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2019 (12) TMI 221 - HC - Indian LawsWaiver of the requirement of pre-deposit under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 - whether the DRAT was justified in declining the Petitioner‟s prayer for waiver of the pre-deposit? HELD THAT:- A plain reading of the provisions of section 21 of RDB Act indicates that there is an absolute bar on the DRAT entertaining an appeal, unless the pre-deposit is made with the DRAT by the Appellant of 50% of the amount due from such Appellant as determined by the DRT under Section 19 of the RDB Act. The proviso to Section 21 permits the DRAT to reduce the amount of pre-deposit up to 25% of the amount of such debt but not beyond that. In other words, the discretion of the DRAT is only to reduce the amount of pre-deposit from 50% of the amount of debt to 25% of the amount of debt, but not to waive the requirement of pre-deposit - It should be noticed that appeals to the DRAT can be preferred not only against order of the DRT under Section 19 of the RDB Act but also against the orders of the DRT under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act). Section 21 of the RDB Act is more or less identical to Section 18 of SARFAESI Act. In both provisions, for an appeal to be entertained before the DRAT, it is mandatory for the Appellant to make a pre-deposit of 50% of the amount of debt due from such Appellant. While under the RDB Act the amount of debt is that determined by the DRT, under the second proviso to Section 18(1) of the SARFAESI Act it could be 50% of the amount of debt as claimed by the secured creditors or determined by the DRT, whichever is less - In either instance there is no discretion with the DRAT to waive the pre-deposit. Unlike Section 21 of the RDB Act, the first proviso to Section 35F of the CE Act requires the Commissioner (Appeals) or the CESTAT to consider if the deposit of duty demanded or penalty levied “would cause undue hardship to such person‟ and gives the power to the Commissioner (Appeals) or the CESTAT “to dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interest of the revenue.‟ This discretionary power to waive the deposit is missing in Section 21 of the RDB Act. Even before this Court, no plea was advanced about the Petitioner being in any financial hardship and not being able to make the pre-deposit of 50% of the amount found due by the DRT. In the circumstances, the Court is unable to find any error having been committed by the DRAT in declining to grant a waiver of the pre-deposit - there are no merits in the petition - petition dismissed.
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