Kerala High Court says pre-deposit needed to appeal interim SARFAESI orders

A Division Bench of the Kerala High Court, led by the Chief Justice, held on 12 October 2026 that a borrower must make the required pre-deposit to appeal to the Debts Recovery Appellate Tribunal (DRAT) even when the order being challenged is only an interim one. The case involved recovery action by Federal Bank Limited under the SARFAESI Act, 2002.

What Happened

The appellants had challenged an order of a single judge of the High Court. The Division Bench declined to interfere with that order.

The bench relied on two earlier judgments of co-ordinate benches of the same court. Those judgments held that the SARFAESI Act does not distinguish between an interim order and a final order passed on an application under Section 17 of the Act, and that a pre-deposit is a requirement for an appeal under Section 18 to be entertained.

Counsel for the appellants asked for three weeks to deposit 25% of the debt due. Counsel also told the court that a valuation of the properties had been placed before the DRAT so that it could consider whether selling one property would be enough to clear the dues owed to the bank.

The court granted the appellants three weeks to deposit 25% of the debt due. It said that if the deposit is not made, the appeal before the DRAT shall not be admitted. The writ appeal was disposed of.

What It Means

For borrowers facing recovery action under the SARFAESI Act, the ruling means that an appeal to the DRAT against an order on a Section 17 application will not be heard without the pre-deposit, whether that order is interim or final. In this case the court fixed the deposit at 25% of the debt due and set a three-week deadline.

Borrowers who plan to appeal such an order should therefore be ready to arrange the deposit within the time allowed, since the court made clear that the appeal will not be admitted without it.

Source: High Court judgment