South Indian Bank Ltd vs Muhaammadkani Rawther

1 WA No.100 of 2026 2026:KER:11825

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN

&

THE HONOURABLE MR.JUSTICE MURALEE KRISHNA S.

MONDAY, THE 16TH DAY OF FEBRUARY 2026 / 27TH MAGHA, 1947

WA NO. 100 OF 2026

AGAINST THE ORDER DATED 19.12.2025 IN OP (DRT) NO.398 OF

2025 OF HIGH COURT OF KERALA

APPELLANTS/RESPONDENTS 1 AND 2

1 SOUTH INDIAN BANK LTD, REPRESENTED BY THE ASSISTANT GENERAL MANAGER,YMCA BUILDING, 3RD FLOOR,M.G ROAD, STATUE JUNCTION,GPO, THIRUVANANTHAPURAM, PIN - 695001

2 THE BRANCH MANAGER, SOUTH INDIAN BANK LTD, PIRAVANTHUR BRANCH, ALIMUKKU,PIRAVANTHUR, KOLLAM DISTRICT, PIN - 689696

BY ADVS. SHRI.B.J.JOHN PRAKASH SHRI.P.PRAMEL SHRI.SOORAJ M.S. SMT.VARSHA VIJAYAKUMAR NAIR SHRI.MANU BABY SMT.RAJASREE K.

RESPONDENTS/PETITIONERS & RESPONDENT NO.3:

1 MUHAAMMADKANI RAWTHER, AGED 76 YEARS S/O RAWTHER , BEENA MANZIL, VAZHAVILA, VENCHEMBU P.O, KARAVALOOR, KOLLAM DISTRICT, PIN - 691333 2 WA No.100 of 2026 2026:KER:11825

2 BEENA NAZEER, AGED 56 YEARS KANIYAMPADICKAL PUTHEN VEEDU,PUNNALA P.O, PIRAVANTHOOR, KOLLAM DISTRICT, PIN - 689696

3 NASEERHAN KANIYAMPADICKAL PUTHENVEEDU SAMAD, KANIYAMPADICKAL PUTHEN VEEDU,PUNNALA P.O, PIRAVANTHOOR, KOLLAM DISTRICT, PIN - 689696

BY ADV SRI.T.M.ABDUL LATHEEF

THIS WRIT APPEAL WAS FINALLY HEARD ON 29.01.2026, THE COURT ON 16.02.2026 PASSED THE FOLLOWING: 3 WA No.100 of 2026 2026:KER:11825

JUDGMENT

Muralee Krishna, J.

The appellants, who are respondents 1 and 2 in O.P.(DRT)

No.398 of 2025, filed this intra-court appeal under Section 5(i) of

the Kerala High Court Act, 1958, challenging the order dated

19.12.2025 passed by the learned Single Judge in that O.P.(DRT).

2. As per the pleadings in the original petition, the 1 st

respondent availed a housing loan from the 2nd appellant Bank, for

the purpose of constructing the residential house for his daughter,

the 2nd respondent, mortgaging an extent of 3.44 Ares of property

in Sy.No.516/2B of Pathanapuram Village and the respondents 2

and 3 are the sureties for the said loan transaction. The appellant

Bank issued a Notice to the respondents, wherein it is stated that

the amount in arrears is to be cleared before 25.05.2023, and

another notice was issued to the respondents, stating that the loan

was classified as Non-Performing Asset (NPA) on 02.06.2023. The

Bank issued a notice under Section 13(4) of the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 ('SARFAESI Act' in short) and informed the 4 WA No.100 of 2026 2026:KER:11825

