Kerala High Court
Mr.C.D.Antos vs Glenny.C.J on 15 July, 2025
Author: Anil K.Narendran
Bench: Anil K.Narendran
1
WA No.1546 of 2025 2025:KER:51545
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
&
THE HONOURABLE MR.JUSTICE MURALEE KRISHNA S.
TUESDAY, THE 15TH DAY OF JULY 2025 / 24TH ASHADHA, 1947
WA NO. 1546 OF 2025
AGAINST THE JUDGMENT DATED 17.06.2025 IN WP(C) NO.18071 OF
2025 OF HIGH COURT OF KERALA
APPELLANT/RESPONDENT NO.3:
MR.C.D.ANTOS,
S/O C.A.DEVASSY, CHITTILAPPALLY,KUNNATH HOUSE, WESTERN
BAZAR, ARANATTUKARA.P.O,THRISSUR DISTRICT, PIN -
680618
BY ADVS.
SRI.S.S.ARAVIND
SHRI.TINU ABRAHAM
RESPONDENTS/PETITIONERS & RESPONDENTS 1 AND 2:
1 GLENNY.C.J.,
AGED 54 YEARS
S/O. CHEMMANNUR JOSEPH, CHEMMANNUR HOUSE,ORLARIKKARA,
ARANATTUKARA VILLAGE, THRISSUR, PIN - 680003
2 JAYA JOSE,
AGED 44 YEARS
W/O GLENNY C.J, CHEMMANNUR HOUSE,ORLARIKKARA,
ARANATTUKARA VILLAGE, THRISSUR, PIN - 680003
3 CANARA BANK,
REPRESENTED BY ITS AUTHORISED OFFICER, SREEKRISHNA
BUILDING, 1ST FLOOR, WEST PALACE ROAD,THRISSUR
DISTRICT, PIN - 680002
2
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4 AUTHORISED OFFICER,
CANARA BANK, SREEKRISHNA BUILDING, 1ST FLOOR, WEST
PALACE ROAD,THRISSUR DISTRICT, PIN - 680002
BY ADVS.
SRI.K.SANEESH KUMAR
SMT.V.B.SANTHINI
SRI.P.VISWANATHAN (SR.)
OTHER PRESENT:
SRI. M. GOPIKRISHNAN NAMBIAR, SC, CANARA BANK
THIS WRIT APPEAL WAS FINALLY HEARD ON 02.07.2025, THE COURT
ON 15.07.2025 PASSED THE FOLLOWING:
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JUDGMENT
Muralee Krishna, J.
This intra-court appeal is filed under Section 5(i) of the
Kerala High Court Act, 1958, by the 3 rd respondent in
W.P.(C)No.18071 of 2025, challenging the judgment dated
17.06.2025 passed by the learned Single Judge, whereby the writ
petition filed by respondents 1 and 2 herein was disposed of by
directing the Debts Recovery Appellate Tribunal to pass orders on
the stay petition filed by respondents 1 and 2 within three weeks
from the date of that judgment, if the application preferred by
them is otherwise in order. It was further directed in that judgment
that till orders are passed as directed, further coercive steps
against respondents 1 and 2 shall be deferred.
2. Going by the averments in the writ petition, respondents
1 and 2 availed two loans, the first one is for Rs.3/- crores and the
second one is for Rs.79/- Lakhs from the 3rd respondent Bank.
When respondents 1 and 2 defaulted repayment of the loan, the
Bank initiated proceedings under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 ('SARFAESI Act' for short). Two items of
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properties offered as security, viz, 6.77 Ares and 7.79 Ares with a
commercial building thereon situated in survey No.1136/1 of
Marathakkara Village of Thrissur Taluk was put in auction on
19.09.2024 by the 4th respondent, Authorised Officer, in
pursuance to the steps taken for recovery of the amount by selling
the secured asset. The appellant participated in the auction
proceedings and was declared the successful bidder for an amount
of Rs.3,32,00,000/-. He remitted 25% of the bid amount on the
day of auction, and the balance 75% before 15 days as mandated
under the Security Interest (Enforcement) Rules 2002.
Challenging the sale, respondents 1 and 2 approached the Debts
Recovery Tribunal by filing S.A. No. 117 of 2021 under Section 17
of the SARFAESI Act. During the pendency of the proceedings, the
Bank sold the third item of the secured asset, having an extent of
53 cents in survey No.1434 of Amballur Village. Before the Debts
Recovery Tribunal, respondents 1 and 2 contended that the total
market value of three items of the property would come to more
than Rs.13/- crores and the reserve price fixed is very meagre.
However, the securitisation application was dismissed by the Debts
Recovery Tribunal by virtue of Ext.P2 order dated 08.05.2025. At
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that stage, respondents 1 and 2 approached this court with the
writ petition filed under Article 226 of the Constitution of India,
seeking the following reliefs:
"I) To issue a writ in the nature of Mandamus, directing the
1st and 2nd respondent not to proceed with the taking of
physical possession of the immovable properties subjected
in the Exhibit P1 application, till the filing of the statutory
appeal before the Debt Recovery Appellate Tribunal as
against the Exhibit P1 final order, and upon the time that
may be fixed by this Honouarable Court to secure justice.
