[Cites 40, Cited by 0]
Bombay High Court
M/S. Sunshine Builders And Developers vs Hdfc Bank Limited And Ors. on 4 February, 2026
Author: R.I. Chagla
Bench: R.I. Chagla
2026:BHC-AS:5862-DB
WP 3929.2024
Sunshine Builders vs. HDFC Bank
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3929 OF 2024
M/s. Sunshine Builders and Developers
partnership firm registered under the Indian
Partnership Act and having its principal office
at 1307, Lotus Trade Centre, Next to Audi
Showroom, New Link Road, Andheri (West),
Mumbai - 400 053 through its partner
Mr. Shailesh Mehta ... Petitioner
V/s.
1. HDFC Bank Limited
having its registered office at HDFC
Bank House, Senapati Bapat Marg,
Lower Parel (W), Mumbai - 400 013
2. The Authorised Officer, attached to
HDFC Bank Ltd., having its registered
office at HDFC Bank House, Senapati
Bapat Marg, Lower Parel (W), Mumbai - 400 013
3. Official Liquidator, High Court, Bombay,
(Gigaplex Developers Pvt. Ltd. in Liquidation),
having office at 5th Floor, Bank of India Bldg.,
M.G. Road, Mumbai - 400 023
4. Kaveri Estate Pvt. Ltd., a Pvt. Ltd. Company
incorporated under the Indian Companies
Act, 1956 and having its registered office
at Raheja Chambers, Linking Road,
Santacruz (W), Mumbai - 400 054
5. Havemore Realty Pvt. Ltd.,
having its registered office at 412, Floor-4,
17G Vardhaman Chamber, Cawasji Patel
Road, Horniman Circle, Fort, Mumbai - 400 001 ... Respondents
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WP 3929.2024
Sunshine Builders vs. HDFC Bank
Mr. Simil Purohit, Senior Advocate with Vikramjit Singh Garewal with Rutwij
Bapat, Shashank Fadia i/b. Priyanka Fadia for the Petitioner
Mr. Prateek Seksaria, Senior Advocate with Mr. Nishant Chothani, Rohit Agarwal,
Ishwar Nankani, Huzefa Khokhawala with Karan Parmar and Kartik Gupta i/b. M/s.
Nankani & Associates for Respondent Nos. 1 and 2
Mr. Nitin Thakker, Senior Advocate with Nimay Dave, Saloni Sulakhe, Declan
Fernandes, Krushika Udeshi i/b. M/s. Dhaval Vussonji & Associates for Respondent
No.5
Mr. Venkatesh Dhond, Senior Advocate with Karishma, Umang Mehta, Aamir Attari
i/b. M/s. Avyaan Legal for Respondent No.6
Ms. Bhavi Vora and Ms. Yashvi Dave, representatives of Lodha Developers Ltd.,
Respondent No.6 present
_______________________________________
CORAM : R.I. CHAGLA AND
FARHAN P. DUBASH, JJ.
RESERVED ON : 16TH DECEMBER 2025
PRONOUNCED ON : 4TH FEBRUARY 2026
JUDGMENT (Per Farhan P. Dubash, J.) :
1. The present Writ Petition assails an order dated 29th February 2024
(impugned order) passed by the Debts Recovery Appellate Tribunal, at
Mumbai in an application preferred by the Petitioner under Section 18(1) of
the Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 directing the Petitioner to make the pre-deposit as
a condition precedent for its appeal to be entertained. Before the DRAT, the
Petitioner had challenged a common order dated 7 th October 2022 passed by
the Debts Recovery Tribunal, at Mumbai in two applications which sought
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Sunshine Builders vs. HDFC Bank
amendment of the pending Securitisation Application filed by it; the first of
which, sought impleadment of the auction purchaser, whilst the other, sought
to bring subsequent facts, including sale of the said property on the record,
whilst also seeking condonation of delay in making such application. By the
present Writ Petition, this Court is called upon to decide the Petitioners'
challenge to the impugned order, which is primarily based on the ground that
the said common order is merely a 'procedural' order which sought
impleadment of a party, amendment and condonation of delay in doing so
and not a 'final' order determining the liability of the borrower or any other
person and hence, the provision of pre-deposit would not be attracted.
2. A brief narration of the facts, insofar as they are necessary for the
adjudication of the disputes raised in the present Writ Petition, is set out
hereunder :
A] The property which is subject matter of dispute in the present Writ
Petition is a parcel of land bearing CTS Nos. 78 and 79 corresponding
to Survey Nos. 91/2 and 4/3 admeasuring 18,156.40 square metres and
12,345.20 square metres respectively, situated at Village Gundavali,
Taluka Andheri, Western Express Highway, Andheri (East), Mumbai
(said property).
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B] The said property is stated to have been declared as a slum under the
Maharashtra Slum Area (I, C and R) Act, 1971 and the occupants of
various structures thereon are said to have formed themselves into a
co-operative society and are said to have appointed the Petitioner as
the developer, to implement the slum rehabilitation scheme. The
Petitioner is a builder who is said to carry on business of construction
and development of properties. In this manner, the Petitioner is said to
have become entitled to the said property.
C] On 21st March 2011, a Co-Development Agreement (1st Co-
Development Agreement) came to be entered into between the
Petitioner and Respondent No. 3 under which, the latter came to be
appointed as the Co-Developer to develop the said property against
payment of a sum of ₹ 97.50 crores to the Petitioner, who in turn,
became entitled to 50% of the total constructed area in the free sale
component to be constructed thereupon.
D] Within 10 days thereof, a Supplemental Co-Development Agreement
(2nd Co-Development Agreement) dated 31st March 2011 came to be
entered into between the Petitioner and Respondent No. 3 under
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which, the Petitioner agreed to forego its said entitlement to 50% of
the total constructed area in the free sale component, in exchange for
50% net revenue from the sale of the free sale component.
E] Simultaneously, on 31st March 2011, a Power of Attorney (duly
registered) also came to be entered into by the Petitioner in favour of
the nominees of Respondent No. 3, in furtherance of the 1 st and 2nd
Co-Development Agreements, inter alia granting power and
permitting Respondent No. 3 to create a mortgage, charge, lien or
other encumbrance on the said property and on the free sale
component to be constructed thereupon, excluding however, the 50%
share of the Petitioner in the net revenue in the sale of the free sale
component, as per the 2nd Co-Development Agreement.
F] On 30th December 2011 and 12th March 2013, two Deeds of Simple
Mortgage (duly registered) came to be entered into between
Respondent No. 3, Petitioner and Respondent No. 4, inter alia
mortgaging the said property (excluding however, the 50% share of
the Petitioner in the net revenue from the sale of the free sale
component to be constructed thereupon) and another property at
Bandra of Respondent No. 4, in favour of Respondent No. 1 Bank,
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pursuant to certain loan / financial facility being extended by it, to
Respondent No. 3. [The Petitioner however contends that at the
relevant time, it was neither informed nor was it aware of these two
Deeds of Simple Mortgage being executed and/or of the said property
or any part thereof being mortgaged with Respondent No. 1 Bank and
this fact became known to it, only at a much later point in time. The
Petitioner also asserts that Respondent No. 3 has illegally and without
any authority and/or power, executed these two Deeds of Simple
Mortgage by joining the Petitioner as a party Mortgagor thereto.]
G] On 12th December 2013, a Further Supplemental Co-Development
Agreement (3rd Co-Development Agreement) came to be entered
into between the Petitioner and Respondent No. 3 under which, the
consideration payable to the Petitioner stood increased to ₹ 281.50
crores and the Petitioner also became entitled to retain constructed
area of 1,25,000 square feet in the free sale component to be
constructed thereupon.
H] Pursuant thereto, (and as was also previously done in the case of the
2nd Co-Development Agreement) a Power of Attorney (duly
registered) came to be executed by the Petitioner in favour of the
nominees of Respondent No. 3.
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I] On 13th June 2015, a letter came to be addressed by the Petitioner to
Respondent No. 3 in which, the Petitioner asserts that the latter had
not been authorized to mortgage the said property or any part thereof
and the two Deeds of Mortgage were executed (by Respondent
No.3 in favour of Respondent No.1 Bank) without the consent
and/or authority of the Petitioner and accordingly, Respondent
No. 3 was called upon to forthwith obtain a release of any charge /
mortgage created by it, on the area falling to the share of the
Petitioner in the free sale component to be constructed in the said
property.
