In a recent decision, the Supreme Court of India held that appeals against certain procedural orders of the Debts Recovery Tribunal (DRT) may not need a pre-deposit under Section 18 of the SARFAESI Act, 2002.
The case arose from an order by the Bombay High Court dated March 19, 2024. It had upheld a Debts Recovery Appellate Tribunal (DRAT) decision that required auction purchasers to deposit ₹125 crores before their appeal could be heard. This appeal was against a DRT order that denied their request to be included in ongoing proceedings.
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The Supreme Court bench, consisting of Justices J.B. Pardiwala and K.V. Viswanathan, questioned whether procedural DRT orders—like the one in this case—should automatically demand a pre-deposit to appeal under Section 18.
"The plain reading of Section 18 suggests that appeals against DRT orders under Section 17 require pre-deposit. But we believe that not every order passed by DRT should attract this condition," the bench noted.
The Court emphasized that pre-deposit should only apply to appeals against final orders—such as those that decide liability. It clarified that procedural orders, like denying a party’s inclusion in a case, may not fall under this rule.
"If an order only declines impleadment of an auction purchaser and does not decide on liability, should pre-deposit still apply? We think not," the judges added.
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As a result, the Supreme Court set aside the Bombay High Court's ruling. The matter has now been sent back to the High Court for fresh consideration in light of the Supreme Court’s observations.
"We are of the view that we should remand the matter to the High Court for the purpose of reconsidering the aforesaid aspects of the matter," the bench concluded.
Appearance: Senior Advocate CU Singh, Radhika Gautam AOR for Appellant
Case Details: M/S SUNSHINE BUILDERS AND DEVELOPERS v. HDFC BANK LIMITED THROUGH THE BRANCH MANAGER & ORS. |CIVIL APPEAL NO.5290/2025
