APHC010504092025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3558] THURSDAY,THE TWENTY SIXTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY THE HONOURABLE SRI JUSTICE TUHIN KUMAR GEDELA WRIT PETITION NO: 25889/2025 Between: 1. TATA CAPITAL LIMITED, (FORMERLY KNOWN AS TATA CAPITAL FINANCIAL SERVICE LIMITED) HAVING ITS OFFICE AT PLOT NO 3 TO 6, AUTO PLAZA, ROAD NO. 3, TIMES OF INDIA, BANJARA HILLS, HYDERABAD, TELANGANA - 500034 ...PETITIONER AND 1. SHAKTHI IMAGING AND DIAGNOSTICS PVT LTD, H. No. 2-2-24/1 /49 /1 Soma Sundar Nagar D D Colony Amberpet, Hyderabad, Telangana . ...RESPONDENT Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased topleased to pass an order or direction or any other proceedings more particularly one in the nature of Writ of Certiorari calling for the records relating the appeal in Dy No. 687/2025 on the file of DRAT, Kolkata and to set aside the impugned order of DRAT, Kolkata dated 04.08.2025 passed in lA No. 398 of 2025 in Appeal Diary No. 687 of 2025 as illegal. Arbitrary and contrary to provisions of SARFAESI Act, 2002 more particularly section 18 of the said Act and to pass 2 CMR,J & GTK,J W.P.No.25889 of 2025 IA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to dispense with the filing of the certified of the impugned order 04.08.2025 passed in lA No. 398 of 2025 in Appealcopy Diary No. 687 of 2025 on the file of DRAT, Kolkata and to pass IA NO: 2 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to grant stay of all further proceedings in the Appeal in Diary No. 687/2025 on the file of DRAT, Kolkata and to pass Counsel for the Petitioner: 1. SHIREEN SETHNA BARIA Counsel for the Respondent: 1. M K VISWANATH NAIDU The Court made the following: 3 CMR,J & GTK,J W.P.No.25889 of 2025 ORDER: (Per Hon’ble Sri Justice Cheekati Manavendranath Roy) Challenging the order dated 04.08.2025 of the Debts Recovery Appellate Tribunal, Kolkata, passed in I.A.No.398 of 2025 in Appeal Diary No.687 of 2025, whereby the Tribunal has ordered to register the appeal without depositing 50% or 25% of the debt in compliance with the proviso to Section 18 of the Act, the instant Writ Petition has been preferred. 2. Heard Mr.Ambadipudi Satyanarayana, learned Senior Counsel appearing on behalf of Ms.Shireen Sethna Baria, learned counsel for the petitioner and Mr.N.Subba Rao, learned Senior Counsel appearing on behalf of Mr.M.K.Viswanath Naidu, learned counsel for the respondent. 3. The writ petitioner is a financial institution in the name and style “Tata Capital Limited”. The respondent has filed an application under Section 17 of the Act challenging the order passed under Section 14 of the Act taking possession of the secured asset. Various pleas have been raised in the said application challenging the order passed under Section 14 of the Act alleging that without the secured asset being registered with the Central Registry in terms of Section 26(B) of the Act that the financial institution cannot initiate measures under the SARFAESI Act in view of the embargo contained in Section 26(D) of the Act and also that the respondent herein cannot be termed as a „borrower‟ for the purpose of initiating the proceedings under the SARFAESI Act. The Tribunal has dismissed the said application filed under Section 17 of the Act, and all the contentions that are raised by the respondent herein have been negatived. 4. Aggrieved thereby, the respondent herein has preferred an appeal to the Debts Recovery Appellate Tribunal, Kolkata, under Section 18 of SARFAESI Act. The proviso to Section 18 of the Act mandates that the borrower has to deposit 50% or 25% of the debt due, as a condition precedent for entertaining the appeal. The respondent herein has filed I.A.No.398 of 2025 seeking waiver of deposit of the said amount. The said petition was 4 CMR,J & GTK,J W.P.No.25889 of 2025 allowed by the impugned order on the ground that the respondent herein has already paid a sum of Rs.3,79,00,000/- even prior to issuing notice under Section 13(2) of the Act, and it satisfies the requirement of deposit of 50% of the debt amount and thereby ordered for registration of the appeal. In effect, it amounts to ordering waiver of the deposit of the amount, which is a condition precedent for registering the appeal. 5. Learned Senior Counsel appearing for the petitioner would contend that the debt means the amount claimed in the notice given under Section 13(2) with interest. Therefore, the respondent has to deposit 50% of the outstanding amount or 25% as the case may be as ordered by the Tribunal and the Tribunal grossly erred in ordering for waiver of the said deposit and to register the appeal. 6. Learned Senior Counsel appearing for the respondent vehemently contended that the proviso to Section 18 says that it is only the borrower who has to deposit the said 50% or 25% of the debt due and the respondent herein will not come within the definition of borrower, as the transaction in question pertains to a lease of machinery. 7. In fact, the same plea that he cannot be termed as a „borrower‟ was taken before the Tribunal. The Tribunal has given a finding on that aspect and negatived the said contention. In fact, the correctness of the said finding is questioned in the appeal before the Appellate Tribunal. Therefore, whether the respondent herein comes within the definition of „borrower‟ as defined under the Act or not is to be decided in the final adjudication of the said appeal. But in view of the mandatory requirement as contained in the proviso to Section 18 of the Act deposit of 50% or 25% of the due amount is a condition precedent to entertain the appeal, the power to waive the said deposit is not conferred on the Appellate Tribunal. 5 CMR,J & GTK,J W.P.No.25889 of 2025 8. The Tribunal failed to take into consideration the total amount due as claimed in Section 13(2) notice. Therefore, we are of the considered view that the said order is liable to be set aside. 9. Resultantly, the Writ Petition is allowed. The impugned order of the Tribunal in ordering to register the appeal without deposit of the said amount in compliance with the proviso to Section 18 of the Act is hereby set aside. The matter is remanded to the Debts Recovery Tribunal, Kolkata, with a direction to pass an order afresh after hearing both the parties along with I.A.No.399 of 2025 in Appeal No.79 of 2025 on or before 25.03.2026. All the contentions which are raised and urged before the Court by the respondent herein are left open to be raised before the Appellate Tribunal. It is made clear that we did not express any opinion on those contentions and we did not decide anything on merits on those contentions in this Writ Petition. It is entirely left to the discretion of the Appellate Tribunal to decide the same on merits according to law. It is also left entirely to the discretion of the Appellate Tribunal to direct deposit of 50% or 25% of the debt amount, if at all it is ultimately found by the Tribunal that the respondent herein is liable to deposit the amount for registering the appeal. There shall be no order as to costs. 10. As a sequel, Interlocutory Applications pending, if any, shall stand closed. ________________________________________ CHEEKATI MANAVENDRANATH ROY, J _______________________ TUHIN KUMAR GEDELA, J Date : 26-02-2026 BMS