J] On 13th February 2017, on account of default of Respondent No.3 in
repayment of the outstanding dues to Respondent No.1 Bank, a notice
under Section 13(2) of the Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI Act) came to be issued by Respondent No. 1 Bank to
various parties, including the Petitioner and Respondent No. 3.
K] On 2nd March 2017, the Petitioner responded to the said Section 13(2)
notice issued by Respondent No. 1 Bank and disputed its contents.
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L] On 10th August 2017, symbolic possession of the said property is
stated to have been taken by Respondent No. 1 Bank and its
authorized officer, Respondent No. 2.
M] On 20th September 2017, Securitisation Application No. 82 of 2019
(SA) was filed by the Petitioner under Section 17 of the SARFAESI
Act before the Debts Recovery Tribunal, at Mumbai (DRT) inter alia
challenging the steps taken by Respondent No. 1 Bank and
Respondent No. 2, under Section 13 of the SARFAESI Act and to
restrain Respondent No.1 Bank and Respondent No.2 from taking any
further steps in respect of the said property.
N] By an order dated 2nd February 2018, passed by this Court in
Company Petition No. 1049 of 2015, the Official Liquidator came to
be appointed as the Liquidator of Respondent No. 3.
O] On 28th January 2019, an order came to be passed under Section 14 of
the SARFAESI Act directing the Court Commissioner to take physical
possession of the said property.
P] On 2nd January 2019, Respondent No. 1 Bank issued the Notice under
Rule 8(6) of the Security Interest (Enforcement) Rules, 2002
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(SARFAESI Rules) for sale of the said property, which was replied to
by the Petitioner, vide its letter dated 19 th January 2019. In turn,
Respondent No. 1 Bank and Respondent No. 2 responded to this reply
vide their letter dated 29th January 2019.
Q] Commercial Suit No. 1003 of 2019 (Commercial Suit) came to be
filed by the Petitioner in this Court against Respondent No. 1 Bank,
Respondent No. 2, Respondent No. 3 and Respondent No. 5 inter alia
seeking declaration of fraud and cancellation of the two Deeds of
Mortgage executed in respect of the said property and for injunction
and damages. [However, till date, no interim / ad-interim reliefs have
been granted to the Petitioner in this Suit.]
R] In exercise of powers under Section 13 of the SARFAESI Act and
Rules 8 and 9 of the SARFAESI Rules, Respondent No. 1 Bank sold
the said property and the requisite Sale Certificate dated 24 th
December 2019 came to be issued by Respondent No. 1 Bank and
Respondent No. 2 in favour of Respondent No. 5, the Auction
Purchaser.
S] Pursuant thereto, on the same date, viz. 24 th December 2024,
Respondent No. 5 is stated to have mortgaged the said property in
favour of Respondent No. 1 Bank.
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T] On 18th February 2020, the Petitioner preferred Interim Application
No. 1431 of 2020 in the Commercial Suit seeking leave to amend the
plaint to inter alia seek cancellation of the Sale Certificate dated 24 th
December 2019 issued in favour of Respondent No. 5 and the Deed of
Mortgage dated 24th December 2019 executed by Respondent No. 5 in
favour of Respondent No. 1 Bank.
U] On 28th January 2021, the Petitioner filed Miscellaneous Application
No. 183 of 2021 in the SA inter alia seeking to implead Respondent
No. 5 in the SA. [A perusal of the affidavit in support of this
Miscellaneous Application would reveal that the Petitioner had learnt
of the sale of the said property to Respondent No. 5 on 12 th February
2020.]
V] Simultaneously, on 28th January 2021, the Petitioner also filed
Miscellaneous Application No. 95 of 2021 (since, renumbered as
Interlocutory Application No. 1652 of 2022) in the SA, to add further
facts and subsequent events on record regarding the sale of the said
property to Respondent No. 5 and also to seek additional reliefs in that
regard. Considering that each measure taken by Respondent No.1
Bank under Section 13 of the SARFAESI Act can be independently
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challenged under Section 17(1) thereof within 45 days of the date on
which such measure had been taken, the Petitioner also sought
condonation of delay in filing such application.
W] A Sale Agreement is stated to have been executed between
Respondent No. 5 and Respondent No. 1 Bank under which area
admeasuring 2,96,960 sq. feet in the free sale component of the said
property was sold by Respondent No.1 - Bank to Respondent No.5 for
an aggregate consideration of ₹ 770.035 crores.
X] By a common order dated 7 th October 2022, (common order) the
DRT dismissed both the said Applications (being MA No. 183 of 2021
And IA No. 1652 of 2022) preferred by the Petitioner.
Y] Pursuant thereto, in November 2022, the Petitioner filed
Miscellaneous Appeal (L) No. 128 of 2022 (Appeal) before the DRAT
against the common order dated 7th October 2022 along with
Interlocutory Application No. 614 of 2022 (waiver application)
seeking waiver of the mandatory pre-deposit under Section 18(1) of
the SARFAESI Act, primarily on the ground that it was neither the
Borrower / Mortgagor / Guarantor.
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Z] On 2nd May 2023, Respondent No. 5 is stated to have entered into a
Development Agreement (duly registered) with Respondent No. 6 for
development of the said property.
AA] By an order dated 21st July 2023, the Petitioner was permitted to
implead Respondent No. 6 in the Appeal.
BB] The impugned order dated 29th February 2024 came to be passed by
the DRAT in the waiver application rejecting the contention of the
Petitioner and directing it to make a pre-deposit of Rs. 125 crores in
three instalments, under Section 18(1) of the SARFAESI Act, as a
condition precedent for entertaining its Appeal.
CC] The Petitioner filed the present Writ Petition which came to be
dismissed by an detailed order dated 19th March 2024.
DD] This order of dismissal came to be set aside by the Supreme Court
vide order dated 17th April 2025 and the present Writ Petition was
remanded to this Court for a fresh hearing.
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EE] In a subsequent order dated 18 th November 2025 passed in a Review
Petition preferred by Respondent No. 5, the Supreme Court has
expressly clarified that this Court should not be influenced by the
observations made in its earlier order dated 17 th March 2024 including
those made in paragraphs 12, 15 and 16 thereof.
SUBMISSIONS OF THE PETITIONER
3. Mr. Simil Purohit, learned counsel who appears on behalf of the Petitioner
has taken us through the three Co-Development Agreements and the two
Powers-of-Attorney executed by and between the parties. He submits that
Respondent No. 3 was not entitled to mortgage the entitlement and share of
the Petitioner in the free sale portion to be constructed on the said property
and also in the sale proceeds thereof. He then invites our attention to the two
Deeds of Mortgage and submits that the same have not been executed by his
clients but instead, have been fraudulently and illegally executed by
Respondent No. 3 purportedly as the Power of Attorney holder of his clients,
without their prior notice and/or knowledge and also without their authority.
As a result, he submits that the two Deeds of Mortgage are not valid and/or
binding on his clients. In that regard, Mr. Purohit invites our attention to the
Commercial Suit seeking such declaration and reliefs that has already been
filed in this Court and informs us that the same is pending adjudication.
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4. Mr. Purohit relies on the decision of the Supreme Court in Assistant
Commissioner of Income Tax (Exemptions) Vs. Ahmedabad Urban
Development Authority reported in (2023) 4 SCC 561 which discusses and
reiterates the law defining the term, "unless the context otherwise requires"
to mean that generally, the word or term so defined should be applied,
subject to the context, collocation and the object of such words. The Apex
Court discusses the importance of terms expressly defined in a statute since
they are internal and binding aids to its interpretation and reiterates that the
prefacing to any definition the phrase "unless the context otherwise requires"
merely signifies that, in case there is anything expressly to the contrary, in
any specific provision(s) in the body of the Act, a different meaning could be
attributed. However, to discern the purport of a provision, the term, as
defined, has to prevail whenever expression is used in the statute. It is further
reiterated that this rule is subject to the exception that when a contrary
intention is plain in particular instances, that meaning is to be given. Relying
on the aforesaid decision, Mr. Purohit points out that the Definitions clause -
Section 2(1) of the SARFAESI Act also begins with the identical phrase,
"unless the context otherwise requires" and hence, the definition of the term,
"borrower" contained in Section 2(1)(f) thereunder, is to be interpreted in
such a manner, so as to exclude his clients, who did not execute the two Deed
of Mortgage in favour of Respondent No. 1 Bank.
