METRO NIKETAN PVT LTD vs THE AUTHORISED OFFICER ALCHEMIST ASSET RECONSTRUCTION COMPANY LTD on 1 September 2026

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA Misc. Appeal Dy. No. 1395 of 2025 THE HON’BLE JUSTICE SHRI ANIL KUMAR SRIVASTAVA, CHAIRPERSON Order No. 11 01.09.2026

Metro Niketan Pvt. Ltd. & Anr.

... Appellant --Vs— Alchemist Asset Reconstruction Co. Ltd. & Ors. .... Respondents For Appellant : Mr. Prasenjit Pal, ld. Adv.

For Respondent : Mr. Nemani Srinivas, ld. Adv.

THE APPELLATE TRIBUNAL

I.A. 819 of 2025 is filed for waiver from making pre-deposit by the appellant. Opposition filed by the respondent. Heard learned counsel for the parties and perused the records. Instant appeal is preferred against the order dated 04.11.2025 passed by the learned DRT-III Kolkata whereby learned DRT dismissed the I.A. 3331 of 2025 filed by the appellant praying for appointment of Special Officer to make inventory and also to restrain respondents from taking any step for sale of the properties. Learned DRT after considering the opposition filed by the respondents dismissed the I.A. 3331 of 2025 on merit. Feeling aggrieved by the impugned order appellant preferred the appeal. Learned counsel for appellant would submit that pending S.A. mortgaged property has been sold and auction sale is under challenge. Learned counsel further submits that impugned order passed by the learned DRT is procedural in nature. It is submitted that in the impugned order prayer for appointment of special officer for making inventory with consequential relief was made and as the prayer was declined by the learned DRT there is no requirement of making pre-deposit. Reliance is placed upon Para 50 of the judgment of the Hon’ble Bombay High Court in Writ Petition No. 3929 of 2024 M/s. Sunshine Builders & Developers Vs. HDFC Bank Ltd. & Ors. Learned counsel for respondents submits that debt due as on the date of filing appeal is Rs.7,03,95,810/-. Learned counsel further submits that since secured asset has already been sold and auction sale is under challenge, appellant cannot take advantage of the sale proceeds. Impugned order was passed on an application for appointment of special officer to prepare inventory and also to restrain respondents from taking any step for sale of the properties. Undisputedly, appellant is a “guarantor” who is covered under the definition of “borrower”. As far as pre-deposit required u/s 18 of the SARFAESI Act, 2002 is concerned, Hon’ble Apex Court In Narayan Chandra Ghosh versus UCO Bank & others (2011) 4 SCC 548, has held that- “7. Section 18(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 the 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.

8. 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 unreasonable restrictions, rendering the right almost illusory. Bearing in mind the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the requirement of pre-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.”

Provisions of Section 18 of the Act are mandatory in nature. Learned counsel for appellant placed reliance upon the judgment in M/s Sunshine (supra) wherein Hon’ble Bombay High Court at Para 50 has held as under : “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 provision of pre-deposit, prescribed in the second proviso to sub-section (1) of Section 18 are attracted.”

Hon’ble High Court also held that order, which is procedural in nature, appeal against that order would not invite compliance of Section 18 of the Act. But in the present case no where it transpires that impugned order is procedural in nature rather it was an order wherein specific relief is sought for by the appellant for appointment of special officer with consequential relief against the secured creditor not to take any step for sale of the properties. Accordingly, appellant cannot take advantage of the judgment of the Hon’ble Bombay High Court in M/s. Sunshine (supra). Debt due as on the date of filing of the appeal is Rs.7,03,95,810/-. As per provision of Section 18 of the Act appellant is required to make pre-deposit 50% of the debt due. At this stage learned counsel for appellant would submit that pre-deposit amount may be reduced to 25% since appellant is facing financial crunch. Having considered the submission made by the learned counsel for appellant pre-deposit amount is reduced to the extent of 30% of Rs.7,03,95,810/- which should be deposited within four weeks. I.A. 819 of 2025 stands disposed of. List on 14.10.2026 for further order. (Anil Kumar Srivastava, J) Chairperson Dated : 01.09.2026 02/pkb