The Kerala High Court's judgment in Delanthabettu Kanyana Shaul Hameed v. K. Mohammed Iqbal establishes a critical distinction between interim orders passed under Article 226 and Article 227 of the Constitution. The Court held that writ appeals lie against such orders when they substantively exercise Article 226 jurisdiction, regardless of the petition's nomenclature. This ruling provides much-needed clarity for practitioners navigating SARFAESI Act proceedings and constitutional remedies.
Background & Facts
The Dispute
The case arose from two original petitions (OP(DRT) Nos. 348 and 350 of 2025) filed by borrowers and guarantors under Article 227 of the Constitution. The petitioners challenged proceedings initiated by Union Bank of India under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). They contended that the secured assets were agricultural lands exempt under Section 31(i) of the SARFAESI Act and sought to amend their appeals before the Debt Recovery Tribunal (DRT) to include challenges against fresh e-auction notices.
Procedural History
The case progressed through multiple stages:
- 2025: Borrowers filed S.A. Nos. 182 and 183 of 2025 before DRT-I, Ernakulam, challenging SARFAESI proceedings
- September 2025: Bank issued fresh e-auction notices (Annexure A11)
- October 2025: Borrowers filed interlocutory applications (I.A. Nos. 3940-3945 of 2025) for amendment and stay before DRT
- November 2025: Borrowers approached Kerala High Court under Article 227 seeking directions to DRT
- 18.11.2025: Single Judge passed impugned interim order directing deposit of ₹1.16 crore and staying auction proceedings
- January 2026: Auction purchasers filed writ appeals (WA Nos. 3045-3046 of 2025) challenging the interim order
The Parties' Positions
The appellants, who were auction purchasers of the secured properties, sought to challenge the interim order that prevented the bank from accepting their balance bid amounts. The original petitioners (borrowers) argued that the writ appeals were not maintainable as the original petitions were filed under Article 227.
The Legal Issue
The central question before the Division Bench was: When does a writ appeal lie under Section 5(i) of the Kerala High Court Act, 1958 against an interim order passed in a petition invoking Article 227 jurisdiction? Specifically, the Court had to determine whether the impugned order substantively exercised Article 226 powers despite the petition's Article 227 label.
Arguments Presented
For the Appellants (Auction Purchasers)
The appellants contended that:
- The impugned order, which stayed auction proceedings and directed deposit of funds, could only have been passed under Article 226 of the Constitution
- Following State Bank of India v. M/s Kinship Services (India) (P) Ltd. [2013 (4) KHC 21], the nature of the relief granted determines maintainability, not the petition's label
- The right to deposit balance auction amounts is a valuable right that cannot be taken away through Article 227 proceedings
- The Bombay High Court's decision in Advani Oerlikon Ltd. v. Machindra Govind Makasare [AIR 2011 Bom. 84] supported their position that appeals lie when the true nature of the order is under Article 226
For the Respondents (Borrowers)
The original petitioners argued that:
- The writ appeals were not maintainable as the original petitions were filed under Article 227, which invokes supervisory jurisdiction
- Citing General Manager, Northern Railways v. Harleen Kaur [2025 SCC Online Del 1317], they contended that no appeal lies against orders passed under Article 227
- The Delhi High Court's judgment established that Article 227 orders are not subject to intra-court appeals
- The reliefs sought in the original petitions were primarily supervisory in nature, falling within Article 227's ambit
The Court's Analysis
The Division Bench conducted a meticulous analysis of constitutional provisions and precedents to resolve the maintainability question.
The Court first examined the distinction between Article 226 and Article 227:
"While Article 226 empowers the High Court to issue writs for enforcement of fundamental rights and other purposes, Article 227 confers supervisory jurisdiction over subordinate courts and tribunals. The nature of relief granted determines which provision was substantively invoked."
The Court relied heavily on the Supreme Court's judgment in Jogendra Sinhji Vijay Singhji v. State of Gujarat [(2015) 9 SCC 1], which established the "true nature test":
"What is important to be ascertained is the true nature of order passed by the Single judge and not what provision he mentions while exercising such powers. A statement by a Single judge that he has exercised power under Article 227, cannot take away right of appeal against such judgment if power is otherwise found to have been exercised under Article 226."
Applying this test to the impugned order, the Court found:
- The direction to deposit ₹1.16 crore and stay auction proceedings was substantive relief that could only be granted under Article 226
- The order effectively stayed coercive steps under the SARFAESI Act, which falls within Article 226's writ jurisdiction
- The fact that the original petitions were labeled under Article 227 was not determinative
The Court distinguished General Manager, Northern Railways v. Harleen Kaur by noting that the Delhi High Court's judgment was based on the specific nature of the relief in that case, which was purely supervisory. In contrast, the present case involved substantive directions affecting parties' rights.
The Court also examined its own precedent in State Bank of India v. M/s Kinship Services (India) (P) Ltd. [2013 (4) KHC 21], where a similar interim order staying SARFAESI proceedings was held appealable. The Division Bench observed:
"The impugned order passed by the learned Single Judge, preventing acceptance of the balance bid amount from the auction purchasers, can only be treated as one passed under Article 226 and not under Article 227 of the Constitution of India."
The Verdict
The Division Bench held that the writ appeals were maintainable. The Court clarified that:
- The impugned interim order substantively exercised Article 226 jurisdiction despite the original petitions being filed under Article 227
- The nature of the relief granted (staying auction proceedings and directing deposits) determined maintainability, not the petition's label
- The appeals were disposed of without interfering with the impugned order, but the appellants were permitted to raise the question of maintainability before the Single Judge
What This Means For Similar Cases
The True Nature Test Prevails Over Labels
Practitioners must now focus on the substantive relief granted rather than the constitutional provision cited in the petition:
- When challenging interim orders, analyze whether the relief could only have been granted under Article 226
- Article 226 reliefs typically include stays of proceedings, directions to deposit funds, or other substantive interventions
- Article 227 reliefs are generally limited to supervisory corrections of procedural irregularities
Strategic Considerations for SARFAESI Proceedings
This judgment has significant implications for parties involved in SARFAESI Act proceedings:
- Auction purchasers: Can challenge interim orders that affect their rights, even if the original petition was filed under Article 227
- Borrowers: Must carefully frame reliefs to avoid triggering appealable Article 226 orders
- Banks: Should be prepared to defend the nature of interim orders when faced with writ appeals
Forum Shopping Risks Mitigated
The judgment reduces the incentive for forum shopping between Article 226 and Article 227 petitions:
- Courts will look beyond the petition's label to the substance of the relief granted
- Parties cannot avoid appealability by merely citing Article 227 when seeking Article 226-type reliefs
- This promotes consistency in constitutional litigation and prevents abuse of procedural technicalities