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5. Mr. Purohit then relies on the decision of the Delhi High Court in Indiabulls
Housing Finance Ltd. Vs. Vaibhav Jhawar and Others reported in 2018
SCC Online Del 12853 to urge that the term, "borrower" as contained in the
second proviso to Section 18(1) of the SARFAESI Act does not include any
other person i.e. other than a borrower or a guarantor and since, his clients
are neither the borrower nor the guarantor in respect of the financial facility
availed from Respondent No. 1 Bank, the stipulation of pre-deposit could not
have been insisted upon by the DRAT on them, in the impugned order.
6. Mr. Purohit also relies on the decision of the Single Judge of this Court in
Nagpur Integrated Township Pvt. Ltd. Vs. Maharashtra Real Estate
Regulatory Authority, Mumbai and Others reported in 2020 SCC Online
Bom 929 which holds that in cases where it is disputed that the Appellant
does not come under the expression, "promoter" and therefore, not liable to
make the pre-deposit under Section 43(5) of the Real Estate (Regulation and
Development) Act, 2016, (RERA) the Appellate Tribunal must take at least a
prima facie view of the matter and only then, pass the order of pre-deposit.
He submits that a similar interpretation ought to be applied to Section 18(1)
of the SARFAESI Act and the DRAT ought to have recorded, at least a
prima facie finding as to whether the Petition is a "borrower" before making
the order of pre-deposit, especially when his clients contend otherwise and
since this has not been done, the impugned order is required to be interfered
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with by this Court.
7. Mr. Purohit then invites our attention to the SA filed by his clients in the
DRT to challenge the steps taken under Section 13 of the SARFAESI Act
and submits that upon becoming aware of the subsequent measures taken by
Respondent No. 1 Bank, which ultimately resulted in the sale of the said
property to Respondent No. 5, his clients were advised to amend the SA that
was already filed by it and pending before the DRT to challenge such
measures, instead of preferring a fresh application for such purpose and it
was under such circumstances that, his clients had taken out the said
Miscellaneous Application to implead the Auction Purchaser - Respondent
No. 5 in the SA and also taken out the said Interim Application to add these
facts and subsequent events on record, regarding the sale of the said property
in favour of Respondent No. 5 and also to seek additional reliefs challenging
such measures whilst also seeking condonation of delay in preferring such
application.
8. Mr. Purohit submits that the common order dated 7 th October 2022
erroneously dismisses both the Applications preferred by his client by
holding that they had failed to satisfactorily explain the delay in preferring
them and the proposed amendment, if granted, would change the nature of
the lis. He submits that the common order does not delve into and/or decide
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the merits of the contentions sought to be taken in the proposed amendment
and merely dismisses the application at the first instance and without any
proper adjudication thereupon. Accordingly, he contends that the DRAT
ought to have appreciated that the common order was merely a procedural
order and not a final order which adjudicates the substantial rights of the
parties and/or determines the liability of borrower or any other party and
therefore, Mr. Purohit submits that the impugned order erroneously directs
his client to make the mandatory pre-deposit under Section 18(1) of the
SARFAESI Act. Moreover, he submits that the DRAT ought to have
appreciated that his client was neither the borrower nor the guarantor nor the
mortgagor and as a result, the mandatory pre-deposit was not required to be
paid by them.
9. Mr. Purohit relies on the decision of the Telangana High Court in Gade
Sreenivas Reddy Vs. State Bank of India and Others reported in 2025 SCC
Online TS 687 which held that a conjoint reading of Sections 19 and 21 of
the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) indicates that
the nature of the appeal contemplated under Section 21 is a substantive
appeal arising from a determination of debt due to the Bank, Financial
Institution or Consortium thereof and if the order under challenge was a mere
procedural one, the same could not be brought within the stranglehold of the
deposit requirement under Section 21. Mr. Purohit submits that a similar
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interpretation ought to be made applicable to Section 18(1) of the
SARFAESI Act in the present case, since the common order was a mere
procedural order, declining condonation of delay, proposed amendment of
the SA and impleadment of the Auction Purchaser of the said property as
sought by his clients, the DRAT ought not to have imposed the pre-deposit
on his clients in the impugned order, by relying upon and applying the
second proviso to Section 18(1) of the SARFAESI Act.
10. Mr. Purohit also relies on the decision of this Court in M/s. Gadekar
Ginning and Pressing Pvt. Ltd. and Anr. Vs. Canara Bank and Anr.
reported in 2024 SCC OnLine Bom 2924 and submits that even in the
present case, since the common order was an order which refused
condonation of delay in permitting his clients to amend the SA, the impugned
order which directs making of the deposit as a pre-condition for entertaining
its Appeal, is required to be set aside.
11. Mr. Purohit also relies on the decision of the Supreme Court in Mardia
Chemicals and Others Vs. Union of India and Others reported in (2004) 4
SCC 311 to contend that an onerous condition of making a pre-deposit
cannot be imposed as a condition precedent for entertaining the matter on
merits.
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12. Mr. Purohit therefore submits that the impugned order is required to be set
aside and this Court ought to direct the DRAT to hear and decide the Appeal
preferred by the Petitioner on merits, without insisting on any pre-deposit
under Section 18(1) of the SARFAESI Act.
SUBMISSIONS OF RESPONDENT NOS. 1 & 2
13. At the outset, Mr. Prateek Seksaria, learned Senior Counsel who appears on
behalf of Respondent No. 1 Bank and its authorised officer, Respondent No.
2, submits that under Section 18 of the SARFAESI Act, the DRAT has no
power to waive the mandatory pre-deposit, irrespective of the nature of the
order appealed against. He submits that Section 18 does not make any
distinction between an interim order or a final order that is appealed against,
or a sub-classification of the nature of interlocutory / interim or final orders
appealed against, whilst laying down the mandatory pre-condition for
entertaining an appeal.
14. In support of this submission, he relies on the decision of the Supreme Court
in Raj Kumar Shivhare Vs. Assistant Director Directorate of Enforcement
reported in (2010) 4 SCC 772. In this judgment, whilst interpreting the
provisions of the Foreign Exchange Management Act, 1999 (FEMA), and in
particular, Section 35 thereof, which confers jurisdiction on the High Court
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to entertain an appeal within 60 days from 'any decision of order of the
appellate authority', the Apex Court held that the word 'any' would mean 'all'
by holding that when a right is conferred on a person aggrieved, to file an
appeal from 'any' order or decision, there is no reason, in the absence of a
contrary statutory intent, to give it a restricted meaning to only include a final
order and not an interlocutory one and further that, where the right of appeal
is limited only from a final order or judgment and not from an interlocutory
one, the statute creating such right, would make it clear. In this context, the
Apex Court had held that the right of appeal, being always a creature of
statute, its nature, ambit and width has to be determined from the statute
itself and when the language of the statute regarding the nature of the order
from which right of appeal has been conferred is clear, no statutory
interpretation is warranted, either to widen or restrict the same. By relying on
this decision, Mr. Seksaria submits that the provisions of Section 18 of the
SARFAESI Act are also clear and unambiguous and the mandatory pre-
deposit is required to made in all matters, irrespective of the fact that the
order under appeal was a mere procedural one, and not a final order which
adjudicates the substantial rights of the parties and/or determines the liability
of borrower or any other party, as contended by the Petitioner herein.
15. In this regard, Mr. Seksaria invites our attention to Section 18 of the
SARFAESI Act and submits that its wordings are clear inasmuch as, the
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DRAT cannot entertain the appeal unless the pre-condition is satisfied since
the right of appeal is created by statute itself and such right is conditional
upon making the pre-deposit. He relies on the decision of the Supreme Court
in B. Premanand and Ors Vs. Mohan Koikal and Ors. reported in (2011) 4
SCC 266 and contends that as per well-settled principles of statutory
interpretation, when the meaning is plain, clear and unambiguous from which
the legislative intent is clear, the literal rule of interpretation will apply to it
and this Court need not call in to aid, other rules of construction of statutes,
which should only be resorted to when the plain words of a statute are
ambiguous or lead to no intelligible results or if read literally, would nullify
the very object of the statute. By relying on this judgment, Mr. Seksaria
submits that this Court ought not to add words to the plain and clear language
of Section 18 of the SARFAESI Act, by interpreting the said section in the
manner, as suggested by the Petitioner herein.