respondents that they are proceeding for taking out the property

and thereupon the 1st respondent approached this Court by filing

W.P.(C)No.19933 of 2024 and this Court by the judgment dated

04.06.2024 disposed of the matter, permitting the 1st respondent

to pay off the overdue amount in 10 instalments. Thereafter, the

respondents remitted the amount as fixed by this Court towards

the outstanding liability of Rs.3,30,491/-, and the entire amount

was paid. Though the payment was accepted by the Bank up to

04.04.2025, thereafter, the Advocate Commissioner has issued

notice stating that he has been authorised to take possession of

the property based upon Ext.P3 order dated 06.05.2025 passed

by the Chief Judicial Magistrate Court, Kollam, in M.C.No.760 of

2025. On receipt of the notice, the 1st respondent filed

W.P.(C)No.20089 of 2025 before this Court, and this Court did not

interfere in the matter and gave liberty to the respondents to

approach the Debts Recovery Tribunal, Ernakulam (the 'Tribunal'

for short). On the basis of the direction issued by this Court, the

respondents approached the Tribunal by filing S.A.No.447 of 2025

and also filed Ext.P4 interim application for stay. But the Tribunal 5 WA No.100 of 2026 2026:KER:11825

dismissed the interim application. Challenging the said order,

respondents 1 and 2 filed O.P.(DRT)No.221 of 2025, and by Ext.P6

judgment dated 06.10.2025, this Court again directed the matter

to be considered by the Tribunal. But the Tribunal, as per Ext.P8

order dated 10.11.2025, dismissed the S.A. and interim

application for stay. With these pleadings, respondents 1 and 2 -

petitioners filed O.P.(DRT)No.398 of 2025 seeking the following

reliefs :

"i) To set aside Ext.P8 order dated 10.11.2025 in S.A.No.447 of 2025 passed by the Debts Recovery Tribunal-2, Ernakulam;

ii) To issue direction to the respondent Bank not to proceed for taking possession of the property, on the basis of Ext.P3 order passed by the Chief Judicial Magistrate Court, Kollam in M.C.No.760 of 2025."

3. On 19.12.2025, when the O.P.(DRT) came up for

consideration, the learned Single Judge passed the impugned

order, which reads thus:

"The petitioners shall remit an amount of Rs.35,000/- (Rupees thirty five thousand only) on or before 05.02.2026 and shall pay the instalment due on 3rd of every month. Post on 06.01.2026."

6 WA No.100 of 2026 2026:KER:11825

4. Being aggrieved, the appellants - respondents 1 and 2

have filed this intra-court appeal.

5. Heard the learned counsel for the appellants and the

learned counsel for respondents 1 and 2 - petitioners in the

O.P.(DRT).

6. The learned counsel for the appellants would submit that

the respondents 1 and 2 are trying to stall the proceedings

initiated by the Bank under the provisions of the SARFAESI Act by

filing repeated writ petitions. When the loan availed by the 1 st

respondent became NPA, the Bank issued a demand notice under

Section 13(2) of the SARFAESI Act on 01.08.2023. Thereafter,

symbolic possession of the secured asset was taken by the Bank.

However, without making the payment, the respondents

approached this Court by filing W.P.(C)No.19933 of 2024, which

was disposed of vide, judgment dated 04.06.2024, permitting the

respondents to clear the overdue amount in ten equal monthly

instalments. The respondents did not comply with the directions

in that judgment. Thereafter, on the application of the Bank under

Section 14 of the SARFAESI Act, in M.C.No.760 of 2025, the Chief 7 WA No.100 of 2026 2026:KER:11825

Judicial Magistrate, Kollam, appointed an Advocate Commissioner

who had issued notice for taking physical possession of the

secured asset. The respondents again approached this Court by

filing W.P.(C)No.20089 of 2025, challenging the said notice. Apart

from that, the respondents filed an interlocutory application

seeking stay of the SARFAESI proceedings in W.P.(C)No.19933 of

2024, and that interlocutory application bearing I.A.No.3 of 2025

was dismissed by the learned Single Judge on 10.06.2025.

Subsequently, W.P.(C)No.20089 of 2025 was also dismissed on

18.06.2025. Thereafter, the respondents filed S.A.No.447 of 2025

before the Tribunal. Since the Tribunal did not grant an interim

stay, the respondents filed O.P.(DRT)No.221 of 2025 before this

Court, which was disposed of by the judgment dated 06.10.2025

with a direction to the Tribunal to pass orders on the stay

application within three weeks. The Tribunal disposed of the stay

application bearing I.A. No.2609 of 2025, directing the appellant

Bank not to take coercive steps until the final disposal of

S.A.No.447 of 2025. Thereafter, the S.A. was heard and finally

disposed of by the Tribunal by Ext.P8 dismissal order dated 8 WA No.100 of 2026 2026:KER:11825

10.11.2025. It is challenging the said order, the present O.P.(DRT)

was filed by the respondents 1 and 2. The learned counsel further

submitted that as on 05.01.2026, an amount of Rs.21,37,787.95/-

is outstanding in the loan account. The learned counsel

vehemently submitted that, against Ext.P8 order of the Tribunal,

the remedy available to respondents 1 and 2 is an appeal before

the Debts Recovery Appellate Tribunal under Section 18 of the

SARFAESI Act. It is further argued by the learned counsel, relying

on the judgment of the Apex Court in Bachhaj Nahar v. Nilima

Mandal [(2008) 17 SCC 491], that the learned Single Judge

ought not have granted the relief beyond the pleadings. The

learned counsel, by relying on the judgment of this Court in State

Bank of India v. M/s. Kinship Services (India) (P) Ltd.

[2013 (4) KHC 21] submitted that since the relief granted in the

impugned interim order is by invoking the jurisdiction under Article

226 of the Constitution of India, writ appeal is maintainable. It is

the submissions of the learned counsel that since an equal and

efficacious remedy is available to respondents 1 and 2 before the

Debs Recovery Appellate Tribunal, the learned Single Judge ought 9 WA No.100 of 2026 2026:KER:11825

not to have passed the impugned order stalling the proceedings

under the SARFAESI Act.

7. The learned counsel for respondents 1 and 2 would

submit that it is only by way of an indulgence that the learned

Single Judge passed the impugned interim order dated

19.12.2025. Therefore, no interference is needed on the

impugned order of the learned Single Judge. By relying on the

judgment of the Apex Court in South Indian Bank Ltd v.

Naveen Mathew Philip [(2023) 17 SCC 311], the learned

counsel submitted that in exceptional circumstances, a writ

petition is maintainable against the proceedings initiated under

the provisions of the SARFAESI Act, and such an exceptional

circumstance exists in the present case. The learned counsel

further relied on the judgments of the Apex Court in Assistant

Commissioner of State Tax v. Commercial Steel

Ltd.[(2022) 16 SCC 447], Ibrat Faizan v. Omaxe Buildhome

Private Ltd. [(2023) 11 SCC 594], Celir LLP v. Bafna Motors

(Mumbai) (P) Ltd.[(2024) 2 SCC 1], and Allahabad High

Court Bar Association v. State of Uttar Pradesh [(2024) 6 10 WA No.100 of 2026 2026:KER:11825

SCC 267], in support of his arguments.

8. The appellants are challenging an interim order dated

19.12.2025 passed by the learned Single Judge in the original

petition filed by respondents 1 and 2, challenging the order of the

Tribunal in a Securitisation Application filed by respondents 1 and

2 under Section 17 of the SARFAESI Act. As far as maintainability

of a writ appeal under Section 5(i) of the Kerala High Court Act,

1958, against an interim order passed by a learned Single Judge

in a writ petition, the Larger Bench of this Court in K.S. Das v.

State of Kerala [1992 (2) KLT 358] held that the word 'order'

in Section 5(i) of the Act includes, apart from other orders, orders

passed by the High Court in miscellaneous petitions filed in the

writ petitions provided the orders are to be in force pending the

writ petition. An appeal would lie against such orders only if the

orders substantially affect or touch upon the substantial rights or

liabilities of the parties or are matters of moment and cause

substantial prejudice to the parties. The nature of the 'order'

appealable belongs to the category of 'intermediate orders'

referred to by the Apex Court in Madhu Limaye v. State of 11 WA No.100 of 2026 2026:KER:11825

Maharashtra [(1977) 4 SCC 551]. The word 'order' is not

confined to 'final order' which disposes of the writ petition. The

'orders' should not however, be ad-interim orders in force pending

the miscellaneous petition or orders merely of a procedural nature.

