The Debts Recovery Tribunal allowed Axis Bank's appeal set aside an order directing refund of Rs. 6.50 lac. The Court held that funds deposited in the loan account were not an upfront amount. As the account was regularized and SARFAESI actions withdrawn, refund was not due.
Impugned order directing refund of Rs. 6.50 lac set aside.
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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA
HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON
Misc. Appeal No. 31 of 2026 (Arising out of S.A. 180 of 2025 in DRT, Siliguri)
Order No. 04 20.05.2026
Axis Bank Limited … Appellant -VsM/s. D.S. Enterprise & Another … Respondents
Mr. Sayak Ranjan Ganguly with Ms. Chaitali Acharjee, Learned Counsel for the Appellant
THE APPELLATE TRIBUNAL:
Heard the Learned Counsel for Appellant. Despite service none is present for the Respondents.
Instant appeal has been preferred against order dated 13.3.2026 passed by DRT, Siliguri in I.A. 879 of 2025 arising out of S.A. 180 of 2025 wherein direction is issued to the Bank to refund an amount of Rs.6.50 lac deposited by the Securitisation Applicants with the Bank.
Feeling aggrieved, Appellants preferred the appeal.
Learned Counsel for Appellant would submit that the amount, as recorded in the impugned order, is not deposited as an upfront amount rather it was deposited as per the order of the DRT dated 2.6.2026 wherein direction was issued for depositing the amount in the loan account. Accordingly, the Borrower deposited the amount in the loan amount was duly adjusted after adjustment of and the account was regularized and communicated to the borrower vide letter vide dated 21.2.2026 and all the SARFAESI actions are also withdrawn by the Bank.
It appears that S.A. was filed by the Respondent herein challenging the action initiated by the Bank under the SARFAESI Act (hereinafter referred to as the ‘Act’) by issuing Notice under Section 13
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(2) and 13 (4) of the Act coupled with the subsequent actions. Pending S.A. on 6.1.2026 following order was passed by the DRT :
“In this view of the matter, applicants are directed to deposit Rs. 6,50,000/- in the loan account within 7 days from today and they are also directed to file the reasonable settlement proposal within 2 weeks from today and the respondent bank has to consider the settlement proposal in view of the guidelines of RBI and till the next date of hearing the bank is restrained to take the physical possession of the property.”
“In compliance of the same, an amount of Rs.6.50 lac was deposited by the Borrowers with the Bank which was duly appropriated in the Loan Account and the Account was regularized and Secrutisation action, under the SARFAESI Act was withdrawn by the Bank.
Learned DRT passed the order for refund of the amount on the ground that the amount was deposited as upfront amount. Learned DRT also placed reliance upon a judgment of the Hon’ble Apex Court in Kut Energy Private Limited -vsAuthorised Officer, Punjab National Bank [(2020 19 SCC 533].”
In compliance of the same an amount of Rs.6.50 lac was deposited by the Borrower with the Bank which was duly appropriated in the loan account and the account was regularized and all the Securitisation actions, under the SARFAESI Act, 2002, was withdrawn by the Bank. Learned DRT passed the order for refund of the amount on the ground that the amount was deposited as upfront amount. Learned DRT also placed reliance on the judgment of the Hon’ble Apex Court in Kut Energy Private Limited -vs- Authorised Officer, Punjab National Bank [(2020 19 SCC 533].
At the very outset, reliance as placed on Kut Energy Private Limited (supra) is totally misplaced, Case law is not applicable in the present case. Secondly the amount was not deposited as an upfront amount as would reflect from the order of the DRT dated 6.1.2026 rather direction was issued to deposit the amount to the loan account which was duly complied with by the Borrowers. Bank also acted upon the same and also regularized the account and withdrew the actions undertaken by the Bank under the SARFAESI Act.
In such circumstances, there was no issue of making the deposit as an upfront amount with the Bank since the amount was deposited
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in the loan account of the Bank and the same was appropriated by the Bank, no question arises for refund of the same particularly when the account has already been regularized.
In such circumstances, the impugned order passed by Learned DRT cannot sustain and is liable to be set aside.
O R D E R
Appeal is allowed.
Impugned order dated 13.3.2026 passed by DRT, Siliguri in I.A.
879 of 2025 arising out of S.A. 180 of 2025 is set aside.
File be consigned to Record room.
Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.
Order pronounced in open Court.
(Anil Kumar Srivastava,J) Chairperson
Dated: 20th May, 2026 18/ac
2 issues framed by the court
Whether deposit made in loan account under DRT order should be refunded as upfront amount.
Whether SARFAESI actions withdrawn after deposit regularize the account obviating refund.
Colour shows how this judgement treated each authority
Kut Energy Private Limited vs Authorised Officer, Punjab National BankDistinguished¶17
Kut Energy Private Limited vs- Authorised Officer, Punjab National Bank [(2020 19 SCC 533)] · Who else cites this
1 provisions across 1 enactments
Axis Bank Limited
M/s. D.S. Enterprise
Anil Kumar Srivastava
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
