Case Note & Summary
The judgment concerns two writ petitions filed by an auction purchaser (Aloukik Construwell LLP) and a secured creditor (HDFC Bank Limited) challenging two orders of the Debts Recovery Appellate Tribunal (DRAT), Mumbai dated 18.11.2025 and 08.12.2025. The respondent-borrower, proprietor of M/s. Vora Enterprises, had availed credit facilities from the bank, which were secured by mortgaging a flat and a piece of land. The account was classified as NPA on 01.05.2020, leading to a notice under Section 13(2) of the SARFAESI Act on 04.09.2020. The borrower filed Securitisation Application No. 52 of 2020 before DRT-I, which was dismissed on 12.05.2023. The borrower's first appeal before DRAT was dismissed for non-deposit. Meanwhile, the bank took possession of the mortgaged land and conducted an e-auction on 19.06.2025, where the auction purchaser emerged as the successful bidder. The borrower then filed a second securitisation application before DRT-II, which was dismissed as time-barred on 15.09.2025. The auction purchaser paid the full bid amount and a sale certificate was issued and registered on 23.09.2025, after which physical possession was handed over. The borrower challenged the DRT-II order by filing Appeal (D) No. 1711 of 2025 before DRAT, seeking waiver of pre-deposit and interim relief. On 18.11.2025, the DRAT, while adjourning the waiver application, directed parties to maintain status quo. On 08.12.2025, the DRAT allowed the waiver application, granting complete waiver of pre-deposit and directing registration of the appeal. The petitioners contended that the DRAT could not pass a status quo order in a waiver application without considering prima facie case, balance of convenience and irreparable loss; that the waiver was erroneous because the appeal sought substantive reliefs beyond condonation of delay; and that the proviso to Section 18 of SARFAESI Act mandates pre-deposit even in such cases, relying on recent decisions of the Bombay High Court in Sunshine Builders and Developers and D Corp Agro Foods. The borrower's arguments were not fully recorded in the truncated text. The court's analysis and final decision are not available in the provided extract. The procedural history includes multiple rounds of litigation and the disposal of earlier writ petitions and appeals at various stages.
Issue of Consideration
Whether the DRAT erred in granting an order of status quo while hearing a waiver application and later granting complete waiver of pre-deposit under Section 18 of the SARFAESI Act, when the borrower's appeal challenged not only dismissal of condonation of delay but also substantive reliefs including setting aside of sale certificate; whether the auction purchaser and secured creditor were entitled to challenge the DRAT orders; and whether the mandatory pre-deposit condition applies to appeals arising from dismissal of delay condonation applications.
Case Details
2026 LawText (BOM) (06) 7
Writ Petition No. 2851 of 2026 with Writ Petition No. 3233 of 2026
Manish Pitale, Shreeram V. Shirsat
Mr. Ankit Lohia, Mr. Charles DeSouza, Mr. Girish Godbole
Aloukik Construwell LLP (in WP 2851 of 2026) and HDFC Bank Limited (in WP 3233 of 2026)
Pradeep Gordhandas Vora and another
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Nature of Litigation
Writ petitions under Article 226 of the Constitution of India challenging orders of the Debts Recovery Appellate Tribunal granting status quo and complete waiver of pre-deposit in an appeal filed by the borrower against the dismissal of his securitisation application and rejection of condonation of delay.
Remedy Sought
Petitioners sought setting aside of DRAT orders dated 18.11.2025 and 08.12.2025, and a direction requiring the respondent-borrower to make pre-deposit in terms of Section 18 of the SARFAESI Act.
Filing Reason
The DRAT's order of status quo was passed in an application for waiver without discussion of interim relief parameters, and the waiver of pre-deposit was granted despite the appeal seeking substantive reliefs including challenge to the sale certificate, which allegedly violated the mandatory provision of Section 18 and prejudiced the rights of the auction purchaser and secured creditor.
Previous Decisions
The borrower's first securitisation application (SA No. 52 of 2020) was dismissed by DRT-I on 12.05.2023; the first appeal (Appeal (D) No. 950 of 2023) was dismissed for non-compliance with pre-deposit direction; the second securitisation application (SA No. 1068 of 2025) along with condonation of delay application was dismissed by DRT-II on 15.09.2025; the impugned orders were passed by DRAT in the subsequent appeal challenging that dismissal.
Issues
Whether the DRAT could pass an interim order of status quo while hearing an application for waiver of pre-deposit without considering the three parameters for grant of interim relief?