9. In Thomas P.T. and another v. Bijo Thomas and others

[2021 (6) KLT 196], a Division Bench of this Court noticed that

the view that was upheld by the Larger Bench in K.S. Das [1992

(2) KLT 358] was that even though an appeal could be filed

against an interlocutory order passed in a writ petition, in order to

be qualified for challenge in an appeal, the order shall be either

substantially affecting or touching upon the substantial rights or

liabilities of the parties or which are matters of moment and cause

substantial prejudice to the parties. According to the Larger

Bench, the nature of the order appealable belongs to the category

of intermediate orders referred to by the Apex Court in Madhu

Limaye [(1977) 4 SCC 551]. It was, however, clarified by the

Larger Bench that such orders should not, however, be ad interim

orders or orders merely of a procedural nature.

10. This Court in State of Kerala v. Pradeepkumar A.V. 12 WA No.100 of 2026 2026:KER:11825

[2025 (1) KHC 672], after considering the issue of

maintainability of a writ appeal under Section 5(i) of the Kerala

High Court Act, 1958, against an interim order, by noting the

principles laid down in K.S Das [1992 (2) KLT 358], Madhu

Limaye [(1977) 4 SCC 551] and Thomas P.T. and another

[2021 (6) KLT 196], held that the interim order of the learned

Single Judge in that particular case not being an order merely

procedural in nature interim and being an order touching upon the

substantial rights and liabilities of the parties and causing

substantial prejudice to the appellants is an interim order qualified

for challenge in an appeal filed under Section 5(i) of the Kerala

High Court Act.

11. While coming to the question of maintainability of the

writ appeal, in view of the fact that the impugned order was

passed by the learned Single Judge in an original petition filed

under Article 227 of the constitution of India, it is to be noted that

the interim order passed by the learned Single Judge is of the

nature that it can only be treated as one passed under Article 226

of the Constitution of India and not under Article 227 of the 13 WA No.100 of 2026 2026:KER:11825

Constitution of India. In State Bank of India [2013 (4) KHC

21], a Division Bench of this Court, considered the appeal filed

against an interim order passed by a learned Single Judge staying

confirmation of sale till further orders in respect of one item of

property which is sought to be sold in an auction scheduled in a

proceedings under the provisions of the SARFAESI Act. By relying

on the judgment of the Apex Court in Civil Appeal No.6 of 2009 in

the case of State of M.P. v. Sanjay Keralkar, dated

05.01.2009 [(2009) 17 SCC 766], the Division Bench held that

the nature of the interim relief granted therein by the learned

Single Judge is nothing but a discretion exercised under Article

226 of the Constitution of India.

12. In State of M.P [2009) 17 SCC 766], the Apex Court

held thus:

"2. Having heard learned counsel for the respective parties, we are unable to sustain the order passed by the Division Bench of the Madhya Pradesh High Court dismissing the appeal as preferred by the appellant herein on the ground that the appeal had been preferred against an order passed under Article 227 of the Constitution. We have had occasion to look into the petition which had been filed before the 14 WA No.100 of 2026 2026:KER:11825

Single Bench of the High Court, which has been styled as writ petition under Article 226/227 of the Constitution of India. The Division Bench of the High Court appears to have not taken into consideration the fact that the petition had been styled as a writ petition under Article 226 as well and that the frame of the petition was that of a writ petition as would also be evident from the prayers made therein.

3. We are unable to agree with the High Court that the learned Single Judge had passed order under Article 227 of the Constitution of India and that the appeal was not maintainable".

