The court confirmed the necessity of a pre-deposit for appeals under SARFAESI Act, validating the Tribunal's discretion to reduce the amount required.

JUDGMENT

Dated this the 25^th day of February, 2026 The petitioner availed financial assistance from the 1^st respondent for an amount of Rs.35 lakhs for agricultural purpose. A mortgage of 18 Ares of property comprised in Re.Sy.No113/3 of Vayakkara Village was created by way of a Gehan. When default occurred, Bank classified the account as NPA and issued notice under Section 13(2) of the SARFAESI Act claiming an amount of Rs.38,57,890/- as on 31.05.2018 along with future interest and expenses. The Bank thereafter filed CMP No.7846 of 2018 before the Chief Judicial Magistrate Court, Thalassery under Section 14 of the Act. An Advocate Commissioner was appointed to take physical possession of the secured asset. The petitioner thereafter filed S.A No.74 of 2019 before the DRT-I, Ernakulam contending that the secured asset is an agricultural land and hence exempted under the provisions of the SARFAESI Act . Therefore, the petitioner in the S.A filed I.A No.992 of 2020 seeking amendment of the S.A. The said application was partly allowed by Ext.P6 order dated 29.03.2021. Challenging Ext.P6, the petitioner approached the DRAT and filed Unnumbered RASA with filing No.AIR 298/2022. The petitioner also filed I.A No.411 of 2022 to waive the pre-deposit of 50% of the amount due from the appellant as contemplated under Section 18 (1) of the Act to entertain the S.A. The DRAT by Ext.P12 proceedings dated

26.02.2025 directed the petitioner to make a pre-deposit of 25% of Rs.30,03,689/- which comes to Rs.7,50,992/- in two equal monthly installments within a period of four weeks from the date of order. The first installment within two weeks and the second installment within two weeks thereafter. It was made clear that the appeal will stand rejected if the amounts are not deposited. Petitioner has challenged Ext.P12 in this O.P(DRT).

2. The contentions raised by the learned counsel for the petitioner is that the petitioner has remitted an amount of Rs.38 lakhs to the loan account of the Bank and therefore, the same can be treated as a pre-deposit and the Appellate Tribunal ought to have waived the pre-deposit.

3. The learned counsel for the respondents submits that under Section 18 of the SARFAESI Act , any person who is aggrieved by the order of the DRT, may prefer an appeal along with such fees as may be prescribed, to the Appellate Tribunal within 30 days from the date of receipt of the order of the DRT. The second proviso states that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal 50% of the amount of debt due from him as claimed by the secured creditor or determined by the Recovery Tribunal whichever is less. The Tribunal is also given the power to reduce the same to 25% for which reasons are to be recorded in writing. The learned counsel submits that the Tribunal has only directed 25% of the amount of Rs.30,03,689/- to be deposited as a pre- deposit. Since, no deposit is made with the Tribunal, the amount deposited in the loan amount cannot be treated as pre-deposit.

4. A reading of Section 18 of the Act would make it clear that the pre-deposit has to be made with the Appellate Tribunal and the amount is 50% subject to reduction to 25% on valid grounds. The Tribunal having considered the facts and circumstances of the case, has directed only 25% of the amount as pre-deposit. In such circumstances, I am of the opinion that Ext.P12 is in order and deserves no interference.

The learned counsel for the petitioner seeks a months’ time for payment of the amount as ordered in Ext.P12. The petitioner is granted a months’ time from today to make the pre-deposit. If the amount is not deposited, the Tribunal is free to proceed in accordance with law.

The Original Petition is disposed of as bove.

Sd/-