MaddaliSriSaiVenkataSatyanarayana vs STATE BANK OF INDIA on 18 August 2026

**IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA** **HON'BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA** **CHAIRPERSON**

**Appeal Dy. No. 305 of 2025**

(Arising out of M.A. No. 214 of 2023 in O.A. No. 779 of 2017 in DRT-II, Hyderabad)

Order No. 14 18.08.2026

Maddali Sri Sai Venkata Satyanarayana & Another .....Appellants

-Vs-

State Bank of India & 11 Others. .....Respondents

Mr. Sarbajit Mukherjee, Learned Counsel Mr. S.N. Patra Bhatta, Learned Counsel for the Appellants

Mr. Uttiyo Mallick, Learned Counsel Ms. Sreejita Gupta, Learned Counsel for the Respondents.

**THE APPELLATE TRIBUNAL :**

**I.A. No. 170 of 2025**

Application for waiver from making pre-deposit as required under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as the 'RDB Act').

**2.** Heard the Learned Counsel for the parties and perused the records.

**3.** Instant Appeal is preferred by the Appellants against an order dated 05.03.2025 passed by Learned DRT-2 Hyderabad in M.A. No. 214 of 2023 arising out of O.A. No. 779 of 2017 (***Sri M.S.S.V. Satyanarayana versus State***


**Bank of India**) whereby the delay for filing an Application to set aside the exparte order dated 29.11.2018 was dismissed by the Learned DRT. Appeal is filed under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 along with the I.A. No. 170 of 2025 for waiver from making pre-deposit.

4. Learned Counsel for the Appellant would submit that the Appeal is filed against an interlocutory order wherein the Application for condonation of delay in filing an Application for setting aside the exparte order was dismissed. Hence, the debt is yet to be finally determined. Accordingly, there is no requirement of making any pre-deposit under Section 21 of the 'RDB Act'. Learned Counsel has placed reliance upon a judgment of the Hon'ble High Court of Telangana at Hyderabad in **Gade Sreenivas Reddy versus The State Bank of India & Others 2025 SCC OnLine TS 687** in Writ Petition No. 12395 of 2025 decided on 28^th August, 2025.

5. Per contra, Learned Counsel for the Respondent would submit that the debt has already been determined in the exparte decree which is sought to be set aside by the Appellant. But the situation is that once DRT has determined the debt, now it is not permissible to file an Appeal without making pre- deposit under Section 21 of the 'RDB Act'.

6. Admittedly, an exparte decree was passed against the Appellant which was sought to be set aside by moving an Application along with an Application for condonation of delay. But the Application for condonation of delay was dismissed by the Learned DRT.

7. Section 21 of the Recovery of Debts and Bankruptcy Act reads as under:

**"21. Deposit of amount of debt due, on filing appeal. -** Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal [fifty per cent.] of the amount of debt so due from him as determined by the Tribunal under section 19:

*Provided that the Appellate Tribunal may, for reasons to be recorded in writing, reduce the amount to be deposited by such amount which shall not be less than twenty-five per cent. of the amount of such debt so due) to be deposited under this section.*

8. Undisputedly provisions of Section 21 of the Recovery of Debts and Bankruptcy Act are mandatory in nature as has been held by the Hon'ble Apex Court in **Narayan Chandra Ghosh versus UCO Bank and others (2011) 4 SCC 548**. However, Division Bench of the Hon'ble High Court of Telangana at Hyderabad in **Gade Sreenivas Reddy versus The State Bank of India** (supra) held that the Supreme Court in the case of **Sunshine Builders and Developers versus HDFC Bank Limited through the Branch Manager and Others 2025 SCC OnLine SC 1234** held that a distinction should be drawn between a final order passed by the DRT determining the liability of the borrower or any other liability of any person and an Appeal preferred under Section 21 of the 'RDB Act' to the Appellate Tribunal. It was held in **Gade Sreenivas Reddy versus The State Bank of India & Others 2025 SCC OnLine TS 687** (supra) in Para No. 40 that -

*"The appeal filed by the petitioner before the DRAT is not a substantive appeal from an adjudication of debt but an appeal for restoration of the principles of natural justice from an ex parte order excluding the petitioner from presenting his case. The significance of preserving the principles of natural justice has specifically been recognised by section 22(1) of the RDB Act. The petitioner's appeal cannot be brought within the stranglehold of the deposit requirement under section 21 of the RDB Act or the proviso contained therein."*

**9.** Principles laid down in ***Gade Sreenivas Reddy versus The State Bank of India & Others*** (supra) squarely applies to the facts of the present case wherein an exparte decree was sought to be set aside and the Application for condonation of delay was dismissed. Accordingly, there is no requirement of making any pre-deposit as required under Section 21 of 'the RDB Act'. Accordingly, I.A. No. 170 of 2025 is allowed.

**10.** Admit the Appeal by providing a regular Appeal number.

**11.** Opposition to the Appeal be filed within two weeks with copy to the Appellant who may file rejoinder if any, within two weeks thereafter.

List on 12^th October, 2026 for hearing of Appeal.

(Anil Kumar Srivastava, J) Chairperson

Dated 18^th August, 2026 /tp

10/8/26