being so, directing the petitioners to deposit funds again while a substantial question of law specifically, as to whether a security interest was ever created in favour of the respondent Nos.1 and 2 Bank is pending consideration, renders the order a violation of law and the principles of natural justice. Consequently, the petitioner filed this O.P.(DRT) challenging Ext P4.

4. Heard the counsels appearing for both sides.

5. The learned counsel for the petitioner contends that the Tribunal, while passing Ext P4 conditional order, has not rightly considered the case of the petitioner and the averments in Ext P2 or in Ext P3 with a proper application of mind. The counsel further maintained that when a substantial challenge as to the creation of a valid security interest in favour of 1^st and 2^nd respondent is pending, the question of enforcement of security interest does not arise at all. Though Ext P4 order is appealable, it would be a negation of justice if the petitioner is again made liable to make a pre-deposit to invoke Sec 18 of the SA