Court emphasizes pre-deposit rule for appeals under Securitisation Act - Compliance crucial for appeal validity

The Court held that the Appellate Tribunal erred in law by allowing an appeal without the mandatory pre-deposit required under section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It emphasized the necessity of complying with the pre-deposit condition as a prerequisite for appealing. The Court directed the appellant to make the required deposit within a specified timeframe for the appeal to proceed, failing which would lead to dismissal of the appeal. The case was concluded with no order as to costs.

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Issues: Whether the Appellate Tribunal had power to entertain an appeal under section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 without insisting on the statutory pre-deposit, and whether the absence of a quantified debt by the Debts Recovery Tribunal permitted complete waiver of that requirement.

Analysis: The right of appeal under section 18(1) is expressly subject to the second proviso, which bars entertainment of the appeal unless the borrower deposits fifty per cent of the debt due as claimed by the secured creditor or determined by the Debts Recovery Tribunal, whichever is less. The third proviso permits only a limited reduction, for recorded reasons, to not less than twenty-five per cent. The statutory language was treated as clear and mandatory, leaving no scope for complete waiver. The fact that the debt had not yet been determined by the Debts Recovery Tribunal did not remove the obligation, because in that situation the deposit is to be computed with reference to the debt claimed by the secured creditor. The Appellate Tribunal therefore had no jurisdiction to admit the appeal without compliance with the pre-deposit requirement.

Conclusion: The requirement of pre-deposit under section 18(1) is mandatory, complete waiver is impermissible, and the Appellate Tribunal erred in entertaining the appeal without directing compliance.

Final Conclusion: The legal effect of the decision is that an appeal under section 18 cannot be entertained unless the borrower first satisfies the statutory deposit requirement, subject only to limited reduction within the bounds fixed by the statute.

Ratio Decidendi: Where a statute makes deposit a condition for entertainment of an appeal and permits only a limited reduction, the appellate authority has no power to grant complete waiver or treat the appeal as maintainable without compliance.

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