16. Mr. Seksaria relies on the scheme of the SARFAESI Act and submits that the
power of the DRT to pass an interim / interlocutory order of any nature is
traceable only to Section 17 thereof, being ancillary to its jurisdiction and in
such circumstances, Section 18 cannot be so interpreted to mean that an
interim / interlocutory order is not referable to Section 17 since it is only in
the context of proceedings under Section 17 of the SARFAESI Act that the
DRT assumes jurisdiction and it is in aid of such jurisdiction that, the DRT
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passes any interim / interlocutory order. He relies on the decision of this
Court in Vinay Container Services Vs. Axis Bank reported in 2011 (1)
Mh.LJ 882 and the decision of the Delhi High Court in Satnam Agri
Products Ltd. Vs. Union of India reported in 2014 SCC Online Del 6965 to
contend that the nature of proceedings from which an appeal is filed under
Section 18 of the SARFAESI Act is wholly irrelevant, and the requirement of
pre-deposit applies not only to final orders but also to appeals against
interlocutory orders.
17. Mr. Seksaria also relies on the decision of the Supreme Court in Union Bank
of India Vs. Rajat Infrastructure Pvt. Ltd. reported in (2020) 3 SCC 770
and submits that Section 18 of the SARFAESI Act provides for an absolute
bar from entertaining an appeal unless the condition precedent of a pre-
deposit is fulfilled and therefore, he submits that the DRAT is not
empowered to grant or allow a full waiver of the mandatory pre-deposit
despite the nature of proceedings from which the appeal arise.
18. Mr. Seksaria then invites our attention to the two Deeds of Simple Mortgage
dated 30th December 2011 and 12th February 2013 executed in favour of
Respondent No. 1 Bank and submits that a bare perusal of these instruments
would reveal that the Petitioner is a party thereto, in its capacity as the
Mortgagor of the said property. He has painstakingly taken us through the
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Sunshine Builders vs. HDFC Bank
relevant clauses of the 1st and 2nd Co-Development Agreements and also the
Power of Attorney dated 31st March 2011 executed by the Petitioner in
favour of the nominees of Respondent No. 3 and asserts that, Respondent No.
3 was fully authorised and entitled to execute the said two Deeds of Simple
Mortgage in favour of his clients. He points out that both these instruments
have since been registered in accordance with law and accordingly, the
Petitioner cannot be permitted to urge something that is ex-facie contrary to
the written terms and conditions contained therein. He further submits that
despite the Petitioner challenging these two Deeds of Mortgage as far back as
in April 2019 by filing Commercial Suit No. 1003 of 2019, till date, no
interim or ad-interim reliefs have been granted in their favour therein.
19. Mr. Seksaria relies on the definition of the term, "borrower" in the Section
2(1)(f) of the SARFAESI Act, which expressly includes a person that has
created a mortgage and accordingly, submits that since the Petitioner is
admittedly shown as a Co-Mortgagor in the said two Deeds of Simple
Mortgage, the mandatory pre-condition of deposit contained in the second
proviso to Section 18(1) of the SARFAESI Act clearly applies to the
Petitioner in the facts of the present case. In support, he relies on the decision
of the Supreme Court in Rajat Infrastructure (supra) and a decision of this
Court in Keystone Constructions Vs. SBI reported in 2013 SCC Online
Bom 2098 which hold that a "mortgager" who has mortgaged its property to
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Sunshine Builders vs. HDFC Bank
secure the repayment of the loan, stands on the same footing as and falls
within the definition of a "borrower" and the amount due from him under the
mortgage falls within the ambit of the expression, "amount due from him" in
the second proviso to Section 18(1) of the SARFAESI Act.
20. Mr. Seksaria further submits that since the Petitioner has already availed its
statutory remedy and filed the SA, that is pending before the DRT, this Court
ought not to exercise its extra-ordinary writ jurisdiction, on grounds which
are subject matter of the pending SA. He further submits that by the said
amendment (sought in the two Applications), the Petitioner seeks to assail
actions that had been taken by Respondent no. 1 Bank under Section 13 of
the SARFAESI Act, each of which, constitutes a fresh cause of action under
Section 17 thereof, and independently capable of being challenged by the
Petitioner within the stipulated time of 45 days prescribed under Section
17(1) of the SARFAESI Act. Accordingly, he submits that it is entirely
incorrect on the part of the Petitioner to contend that the amendments sought
by it, in the two Applications filed before the DRT, only seek to place
subsequent events on record and as such, are merely formal in nature. On the
contrary, he contends that by such amendments, the Petitioner asserts a
substantive right that is available to it and granted under Section 17 of the
SARFAESI Act. On this ground also, Mr. Seksaria submits that the
Petitioner's contention that the common order is a mere procedural one and
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Sunshine Builders vs. HDFC Bank
not one that deals with the substantive rights of the Petitioner, is incorrect
and ought not to be accepted by this Court.
21. Without prejudice to the aforesaid submissions, Mr. Seksaria submits that if
it is contented by the Petitioner that the common order rejecting its two
Applications is merely a procedural order, then no appeal thereto, would be
maintainable under Section 18 of the SARFAESI Act. He contends that since
procedural orders do not affect the rights or liabilities of a party, it is settled
law that they do not fall within the ambit of 'any order' / 'every order' such
as orders regarding summoning of witnesses, discovery, production,
inspection of documents, fixing of date of hearing etc. which orders are
merely steps towards the final adjudication and regulate the procedure alone,
without affecting any rights or liabilities of a party. He therefore submits that
no reliefs ought to be granted in the present Writ Petition and instead, the
same should to be dismissed.
22. Mr. Nitin Thakker, learned Senior Counsel appears on behalf of Respondent
No. 5 who is the Auction Purchaser of the said property. He submits that his
client has purchased the said property for a sum of ₹ 232 crores and relies on
the registered Sale Certificate dated 24th December 2019 issued by
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Sunshine Builders vs. HDFC Bank
Respondent no. 1 Bank in his client's favour. He further states that since then,
his client, in turn, has entered into a Development Agreement dated 2 nd
February 2023 with Respondent No. 6 for further development of the said
property. He supports the submissions already advanced by Mr. Seksaria on
the interpretation of Section 18 of the SARFAESI Act and adds that even as
per the Black's Law dictionary and the Meriam Webster's dictionary, the
word, "any" is interpreted to mean "all" and "every". He also relies on the
decision of the Supreme Court in Lucknow Development Authority Vs. M.
K. Gupta reported in (1994) 1 SCC 243 and of this Court in Man Global
Ltd., Mumbai Vs. Ram Prakash Jookani reported in 2023 SCC Online
Bom 600 and submits that it has been held that the word, "any" has a
diversity of meanings and may be employed to indicate "all" or "every" as
well as "some" or "one" and its meaning in a given statute depends upon the
context and the subject matter of the statute.
23. Mr. Thakker further submits that on a plain reading of the language of
Section 18 of the SARFAESI Act, "any order" that is challenged, attracts the
mandatory pre-deposit and when the statute is clear and unambiguous, its
provisions cannot be read to be given a different meaning, so as to change the
very intention of legislature. In that connection, he relies on the decisions of
the Supreme Court in Ansal Properties and Industries Ltd. Vs. State of
Haryana & Anr. reported in (2009) 3 SCC 553, Satheedevi Vs. Prasanna &
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Sunshine Builders vs. HDFC Bank
Anr. reported in (2010) 5 SCC 622 and United India Insurance Co. Ltd. v.
M/s. Orient Treasures Pvt. Ltd. reported in (2016) 3 SCC 49.
24. Mr. Thakker also submits that the language of Section 18(1) of the
SARFAESI Act makes it abundantly clear that the expression "any order"
therein encompasses both, final and interlocutory orders and the same cannot
be distinguished on the basis of whether the order appealed against is a
procedural one or a final one, as there is no distinguishment thereof under the
SARFAESI Act. He submits that in light of the statutory scheme and intent
of legislation while incorporating the Act, as well as the consistent Judicial
interpretation by various courts, the phrase "any order" used in Section 18(1)
is broad, unqualified and purposive and encompasses all orders i.e. final,
interlocutory, procedural, or ancillary that may be passed by the DRT under
Section 17 thereof. He submits that the intention of the pre-deposit under
Section 18 is to deter frivolous appeals whilst ensuring seriousness from
borrowers who seek to challenge orders passed by the DRT and thereby,
balance the rights by streamlining debt recovery for the secured creditors by
requiring deposit of 50% of the debt due (including interest) before appealing
to the DRAT. He submits that this provision acts as a filter, preventing
baseless challenges to legitimate recovery actions. He argues that the
legislature, in employing the phrase "any order" has deliberately chosen to
confer a wide appellate jurisdiction upon the DRAT so that no aggrieved
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Sunshine Builders vs. HDFC Bank
person is left without recourse against orders passed by the DRT. He submits
that a plain literal interpretation of the provision leaves no scope for judicial
limitation or reading down the said provision and submits that no
interference is warranted to the impugned order, and the present Writ Petition
is therefore required be dismissed.