II) To issue a writ in the nature of Mandamus, directing the
Respondents 1 and 2 to keep in abeyance all further
proceedings pursuant to Exhibit P2 order for a period of one
month from today".
3. In the writ petition, respondents 1 and 2 herein-writ
petitioners contend that they intend to challenge Ext.P2 order
before the Debts Recovery Appellate Tribunal under Section 18 of
the SARFAESI Act. They have 30 days' time to challenge Ext.P2
order. But, meanwhile, the Bank may proceed with the matter
and take possession of immovable properties which are the
subject matter of Ext.P2. Till respondents 1 and 2 avail their
statutory remedy, the interference of this Court is necessary to
safeguard their interests. After hearing the learned counsel for
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respondents 1 and 2 and also the Bank, the learned Single Judge
disposed of the writ petition as stated above.
4. Heard the learned counsel for the appellant, the learned
Senior Counsel for respondents 1 and 2 and the learned Standing
Counsel for the Bank.
5. The learned Counsel for the appellant would argue that
against Ext.P2 order of the Debts Recovery Tribunal, respondents
1 and 2 have a statutory remedy under Section 18 of the
SARFAESI Act before the Debts Recovery Appellate Tribunal.
However, as per the stipulation in the 2nd proviso to Section 18(1),
to entertain the appeal, they have to deposit 50% of the debt due.
The Appellate Tribunal is empowered to waive only 25% of that
amount, and hence, respondents 1 and 2 have to mandatorily
deposit 25% of the debt before the Appellate Tribunal. It is to
escape from the same, respondents 1 and 2 approached this
Court with the writ petition under Article 226 of the Constitution
of India. The learned counsel further submitted that by the
judgments of the Apex Court and that of this court when a
statutory appeal is provided against the steps taken under the
provisions of the SARFAESI Act, this court by exercising
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jurisdiction under Article 226 of the Constitution of India shall not
interfere with the same unless the exceptional circumstances
mentioned in the judgment of the Apex Court in the Authorized
Officer, State Bank of Travancore and Another v. Mathew
K.C. [2018 (1) KHC 786] is made out. No such exceptional
circumstance is made out in the present case, and hence the
direction issued by the learned Single Judge is not legally
sustainable.
6. On the other hand, the learned Senior Counsel appearing
for respondents 1 and 2 would submit that respondents 1 and 2
received a physical copy of the impugned order of the Tribunal on
16.05.2025. Within the statutory period of 30 days provided under
Section 18 of the SARFAESI Act, they filed the appeal before the
Debts Recovery Appellate Tribunal. However, the appeal is yet to
be numbered in its usual course and in the interregnum, there is
a possibility of taking possession of the property of respondents 1
and 2 by the Bank in collusion with the appellant and hence,
respondents 1 and 2 approached this Court. By relying on the
judgments of the Apex Court in Anita Kushwaha and others v.
Pushap Sudan and others [(2016) 8 SCC 509] and that of
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this Court in HDFC Bank Ltd. v. Debts Recovery Tribunal-I
[2022 (2) KLT 27], the learned Senior Counsel submitted that if
no efficacious adjudicatory mechanism is available, then the right
of the citizen for access to justice can be protected by this Court
by exercising jurisdiction under Article 226 of the Constitution of
India. Till a decision is taken by the Appellate Tribunal in the stay
petition filed by respondents 1 and 2, the interest of respondents
1 and 2 can be protected only by an order of this Court under
Article 226 of the Constitution of India, and there is no illegality
or incorrectness in the impugned judgment.
7. The learned counsel appearing for the Bank supported
the arguments of the learned counsel for the appellant.
8. The appellant herein is an auction purchaser of the
properties of respondents 1 and 2 by the 3 rd respondent Bank
through the 4th respondent for recovery of debt, which was
converted into a Non-Performing Asset. Against the same,
respondents 1 and 2 approached the Debts Recovery Tribunal
wherein Ext.P2 order dated 08.05.2025 was passed against
respondents 1 and 2. As far as the challenge against the said order
is concerned, respondents 1 and 2 have a remedy before the Debts
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Recovery Appellate Tribunal under Section 18 of the SARFAESI Act.
The said section 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:
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."
9. In Narayan Chandra Ghosh v. Uco Bank [(2011) 4
SCC 548] while considering the question 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
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Court held thus:
"8. Section 8(1) of the Act confers a statutory right on a
person aggrieved by any order made by the Debts Recovery
Tribunal under Section 17 of the Act to prefer an appeal to
the Appellate Tribunal. However, the right conferred under
Section 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 Section 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
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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 - deposit under sub-section (1) of
Section 18 of the Act is mandatory and there is no reason
whatsoever for not giving full effect to the provisions
contained in Section 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 Section 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 Section 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.
