Supreme Court modifies order on pre-deposit waiver, permits deposit of 25% debt due, appeal allowed.

The Supreme Court set aside the High Court's order allowing a waiver of pre-deposit and modified the Debts Recovery Appellate Tribunal's order. Respondents were permitted to deposit twenty-five percent of the remaining debt due within eight weeks to prosecute their appeal. The appeal was allowed in part, and the contempt petition was closed as unnecessary.

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Issues Involved:
1. Waiver of pre-deposit requirement under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993.
2. Compliance with the order of deposit directed by the Supreme Court.
3. Calculation of the debt due and the effect of compensation received on the debt amount.

Issue-wise Detailed Analysis:

1. Waiver of Pre-deposit Requirement:

The appellant challenged the High Court of Delhi's order allowing respondents to prosecute an appeal before the Debts Recovery Appellate Tribunal (DRAT) without the pre-deposit mandated by Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 (RDBA Act). Section 21 stipulates that an appeal cannot be entertained unless fifty percent of the debt due is deposited, with the Appellate Tribunal having the discretion to reduce this amount to not less than twenty-five percent. The Supreme Court emphasized that a total waiver of pre-deposit is against the statutory provisions and that the High Court's order was not justified. The DRAT had correctly ordered a fifty percent pre-deposit of the debt balance after considering the compensation received by the bank.

2. Compliance with the Order of Deposit Directed by the Supreme Court:

The Supreme Court had initially directed respondents to deposit Rs. 20 Crores as a condition for staying further proceedings before the DRAT. The respondents failed to comply, leading to a contempt petition by the appellant. However, considering the final order, the Supreme Court deemed further proceedings in the contempt petition unnecessary and closed it.

3. Calculation of the Debt Due and the Effect of Compensation Received:

The respondents argued that the compensation amount received by the bank during the pendency of the original application should be considered in the pre-deposit calculation. The High Court had concluded that the compensation amount received should be considered, leading to the waiver of the pre-deposit. However, the Supreme Court found that the DRAT had correctly calculated the remaining debt due after accounting for the compensation received. The DRAT had determined that even after the compensation, a balance of Rs. 68,18,92,841 remained due, and ordered a fifty percent pre-deposit of this amount. The Supreme Court modified this to allow a twenty-five percent pre-deposit of the remaining debt due, considering the peculiar facts and circumstances of the case.

Conclusion:

The Supreme Court set aside the High Court's order and modified the DRAT's order, permitting the respondents to deposit twenty-five percent of the remaining debt due (Rs. 68,18,92,841) within eight weeks to prosecute their appeal. The appeal was allowed in part, and the contempt petition was closed as unnecessary. Pending applications were disposed of accordingly.

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