Wife Claiming Residence Rights In Mortgaged Property Need Not Make SARFAESI Pre-Deposit For Appeal: DRAT Delhi

A wife claiming a right to reside in a mortgaged property as her shared household is not required to make the statutory pre-deposit to pursue an appeal under the SARFAESI Act, the Delhi Bench of the Debts Recovery Appellate Tribunal (DRAT) has held.

The tribunal, however, ruled that her claim under the Protection of Women from Domestic Violence Act, 2005, could not defeat HDFC Bank's right to enforce its security interest over the property.

A tribunal headed by Chairperson Justice Sudhir Kumar Jain upheld the Debts Recovery Tribunal's order refusing interim protection against the bank's recovery action.

It first allowed Meenakshi Goel's application seeking waiver of the statutory pre-deposit before dismissing her appeal on merits.

“The appellant, being an independent third party in a loan transaction, is not required to make any pre-deposit as per Section 18 of the SARFAESI Act. The application is allowed accordingly.”, the tribunal ruled.

The dispute arose after HDFC Bank initiated recovery proceedings against a property mortgaged to secure loan facilities, alleging outstanding dues of about Rs 4.21 crore. Goel, citing matrimonial differences and alleging that her husband had deserted her, claimed she had been residing in the property as her matrimonial home. In September 2024, she obtained orders from a Mahila Court and a civil court restraining her husband and father-in-law from dispossessing her from the property.

After the bank initiated measures to take possession of the mortgaged property, Goel challenged the action before the Debts Recovery Tribunal. When interim relief was refused on April 17, 2026, she approached the appellate tribunal.

Before the appellate tribunal, Goel argued that she had an independent statutory right of residence under the Protection of Women from Domestic Violence Act. She also invoked Article 21 of the Constitution, alleged connivance and collusion between the bank and her husband and father-in-law to evict her, and contended that the bank could recover its dues by proceeding against other mortgaged properties.

HDFC Bank questioned her locus to maintain the appeal, arguing that she was neither the borrower, guarantor nor mortgagor in the loan transaction. Her husband, father-in-law and their partnership firm also contended that the injunctions obtained in the matrimonial dispute did not confer rights superior to those of the secured creditor.

The tribunal accepted Goel's contention that no pre-deposit was required because she was an independent third party asserting her own right of residence and was neither the borrower, guarantor nor mortgagor. It also held that she qualified as a "person aggrieved" since the bank's action directly threatened her physical possession and right to reside in the property, entitling her to maintain the appeal.

On the merits, however, the tribunal found no reason to interfere with the Debts Recovery Tribunal's order.

“The right of respondent no.1 under the SARFESI Act and the right of the appellant under the Protection of Women from Domestic Violence Act are not in conflict with each other and are independent in operation. However, the right of the respondent no.1 under the SARFESI Act cannot be defeated by the operation of the Protection of Women from Domestic Violence Act, 2005.”

The tribunal also rejected Goel's submission that the bank should be directed to recover its dues from other mortgaged properties instead of the property where she resided. It observed that no direction could be issued requiring the secured creditor to recover its dues from a particular mortgaged property.

Finding no illegality or infirmity in the Debts Recovery Tribunal's order refusing interim protection, the tribunal dismissed the appeal. It clarified that nothing in its order would affect the other legal proceedings initiated by Goel.

For Appellant: Senior Advocate Prem Lata Bansal along with Sh. Shivam Banal

For Respondent no. 1: Kashish Narang and Deboshree Saha

For Respondents no. 3 and 4: Atul Gupta