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2020 (3) TMI 76

..... 18 of the SARFAESI Act, 2002? - HELD THAT:- The order of the High Court does not show any exercise of such discretionary powers but according to the High Court on an interpretation of the Section, predeposit was not required. We are also not impressed with the argument of Mr. Chaudhri that his client is not a borrower. A guarantor or a mortgagor, who has mortgaged its property to secure the repayment of the loan, stands on the same footing as a borrower and if he wants to file an appeal, he must comply with the terms of Section 18 of the SARFAESI Act. Also, the High Court has no powers akin to powers vested in this Court under Article 142 of the Constitution. The High Court cannot give directions which are contrary to law. Appeal allowed. - .....

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..... 2 and 3 who are the alleged leaseholders in possession of the property are the highest bidders for a sum of ₹ 65.52 crores. The main objection of the respondent no.1 to the sale is that it is for a low amount and there is collusion between the officers of the Bank and the auction purchaser. The petitioner challenged the order of the DRAT dated 11.11.2019 before the High Court and the High Court passed the following order dated 25.11.2019: 2. Relegating the Petitioner to the appellate remedy on account of afore-noted facts and holding that the Petitioner has an efficacious alternate remedy of appeal before the learned DRAT where no pre-deposit is required, the Petition is rejected without making any observation on the merits of the di .....

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..... or counsel appearing for the respondent no.1 urged that the High Court has exercised its discretionary jurisdiction under Article 226 of the Constitution of India while holding that it is not required to make pre-deposit. He also submits that the respondent no.1 is not a borrower and finally submits that the main ground is that since the amount offered by the highest bidder is below the value of the property, the DRAT is entitled to entertain the appeal without deposit of any amount. It is submitted that the value of the property is about ₹ 160 crores and even the value as per the circle rate is about ₹ 120 crores, but the same has been sold for a pittance of ₹ 65.52 crores. He also submitted that there is collusion betwee .....

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..... RT, the appeal could not be entertained by the DRAT without insisting on pre-deposit. The DRAT, at best could, after recording the reasons, have reduced the amount to 25% but could not have totally waived the deposit. This Court also held that the right of appeal conferred under Section 18(1) is subject to the conditions laid down in the second proviso therein which postulates that no appeal shall be entertained unless the borrower has deposited 50% of the amount of debt due from him as claimed by the secured creditors or determined by the DRT, whichever is less. The third proviso enables the DRAT, for reasons to be recorded in writing, to reduce the amount of deposit to not less than 25%. The following observations of this Court are releva .....

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