13. Jogendra Sinhji Vijay Singhji v. State of Gujarat

[(2015) 9 SCC 1], the Apex Court held thus:

"Where the facts justify a party in filing an application either under Article 226 or 227 of the Constitution, and the party chooses to file his application under both these articles, in fairness and justice to such party and in order not to deprive him of the valuable right of appeal the court ought to treat the application as being made under Article 226, and if in deciding the matter, in the final order the court gives ancillary directions which may pertain to Article 227, this ought not to be held to deprive a party of the right of appeal under Clause 15 of the Letters Patent where the substantial part of the order sought to be appealed against is under Article 226, If the judgment under appeal falls squarely within four corners of Article 227, it goes without saying 15 WA No.100 of 2026 2026:KER:11825

that intra-court appeal from such judgment would not be maintainable. On the other hand, if the petitioner has invoked the jurisdiction of the High Court for issuance of certain writ under Article 226, although Article 227 is also mentioned, and principally the judgment appealed against falls under Article 276, the appeal would be maintainable. What is important to be ascertained is the true nature of order passed by the Single judge and not what provision he mentions while exercising such powers. A statement by a Single judge that he has exercised power under Article 227, cannot take away right of appeal against such judgment if power is otherwise found to have been exercised under Article 226. The vital factor for determination of maintainability of the intra court appeal is the nature of jurisdiction invoked by the party and the true nature of principal order passed by the Single judge".

(Underline supplied)

14. In the original petition, the respondents 1 and 2 are

challenging Ext.P8 order of the Tribunal dated 10.11.2025 in

S.A.No.447 of 2025. Though the 1st relief sought in the original

petition is to set aside the aforesaid order of the Tribunal, the 2 nd

relief sought in the original petition is to issue a direction to the

appellant Bank not to proceed for taking possession of the

property on the basis of Ext.P3 order passed by the Chief Judicial 16 WA No.100 of 2026 2026:KER:11825

Magistrate, Kollam, in M.C.No.760 of 2025. The said relief is the

one that can be taken as under Article 226 of the Constitution of

India and not under Article 227 of the Constitution of India. Viewed

in the light of the principles laid down in these judgments, we are

of the opinion that the present intra-court appeal is maintainable

under Section 5(i) of the Kerala High Court Act, since it affects the

substantial rights and liabilities of the parties and causes

substantial prejudice to the appellants, and the nature of the 2nd

relief sought in the original petition and nature of the impugned

order can only be treated as one under Article 226 of the

Constitution of India.

15. From the pleadings and materials on record, we notice

that the 1st respondent had already approached this Court with

another writ petition, i.e., W.P.(C)No.20089 of 2025, against the

possession notice issued by the Advocate Commissioner in

M.C.No.760 of 2025 and that writ petition ended in dismissal.

Therefore, it is appropriate to extract some of the judgments

regarding the maintainability of a writ petition under Article 226

of the Constitution of India against the proceedings initiated under 17 WA No.100 of 2026 2026:KER:11825

the provisions of the SARFAESI Act.

16. In Authorized Officer, State Bank of Travancore v.

Mathew K.C. [(2018) 3 SCC 85], the Apex Court held that the

High Court under Article 226 of the Constitution of India can

entertain a writ petition only under exceptional circumstances and

that it is a self-imposed restraint by the High Court. The four

exceptional circumstances such as, where the statutory authority

has not acted in accordance with the provisions of the enactment

in question, or in defiance of the fundamental principles of judicial

procedure, or has resorted to invoke the provisions which are

repealed, or when an order has been passed in total violation of

the principles of natural justice, were re iterated in paragraph 6 of

the said judgment by relying on the judgment of the Apex Court

in Commissioner of Income Tax and Others v. Chhabil Dass

Agarwal [(2014) 1 SCC 603].

