Nasim Uddin Choudhury Vs the State Bank of India and Anr.

It is not in dispute that the petitioner along with his father namely, Shams Uddin Choudhury and brother, namely, Gias Uddin Choudhury, jointly applied for a home loan of Rs.71,00,000/- (Rupees Seventy One Lakh only) in the year 2022. Pursuant to the loan availed, an equitable mortgage was created in respect of the security assets which is more particularly described in paragraph 3 of the writ petition. Having availed the loan, the petitioner now contends that the equitable mortgage was created outside the notified area under Section 58 (f) of the Transfer of Property Act, 1882 and accordingly, creation of mortgages claimed to be illegal.

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It is also not in dispute that the respondent No. 2 had issued a notice to the petitioner under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ for short) read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 dated 12.11.2024, calling upon the petitioner to discharge and repay the outstanding loan amount with interest within 60 (Sixty) days from the date of receipt of notice. Thereafter, on 06.02.2025, constructive possession of the

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security assets was taken over by the respondent No. 2. Thereafter, the respondent No. 2 applied before the District Magistrate, Hailakandi on 28.03.2025 to provide assistance for taking over possession of the security assets. Accordingly, by an order dated 09.05.2025, the Additional District Magistrate, Hailakandi, entrusted the concerned Circle Officer, Algapur and Executive Magistrate, Hailakandi, to provide the necessary assistance to the respondent No. 2 for securing the possession of the security assets.

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Accordingly, the respondent No. 2, by a letter dated 23.07.2025, put the petitioner and the other borrowers to notice for taking over possession in terms, which is morefully mentioned in the said notice.

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Aggrieved by the steps so taken, the petitioner had approached the Debts Recovery Tribunal, Guwahati, by filing a SARFAESI application under Section 17 of the SARFAESI Act. The same was registered as S.A. No. 116/2025. The petitioner had also filed an interlocutory application, which was registered as I.A.(Civil) No. 614/2025 with a prayer to stay the operation of the vacation notice dated 23.07.2025, pursuant to the order dated 09.05.2025, passed by the Additional District Magistrate, Hailakandi.

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The learned Tribunal, by an order dated 02.09.2025, had dismissed the said interlocutory application by holding that the petitioner had failed to make out any prima facie case in his favour and that balance of convenience was also not in his favour and the SARFAESI application was listed for hearing.

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The learned counsel for the petitioner has submitted that the various provisions of the SARFAESI Act and rules framed thereunder, read with the Recovery of Debts and Bankruptcy Act, 1993 and rules framed thereunder, vest

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jurisdiction upon the Debts Recovery Tribunal to pass an interlocutory order. In support of the contention that the Tribunal’s have the power to pass interlocutory orders, the learned counsel for the petitioner has placed reliance on the following three cases :-

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Industrial Credit and Investment Corporation of India Ltd. –vs- Grapco Industries Ltd. & Ors., (1999) 4 SCC 710,

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2.Allahabad Bank, Calcutta –vs- Radha Krishna Maity & Ors.,(1999) 6 SCC 755,

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Authorised Officer, Indian Bank –vs- D. Visalakshi & Anr.,(2019) 20 SCC 47.

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The learned counsel for the petitioner has also submitted that notwithstanding that the provision for an appeal is prescribed under Section 18 of the SARFAESI Act, but for filing an appeal, the petitioner would have to make a pre-deposit. It is submitted that as the debts due has not been determined under the Recovery of Debts and Bankruptcy Act, 1993, the claims would be based only on the dues declared in the notice under Section 13(2) of the SARFAESI Act. However, under second proviso to Section 18 of the Securitisation Act, the petitioner has the liberty of paying the reduced amount of fees on the lower of the two determination of the debts. However, it is submitted that the appeal to the Appellate Tribunal would only lie against the final determination and not against the determination made in the interlocutory application.

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It is further submitted that in a similar application challenging the action taken under Section 14 of the SARFAESI Act, this Court had entertained a writ petition in the matter of M/s Moon Enterprise & another-vs-State Bank of India & another, WP(C)/449/2024 and in the said proceedings, this Court, vide an

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order dated 02.02.2024, issued notice and the order dated 31.08.2023 passed by the District Magistrate concerned was suspended. It is submitted that the said writ petition is pending for disposal before this Court.

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The grounds on which the impugned order has been assailed are contained in Sub para (i) to (xvii) of paragraph 12 of this writ petition, which are not reproduced herein for the sake of brevity.

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It would suffice to mention that the endeavour of the learned counsel for the petitioner is to demonstrate that the manner in which assistance under Section 14 of the SARFAESI Act was sought for and granted by the Additional District Magistrate, is not accordance with law and liable to be interfered with.