25. Mr. Venkatesh Dhond, learned Senior Counsel appears on behalf of
Respondent No. 6, a developer with whom the Auction Purchaser, Defendant
No.5 has entered into a subsequent Development Agreement for
development of the said property. At the outset, he submits that since the
Petitioner has itself chosen to file the Appeal under Section 18 of the
SARFAESI Act, it is deemed to have accepted that the common order was
one, passed under Section 17 thereof. He argues that having invoked the
appellate jurisdiction of the DRAT under Section 18, the Petitioner cannot be
permitted to now contend that the common order passed by the DRT is
actually one falling outside the scope of "any order" contemplated therein
and therefore, he contends that the Petitioner is not entitled to urge any of the
contentions that have been argued by it, moreso when, the Petitioner did not
invoke the writ jurisdiction of this Court in the first instance and consciously
chose to instead file the Appeal before the DRAT. As a result, he argues that
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Sunshine Builders vs. HDFC Bank
in this second round of proceedings, the Petitioner cannot be heard to
recharacterize the common order, solely to evade the statutory pre-deposit.
26. Mr. Dhond submits that Section 18(1) of the SARFAESI Act confers a right
of appeal on any person, including persons other than a borrower. However,
he submits that whilst any person may have the locus to appeal, despite not
being borrowers, the rigors of pre-deposit are not diluted inasmuch as, the
second proviso to Section 18(1) uses the expression 'borrower' only to
identify the person whose debt is required to be secured and therefore, whilst
a third party may have locus to appeal, even in such an appeal, the
'borrower' must make the mandatory pre-deposit. He submits that such
deposit can be by the 'borrower' itself or by someone, on behalf of the
borrower, since the appeal is against an order passed under Section 17, which
is a repository of provisions which enable 'any person' (including a
borrower) to challenge measures taken under Section 13(4). Thus, Mr.
Dhond submits that Section 17 remedy is anti-section 13 measure or an anti-
recovery measure and therefore. a Section 17 relief stalls / defeats / delays an
enforcement measure under Section 13 and consequently, any person seeking
to stall or defeat such a measure is put on the same plane as a 'borrower' for
the purposes of pre-deposit.
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Sunshine Builders vs. HDFC Bank
27. Mr. Dhond further submits that the pre-deposit mandated under Section 18 of
the SARFAESI Act is debt-centric and is intrinsically linked to the
outstanding debt due to the secured creditor, inasmuch as, it operates as a
statutory safeguard to secure the debt pending the pendency of appellate
proceedings. He submits that the legislature in its wisdom has consciously
imposed this condition to ensure that a secured creditor, whose recovery
process has already matured into enforceable measures, is not subjected to
repeated and protracted litigation, without any security for the debt. He
submits that the statutory insistence on a deposit of a percentage of the debt
due, rather than the nature of the order appealed against, clearly demonstrates
that the pre-deposit is intended to secure the creditor against delay and
attrition and not merely to regulate procedure. He therefore submits that the
common order is not a mere procedural order, as erroneously contented by
the Petitioner.
28. Further, Mr. Dhond submits that as a direct consequence of the common
order, the Petitioner's right to challenge the auction sale now stands
extinguished and the auction purchaser's title stands crystallized and the
challenge to the concluded statutory sale cannot survive in law. He therefore
submits that such a determination, as done in the common order, is not a
procedural one but is an adjudication on the very right of the Petitioner to
litigate against the proposed party. To further substantiate, Mr. Dhond has
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Sunshine Builders vs. HDFC Bank
painstakingly taken us through the common order and in particular, the
several findings recorded and rendered therein, in an effort to persuade us
that the same is a substantive ruling and not a mere procedural one.
29. Lastly, Mr. Dhond submits that even otherwise, if an amendment is
substantially valid, courts may refuse to allow it, if it would cause injustice to
the other side and it is not necessary for the purpose of determining the real
controversy. In the present case, he submits that valid third party rights were
created in favour of his client, as far back as in May 2023 and that too, under
a Development Agreement (duly registered) pursuant to which, his client has
paid the entire consideration of ₹ 150 crores to Respondent No. 5. He points
out that the Petitioner has not been able to obtain any stay or injunction
preventing the creation of such rights and as a result, his client has obtained
these rights in a bona fide manner and in good faith. He further submits that,
pursuant to the said Development Agreement, substantial third party rights
have been crystallized and large financial commitments have since also been
made and multiple home buyers have acquired enforceable contractual
interests and any attempt to reopen the concluded sale at this stage, would
gravely prejudice all these vested rights.
30. Mr. Dhond adds that the two Applications preferred by the Petitioner are
nothing but a disguised attempt to blatantly open a concluded statutory sale,
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Sunshine Builders vs. HDFC Bank
after recovery has been completed and sale proceeds have been received by
the secured creditor. He submits that during this period, independent vested
rights have been lawfully created in favour of his client, substantial
redevelopment of the said property has been undertaken, significant financial
investments have been made and agreements for sale have been executed
with third party home buyers and as a result, he submits that grave injustice
will be caused not only to his client but also to all the other third party buyers
by allowing such an amendment.
31. In support of this submissions, Mr. Dhond tenders a statement providing
details of the expenses incurred by this client for construction and
development, the status of the construction and details of the sold / unsold
units in the said property. For convenience, the said details are reproduced
hereunder:
(i) Expenses incurred for construction and development of the project -
Sr. Tower Total ₹ incl. tax ₹ In crores
1 Tower A 19,35,93,996 19.36
2 Tower B 5,26,76,630 5.27
3 Tower C 18,26,75,608 18.27
4 Tower D 5,63,84,481 5.64
5 Infra 31,75,37,295 31.75
80,28,68,010 80.29
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(ii) Status of Construction -
Wing Status Total Floors
Tower A RCC Complete - Finishing G + 15 floors
works in progress
Tower B 2nd Floor RCC works in G + 15 floors
progress
Tower C RCC Complete - Finishing G + 15 floors
works in progress
Tower D Plinth Completed G + 15 floors
(iii) Sold / Unsold Units
Wing Sold Unsold Grand Total Sold Unsold
A 36 21 57 63% 37%
B 35 29 64 55% 45%
C 28 39 67 42% 58%
Grand Total 99 89 188 53% 47%
32. He further points out that his client has also constructed 10 rehab buildings
on the said property, of which 8 buildings have already received their
occupancy certificate as on August 2025 and the units therein have been
handed over and the erstwhile occupants / dwellers have already been
rehabilitated. He therefore implores this Court not to interfere with but
instead confirm the impugned order.
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Sunshine Builders vs. HDFC Bank
ANALYSIS, REASONS AND FINDINGS
33. Despite the lengthy arguments made by the parties and the voluminous
record, this Court is of the view that the issue that is required to be
adjudicated in the present Writ Petition is a limited one - Whether the
common order passed by the DRT is of such a nature that it does not attract
the requirement of the mandatory pre-deposit in appeal? In support of its
contention which seeks to answer the above issue in the affirmative, the
Petitioner has effectively sought to urge two main propositions - Firstly, that
it is not a borrower and therefore, the second proviso to Section 18(1) of the
SARFAESI Act is not attracted, and Secondly, the common order passed by
the DRT, is a mere procedural order and not a final order determining the
liability of the borrower or any other person and hence, the provisions of pre-
deposit are not attracted.
