Kerala High Court
Canara Bank vs E.T.Firoz on 23 February, 2026
Author: Anil K. Narendran
Bench: Anil K. Narendran
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN
&
THE HONOURABLE MR. JUSTICE MURALEE KRISHNA S.
MONDAY, THE 23RD DAY OF FEBRUARY 2026 / 4TH PHALGUNA, 1947
WA NO. 2673 OF 2025
AGAINST THE JUDGMENT DATED 08.10.2025 IN WP(C) NO.3068 OF
2025 OF HIGH COURT OF KERALA
APPELLANTS/RESPONDENTS 2 & 3 IN W.P.(C)NO.3068 OF 2025:
1 CANARA BANK,
ASSET RECOVERY BRANCH, KANAYANNUR TALUK,
ERNAKULAM, PIN - 682035
2 PUNJAB NATIONAL BANK,
CIRCLE OFFICE, MINI BYPASS ROAD,
GOVINDAPURAM, KOZHIKODE, PIN - 673016
BY ADVS.
SRI.C.AJITH KUMAR
SMT.VARSHA S.S.
RESPONDENTS/PETITIONERS & 1ST RESPONDENT IN W.P.(C)NO.
3068 OF 2025:
1 E.T. FIROZ
AGED 52 YEARS
S/O. E.T. MUHAMMED BASHEER, SOUMYA,
2/1788A,
FLORICAN ROAD, KALATHIL AVENUE,
CIVIL STATION, MALAPPARAMBU,
KOZHIKODE, PIN - 673020
2 THE RECOVERY OFFICER
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DEBTS RECOVERY TRIBUNAL-I,
KSHB BUILDING, 5TH FLOOR,
PANAMPILLY NAGAR, ERNAKULAM,
KERALA, PIN - 682036
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09.02.2026,
THE COURT ON 23.02.2026 DELIVERED THE FOLLOWING:
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JUDGMENT
Muralee Krishna S., J.
Respondents 2 and 3 in W.P.(C)No.3068 of 2025 filed this
writ appeal under Section 5(i) of the Kerala High Court Act, 1958,
challenging the judgment dated 08.10.2025 passed by the learned
Single Judge in that writ petition.
2. The 1st respondent-writ petitioner filed W.P.(C)No.3068
of 2025 under Article 226 of the Constitution of India, seeking the
following reliefs;
“a. Issue a writ of certiorari or any other appropriate writ, order,
or direction quashing Ext.P7 attachment order dated 13.01.2025
issued by the 1st respondent;
b. Issue a writ of mandamus or any other appropriate writ, order,
or direction directing the 1st respondent to refrain from interfering
with the custody or disposition of the pre-deposit amount held by
the Hon’ble Debts Recovery Appellate Tribunal (DRAT), Chennai,
in RA(SA)No.5 of 2024;
c. Direct the Hon’ble DRAT, Chennai, to release the pre-deposit
amount of Rs.3,95,50,000/- (Rupees Three Crores Ninety-Five
Lakhs Fifty Thousand Only) to the petitioner forthwith, as the
appeal in RA(SA)No.5 of 2024 has been dismissed and no lawful
appropriation or attachment of the pre-deposit has occurred.”
3. Going by the pleadings in the writ petition, the 1 st
respondent-writ petitioner was the 2nd appellant in R.A. (S.A) No.5
of 2024 before the Debts Recovery Appellate Tribunal (‘DRAT’ for
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short), Chennai. The said appeal was one filed against the order
passed by the Debts Recovery Tribunal-I, Ernakulam (the
‘Tribunal’ for short), in O.A.No.76 of 2023, concerning the sale
held on 30.07.2022. To comply with the statutory requirements of
pre-deposit under Section 18 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (‘SARFAESI Act‘ for short), the 1st respondent,
along with the 1st appellant therein, namely M/s. Annam Steels (P)
Ltd. was directed by the DRAT, Chennai, in I.A.No.294 of 2023 to
deposit a sum of Rs.3,95,50,000/-. In compliance with this
direction, the said amount was deposited by the 1st respondent
and the 1st appellant in S.A.No.5 of 2024 by way of a demand draft
dated 21.12.2023 drawn on Indian Overseas Bank. Later, the
appeal was dismissed by the DRAT on 31.07.2024. Thereafter, the
1st respondent-writ petitioner filed Ext.P1 interlocutory application
bearing I.A.No.561 of 2024 before the DRAT seeking release of
the pre-deposit amount. When Ext.P1 interlocutory application
was taken up for consideration by the DRAT, the respondents 2
and 3-appellants herein objected to the same, stating that the
Tribunal was considering an attachment of the pre-deposit
amount. Relying on the principles laid down by the Apex Court in
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Axis Bank v. SBS Organics Pvt. Ltd. [(2016) 12 SCC 18], the
1st respondent contended that once the appeal is dismissed, he is
entitled to the refund of the pre-deposit, unless it has been
lawfully appropriated, attached or adjusted with the consent of the
depositor, none of which had occurred in that case. The 1st
respondent further contended that the appellants-respondents 2
and 3 failed to initiate proceedings under Section 13(10) of the
SARFAESI Act r/w Rule 11 of the Security Interest (Enforcement)
Rules, 2002, for the attachment of the pre-deposit. In the absence
of such proceedings, any claim over the pre-deposit was legally
unsustainable. It was also emphasised that the Recovery Officer
of the Tribunal does not have jurisdiction to override the authority
of the Appellate Tribunal concerning the custody and disposition
of the pre-deposit.
3.1. After several adjournments, on 09.01.2025, the matter
was heard in detail by the DRAT, and orders were reserved. The
1st respondent, in the meanwhile, filed detailed objections before
the 2nd respondent, Recovery Officer, in response to the prayer for
attachment of the pre-deposit amount made by the appellants.
The said objection dated 26.12.2024 filed before the 2 nd
respondent is produced as Ext.P6 in the writ petition. However,
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the 2nd respondent, by Ext.P7 order dated 13.01.2025, passed an
attachment order against the pre-deposit made in the appeal
before the DRAT. Contending that the 2nd respondent has acted
beyond its jurisdiction by attaching the pre-deposit amount, which
was statutorily deposited by the 1st respondent solely for appellate
purposes, the 1st respondent filed the writ petition.
4. On behalf of the appellants, a counter affidavit dated
03.02.2025 was filed in the writ petition, opposing the reliefs
sought for, producing therewith Exts.R2(a) to R2(c) documents.
5. After hearing both sides, the learned Single Judge
disposed of the writ petition by Annexure A1 judgment dated
04.02.2025. In that judgment, the learned Single Judge found
that the 1st respondent-writ petitioner has an appellate remedy
against Ext.P7 order. Therefore, it would be only appropriate that
the 1st respondent-writ petitioner approaches the Tribunal against
Ext.P7 order. In order to facilitate the 1st respondent to approach
the Tribunal, the proceedings pursuant to Ext.P7 order were
deferred for a period of two weeks. Challenging Annexure A1
judgment, the 1st respondent-writ petitioner filed W.A.No.357 of
2025. By Annexure A2 judgment dated 03.03.2025, a Division
Bench of this Court disposed of the writ appeal by setting aside
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Annexure A1 judgment and the writ petition was remanded for
fresh consideration by the learned Single Judge. The parties were
granted liberty to raise all available contentions before the learned
Single Judge. Thereafter, by the present impugned judgment
dated 08.10.2025, the learned Single Judge disposed of the writ
petition, directing the Tribunal to consider and pass appropriate
orders on I.A.No.561 of 2024 in R.A.(S.A) No.5 of 2024 in
accordance with law. Based on the orders to be passed in the said
application, the Tribunal was permitted to make further directions
to the parties.
6. Being aggrieved by the impugned judgment dated
08.10.2025 passed by the learned Single Judge, the appellants
have filed the present writ appeal.
7. Heard the learned counsel for the appellants and the
learned counsel for the 1st respondent-writ petitioner.
8. The learned counsel for the appellants would submit
that in Annexure A2 judgment dated 03.03.2025, the learned
Single Judge was directed to consider the writ petition afresh,
since in Annexure A1 judgment, the contentions of the parties
were not considered on merits. In Annexure A2 judgment, the
Division Bench observed that the contentions raised by the bank
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are vital in nature as far as the disputes involved are concerned.
In Annexure A2 judgment, the Division Bench further noted that
whether the 1st respondent alone could maintain the writ petition
is a serious issue. Likewise, the contention of the 1 st respondent
herein regarding non-availability of the appellate remedy under
Section 30 of the Recovery of Debts and Bankruptcy Act is also
held as an issue deserving serious consideration. However, in the
impugned judgment dated 08.10.2025, the learned Single Judge
did not consider any of the aforesaid contentions as directed in
Annexure A2 judgment. The learned counsel would submit that
there is difference in the facts of the judgment in SBS Organics
Pvt. Ltd [(2016) 12 SCC 18], and the present case is concerned,
since in this case the appeal before the DRAT was already disposed
of. The learned counsel further submitted that Ext.P7, being an
order passed by the 2nd respondent, Recovery Officer of the
Tribunal, the same can be challenged only by filing an O.P.(DRT)
under Article 227 of the Constitution of India and not by a writ
petition under Article 226 of the Constitution of India. As far as
the authority of the 2nd respondent for recovery of money in the
custody of another court is concerned, the learned counsel pointed
out that as per Section 28(4) of the Recovery of Debts and
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Bankruptcy Act, 1993, the 2nd respondent may apply to the court
in whose custody there is money belonging to the defendant for
payment to him of the entire amount of such money, or if it is
more than the amount of debt due, an amount sufficient to
discharge the amount of the debt so due.
9. The learned counsel for the 1st respondent would
submit that insolvency proceedings have been initiated in respect
of M/s. Annam Steel Pvt. Ltd, in which the 1st respondent is the
Director before the National Company Law Tribunal, Division
Bench-II, Chennai (‘NCLT’ for short), as C.P.(IB)/208(CHE)2023.
Therefore, whatever recovery proceedings are initiated, the NCLT
is also a necessary party to those proceedings. However, the
learned counsel for the 1st respondent also conceded that the
impugned judgment was passed by the learned Single Judge
without considering the directions in Annexure A2 judgment of the
Division Bench.
10. From Annexure A2 judgment, we notice that a Division
Bench of this Court, after considering the materials placed on
record and the rival submissions made at the Bar, arrived at a
conclusion that in Annexure A1 judgment passed by the learned
Single Judge on 04.02.2025, none of the contentions raised by the
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parties was decided on merits. After holding that if the Division
Bench proceed to pronounce upon those issues which were not
considered and decided by the learned Single Judge, the same
would result in deprivation of valuable opportunity of appeal to
both sides, the Division Bench remanded the matter for fresh
consideration by the learned Single Judge. Paragraphs 3 to 6 of
Annexure A2 judgment of the Division Bench read thus;
“3. Learned counsel for the Appellant Mr.Praveen Hariharan
submitted, relying on the judgment of the Hon’ble Supreme
Court in Axis Bank v. SBS Organics Private Limited and
another that the order passed by the Recovery Officer was
in direct conflict with the law laid down by the Hon’ble
Supreme Court that the deposit before the Tribunal is not a
secured asset and on disposal of the appeal the pre-deposit
should be returned to the Appellant. He hence argued that
the impugned order of the Recovery Officer being obviously
illegal the writ petition ought to have been entertained and
allowed. Writ jurisdiction can be invoked even if statutory
remedies are available when the impugned proceedings are
ex facie illegal. The learned counsel further contended that
the conclusion of the learned Single Judge that appeal under
Section 30 of the Recovery of Debts and Bankruptcy Act,
1993 would lie against the order of the Recovery Officer is
incorrect. He referred to Section 30 of the Act and
contended that right of appeal is available under the said
provision only against orders made by the Recovery Officer
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He submitted that the order of attachment issued by the
Recovery Officer is not one passed under the provisions of
Sections 25 to 28 and hence no appeal can be preferred
under Section 30 of the Act. He therefore pleaded that the
impugned judgment be set aside and the writ petition may
be allowed.
4. The learned counsel for the Bank Mr.C.Ajith Kumar
contended that the attempt of the Appellant is to avoid filing
of statutory appeal as the same would involve making a pre-
deposit. He vehemently contended that the Appellant had
no locus to maintain the writ petition for the reason that in
the appeal filed before the DRAT there were 22 Appellants.
The private limited company, M/s.Annam Steels was the 1st
Appellant and among the other Appellants another private
limited company and an LLP were also there. Hence, he
contended that the Appellant could not have approached
this Court alone challenging the order of the Recovery
Officer. He further submitted that though the said aspect
was pointed out before the learned Single Judge the
contention has not been addressed in the impugned
judgment.
5. Some of the contentions above mentioned are vital in
nature as far as the disputes involved are concerned.
Whether the Appellant alone could maintain the writ petition
is a serious issue. Likewise, contention of the Appellant
regarding non-availability of the appellate remedy under
Section 30 of the Recovery of Debts and Bankruptcy Act is
also an issue deserving serious consideration. If we proceed
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and decided by the learned Single Judge, the same may
result in deprivation of the valuable opportunity of appeal to
both sides. If these aspects are considered by the learned
Single Judge, the parties would not be deprived of the
opportunity of re-agitating the issues in an intra-court
appeal, if any of them is not satisfied with the outcome.
Therefore it is appropriate to set aside the impugned
judgment and to remit the writ petition for fresh
consideration by the learned Single Judge.
6. In the result, the impugned judgment is set aside. The
writ petition is remanded for fresh consideration by the
learned Single Judge. Parties shall be at liberty to raise all
available contentions before the learned Single Judge.
Appeal is disposed of as above.”
11. The perusal of the impugned judgment dated
08.10.2025, passed by the learned Single Judge, shows that the
consideration of the writ petition on merits, as directed in
Annexure A2 judgment, is not done in the impugned judgment
also. In such circumstances, we find no ground to sustain the
present judgment of the learned Single Judge impugned in this
writ appeal.
12. Having considered the pleadings and materials on
record and the submissions made at the Bar, we deem it
appropriate to again remit the writ petition for fresh consideration
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by the learned Single Judge in the light of the observations made
in Annexure A2 judgment dated 03.03.2025.
In the result, this writ appeal is disposed of by setting aside
the impugned judgment dated 08.10.2025 passed by the learned
Single Judge in W.P.(C)No.3068 of 2025 and the writ petition is
remanded for fresh consideration by the learned Single Judge, as
directed in Annexure A2 judgment dated 03.03.2025. It is made
clear that the parties shall be at liberty to raise all available
contentions before the learned Single Judge.
Sd/-
ANIL K. NARENDRAN, JUDGE
Sd/-
MURALEE KRISHNA S., JUDGE
MSA
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APPENDIX OF WA NO. 2673 OF 2025
PETITIONER ANNEXURES
Annexure-A1 TRUE COPY OF THE JUDGMENT DATED 04/02/2025
PASSED BY THIS HON’BLE COURT IN W.P (C)
3068/2025
Annexure-A2 TRUE COPY OF THE JUDGMENT DATED 03/03/2025
PASSED BY THIS HON’BLE COURT IN W.A 357/2025