17. In South Indian Bank Ltd. (M/s.) v. Naveen

Mathew Philip [(2023) 17 SCC 311], after discussing the

various judgments on the point as to circumstances in which the

High Court can interfere with matters pertaining to the SARFAESI 18 WA No.100 of 2026 2026:KER:11825

Act, it is held by the Apex Court as under:

"Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Art.226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi - judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Art.226 of the Constitution, a person must exhaust the remedies available under the relevant statute".

18. In PHR Invent Educational Society v. UCO Bank

[(2024) 6 SCC 579] the Apex Court held that it is more than a

settled legal position of law that in matters arising out of the RDB

Act and the SARFAESI Act, the High Court should not entertain a 19 WA No.100 of 2026 2026:KER:11825

petition under Art.226 of the Constitution, particularly when an

alternative statutory remedy is available.

19. A learned Single Judge of this Court in Jasmin K. v.

State Bank of India [2024 (3) KHC 266] reiterated the

position of law laid down by the Apex Court in the aforementioned

judgments.

20. From the judgments quoted above, it is clear that

unless the four exceptional circumstances mentioned by the Apex

Court in Mathew K.C. [(2018) 3 SCC 85], the respondents

cannot invoke the writ jurisdiction of this Court under Article 226

of the Constitution of India. In the instant case, though the

respondents 1 and 2 filed the Original Petition under Article 227

of the Constitution of India as if the relief sought is by exercising

supervisory jurisdiction, the relief No.(ii) would show that it is of

the nature that can be granted by exercising jurisdiction under

Article 226 of the Constitution of India. Moreover, the 1st

respondent has already challenged the issuance of possession

notice by the Advocate Commissioner in pursuance to Ext.P3 order

of the Court of Chief Judicial Magistrate, in W.P.(C)No.20089 of 20 WA No.100 of 2026 2026:KER:11825

2025, and this Court relegated them to the Tribunal. Thereafter

the challenge raised by the respondents was considered by the

Tribunal in the securitisation application filed by them and decided

against the respondents.

21. While coming to the point of availability of an equal and

efficacious remedy of appeal before the Debts Recovery Appellate

Tribunal against an order passed by the Tribunal in a securitisation

application, and the maintainability of an original petition under

Article 227 or a writ petition under Article 226 of the Constitution

of India, it is relevant to note Section 18 of the SARFAESI Act

and also some of the judgments of the Apex Court as well as this

Court on the point.

22. Section 18 of the SARFAESI Act reads thus:

"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:

21 WA No.100 of 2026 2026:KER:11825

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.

(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder."

23. In Sreedhar K. v. M/s Raus Constructions Pvt. Ltd.

[(2023) 11 SCC 169], the Apex Court, while considering the

requirement of deposit of 25% of the debt due before the Debts

Recovery Appellate Tribunal to avail the statutory remedy of

appeal, held thus:

"6. At the outset, it is required to be noted that what was challenged before the High Court by the borrower in a writ petition under Article 226 of the Constitution of India was the judgment and order passed by the DRT-I. Against the judgment and order passed by the DRT-I dismissing the application, the borrower had a statutory remedy available 22 WA No.100 of 2026 2026:KER:11825

by way of appeal before the DRAT. If the borrower would have preferred an appeal before the DRAT, he would have been required to deposit 25% of the debt due. To circumvent the provision of appeal before the DRAT and the pre-deposit, the borrower straightway preferred the writ petition before the High Court under Article 226/227 of the Constitution. Therefore, in view of alternative statutory remedy available by way of appeal before the DRAT, the High Court ought not to have entertained the writ petition under Article 226/227 of the Constitution of India challenging the judgment and order passed by the DRT- I. By entertaining the writ petition straightway under Article 226/227 of the Constitution of India challenging the order passed by the DRT-I, the High Court has allowed/permitted the borrower to circumvent the provision of appeal before the DRAT under the provisions of the SARFAESI Act."