34. Accordingly, let us first ascertain whether the second proviso to Section
18(1) of the SARFAESI Act would be applicable in the present case insofar
as, the Petitioner is concerned. In order to do that, it would be advantageous
to reproduce the contents of the said section, which is reproduced hereunder:
"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
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Sunshine Builders vs. HDFC Bank
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 provided)
35. A perusal of the two Deeds of Simple Mortgage reveal that the same have
been executed by the Petitioner who is shown therein, as the mortgagor. Both
Deeds have also been registered with the Sub-Registrar of Assurances and
hence, they are valid and binding on all the parties thereto. The first of the
two Deeds was executed on 30 th December 2011, whilst the other came to be
executed on 12th March 2013. Even if the case espoused by the Petitioner is
accepted that at the time of execution of these two Deeds, it was unaware, the
Petitioner filed the Commercial Suit challenging the said two Deeds as far
back as in 2019 and despite this, since then, it has been unsuccessful in
obtaining any interim or ad-interim orders in its favour. Hence, the Tribunals
and this Court cannot ignore the said two Deeds and/or go behind them, as
urged by Mr. Purohit who vehemently contends that fraud was played on his
clients, in executing them. Accordingly, the contention of the Petitioner that
in the facts and circumstances of the present case, it is not a mortgagor, does
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Sunshine Builders vs. HDFC Bank
not appear to be well founded.
36. Section 2(1)(f) of the SARFAESI Act defines the term, 'borrower' to mean:
"(f) "borrower" means any person who, or a pooled investment
vehicle as defined in clause (da) of section 2 of the Securities
Contracts (Regulation) Act, 1956 (42 of 1956) which, has been
granted financial assistance by any bank or financial institution or
who has given any guarantee or created any mortgage or pledge
as security for the financial assistance granted by any bank or
financial institution and includes a person who, or a pooled
investment vehicle which, becomes borrower of a asset
reconstruction company consequent upon acquisition by it of any
rights or interest of any bank or financial institution in relation to
such financial assistance or who has raised funds through issue of
debt securities"
In Keystone Constructions (supra), the Division Bench of this Court has
categorically held that the term 'borrower' in Section 2(1)(f) of the
SARFAESI Act includes a 'mortgagor'. Thereafter, in Union Bank of India
(supra), the Supreme Court has also held that under Section 18 of the
SARFAESI Act, a 'mortgagor' stands on the same footing as a 'borrower'. In
the premises and considering the judicial pronouncements noted above, this
Court is not inclined to accept the contention of Mr. Purohit that his client
cannot be held to be a borrower, and a result thereof, the second proviso to
Section 18(1) of the SARFAESI Act would not be applicable to them.
37. The decision of the Delhi High Court in Indiabulls Housing Finance Ltd.
(supra) would not be of any assistance to the Petitioner since the said court
was not dealing with a case involving a 'mortgagor' therein, but instead, was
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Sunshine Builders vs. HDFC Bank
merely considering whether persons (Respondent Nos. 1 to 5 therein) who
had invested monies with the borrower (Respondent No. 6 therein) could be
directed to make the pre-deposit under Section 18(1) of the SARFAESI Act
and it is under those peculiar circumstances that the court held whilst
considering the second proviso, the term 'borrower' would also include a
'guarantor' and no other person.
38. Insofar as, the phrase "unless the context otherwise requires" appearing at the
beginning of Section 2 of the SARFAESI Act which contains the Definitions
clause that prescribes the meanings to be attributed to words/phrases included
in the SARFAESI Act is concerned, the wordings of Section 2(1)(f) and
Section 18 of the SARFAESI Act are plain and clear and leave no room for
any doubt. Mr. Purohit has not been able to convincingly demonstrate any
other provision/s therein which is/are expressly contrary to the said wordings.
Accordingly, the reliance of Mr. Purohit on the decision of the Supreme
Court in Ahmedabad Urban Development Authority (supra) is wholly
misplaced and the said decision is of no assistance to him. On the contrary, as
more particularly held in B. Premanand (supra), the first and foremost
principle of interpretation of a statute in every system of interpretation is the
literal rule of interpretation and other rules, such as the mischief rule,
purposive interpretation, etc. can only be resorted to when the plain words of
a statute are ambiguous or lead to no intelligible results or if read literally,
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Sunshine Builders vs. HDFC Bank
would nullify the very object of the statute. In Satheedevi (supra), the
Supreme Court has once again reiterated the two rules of interpretation of
statutes, the primary rule of construction being that the intention of the
legislature must be found in the words used by the legislature itself and if the
words are capable on one construction, then it would not be open to the
courts to adopt any other hypothetical construction on the ground that such
hypothetical construction is more consistent with the object and policy of the
Act.
39. The other important rule of interpretation has also been reiterated and courts
have been cautioned against adding words to a statute or read words which
are not there in it, even if there is a defect or omission therein. A similar view
was subsequently also taken by the Supreme Court in United India
Insurance (supra). In Ansal Properties (supra). The Supreme Court has
enunciated the well-settled legal principle that courts ought not to read
anything into a statutory provision which is plain and unambiguous. Upon
careful perusal of the caselaw discussed above and considering our above-
recorded findings on the meaning and inclusion of the term 'borrower' and
the wordings contained in Section 18 of the SARFAESI Act, we are of the
view that there is no need and/or requirement to import any other meaning
thereto, by employing other rules of statutory interpretation, as suggested by
Mr. Purohit. Resultantly, we are of the considered opinion that the Petitioner
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Sunshine Builders vs. HDFC Bank
would squarely fall within the meaning of the term, 'borrower' as contained
in Section 18(1) of the SARFAESI Act.
40. Next, let us ascertain whether the common order passed by the DRT in the
present case, is a mere procedural order and not a final order and whether, as
a result thereof, the provisions of pre-deposit are not attracted. In order to
properly appreciate the submissions of the parties, it would be apposite to
appreciate the scheme of the SARFAESI Act and in particular, Chapter III
therein, which is titled, 'Enforcement of Security Interest'. Section 13 which
also bears the same title, contains various provisions whereunder, a secured
creditor is empowered to enforce its security interest without the intervention
of a court or tribunal. One of the measures available under sub-section (4)
thereof to such secured creditor is to take possession of the secured assets,
including the right to transfer by way of lease, assignment or sale for
realising the secured asset. Section 14 then prescribes various provisions to
the Chief Metropolitan Magistrate or the District Magistrate to assist such
secured creditor in taking possession of the secured asset, whilst Section 17
provides for the recourse that can be taken by any person who may be
aggrieved by any of the measures referred to in sub-section (4) of Section 13
being taken by the secured creditor by making an application to the DRT
within 45 days from the date on which such measure had been taken.
Thereafter, Section 18 contains the provisions of Appeal which can be made
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Sunshine Builders vs. HDFC Bank
to the Appellate Tribunal (DRAT) by any person who is aggrieved by any
order made by the DRT within 30 days from the date of receipt of such order.
41. For convenience, the afore-mentioned provisions of the SARFAESI Act are
extracted and reproduced hereunder:
"13. Enforcement of security interest - ...
...
...
(4) In case the borrower fails to discharge his liability in full
within the period specified in sub-section (2), the secured
creditor may take recourse to one or more of the following
measures to recover his secured debt, namely:--
(a) take possession of the secured assets of the
borrower including the right to transfer by way of
lease, assignment or sale for realising the secured
asset;
(b) take over the management of the business of the
borrower including the right to transfer by way of
lease, assignment or sale for realising the secured
asset:
Provided that the right to transfer by way of lease,
assignment or sale shall be exercised only where the
substantial part of the business of the borrower is
held as security for the debt:
Provided further that where the management of
whole of the business or part of the business is
severable, the secured creditor shall take over the
management of such business of the borrower which
is relatable to the security for the debt;]
(c) appoint any person (hereafter referred to as the
manager), to manage the secured assets the
possession of which has been taken over by the
secured creditor;
(d) require at any time by notice in writing, any person
who has acquired any of the secured assets from
the borrower and from whom any money is due or
may become due to the borrower, to pay the secured
creditor, so much of the money as is sufficient to pay
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the secured debt."
"17. Application against measures to recover secured
debts --
(1) Any person (including borrower) aggrieved by any of the
measures referred to in sub-section (4) of Section 13 taken
by the secured creditor or his authorised officer under this
chapter, may make an application along with such fee, as
may be prescribed, to the Debts Recovery Tribunal having
jurisdiction in the matter within forty-five days from the
date on which such measure had been taken:
Provided that different fees may be prescribed for making
the application by the borrower and the person other than
the borrower.
Explanation.--For the removal of doubts, it is hereby
declared that the communication of the reasons to the
borrower by the secured creditor for not having accepted
his representation or objection or the likely action of the
secured creditor at the stage of communication of reasons
to the borrower shall not entitle the person (including
borrower) to make an application to the Debts Recovery
Tribunal under this sub-section.
