MS CHINTAMANI JEWELLERS INDIA PVT LTD vs ABHYUDAYA COOPERATIVE BANK LIMITED on 12 November 2026

1. Present as under:

Mr. Rohan Mahadik along with Mr. Bhavin & Mr. Ram B., i/b M/s. the Juris Partners, Counsel for Applicants/Borrowers. Mr. Nikhil Rajani, i/b M/s. V. Deshpande & Co., Counsel for Respondent Bank.

2. I.A. No. 679/2026 in Misc. Appeal (Diary) No. 1860/2026 is taken up on the basis of a praecipe filed by the Applicants/Borrowers, along with copies of the orders dated 06.11.2026 and 09.11.2026 passed by the Hon'ble High Court of Bombay in Writ Petition No. 15325/2026. Vide order dated 06.11.2026, the Hon'ble High Court directed this Appellate Tribunal to decide the application, if filed on or before 09.11.2026 by the Applicants/Borrowers on its merits.

Vide order dated 09.11.2026 passed in the same Writ Petition, the Hon'ble High Court extended the time for filing the application until 12.11.2026 i.e. today.

3. Heard.

4. The Learned Counsel for the Applicants/Borrowers would submit that during the period from 07.12.2022 to 06.07.2026 i.e. after their account was classified as NPA, the Applicants/Borrowers have paid an amount of approximately ₹24,39,99,545/- to the Respondent Bank.

He would further submit that the loan which is the subject matter of challenge in the present appeal is initially for an amount of ₹4 crore and does not pertain to the other multiple loans availed by the Applicants/Borrowers from the Respondent Bank.

However, he would fairly concede at the Bar that the Applicants/Borrowers had availed multiple loan facilities from the Respondent Bank, aggregating to approximately ₹39.75 crore.

He would further submit that, as per the letter dated 20.11.2025 (Exhibit-D, page No. 117 of the appeal memo), the Respondent Bank had demanded only a sum of ₹1,15,99,592/- which according to him, represented the entire outstanding dues; that, the Applicants/Borrowers have already paid a sum of ₹24,33,98,740/- during the period from 07.12.2022 to 06.07.2026 (pages 34 of I.A. No. 679/2026); that, in view of the aforesaid payments, the outstanding dues cannot be ₹37.62 crore, as claimed against the Applicants/Borrowers; that, even as per the ledger maintained by the Respondent Bank, the outstanding dues against the Applicants/Borrowers are approximately ₹1.15 crore only.

However, he would fairly concede that the said ledger (Exhibit- D) pertains only to the individual loan facility of ₹4 crore extended to the Applicants/Borrowers, out of the multiple loan facilities availed by them.

5. Per contra, the Learned Counsel for the Respondent Bank seeks time to file the reply to the I.A. No. 679/2026.

6. Considered.

7. However, the request for granting time to the Respondent/Bank to file its reply cannot be acceded to as the Hon'ble High Court, vide its order dated 09.11.2026 passed in Writ Petition No. 15325/2026, has directed this Appellate Tribunal to decide the application on merits in accordance with law on 12.11.2026. Accordingly, the request made by the Learned Counsel for the Respondent Bank is declined.

8. Heard Respondent/Bank on I.A. No. 679/2026.

9. The Learned Counsel for the Respondent/Bank would submit that the Applicants/Borrowers have challenged the sale notice dated 15.07.2026 issued under Section 13(4) of the SARFAESI Act, 2002, along with all consequential actions.

He would further submit that it is an admitted position of the Applicants/Borrowers that multiple loan facilities from the Respondent/Bank, cumulatively amounting to approximately ₹40

crore has been availed by the Applicants/Borrowers; that, the ledger relied upon by the Applicants/Borrowers (page No. 25 of I.A. No. 679/2026) pertains only to the individual loan facility of ₹4 crore, whereas the demand under the impugned notice dated 15.07.2026 is for an amount of ₹3,762.23 lakh as on 30.06.2026; that, even if the alleged payments, though not admitted, made by the Applicants/Borrowers are taken into consideration, the same pertain to the period prior to issuance of the notice dated 15.07.2026 under Section 13(8) of the SARFAESI Act, 2002; that, this Appellate Tribunal, vide its order dated 02.11.2026, had already considered all these aspects and no new facts have been pleaded in the present application i.e. I.A. No. 679/2026.

