SARFAESI pre-deposit conditions bar complete waiver; appellate challenge must follow statutory deposit requirements before merits are heard.

Section 18 of the SARFAESI Act permits an appeal only on deposit of fifty per cent of the debt due, with limited discretion to reduce that amount for recorded reasons but not below twenty-five per cent. Complete waiver of the statutory pre-deposit is not available as of right, even where the appellant alleges denial of natural justice before the Debts Recovery Tribunal. The appellate forum may insist on compliance with the deposit condition before examining the merits of the appeal, and a challenge to the underlying merits must ordinarily be pursued through the statutory appeal mechanism.

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Issues: Whether the order of the Appellate Tribunal directing the borrower to make a pre-deposit for entertaining the appeal under the SARFAESI Act was sustainable, and whether complete waiver of the statutory deposit could be granted on the ground of alleged violation of natural justice before the Debts Recovery Tribunal.

Analysis: Section 18 of the SARFAESI Act permits an appeal against an order under Section 17 only on deposit of fifty per cent of the debt due, with power in the Appellate Tribunal to reduce the amount for recorded reasons, but not below twenty-five per cent. The Court held that the statute does not contemplate a complete waiver of pre-deposit as a matter of right. It further noted that the challenge raised by the petitioners went to the merits of the appeal and that such merits could be examined only in the statutory appeal after compliance with the deposit requirement. Considering the amount due, the amount already recovered, and the limited scope of the proviso, the Tribunal's insistence on a pre-deposit was held to be within jurisdiction.

Conclusion: The demand for complete waiver was rejected. The pre-deposit direction was upheld in principle, though the amount was modified to Rs. 57 crores, and the writ petition failed.

Final Conclusion: The statutory appeal mechanism under Section 18 was held to be subject to mandatory deposit conditions, and the impugned order was not interfered with except for modification of the quantum of pre-deposit.

Ratio Decidendi: Where a statute prescribes a minimum pre-deposit for entertaining an appeal and confers only limited power to reduce that amount, complete waiver cannot be claimed as of right, and the appellate forum may insist on compliance with the statutory threshold before hearing the appeal on merits.

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