(1-A) An application under sub-section (1) shall be filed before
the Debts Recovery Tribunal within the local limits of whose
jurisdiction--
(a) the cause of action, wholly or in part, arises;
(b) where the secured asset is located; or
(c) the branch or any other office of a bank or financial
institution is maintaining an account in which debt
claimed is outstanding for the time being.
(2) The Debts Recovery Tribunal shall consider whether any of
the measures referred to in sub-section (4) of Section
13 taken by the secured creditor for enforcement of
security are in accordance with the provisions of this Act
and the rules made thereunder.
(3) If, the Debts Recovery Tribunal, after examining the facts
and circumstances of the case and evidence produced by
the parties, comes to the conclusion that any of the
measures referred to in sub-section (4) of Section 13, taken
by the secured creditor are not in accordance with the
provisions of this Act and the rules made thereunder, and
require restoration of the management or restoration of
possession, of the secured assets to the borrower or other
aggrieved person, it may, by order, --
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(a) declare the recourse to any one or more measures
referred to in sub-section (4) of Section 13 taken by
the secured creditor as invalid; and
(b) restore the possession of secured assets or
management of secured assets to the borrower or
such other aggrieved person, who has made an
application under sub-section (1), as the case may
be; and
(c) pass such other direction as it may consider
appropriate and necessary in relation to any of the
recourse taken by the secured creditor under sub-
section (4) of Section 13.
(4) If, the Debts Recovery Tribunal declares the recourse taken
by a secured creditor under sub-section (4) of Section 13, is
in accordance with the provisions of this Act and the rules
made thereunder, then, notwithstanding anything contained
in any other law for the time being in force, the secured
creditor shall be entitled to take recourse to one or more of
the measures specified under sub-section (4) of Section 13
to recover his secured debt.
(4-A) Where --
(i) any person, in an application under sub-section (1),
claims any tenancy or leasehold rights upon the
secured asset, the Debt Recovery Tribunal, after
examining the facts of the case and evidence
produced by the parties in relation to such claims
shall, for the purposes of enforcement of security
interest, have the jurisdiction to examine whether
lease or tenancy,--
(a) has expired or stood determined; or
(b) is contrary to Section 65-A of the Transfer of
Property Act, 1882 (4 of 1882); or
(c) is contrary to terms of mortgage; or
(d) is created after the issuance of notice of
default and demand by the Bank under sub-
section (2) of Section 13 of the Act; and
(ii) the Debt Recovery Tribunal is satisfied that tenancy
right or leasehold rights claimed in secured asset
falls under the sub-clause (a) or sub-clause (b) or
sub-clause (c) or sub-clause (d) of clause (i), then
notwithstanding anything to the contrary contained
in any other law for the time being in force, the Debt
Recovery Tribunal may pass such order as it deems
fit in accordance with the provisions of this Act.
(5) Any application made under sub-section (1) shall be dealt
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with by the Debts Recovery Tribunal as expeditiously as
possible and disposed of within sixty days from the date of
such application:
Provided that the Debts Recovery Tribunal may, from time
to time, extend the said period for reasons to be recorded
in writing, so, however, that the total period of pendency of
the application with the Debts Recovery Tribunal, shall not
exceed four months from the date of making of such
application made under sub-section (1).
(6) If the application is not disposed of by the Debts Recovery
Tribunal within the period of four months as specified in
sub-section (5), any part to the application may make an
application, in such form as may be prescribed, to the
Appellate Tribunal for directing the Debts Recovery Tribunal
for expeditious disposal of the application pending before
the Debts Recovery Tribunal and the Appellate Tribunal
may, on such application, make an order for expeditious
disposal of the pending application by the Debts Recovery
Tribunal.
(7) Save as otherwise provided in this Act, the Debts Recovery
Tribunal shall, as far as may be, dispose of the application
in accordance with the provisions of the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993 (51 of
1993) and the rules made thereunder."
"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 an 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.
(2) Save as otherwise provided in this Act, the Appellate
Tribunal shall, as far as may be, dispose of the appeal in
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Sunshine Builders vs. HDFC Bank
accordance with the provisions of the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993 (51 of
1993) and rules made thereunder"
42. From the above provisions, it is quite clear that every action of Respondent
No. 1 Bank under Section 13 of the SARFAESI Act constitutes a fresh cause
of action and was capable of being independently challenged by the
Petitioner under Section 17 thereof. This is also reiterated in Authorised
Officer, Indian Overseas Bank and Anr. Vs. Ashok Saw Mill reported in
(2009) 8 SCC 366 which clarifies that the Amending Act of 2004, gave an
opportunity to the borrower to approach the DRT at any stage and against
any measure taken by the secured creditor under sub-section (4) of Section
13 of the SARFAESI Act which was not in conformity therewith. Admittedly,
on 20th September 2017, the Petitioner had initially filed Securitisation
Application No. 82 of 2019 before the DRT challenging some steps taken by
Respondent No. 1 Bank under Section 13(4) of the SARFAESI Act.
However, no reliefs came to be granted in its favour and since then,
Respondent No. 1 Bank pursued the other measures available to it thereunder
and obtained an order dated 26 th January 2019 under Section 14 for taking
physical possession of the said property. Respondent No. 1 Bank then
proceeded under the SARFAESI Rules for sale of the said property and
ultimately, on 24th December 2019, the Sale Certificate came to be issued in
favour of the Auction Purchaser, Respondent No. 5. All these steps were
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within the knowledge of the Petitioner who in fact had even exchanged
communication with Respondent No. 1 Bank during this period and also filed
the Commercial Suit in this Court but for reasons best known to it, preferred
Miscellaneous Application No. 183 of 2021 and Miscellaneous Application
No. 95 of 2021 (since, renumbered as Interlocutory Application No. 1652 of
2022) in the pending Securitisation Application No. 82 of 2019 only much
later, on 28th January 2021 (and much after the expiry of the period of 45
days prescribed under sub-section (1) of Section 17 of the SARFAESI Act) to
challenge these subsequent measures taken by Respondent No. 1 Bank. In
fact, the record reveals that the Petitioner was aware of the sale of the said
property since as far back as on 12th February 2020 but decided to challenge
the same in the DRT only about one year later.
43. Moreover, as provided in the said sub-section (1) of Section 17 of the
SARFAESI Act, each measure adopted by Respondent No. 1 Bank under
sub-section (4) of Section 13, afforded a separate cause of action to the
Petitioner and was capable of being independently challenged by it before the
DRT within 45 days of such measure being taken. If this were done by the
Petitioner, either by filing subsequent Securitisation Applications or by
amending the Securitisation Application No. 82 of 2019 already filed by it
before the DRT within the prescribed time, then there would be no question
of the DRT considering any application for condonation of delay and such
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application would have been dealt with on its merits. However, the Petitioner
has instead chosen not to follow the prescribed procedure and has instead
belatedly chosen to amend the Securitisation Application No. 82 of 2019 and
challenge these subsequent measures whilst seeking condonation of delay in
doing so, in the bargain.
44. It was under these circumstances that the common order dated 7 th October
2022 came to be passed by the DRT. Whilst appreciating the peculiar facts of
the case, the DRT has categorically held that the Petitioner has failed to
explain the delay in challenging the measures by independently assessing the
cause of action and the period of limitation for each measure (under Section
13(4) of the SARFAESI Act) that the Petitioner had sought to challenge by
the said amendments. Whilst doing so, the DRT has also taken cognizance of
the fact that the Petitioner had approached the civil court and filed the
Commercial Suit, which was sought to be amended by challenging the
subsequent measures taken by Respondent No. 1 Bank much before moving
the DRT for the same reason. Hence, the common order records that despite
knowledge of the sale of the said property, the Petitioner slept over its rights
and approached the DRT after inordinate and unexplained delay and in the
bargain, has waived, abandoned and relinquished its rights. Under such
peculiar circumstances, the common order declines to unsettle the rights
acquired by the Auction Purchaser, Respondent No. 5 in the said property.
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Thus, in light of the discussion recorded above, we are inclined to accept the
submissions of the Respondents that the said common order was not a mere
procedural order but rather, one passed upon proper consideration and
adjudication of the events that have transpired in the matter.
