Pre-deposit under recovery law cannot be demanded when settlement receipts were already accounted for in the debt determination.

Because the creditor's claim continued to rest on the original settlement amount, with sums already received during the proceedings taken into account in the recovery determination, the appellate pre-deposit requirement under Section 21 could not be insisted upon merely because payment was received before final order. The High Court found the tribunal's approach to pre-deposit incorrect, held that no further deposit was justified, and directed that the appeal be heard on the merits along with the connected appeals and cross-appeals.

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Issues: Whether the Debts Recovery Appellate Tribunal was justified in insisting on pre-deposit under Section 21 of the Recovery of Debts and Bankruptcy Act when the secured creditor had already received substantial amounts during pendency of the original application and the recovery certificate remained based on the settlement amount.

Analysis: The amount received by the bank during pendency of the original application was not treated as having altered the foundation of the claim by any amendment to the original application. The Tribunal proceeded on the basis of the settlement amount of Rs. 145 crores with future interest at 9% per annum, after taking the amount already received into account. In that setting, the mere timing of receipt of the amount, before the final judgment rather than thereafter, did not alter the nature of the debt for the purpose of pre-deposit under Section 21. The Tribunal's approach to the pre-deposit requirement was therefore found to be incorrect.

Conclusion: The insistence on further pre-deposit was unjustified, and the petitioners were entitled to have their appeal heard without making any further deposit.

Final Conclusion: The impugned orders were set aside and the matter was directed to be heard by the appellate tribunal on the merits along with the connected appeals and cross-appeals.

Ratio Decidendi: Where the creditor's claim continues to rest on the original settlement basis and the amount already received during the proceedings has been taken into account in the recovery determination, the appellate pre-deposit requirement cannot be insisted upon merely because the receipt occurred before, and not after, the final order.

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