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2020 (1) TMI 746 - HC - Indian LawsWaiver of pre-deposit - Direction to deposit 50% of the amount of debt due - applicability of Section 18(1) of the SARFAESI Act - It is a conceded case of the respondents that none of the eventualities exist as the amount due to the Bank has been recovered - HELD THAT:- Section 18(1) of the SARFAESI Act clearly stipulates that any person aggrieved by any order made by the DRT under Section 17, may prefer an appeal to DRAT within 30 days from the date of receipt of the order of the DRT. The second proviso to Section 18(1) stipulates that no appeal shall be entertained by the DRAT unless the borrower has deposited with it 50% of the amount of debt due from him, as claimed by the secured creditor or as determined by the DRT, whichever is less. The third proviso to Section 18(1) gives a discretion to DRAT to reduce the aforesaid amount to not less than 25%, provided that DRAT gives reasons for the same which are to be recorded in writing. What becomes clear from the aforesaid provisions is that there is a jurisdictional bar from entertaining an appeal filed by the borrower from an order passed under Section 17, unless the borrower deposits 50% of the amount of debt due from him, as claimed by the secured creditor or as determined by the DRT, whichever is less. There is also a discretion granted to the DRAT to reduce this amount to 25% provided it finds adequate reasons for doing so and gives reasons, that are recorded in writing. If this deposit is not made, then DRAT has no jurisdiction to entertain the appeal of the borrower. The DRAT has no power or jurisdiction to reduce the deposit amount to less than 25%. This is ex-facie clear from the plain and unambiguous language of Section 18 of the SARFAESI Act. The submissions made on behalf of the Petitioners that as the amount of debt due had not been determined by DRT, the appeal entertained by the DRAT without insisting of pre-deposit is erroneous. Under the second proviso to sub-Section (1) of Section 18 of the SARFAESI Act, the amount of 50% which is required to be deposited by the borrower is computed either with respect to the debt due as claimed by secured creditor in his statutory notice or as determined by the DRT whichever is less. This means that if the amount of debt is yet to be determined by DRT then the borrower while preferring an appeal would be liable to deposit 50% of the debt due from him as claimed by the secured creditor in his statutory notice. Since the condition of pre-deposit is mandatory, complete waiver of pre-deposit cannot be granted and it is beyond the jurisdiction of the Tribunal to do so as is evident from the second and third proviso to Section 18(1). In the present case, the Petitioners have challenged the sale of its two properties at Nagpur and Kolkatta before the DRT and therefore the amount that has been realized pursuant to sale of the aforesaid two properties would not be available to the Petitioners for considering it towards the pre-deposit amount. Had the Petitioners not challenged the sale, then in that event the amount of ₹ 7,60,50,000/- would have been available to the Petitioners. But, having challenged the same, the same would now not be counted. The debt due would be debt which would be outstanding under the statutory notice issued by Respondent no. 1 under the SARFAESI Act. This debt would be debt due as on 2006. Further in addition to this debt due, an amount of interest and future interest that would be added from 2006 onwards until 2017 would escalate the "debt due" to a higher sum. The Petitioners would therefore be liable to deposit 25% of this amount as condition precedent under the provisions of the said Act in the appeal proceedings as pre-deposit, in view of the challenge made by the Petitioners to the sale of its properties as well as due to the pendency of the counter-claim of the Petitioners - We therefore, fail to see as to how the Petitioners can make a grievance and seek complete waiver of the pre-deposit amount. Petition dismissed.
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