Non-Availability of DRAT Chairperson Cannot Defeat Restoration Plea: Bombay HC Grants Temporary Relief Against Secured Asset [Read Order]

The Bombay High Court has granted temporary protection to borrowers against coercive possession proceedings initiated by the secured creditor observing that the non-availability of the Chairperson of the Debts Recovery Appellate Tribunal (DRAT) cannot render a restoration application infructuous.

The petitioners who were the Director of the original borrower company and a guarantor, had earlier filed an appeal before the DRAT Mumbai against an order of the Debts Recovery Tribunal (DRT). By an order dated January 2, 2025, the DRAT directed the petitioners to deposit ₹40 lakh as a pre-condition for hearing the waiver application. The amount was to be paid in instalments and subject to such compliance the possession proceedings were deferred.

According to the petitioners, the entire pre-deposit amount was duly paid within the stipulated time and interim protection continued during the pendency of the appeal. However, during this period the office of the DRAT Chairperson at Mumbai fell vacant, resulting in repeated adjournments.

Subsequently, after appointment of a new Chairperson in February 2026 the appeal was listed on March 16, 2026. Due to lack of knowledge regarding the listing there was no representation on behalf of the petitioners and the appeal came to be dismissed for default, leading to vacation of interim protection.

The petitioners argued that they immediately moved restoration applications but were unable to secure an urgent hearing because the DRAT Chairperson at Mumbai was unavailable till May 15, 2026. They further submitted that even the Chennai DRAT Chairperson was unavailable on the date when circulation was sought while the respondent bank had scheduled physical possession of the secured assets on May 11, 2026.

The Division Bench comprising Justice Manish Pitale and Justice Farhan P. Dubash held that the petitioners deserved a limited protective window to pursue restoration remedies before the appropriate DRAT forum.

Accordingly, the Court deferred the proposed possession proceedings till May 20, 2026, while clarifying that it had not expressed any opinion on the merits of the dispute.

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