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Therefore, the condition of pre-deposit being mandatory, a
complete 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".
10. 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 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
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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
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waiver.
11. It is the specific case of the appellant that to maintain
an appeal against an order under Section 17 passed by the Debts
Recovery Tribunal before the Debts Recovery Appellate Tribunal,
apart from the fees prescribed, respondents 1 and 2 have to
deposit 50% of the amount of debt due from them. The Appellate
Tribunal is entitled to reduce that amount to not less than 25%.
Therefore, to entertain their appeal, it is mandatory to deposit a
minimum 25% of the debt, even if respondents 1 and 2 are
seeking a waiver of the remaining 25%, the maximum of which
can be given by the Appellate Tribunal. It is to escape from that
liability, respondents 1 and 2 approached this Court with the writ
petition. While going through the second and third Provisos to
Section 18(1) of the SARFAESI Act in the light of the judgments
referred to above, we find force in the said argument of the
learned counsel for the appellant.
12. The maintainability of a writ petition under Article 226
of the Constitution of India, against the steps taken under the
provisions of SARFAESI Act by the secured creditor, by invoking
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the power under Section 13(4), is settled by the judgments of the
Apex Court as well as this Court.
13. In Authorized Officer, State Bank of Travancore
and Another v. Mathew K.C. [2018 (1) KHC 786], 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].
14. This position was reiterated by the Apex Court in South
Indian Bank Ltd. (M/s.) v. Naveen Mathew Philip [2023 (4)
KLT 29] and after discussing the various judgments on the point
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as well as the circumstances in which the High Court can interfere
with in matters pertaining to the SARFAESI Act, held as under:
"Unfortunately, the High Court overlooked the settled law
that the High Court will ordinarily not entertain a petition
under Article 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 Article226 of the Constitution,
a person must exhaust the remedies available under the
relevant statute".
15. In PHR Invent Educational Society v. UCO Bank
[2024 (3) KHC SN 3] the Apex Court held that it is more than a
settled legal position of law that in matters arising out of RDB Act
and SARFAESI Act, the High Court should not entertain a petition
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under Art.226 of the Constitution particularly when an alternative
statutory remedy is available.
16. 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.
17. From the submissions made at the Bar, we notice that
the Debts Recovery Tribunal passed Ext.P2 order on 08.05.2025.
According to respondents 1 and 2, they received certified copy of
that order only on 16.05.2025. They have filed the above writ
petition on 12.05.2025. However, they approached the Debts
Recovery Appellate Tribunal on 13.06.2025. While going through
this chronological events, conclusion is irresistible that the
respondents 1 and 2 are trying to get more time to approach the
Debts Recovery Appellate Tribunal by approaching this Court in
the interregnum by filing the writ petition under Article 226 of the
Constitution of India.
18. In the case of HDFC Bank Ltd. [2022 (2) KLT 27]
relied by the learned Senior Counsel for respondents 1 and 2, this
Court held that when the fundamental right to access to justice is
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denied, the aggrieved are entitled to approach this Court under
Article 226 or 227 of the Constitution of India. But on going
through the said judgment, it is clear that it was in the
circumstance of absence of Presiding Officers of the Forum created
under the statute, such a finding was given by this Court. In the
instant case, respondents 1 and 2 have no case that the Debts
Recovery Appellate Tribunal is facing any difficulty due to absence
of Presiding Officer to consider the appeal. Therefore, the
judgment in HDFC Bank Ltd. [2022 (2) KLT 27] is not
applicable to the facts of the case in our hand.
19. In Anita Kushwaha [(2016) 8 SCC 509] also four
circumstances are mentioned in paragraph 30 of the judgment as
the essence of access to justice. They are (i) the state must
provide an effective adjudicatory mechanism; (ii) the mechanism
so provided must be reasonably accessible in terms of distance;
(iii) the process of adjudication must be speedy; and (iv) the
litigants access to the adjudicatory process must be affordable.
When a statutory mechanism, by way of Section 18 of the
SARFAESI Act is provided against an order passed by the Debts
Recovery Tribunal under Section 17 of the Act, the respondents 1
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and 2 cannot be heard to say that the access to justice is denied
to them. Any of the four circumstances mentioned in Anita
Kushwaha [(2016) 8 SCC 509] is not made out by respondents
1 and 2. They have no case that Section 18 of the SARFAESI Act
does not provide sufficient remedy to an aggrieved in the order
passed under Section 17 of the Act. Therefore, we have no
hesitation to hold that respondents 1 and 2 have not made out
any sufficient ground to maintain their writ petition under Article
226 of the Constitution of India. The learned Single Judge failed
to consider these aspects while disposing of the writ petition filed
by respondents 1 and 2 as mentioned above.
In the result, this writ appeal is allowed by setting aside the
impugned judgment dated 17.06.2025 in W.P.(C)No.18071 of
2025 and the writ petition stands dismissed.
Sd/-
ANIL K. NARENDRAN, JUDGE
Sd/-
sks MURALEE KRISHNA S., JUDGE