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Per contra, the learned counsel for the respondents has submitted that it is too well settled proposition of law that as Section 18 (1) of the SARFAESI Act contemplates filing of an appeal against ‘any’ order, there would be no bar for the petitioner to file an appeal. Moreover, it is submitted that the pre-deposit is subject to such orders that may be passed in an interlocutory application accompanying the appeal before the Appellate Tribunal and in this regard, he places reliance on the following three cases :-

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Axis Bank –vs- SBS Organics Private Limited & anr., (2016) 12 SSC 18,

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Narayan Chandra Ghosh –vs- UCO Bank & Ors., (2011) 4 SCC 548,

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M/S. Vinay container Services Pvt. Ltd. vs- Axis Bank, (AIR 2011 Bom 37).

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It is further submitted that, in the proceedings of WP(C)/4153/2025, as regards the quantum of deposit, this Court had issued a notice and in the interim, it was provided to the effect that the Debts Recovery Tribunal shall not

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dismiss the appeal as infructuous for not having deposited 35% of the recoverable debt amount.

¶47

At the outset, having appreciated the materials available on record and the cases cited at the Bar, there is no dispute that as per the provision of Section 18(1) of the SARFAESI Act, the mandate of law is that any person aggrieved by “any order” made by the Debts Recovery Tribunal, may prefer an appeal. The said provision is in relation to Section 17 of the SARFAESI Act.

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The requirement of a pre-deposit is prescribed under second proviso to Section 18(1) of the SARFAESI Act and the third proviso to sub-section (1) of Section 18 of the SARFAESI Act also provides power to the Appellate Tribunal to reduce the amount to an extent which is permissible under the said provision.

¶49

Therefore, under the facts and circumstances of the present case, it is not in dispute that the petitioner, along with two other borrowers, had taken a housing loan and that the entire loan and interest amount has not been refunded or repaid to the respondents. Under the circumstances, as a rule of prudence, this Court would refrain itself from examining the legality of the order dated 02.09.2025, passed by the Debts Recovery Tribunal, as the provisions of the SARFAESI Act provides for an alternative and efficacious remedy by way of an appeal before the Debts Recovery Appellate Tribunal.

¶50

The Appellate Tribunal, in view of Section 18 of the SARFAESI Act, has the competence to not entertain an appeal unless a deposit is made as per the proviso thereto and on the other hand, it also has competence to give reasons and to reduce the pre-deposit to an extent as provided under the third proviso to the sub-section (1) of Section 18 of the SARFAESI Act.

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19. The other reason to exercise self-restraint in exercising power under Article 226 of the Constitution of India is that the District Magistrate and the Additional District Magistrate are vested with power under Section 14 of the SARFAESI Act, to assist the secured creditor in taking possession of the secured assets. There is no material on record to show that on receipt of notice under section 13 (2) of the SARFAESI Act, the petitioner has made repayment of the financial assistance upon receipt of notice and therefore, it was incumbent on the part of the Additional District Magistrate to give the required assistance as provided under Section 14 of the SARFAESI Act . The exercise of such power cannot be held to be illegal.

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20. In t his regard, it is projected in this writ petition that there is a certain procedural irregularity in passing of the order by the Additional District Magistrate. If that be so, even in that situation, it is for the Debt Recovery Tribunal as well as the Debt Recovery Appellate Tribunal to examine the application made by the respondent No.2 under Section 14 of the SARFAESI Act as they are the prescribed statutory Forum to entertain the SARFAESI application as well as the appeal against the orders passed in a SARFAESI application. Therefore, any determination by this Court regarding the disputed question of fact would have the tendency to prejudice one of the two sides.

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The statutory law requiring a pre-deposit to accompany the appeal has not been held to be unconstitutional by any court of law. Therefore, merely because the statute requires a pre-deposit to entertain an appeal would not be a sufficient ground for this Court to examine the legality of the order dated 02.09.2025 passed by the Debt Recovery Tribunal to substitute its wisdom on the jurisdiction vested with the Debt Recovery Appellate Tribunal.

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Accordingly, the cases cited by the learned counsel for the petitioner does

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not help the petitioner in any manner as those citations are not authority on the point that despite appellate jurisdiction being available, a writ petition should be entertained against every order that is passed in SARFAESI application by the Debt Recovery Tribunal. Therefore, there is no need to discuss the said cases and burden this order with volume.

¶58

As per the ratio laid down by the Supreme Court of India in the case of Central Council for Research in Ayurvedic Sciences v. Bikartan Das, 2023 INSC 733: (2023) 0 Supreme (SC) 763, the contours of the High Court in entertaining challenge to the orders passed by the Tribunals is well defined. Therefore, unless the order is ex-facie illegal and vitiated by non-consideration of materials available on record or consideration of materials which are extraneous to the records, which vitiate the order, the High Court in exercise of jurisdiction under Article 226 and or Article 227 of the Constitution of India, in this case, has to exercise self-restraint.

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