Kerala High Court Division Bench Clarifies Article 226 vs Article 227 Remedy for Challenging Recovery Officer's Orders Under the RDB Act

E.T. Firoz v. The Recovery Officer, Debts Recovery Tribunal-I & Ors. | Kerala High Court, Division Bench | 31 August 2026

A Division Bench of the Kerala High Court allowed a writ appeal against a Recovery Officer's order under Section 28(4) of the Recovery of Debts and Bankruptcy Act, 1993, attaching the appellant's statutory pre-deposit made under the second proviso to Section 18 of the SARFAESI Act. Although the Bench accepted, following Radhey Shyam v. Chhabi Nath and the recent Ajit Singh v. State of Rajasthan, that the proper remedy against a DRT/Recovery Officer's order ordinarily lies under Article 227 and not Article 226, it declined to relegate the appellant to fresh proceedings in the interest of justice and decided the appeal itself. On merits, the Court held that Section 28(4) is a garnishee-type provision that does not contemplate attachment of a statutory SARFAESI pre-deposit, and accordingly set aside the attachment order as palpably erroneous and contrary to law.

Background

1. The appellant had preferred an appeal against a DRT order after making the statutory pre-deposit required under the second proviso to Section 18 of the SARFAESI Act, 2002.
2. The Recovery Officer, Debts Recovery Tribunal-I, Ernakulam, passed an order under Section 28(4) of the Recovery of Debts and Bankruptcy Act, 1993 attaching the pre-deposit amount of Rs. 3,95,50,000/-.
3. A learned Single Judge had earlier entertained a writ petition (WP(C) No. 3068 of 2025) challenging the attachment order; the present intra-court appeal arose from the judgment dated 30 July 2026 passed therein.
4. The secured creditor (Bank) opposed the writ appeal on the ground that an efficacious alternative remedy existed under Section 30 of the RDB Act, and separately contended that the proper constitutional remedy against DRT-connected orders lay under Article 227, not Article 226.
5. The appellant relied on the pendency of an earlier proceeding (O.P.(DRT) No. 401 of 2024) in which similar apprehensions about appropriation of the pre-deposit had been raised.

Court's Observations

1. The Bench held that, per the three-Judge Bench ruling in Radhey Shyam v. Chhabi Nath and the recent Supreme Court decision in Ajit Singh v. State of Rajasthan, challenges to orders of tribunals over which the High Court exercises Article 227 superintendence should ordinarily be brought under Article 227, not Article 226.
2. Despite accepting that the writ petition ought to have been filed under Article 227, the Court held it would be unfair to relegate the appellant to fresh proceedings at this stage, particularly since the Single Judge had not had the benefit of the Radhey Shyam ruling, and decided the appeal itself in the larger interest of justice.
3. On merits, the Court held that Section 28(4) of the RDB Act operates in the nature of a garnishee proceeding and does not contemplate attachment of a statutory pre-deposit made under the second proviso to Section 18 of the SARFAESI Act.
4. Because exercise of power under Section 28(4) was found palpably erroneous and contrary to law, the Court held it necessary to exercise its Article 226 discretion, notwithstanding availability of the Article 227 remedy, to lay down the correct legal position for future guidance of the Tribunal.
5. The order of attachment (Ext.P7) issued by the Recovery Officer was accordingly set aside.

Legal Provisions Discussed

1. Section 28(4), Recovery of Debts and Bankruptcy Act, 1993.
2. Section 30, Recovery of Debts and Bankruptcy Act, 1993.
3. Second proviso to Section 18, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
4. Articles 226 and 227, Constitution of India.
5. Radhey Shyam and Another v. Chhabi Nath and Others, (2015) 5 SCC 423.
6. Ajit Singh v. State of Rajasthan and Others, 2026 SCC OnLine SC 1372.

Case Details :

Court Name: High Court of Kerala at Ernakulam

Case Number: W.A. No. 1618 of 2026

Case / Party Name: E.T. Firoz v. The Recovery Officer, Debts Recovery Tribunal-I & Ors.

Court: Kerala High Court, Division Bench

Coram / Judges: Soumen Sen, C.J. and Syam Kumar V.M., J.

Date of Decision: 31 August 2026

Letters Patent / Appeals (if any): Writ Appeal against Judgment dated 30.07.2026 in WP(C) No. 3068 of 2025

Division Bench ruling clarifying the Article 226/227 remedy for RDB Act/Recovery Officer orders, applying and reconciling recent Supreme Court authority (Ajit Singh, 2026); likely to be cited in similar SARFAESI/RDB disputes.