45. In any event, as more particularly held by the Division Bench of this Court in
Vinay Container Services (supra), the requirement of pre-deposit under sub-
section (1) of Section 18 of the SARFAESI Act would also apply where an
appeal is filed before the DRAT against an interlocutory order passed by the
DRT under Section 17 of the Act since the power of the DRT to pass an
interlocutory order in ancillary to its jurisdiction under Section 17 and the
provisions of Section 18(2) cannot be so interpreted to mean that an
interlocutory order passed by the DRT is not referrable to the provisions of
Section 17. A similar view has also been taken by the Division Bench of the
Delhi High Court in Satnam Agri Products (supra), which goes on to hold
that there is no reason to exempt the appeals arising out of the orders passed
by the DRT on interlocutory applications merely on the ground that the said
orders do not have the effect of staying the action or measures taken by the
secured creditor under sub-section (4) of Section 13 of the SARFAESI Act
for enforcement of security interest. In Rajat Infrastructure (supra), the
Supreme Court after relying on past judicial pronouncements has held that
the right of appeal under Section 18(1) is only subject to the condition of
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Sunshine Builders vs. HDFC Bank
deposit laid down in the second proviso therein.
46. Moreover, the provisions of sub-section (1) of Section 18 are very clear
inasmuch as, they clearly include the words, "Any person aggrieved, by any
order made by the Debts Recovery Tribunal under Section 17, may prefer an
appeal...". There is no qualification provided by the legislature restricting the
applicability of this sub-section to only some class or category of orders,
whether a procedural one or otherwise, a final order which determines the
liability of the borrower or any other person. Instead, the only prescribed
requirement is that the order must be one that is passed by the DRT under
Section 17 of the SARFAESI Act and as discussed above, if any person is
aggrieved with the measures undertaken by a secured creditor under Sections
13 and 14 of the SARFAESI Act, an application can be made to the DRT
challenging the same and the various provisions relating thereto, are
contained in Section 17 of the Act. Here again, there is no qualification
provided by the legislature restricting the applicability of invoking this
Section only against some class or category of measures that may be
undertaken under Sections 13, 14 and instead, Section 17 can be availed by
any person, not merely a borrower, to challenge any and all measures
undertaken by the secured creditor.
47. In this background, when we consider the words, "any order" found in sub-
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Sunshine Builders vs. HDFC Bank
section (1) of Section 17, it is difficult to restrict its applicability to only a
final order which determines the liability of the borrower or other person, as
urged by Mr. Purohit. There are several judicial pronouncements which have
been relied upon by the Respondents, including inter alia Lucknow
Development Authority (supra), Man Global (supra) and Raj Kumar
Shivhare (supra) which interpret the word, 'any' as contained in several
statutes to mean the word, 'all'. Similarly, even the Black's Law Dictionary
does not restrict the meaning of the word 'any' and describes it thus - "Any
does not necessarily mean only one person, but may have reference to more
than one or to many". Merrium Webster's Dictionary explains the pronoun
'any' to be either, singular or plural in construction.
48. Upon consideration of the discussion above, we are unable to accept the
submission of Mr. Purohit that the provision of pre-deposit cannot be
attracted to the common order passed by the DRT and his reliance on the
decision of the Supreme Court in Gade Sreenivas Reddy (supra) which came
to be passed whilst interpreting certain provisions of the RDB Act, is wholly
misconceived and cannot be applied to the facts of the present case. So also,
his reliance on the decision of the Division Bench of this Court in Gadekar
Ginning and Pressing (supra) does not take his case further, inasmuch as,
the said decision holds that the DRAT could not have passed the order of pre-
deposit when the appeal before it merely challenged an order which rejected
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an Interlocutory Application which sought condonation of delay. Further, the
contents of the said Interlocutory Application and the exact nature of the
reliefs sought therein are not clearly spelt out in the said judgment.
49. Similarly, Mr. Purohit's reliance on the decision of the Supreme Court in
Mardia Chemicals (supra) to contend that an onerous condition of pre-
deposit cannot be imposed as a condition precedent to hear and decide the
Appeal is wholly misconceived inasmuch as, in the present case, the
condition of pre-deposit under the second proviso to sub-section (1) of
Section 18 of the SARFAESI Act is prescribed in the statute itself. So also,
his reliance on Nagpur Integrated Township (supra) to contend that before
passing any order of pre-deposit, the DRAT was required to record at least a
prima facie finding on whether the Petitioner was a borrower or not, is
misconceived and contrary to the provisions of the statute itself which does
not prescribe any such requirement as a condition precedent or otherwise.
50. The upshot of the discussion above leads to the conclusion that the common
order passed by the DRT in the present case, cannot be said to be a mere
procedural order, as sought to be contended by the Petitioner and as a result
thereof, the provisions of pre-deposit, prescribed in the second proviso to
sub-section (1) of Section 18 are attracted.
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51. Moreover, a bare perusal of the pleadings reveal that the Appeal has been
preferred before the DRAT under Section 18 of the SARFAESI Act. In other
words, even the Petitioner admits or at least is deemed to admit that the
common order was passed by the DRT under sub-section (1) of Section 17 of
the SARFAESI Act on its application which inter alia sought to challenge the
measures undertaken by Respondent No. 1 Bank under Sections 13 and 14 of
the Act. In the premises, we are not inclined to accept Mr. Purohit's
submission that the two Applications preferred by his clients and the
common order passed thereon, by the DRT was instead, in accordance with
the provisions of the RDB Act and Rules made thereunder, by relying on the
provisions of sub-section (7) of Section 17 of the SARFAESI Act.
52. Even otherwise, there is a catena of decisions including inter alia one of the
Division Bench of this Court in Vijaysing (supra), which relies on an older
decision of this Court in State of Bombay Vs. Morarji Cooverji reported in
1958 (LXI) BLR 318 and reiterates that in order to get relief from this Court
exercising equitable jurisdiction under Article 226 of the Constitution of
India, not only must the party come with clean hands and not suppress any
material facts and show utmost good faith, but he must also satisfy the Court
that passing an order in his favour would do justice and that justice lies on his
side.
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53. In the present case, besides the merits not being in favour of the Petitioner,
even equities are not on its side. As noted above, the Petitioner is guilty of
inordinate delay and has slept on its rights and selectively chosen to enforce
them, at its own whim and fancy. Initially, it related to the two Deeds of
Simple Mortgage dated 30th December 2011 and 12th March 2013, then to the
notice and the initial steps undertaken by Respondent No. 1 Bank under
Sections 13(2) and 13(4) and then under Section 14 and ultimately to the sale
of the said property to Respondent No. 5 and the subsequent Development
Agreement that has been entered into between Defendant Nos. 5 and 6. On
all these occasions, besides approaching the Court or Tribunal belatedly to
challenge the measures, agreements, etc. the Petitioner has consistently failed
to obtain a single interim or ad-interim order in its favour preventing
subsequent events. As a result, an irreversible situation has presented itself
inasmuch as, pursuant to the sale of the said property in favour of
Respondent No. 5 by a registered sale certificate dated 24 th December 2019, a
fresh mortgage of the said property has been created in favour of Respondent
No. 1 Bank and thereafter, on 2nd May 2023, a registered Development
Agreement has been executed between Respondent Nos. 5 and 6 under which
the latter has since not only undertaken construction on the said property but
also created multiple third party rights in the constructed units. As more
particularly set out hereinabove, the construction undertaken on the said
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property involves 4 Towers of ground + 15 floors where about 53% of the
units have already been sold to third party purchasers whilst Respondent No.
6 is stated to have expended more than ₹ 80 crores in the bargain. Moreover,
Respondent No. 6 has also constructed 10 rehab buildings on the said
property, of which 8 buildings have already received their occupancy
certificate as on August 2025 and the units therein have been handed over
and the erstwhile occupants / dwellers have already been rehabilitated. Thus,
the equities do not favour the Petitioner in the present case.
54. For all the above reasons, we decline to exercise our extraordinary equitable
jurisdiction under Article 226 of the Constitution of India in favour of the
Petitioner and as a result, the present Writ Petition fails. Accordingly, the
following order is passed:
:: ORDER ::
(a) The present Writ Petition is hereby dismissed.
(b) There shall be no order as to costs.
( FARHAN P. DUBASH, J. ) ( R.I. CHAGLA J. )
JYOTI by JYOTI
PRAKASH
PRAKASH PAWAR
PAWAR Date: 2026.02.04
19:29:25 +0530
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Order dated 4th February 2026
