A guarantor challenged DRT and DRAT orders requiring a pre-deposit under Section 18 of the SARFAESI Act in his appeal against an auction sale. The court held that repayment by another guarantor did not excuse the pre-deposit requirement and dismissed the writ petition.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
NC: 2024:KHC:12060-DB WP No. 31992 of 2017
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF MARCH, 2024
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE C.M. POONACHA
WRIT PETITION NO. 31992 OF 2017 (GM-DRT)
BETWEEN:
…PETITIONER
(BY SRI. JAGADISH BALIGA N .,ADVOCATE)
AND:
Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA
…RESPONDENTS (BY SRI. M R SHASHIDHAR, ADVOCATE ACCEPTS NOTICE FOR R1 V/O DTD 15.3.2024 (VK NOT FILED) SRI KRISHNAMOOTHY D.,ADVOCATE FOR R2)
NC: 2024:KHC:12060-DB WP No. 31992 of 2017
THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THAT THE ORDER ON I.A.3073/2007 IN IR 934/2007 DATED 6.5.2008 PASSED BY THE LEARNED DEBTS RECOVERY TRIBUNAL AT BENGALURU AT ANNEX-E AS ILLEGAL AND QUASH THE SAME AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, POONACHA. J. , MADE THE FOLLOWING:
ORDER
The present petition is filed challenging the order dated 6.5.2008 passed by the Debt Recovery Tribunal, Bengaluru1 as well as the orders dated 7.2.2017 and 13.3.2017 passed by the Debts Recovery Appellate Tribunal, Chennai2 .
1 Hereinafter referred to as the ‘DRT’
2 Hereinafter referred to as the ‘DRAT’
3 Hereinafter referred to as the ‘bank’
4 Hereinafter referred to as the ‘SARFAESI Act’
preferred an appeal under section 18 of the SARFAESI Act before the DRAT in MA (SA) No.339/2010. In the said appeal, the petitioner filed an application to waive the entire predeposit amount. The DRAT by its order dated 7.2.2017 disposed of the said application and directed the petitioner to make a pre-deposit of `5.50 lakhs within four weeks from the date of the said order. Since the said pre-deposit was not made, vide order dated 13.3.2017, the appeal was dismissed for want of compliance. Being aggrieved, the present Writ Petition is filed.
bank justifies the orders passed by the DRT and DRAT.
have been considered and the material on record has been perused. The question that arises for consideration is, whether the orders passed by the DRT and DRAT are erroneous and liable to be interfered with?
bank. In that view of the matter, it cannot be said that the petitioner is not liable to make the pre-deposit.
pre-deposit that has been ordered to be paid by the DRAT, but the requirement of the petitioner to make the pre-deposit in the appeal filed by him before the DRAT.
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 20025 , reads as under:
“18. Appeal to Appellate Tribunal.-
(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal along with such fee, as may be prescribed to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.
Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower:
Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less:
Provided also that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twenty-five per cent. of debt referred to in the second proviso.”
(emphasis supplied)
9. Merely because the loan amount has been fully
repaid by another guarantor, the same does not absolve the
5 Hereinafter referred to as the ‘SARFAESI Act’
NC: 2024:KHC:12060-DB WP No. 31992 of 2017
petitioner from making the pre-deposit since the requirement of Section 18 of the SARFAESI Act regarding making of the predeposit is required to be complied with.
No costs.
Sd/-
JUDGE
Sd/JUDGE
ND
List No.: 1 Sl No.: 25
2 issues framed by the court
Whether the DRT's dismissal of the delay-condonation application and the DRAT's pre-deposit direction and dismissal of appeal for non-compliance were liable to interference?
Whether repayment of the loan by another guarantor absolved the petitioner from making the statutory pre-deposit under Section 18 of the SARFAESI Act?
3 provisions across 2 enactments
Sri Pradeep S/o H R Ramesh
The Canara Bank, Saraswathipuram, Mysore
Sri S N Devaraj S/o Late Nanjaiah
S.G. Pandit
C.M. Poonacha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
