Bank has no lien in terms of Section 171
of The Indian Contract Act, 1872 on the pre-deposit made by the borrower under
Section 18 of the SARFAESI Act as pre-condition for hearing his appeal on
merits
Facts:
a)
The respondent-borrower filed Securitisation Application before the DRT against
the steps taken by the secured creditor, a bank, for enforcing his security.
However, DRT rejected the same.
b)
The respondent-borrower moved to DRAT u/s 18 of the SARFAESI Act and deposited
sum of Rs.50 lakhs before the Appellate Tribunal in terms of the proviso to
section 18 of the said Act.
c)
Realising that the appeal would not survive thereafter, the respondent sought
permission from DRAT to withdraw the same and also for refund of the deposited
amount. DRAT granted permission to withdraw deposits subject to the disposal of
the appeal.
d)
As the appeal itself was being withdrawn, the respondent filed writ before High
Court.
e)
The High Court set aside the said condition and permitted the respondent to
withdraw the amount unconditionally.Aggrieved by the order, the appellant-Bank
filed an intra-Court appeal which was dismissed by Division bench
On further appeal, the Supreme Court held
as under:
