Bombay HC Grants Temporary Protection as DRAT Chairperson Was Unavailable to Hear Restoration Plea

Dipen Dhirajlal Doshi & Anr. Vs Bank of India & Anr. (Bombay High Court)

The Bombay High Court heard a writ petition filed by the petitioners, who were a Director of the original borrower and a guarantor, seeking urgent relief in relation to proceedings before the Debts Recovery Appellate Tribunal (DRAT), Mumbai.

The petitioners had earlier filed Miscellaneous Appeal (D) No. 2765 of 2024 before the DRAT, Mumbai challenging an order passed by the Debts Recovery Tribunal. On 2 January 2025, the DRAT directed the petitioners to deposit Rs.40 lakh as a pre-deposit before hearing their waiver application. The amount was permitted to be deposited in instalments. Subject to compliance with this condition, the DRAT deferred the taking over of physical possession of the secured assets. The order further stated that any default in payment would automatically result in dismissal of the appeal without further reference to the DRAT.

The petitioners stated in their writ petition that they complied with the DRAT order by depositing the entire amount of Rs.40 lakh in instalments on 2 January 2025, 16 January 2025, and 30 January 2025. They asserted that after verification of these payments, the Tribunal extended the interim protection granted by the order dated 2 January 2025 from time to time. During the hearing before the High Court, the petitioners also produced documents supporting their claim of compliance with the deposit conditions, and the Court took those photocopies on record.

The Court noted that because the deposit condition had been complied with, interim protection in favour of the petitioners continued during the pendency of the appeal. However, during this period, the office of the Chairperson of the DRAT, Mumbai became vacant. As a result, the appeal was repeatedly adjourned while interim protection continued.

It was further brought to the Court’s notice that a Chairperson for the DRAT, Mumbai was appointed in February 2026 and the appeal was listed for hearing on 16 March 2026. According to the petitioners, their advocate was unaware of the appointment of the Chairperson and therefore no one appeared on their behalf when the matter was called before the DRAT on 16 March 2026. Consequently, the appeal was dismissed for default and the interim protection operating in favour of the petitioners also stood vacated.

The petitioners further informed the High Court that on 4 May 2026, a police constable visited their office and informed them that the respondent bank was likely to execute the order for taking physical possession of the secured assets on 11 May 2026. Upon learning this, the petitioners immediately moved applications for restoration of the appeal and for restoration of interim protection.

The petitioners submitted that when they approached the DRAT, Mumbai on 7 May 2026, they discovered that the Chairperson was unavailable until 15 May 2026. They then mentioned the matter before the DRAT at Chennai, where circulation was granted for 8 May 2026. However, the Chairperson at DRAT Chennai was also unavailable on that date. The petitioners informed the High Court that the papers were required to be physically sent by courier even for consideration before the Chennai Bench, and due to the scheduled possession date of 11 May 2026, it was logistically difficult for their applications to be heard before then. They contended that this situation could render their restoration applications infructuous.

In light of these circumstances, the petitioners approached the Bombay High Court seeking relief. The High Court observed that the petitioners had positively asserted compliance with the conditions imposed by the DRAT order dated 2 January 2025 and that interim protection had been operating in their favour since that date. The Court held that such protection deserved to be extended for a brief period so that the petitioners could pursue their restoration applications before the appropriate forum. The Court further observed that the non-availability of the Chairperson of the DRAT, Mumbai should not result in the applications becoming infructuous.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1. Heard learned counsel for the petitioners.

2. This petition was mentioned in the morning at 11:00 a.m. for urgent listing on the production board, in the backdrop of peculiar circumstances faced by the petitioners.

3. The petitioners are the Director of the original borrower and a Guarantor, who had filed Miscellaneous Appeal (D) No. 2765 of 2024 before the Debts Recovery Appellate Tribunal, Mumbai (DRAT) to challenge an order passed by the Debts Recovery Tribunal. In the aforesaid appeal, on 2^nd January 2025, the DRAT at Mumbai directed the petitioners to deposit the sum of Rs.40 lakhs as pre-deposit before hearing on the application for waiver. The DRAT, Mumbai directed that the aforesaid amount of Rs.40 lakhs shall be deposited in installments. Subject to such deposit, the taking over of physical possession of secured assets was deferred. It was also specified that in case of default, the appeal itself would stand dismissed, without reference to the DRAT, Mumbai.

4. In paragraph 5 of the petition, the petitioners have specifically stated as follows :

“5. As directed in the aforesaid Order dated 2nd January 2025, The Petitioners have deposited the aforesaid amount of Rs.40,00,000/- in instalments on 2nd January 2025, 16th January 2025 and 30th January 2025 with the registry. Upon verification of the aforesaid deposits of money with the registry, the Honble Tribunal has extended the aforesaid Interim Order dated 2nd January 2025 from time to time. The Petitioners craves leave to refer and rely upon various letters addressed to the registry for intimation of payment of money and subsequent orders extending the interim protection granted to The Petitioners by the aforesaid order dated 2nd January 2026.”

5. During the course of arguments, the learned counsel for the petitioners tendered documents to support the assertion, as made in paragraph 5 of the petition. The photocopies of the documents are taken on record.

6. In the light of the deposit being made in terms of the order dated 2^nd January 2025, the interim protection continued during the pendency of the appeal.

7. It is further brought to our notice that in the interregnum and during the pendency of the aforesaid miscellaneous appeal, office of the Chairperson at DRAT, Mumbai, became vacant and in that light, the said appeal was adjourned from time to time with the interim protection being continued.

8. It is further stated that Chairperson of the DRAT, Mumbai was appointed in February 2026 and the said appeal was listed for consideration on 16t^h March 2026. It is claimed that the Advocate for the petitioners was unaware about appointment of the Chairperson at DRAT, Mumbai and therefore, there was no representation on behalf of the petitioners before the DRAT, Mumbai on 16t^h March 2026. In that light, the appeal was dismissed for default, as a consequence of which, the protection operating in favour of the petitioners also stood vacated.

9. It is further stated that on 4t^h May 2026, a Constable from the local police station visited the office of the petitioners and informed them about the fact that the respondent-bank (secured creditor) was likely to execute a direction for taking physical possession of the secured assets on 11t^h May 2026.

10. In that light, the petitioners immediately moved an application for restoration of the appeal and also for restoration of the interim protection that was operating in their favour. The petitioners assert that when they sought to move the DRAT, Mumbai on 7t^h May 2026, they came to know that Chairperson, DRAT, Mumbai is not available till 15t^h May 2026. In that context, the petitioners were constrained to mention the matter before DRAT at Chennai on ‘7t^h May 2026 and circulation was granted for 8th May 2026. This Court is informed that on 8t^h May 2026, the Chairperson, DRAT at Chennai was also not available. It is in these circumstances the petitioners are constrained to move this Court. It is brought to our notice that the papers are required to be sent by courier, even if Chairperson, DRAT at Chennai is to taken up the matter for consideration. Since, the date for taking physical possession of the secured assets has been fixed as 11t^h May 2026, logistically it may not be possible for the papers to be physically presented before the Chairperson at DRAT, Chennai and in such a situation, the aforesaid application of the petitioners for restoration of the appeal and the interim protection may be rendered infructuous.

11. In these peculiar circumstances, the petitioners have knocked the doors of this Court by way of the present writ petition.

12. We are of the opinion that since a positive assertion is made that the conditions imposed in the order dated 2^nd January 2025 passed by the DRAT, Mumbai, were complied with and interim protection was operating in favour of the petitioners since 2^nd January 2025, the said protection can be extended for a brief period, in order to grant a window of opportunity to the petitioners to argue their applications for restoration of the appeal and also the interim protection. The non-availability of the Chairperson, DRAT, Mumbai, should not lead to applications filed on behalf of the petitioners being rendered infructuous.

13. In view of the above, while keeping the writ petition pending, we direct that the action proposed to be undertaken by the respondent No.1-bank of taking physical possession of the secured assets on 11t^h May 2026, shall stand deferred till 20t^h May 2026.

14. The petitioners shall immediately take necessary steps to move the Chairperson, DRAT at Chennai for consideration of the said applications for restoration of the appeal and also for their prayer for restoration of interim protection. If the Chairperson, DRAT, Mumbai is available before 20t^h May 2026, liberty is reserved for the petitioners to take appropriate steps to move their applications before Chairperson, DRAT at Mumbai, as the case may be.

15. It is made clear that the aforesaid limited protection granted by this Court shall expire after 20t^h May 2026. It is further made clear that this Court has not expressed any opinion on the rival claims and the rights and contentions of all the parties are kept open.

16. List for further consideration on 16t^h June 2026 (High on Board).

17. Liberty to move the vacation Court, in case of urgency.