10. The Learned Counsel for the Respondent Bank would rely upon the judgment of the Hon'ble Supreme Court of India in M/s. Sidha Neelkanth Paper Industries Pvt. Ltd. & Anr. v. Prudent ARC Ltd. & Ors., 2023 SCC OnLine SC 12, and would submit that the Hon'ble Supreme Court, in the said judgment, has held as follows:- “ In case of challenge to the sale of the secured assets, the amount mentioned in the sale certificate will have to be considered while determining the amount of pre-deposit under Section 18 of the SARFAESI Act. However, in a case where both are under challenge, namely, steps taken under Section 13 (4) against the secured assets and also the auction sale of the secured assets, in that case, the “debt due” shall mean any liability (inclusive of interest) which is claimed as due from any person, whichever is higher”.

He would further submit that, in the earlier application, being I.A. No. 638/2026, decided by this Appellate Tribunal on 02.11.2026, the Applicants/Borrowers had neither pleaded any financial hardship nor produced any documentary evidence in support thereof, such as Income Tax Returns; that, even in the present application, the Applicants/Borrowers have failed to produce any documentary evidence to substantiate their alleged financial hardship.

11. Considered and perused the records.

12. It would be pertinent to note that the present appeal has been filed challenging the order dated 15.09.2026 passed by the Learned DRT-II, Mumbai on Interim Application No. 2248/2026 in Securitisation Application No.

filed by the Applicants/Borrowers. By way of the said application, the Applicants/Borrowers had sought relief for setting aside the impugned notice dated 15.07.2026 issued by the Respondent Bank under Section 13(8) of the SARFAESI Act, 2002 in respect of the secured asset.

A perusal of the Securitisation Application would also reveal that the main relief sought therein was to quash and set aside the sale notice dated 15.07.2026 issued by the Respondent Bank in respect of the secured asset situated at Village Antrat Turfe, Need, Taluka Karjat, District Raigad.

A perusal of paragraph 5 of the notice dated 15.07.2026 would reveal that the outstanding dues against the Applicants/Borrowers were stated to be ₹3,762.23 lakhs together with further interest and other charges as on 30.06.2026.

13. The submission made by the Applicants/Borrowers that they had paid total amount of approximately ₹24 crore to the Respondent Bank during the period between 07.12.2022 to 06.07.2026 does not, by itself, support their case for waiver of pre-deposit. This is particularly so when the impugned notice was issued on 15.07.2026 i.e. after this period and the Applicants/Borrowers challenged this notice in the Securitisation Application.

With present I.A. No. 679/2026, the Applicants/Borrowers have themselves placed on record the E-Auction Sale Notice dated 17.10.2026 in respect of the secured asset wherein against Column No. 14 relating to the amount of outstanding dues, a sum of ₹3,809.85 lakhs is reflected as on 01.10.2026. It is pertinent to note that despite availing the liberty granted by the Hon'ble High Court to file a fresh application seeking waiver of pre-deposit the Applicants/Borrowers have once again failed to place on record any documentary evidence to substantiate their alleged financial hardship. Although the Applicants/Borrowers have raised the ground of financial hardship in paragraph 7 of the present application but same was not raised in the earlier application I.A. No. 638/2026. Moreover, no supporting documentary material, such as Income Tax Returns or other financial statements has been produced in support thereof. Therefore, in the considered view of this Appellate Tribunal, the plea of financial hardship in the absence of any supporting documentary evidence in this application appears to be an afterthought.

14. The Hon’ble Supreme Court of India in its judgment in M/s. Sidha Neelkanth (Supra) has held that when any auction sale of secured asset is under challenge then the debt due shall mean any liability inclusive of interest which is claimed from such person.

15. In view of the above discussion, this Appellate Tribunal is of the considered view that the Applicants/Borrowers have not placed any new fact in the present application. Therefore, the Applicants/Borrowers are not entitled to any waiver as per the 3rd proviso to section 18 of the SARFAESI Act.

16. Accordingly, this Tribunal directs the Applicants/Borrowers to deposit 50% of ₹3809.85 Lakhs, which comes to ₹19,04,92,500/- on or before 19.11.2026.