24. In Narayan Chandra Ghosh v. Uco Bank [(2011) 4

SCC 548], while considering the question as to whether Debts

Recovery Appellate Tribunal has the jurisdiction to exempt a

person preferring an appeal under Section 18 of the SARFAESI Act

from making any predeposit in terms of the said provision, the

Apex Court held thus:

"8. S.18(1) of the Act confers a statutory right on a person aggrieved by any order made by the Debts Recovery 23 WA No.100 of 2026 2026:KER:11825

Tribunal under S.17 of the Act to prefer an appeal to the Appellate Tribunal. However, the right conferred under S.18(1) is subject to the condition laid down in the second proviso thereto. The second proviso postulates 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. However, under the third proviso to the sub-section, the Appellate Tribunal has the power to reduce the amount, for the reasons to be recorded in writing, to not less than twenty - five per cent of the debt, referred to in the second proviso. Thus, there is an absolute bar to entertainment of an appeal under S.18 of the Act unless the condition precedent, as stipulated, is fulfilled. Unless the borrower makes, with the Appellate Tribunal, a pre-deposit of fifty per cent of the debt due from him or determined, an appeal under the said provision cannot be entertained by the Appellate Tribunal. The language of the said proviso is clear and admits of no ambiguity. It is well - settled that when a Statute confers a right of appeal, while granting the right, the Legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions, rendering the right almost illusory. Bearing in mind the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the requirement of pre -

24 WA No.100 of 2026 2026:KER:11825

deposit under sub-section (1) of S.18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in S.18 of the Act. In that view of the matter, no court, much less the Appellate Tribunal, a creature of the Act itself, can refuse to give full effect to the provisions of the Statute. We have no hesitation in holding that deposit under the second proviso to S.18(1) of the Act being a condition precedent for preferring an appeal under the said Section, the Appellate Tribunal had erred in law in entertaining the appeal without directing the appellant to comply with the said mandatory requirement.

9. The argument of learned counsel for the appellant that as the amount of debt due had not been determined by the Debts Recovery Tribunal, appeal could be entertained by the Appellate Tribunal without insisting on pre-deposit, is equally fallacious. Under the second proviso to sub-section (1) of S.18 of the Act the amount of fifty per cent, which is required to be deposited by the borrower, is computed either with reference to the debt due from him as claimed by the secured creditors or as determined by the Debts Recovery Tribunal, whichever is less. Obviously, where the amount of debt is yet to be determined by the Debts Recovery Tribunal, the borrower, while preferring appeal, would be liable to deposit fifty per cent of the debt due from him as claimed by the secured creditors. Therefore, the condition of pre-deposit being mandatory, a complete 25 WA No.100 of 2026 2026:KER:11825

waiver of deposit by the appellant with the Appellate Tribunal, was beyond the provisions of the Act, as is evident from the second and third proviso to the said Section. At best, the Appellate Tribunal could have, after recording the reasons, reduced the amount of deposit of fifty per cent to an amount not less than twenty-five per cent of the debt referred to in the second proviso. We are convinced that the order of the Appellate Tribunal, entertaining appellant's appeal without insisting on pre-deposit was clearly unsustainable and, therefore, the decision of the High Court in setting aside the same cannot be flawed".

25. In Union Bank of India, Kottayam, v. M/s

Suwique Traders [2025 (4) KLT 455], while considering the

above issue, by considering the relevant provisions under the

SARFAESI Act and also relying on the decision in Narayan

Chandra Ghosh [(2011) 4 SCC 548], this Court held thus:

"20. When complete waiver of pre-deposit is beyond the provisions of Section 18(1) of the SARFAESI Act, it cannot be contended that, a person aggrieved by any order made by the Debts Recovery Tribunal under Section 17, can prefer an appeal before the Appellate Tribunal, within the time limit specified in Section 18(1), along with an application for complete waiver of pre-deposit under the second proviso to Section 18(1), after remitting only the fee provided under Section 18(1), since the Appellate Tribunal cannot grant 26 WA No.100 of 2026 2026:KER:11825

