Authority: Calcutta High Court

Order Date: 14 September 2026

Case Overview

  • Parties: Petitioner Poorvi Bagaria (heir of the late Uttam Kumar Bagaria) represented by advocates Arijit Bardhan, Soumyajit Mishra and Gourab Mondal; Respondent State Bank of India (SBI) represented by Senior Advocate Joy Saha and others.
  • The petition is an application under Article 227 challenging Order No. 5 dated 24 February 2026 of the Debts Recovery Appellate Tribunal (DRAT), Kolkata, in Appeal Diary No. 1021 of 2025.
  • Underlying dispute: a SARFAESI Act proceeding where the heirs filed a Section 17(1) application against SBI and its authorized officer, contesting a Demand Notice dated 19 December 2022 and a Possession Notice dated 13 March 2023 issued on loan facilities originally granted to Merril Impex Private Limited (later Global Metcoke Private Ltd and Janmani International Private Ltd).
  • Credit facilities: Rs 29 lakh in 2007, increased to Rs 39.85 crore on 3 December 2011, and further to Rs 59.99 crore on 29 January 2013.
  • Security: equitable mortgage over four duplex flats (“Jaisalmer”, 1st & 2nd floor, B+G+5 building, 3380 sq ft, 4 car spaces) owned by Uttam Kumar Bagaria, Mamta Bagaria and Gita Bagaria; title deeds dated 19 January 2001.
  • After Uttam Kumar Bagaria’s death on 20 February 2012, his heirs inherited the property and were treated as legal representatives of the borrower.
  • The DRAT upheld the Demand and Possession Notices and dismissed the SARFAESI application. The petitioner appealed to the DRAT, which directed her to deposit 50 % of the debt amount (Rs 1,12,12,58,945) as pre‑deposit under Section 18 of the SARFAESI Act.
  • The petitioner sought waiver of the pre‑deposit (IA 637 of 2025). SBI argued that the petitioner, as heir and guarantor/mortgagor, is a “borrower” under the Act and must comply with the mandatory 50 % pre‑deposit, citing Supreme Court decisions (Narayan Chandra Ghosh vs UCO Bank, 2011; Union of India vs Rajat Infrastructure Private Ltd, 2020).
  • The petitioner contended she was not a guarantor and that liability should be limited to the value of the mortgaged flat.

Court’s Reasoning

  • The Court rejected the petitioner's claim that she was not a guarantor, noting the equitable mortgage and the absence of any material to prove otherwise; an adverse inference was drawn from the lack of guarantee documents before the deceased’s death.
  • Defined “borrower” under Section 2(1)(f) of the SARFAESI Act to include guarantors and mortgagors; heirs stepping into the shoes of the deceased guarantor are therefore borrowers.
  • Reiterated the mandatory nature of the pre‑deposit under Section 18(1) and the limited discretion of the Appellate Tribunal to reduce it only to a minimum of 25 % with reasons recorded.
  • Cited Supreme Court authority that the pre‑deposit condition is not onerous and cannot be waived; the Appellate Tribunal erred in entertaining an appeal without insisting on the deposit.
  • Applied the principle that a guarantor/mortgagor stands on the same footing as a borrower and must comply with Section 18.

Final Outcome

  • The High Court dismissed C.O. 866 of 2026, upholding the requirement that the petitioner deposit the statutory pre‑deposit (minimum 50 % of the debt, reducible to not less than 25 %).
  • No order as to costs was made.
  • The Court directed that urgent certified copies be supplied upon compliance with formalities.

Topics: SARFAESI Act, Banking Regulation, Debt Recovery