Statutory appeal pre-deposit conditions upheld as constitutional, and courts cannot reduce the minimum below the prescribed limit.

A statutory right of appeal under the SARFAESI Act may be conditioned by a reasonable pre-deposit requirement, and the second proviso to section 18 was held not to be arbitrary or violative of Article 14 because it operates at the appellate stage and preserves limited discretion within a statutory minimum. The court also held that the Debts Recovery Appellate Tribunal cannot direct a deposit below the minimum fixed by the statute, as that would rewrite the provision. The challenge to validity failed, the 25% deposit requirement was upheld, and only the time for compliance was extended.

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Issues: (i) Whether the second proviso to section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, requiring pre-deposit as a condition for appeal, was unconstitutional as arbitrary and violative of Article 14 of the Constitution of India; (ii) Whether the Debts Recovery Appellate Tribunal could be directed to reduce the pre-deposit below 25% of the debt.

Issue (i): Whether the second proviso to section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, requiring pre-deposit as a condition for appeal, was unconstitutional as arbitrary and violative of Article 14 of the Constitution of India.

Analysis: The provision governing appeal to the Appellate Tribunal was examined in the context of the earlier challenge to the pre-deposit requirement in section 17 of the same Act. The Court noted that the right of appeal is a statutory creation and that the legislature may attach conditions to its exercise so long as they are not so onerous as to make the remedy illusory. Relying on the principle that conditions on appeal may be imposed within reasonable limits, and distinguishing the earlier challenge to the initial remedial stage under section 17, the Court held that the appeal provision under section 18, which operates at the appellate stage and contains a limited discretion to reduce the deposit to not less than 25%, is not unconstitutional.

Conclusion: The challenge to the constitutional validity of the second proviso to section 18 failed and was rejected.

Issue (ii): Whether the Debts Recovery Appellate Tribunal could be directed to reduce the pre-deposit below 25% of the debt.

Analysis: The Court held that the Appellate Tribunal is bound by the statutory text and cannot travel beyond the express minimum prescribed by the provision. Since the proviso permits reduction only up to, and not below, 25% of the debt, any direction requiring a lesser deposit would amount to rewriting the statute, which is impermissible. The Court also reiterated that courts cannot substitute or reframe legislative provisions.

Conclusion: The order requiring deposit of 25% was upheld and the prayer to reduce the amount further was refused.

Final Conclusion: The writ petition was dismissed, while the time for making the pre-deposit was extended.

Ratio Decidendi: A statutory right of appeal may be subject to reasonable pre-deposit conditions, and neither the court nor the appellate tribunal can dilute a clear statutory minimum by rewriting the provision.

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