complete waiver of pre-deposit, which is beyond the scope of the provisions contained in the second and third provisos to Section 18(1). In that view of the matter, in an appeal filed under Section 18 of the Act, which is accompanied by an application invoking the provisions of the third proviso to Section 18(1) for waiver of pre-deposit, as stipulated in the second proviso to Section 18(1), the appellant has to deposit with the Appellate Tribunal twenty-five per cent of the debt referred to in the second proviso to Section 18(1). The Appellate Tribunal cannot entertain, i.e., give judicial consideration of an appeal filed under Section 18 and the interlocutory application filed under the third proviso to Section 18(1) for waiver of predeposit, as stipulated in the second proviso to Section 18(1), unless the appellant has deposited with the Appellate Tribunal twenty-five per cent of the debt referred to in the second proviso to Section 18(1). Therefore, we find absolutely no merit in the submission of the learned counsel for the respondents- petitioners that the respondents are required to remit only the prescribed fee as provided under Section 18(1) of the Act, at the time of preferring Ext.P2 appeal and the question of deposit with the Appellate Tribunal the pre-deposit provided under the second proviso to Section 18(1) arises only on an order being passed by the Appellate Tribunal on the application for waiver".

26. From the materials placed on record and the 27 WA No.100 of 2026 2026:KER:11825

arguments addressed at the Bar, we notice that respondents 1 and

2 have approached this Court with the O.P.(DRT) against the

impugned Ext.P8 order of the Tribunal without exercising their

remedy under the provisions of the SARFAESI Act before the

Debts Recovery Appellate Tribunal, under Section 18 of the said

Act. When an equal and efficacious remedy is available to the

respondents, an original petition against Ext.P8 order is not

maintainable before this Court, unless the special circumstance as

noted above is made out, which is conspicuously absent in the

instant case. In such circumstances, the learned Single Judge

ought not have granted the interim relief in favour of respondents

1 and 2. The intention behind non-availing of remedy before the

Debts Recovery Appellate Tribunal by the respondents appears as

to avoid the payment of required pre-deposit to file the appeal,

and also to stall the recovery proceedings initiated by the Bank by

adopting a shortcut method. We are constrained to make the

aforesaid observation for the reason that the respondents have

approached this Court repeatedly with the very same relief by

filing different writ petitions such as W.P.(C)No.19933 of 2024 and 28 WA No.100 of 2026 2026:KER:11825

W.P.(C)No.20089 of 2025, as noted above. Even after the

dismissal of their prayer against the proceedings initiated under

Section 14 of the SARFAESI Act by virtue of the judgment in

W.P.(C)No. 20089 of 2025, the very same relief is again sought in

the present original petition, i.e., in O.P.(DRT)No.398 of 2025.

Prima facie, no sufficient reason is stated by respondents 1 and 2

in the original petition for not invoking the jurisdiction of the Debts

Recovery Appellate Tribunal against the impugned Ext.P8 order of

the Tribunal. During the course of arguments, though both sides

have cited some other judgments as mentioned above, they are

irrelevant as far as the decision of this writ appeal is concerned.

27. Having considered the pleadings and materials on record

and the submissions made at the Bar, we are of the opinion that

the appellants have made out sufficient ground to set aside the

impugned order dated 19.12.2025 passed by the learned Single

Judge in O.P.(DRT) No.398 of 2025, and we do so.

28. In the result, the writ appeal is allowed by setting aside

the impugned order dated 19.12.2025 in O.P.(DRT) No.398 of

2025. It is made clear that the parties to this writ appeal are at 29 WA No.100 of 2026 2026:KER:11825

liberty to move the learned Single Judge for early disposal of the

original petition itself on merits, pointing out the urgency, if they

are advised to do so.

The pending interlocutory application, i.e., I.A.No.1 of 2026,

filed by respondents 1 and 2 for reception of some additional

documents stands closed since unnecessary for deciding this

appeal.

Sd/-

ANIL K.NARENDRAN, JUDGE Sd/-

sks MURALEE KRISHNA S., JUDGE