Whether the DRAT could grant complete waiver of pre-deposit under the proviso to Section 18 of the SARFAESI Act when the appeal before it sought not only setting aside of the order rejecting condonation of delay but also substantive prayers such as stay of further proceedings on confirmation of sale and challenge to the sale certificate?
Whether the auction purchaser has locus standi to challenge the DRAT orders affecting its rights after issuance and registration of the sale certificate and delivery of possession?
Whether the proviso to Section 18 of the SARFAESI Act, which mandates pre-deposit, applies to an appeal filed against dismissal of a condonation of delay application that results in rejection of the securitisation application?
Submissions/Arguments
Mr. Ankit Lohia for the auction purchaser argued that the DRAT erred in relying on the judgment in Gadekar Ginning because that case involved an appeal simpliciter against dismissal of delay condonation, whereas the present appeal sought extensive substantive reliefs on merits; thus pre-deposit was mandatory.
The DRAT's approach was contrary to the recent Division Bench decision in M/s. Sunshine Builders and Developers vs. HDFC Bank Limited, which held that any DRT order challenged by a borrower requires pre-deposit under Section 18, and the order in Gadekar was considered and distinguished.
The auction purchaser has clear locus to challenge the DRAT orders as the sale certificate was already issued and registered, and possession was handed over; any DRAT order would directly affect its interests.
The borrower's allegations of fraud and collusion are matters for the DRAT and not for the writ court at this stage.
The order of status quo was passed in the waiver application without any discussion of prima facie case, balance of convenience or irreparable loss, and was therefore unsustainable.
Mr. Charles DeSouza for the bank supported the auction purchaser's arguments and submitted that the waiver application was wrongly allowed without proper application of legal principles under Section 18.
Judgment Excerpts
By order dated 18.11.2025, the DRAT, while adjourning hearing on an application for waiver of pre-deposit filed by respondent-borrower, directed the parties to maintain status quo.
On 08.12.2025, the DRAT allowed the waiver application and granted complete waiver to the respondent - borrower.
The respondent - borrower could not be permitted to rely upon the order passed by this Court in the case of M/s. Gadekar Ginning and Pressing Pvt. Ltd. and another vs. Canara Bank and another (supra). In the said case, this Court was concerned with an appeal filed before the DRAT, which simplicitor challenged dismissal of application for condonation of delay by the concerned DRT.
The approach adopted by the DRAT is erroneous, in the light of the recent judgment of Division Bench of this Court in the case of M/s. Sunshine Builders and Developers vs. HDFC Bank Limited and others.
Procedural History
01.05.2020: Borrower's account classified as NPA. 04.09.2020: Bank issued notice under Section 13(2) of SARFAESI Act. 16.12.2020: Borrower filed SA No. 52 of 2020 before DRT-I. 30.11.2021: DRT-I rejected interim relief. 02.12.2021: Bombay High Court in WP No. 1610 of 2022 directed payment of ₹1 crore and deferred possession; later writ petition disposed on 15.03.2022. 28.03.2022: Borrower filed Misc. Appeal No. 15 of 2022 before DRAT. 06.04.2022: DRAT directed pre-deposit; later on 15.07.2022 remanded SA to DRT-I. 12.05.2023: DRT-I dismissed SA No. 52 of 2020. 10.06.2023: Borrower filed Appeal (D) No. 950 of 2023 before DRAT; dismissed on 07.12.2023 for non-deposit. 07.01.2025: Bank took possession under Section 14. 09.05.2025: Bank issued e-auction notice; auction held 19.06.2025. 26.06.2025: Borrower filed SA No. 1068 of 2025 before DRT-II with condonation application. 15.09.2025: DRT-II dismissed delay condonation application. 16.09.2025: Auction purchaser deposited full bid amount. 22.09.2025: Borrower filed WP (L) No. 30370 of 2025; withdrew on 26.09.2025. 23.09.2025: Sale certificate issued and registered. 01.10.2025: Possession handed over. 14.10.2025: Borrower filed Appeal (D) No. 1711 of 2025 before DRAT with waiver and interim applications. 04.11.2025: Borrower filed SA No. 491 of 2025 for setting aside sale. 18.11.2025: DRAT directed status quo. 08.12.2025: DRAT allowed waiver and directed registration of appeal; status quo continued thereafter.
Acts & Sections
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: 13(2), 14, 18(1) proviso