17. The amount shall be deposited in the form of a Demand Draft with the Registrar of this Appellate Tribunal.

18. As and when the said amounts are deposited, the same shall be invested in term deposits in the name of the Registrar, DRAT, Mumbai with any nationalised Bank, initially for 13 months, and thereafter to be renewed periodically.

19. With this observation, the I.A. No. 679/2026 is disposed of.

20. On deposit of the amount, the Registry is directed to register this appeal and interlocutory application, if otherwise in order under the rules.

The Respondent Bank is at liberty to file a reply to the grounds of the Appeal and stay application with an advance copy to the other sides.

21. At this stage, the Learned Counsel for the Applicants/Borrowers would pray for Application (Diary) No. 1867/2026 for staying the order passed by the Ld. Presiding Officer, DRT-II, Mumbai.

22. The Learned Counsel for the Respondent Bank oppose for grant for any stay on the ground that the Appeal is not yet registered due to non-payment of mandatory pre-deposit.

23. The Learned Counsel for the Respondent/Bank relied upon the judgment dated 04.03.2026 in Writ Petition No. 15718/2025 in Anil Kumar Pawar & Anr V/s The Authorised Officer, Union Bank of India & Ors, the Hon’ble High Court of Bombay observed that after depositing the pre-deposit amount under section 18 of the SARFAESI Act within time, the matter be sent before the Ld. Registrar for registering the Appeal and Interlocutory Application. Only after registration, the I.A.

for stay or appeal be heard and decided.

24. Considered and perused the record. The relevant part of the judgment of the Hon’ble High Court of Bombay is reproduced here as under. “8. We find on perusal of the impugned order that it suffers from a serious procedural infirmity. The Application considered and decided in the impugned order dated 14th May 2025 was only the Application seeking waiver of pre-deposit under Section 18 of the Securitisation Act. The only prayer made on behalf of Respondent Nos. 2 and 3 before the DRAT was for such waiver on the basis of statements made in the said Application. While considering the said Application the DRAT discussed the rival submissions, made certain observations and thereupon found that the Respondent Nos.2 and 3 were required to deposit 40% of the amount due and that complete waiver from pre-deposit was not warranted. Having reached the said conclusion the DRAT was expected to issue a positive direction to Respondent Nos.2 and 3 to deposit such 40% amount towards pre-deposit so that the Appeal could be registered and then take up the Application for interim relief and the Appeal for further consideration. (emphasis supplied)

9. ……………………………………………

10. We find that the aforesaid approach adopted by the DRAT suffers from serious procedural irregularity and infirmity. It appears that the DRAT proceeded on an assumption that the moment a pre-deposit direction was issued in an Application seeking waiver thereof, the interim relief would follow as a matter of course upon the amount so directed to be deposited, in fact being deposited by the Appellants (Respondent Nos.2 and 3 herein). We find that the approach of the DRAT is unsustainable.”

25. In re Anil Pawar Case (Supra) the Hon’ble High Court has castigated the approach of DRAT of granting stay or interim relief before the registration of the appeal on deposit of mandatory pre- deposit under Section 18 of the SARFAESI Act for filing of the appeal. It would be important to revisit Section 18 of the Act.

It reads: “18. Appeal to Appellate Tribunal.—(1) Any person aggrieved, by an order made by the Debts Recovery Tribunal [under section 17, may prefer an appeal alongwith 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.

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26. In view of the proviso to section 18 of the SARFAESI Act and observations of the Hon’ble High Court of Bombay in re “Anil Kumar Pawar” (Supra), this Appellate Tribunal is of the considered view that an appeal and application for interim relief can only be heard and decided only after registration of appeal on mandatory pre-deposit under section 18 of the SARFAESI Act. That is to say that before registration of an appeal on deposit of an amount as per section 18 of the ‘Act’, no Appeal or any Interlocutory Application therein can be entertained. Hence, no interim stay can be granted at this stage before registration of the Appeal and the interim stay application after depositing the mandatory amount under section 18 of the SARFAESI Act.

27. If the deposit is made as stated in para 16 above on or before 19.11.2026, list the Appeal on 20.11.2026 for reporting compliance and hearing. Sd/- Chairperson 12.11.2026 Psa-01