SARFAESI pre-deposit is computed on outstanding debt with interest, after giving credit for part-payments.

For the purpose of the SARFAESI Act pre-deposit under section 18, the amount to be deposited is the debt due as claimed by the secured creditor on the relevant date, not merely the figure stated in the section 13(2) notice. Where the claim includes future or accrued interest, that interest forms part of the debt due for computing the deposit. Any part-payments already made by the borrower must be credited, because they reduce the outstanding liability. The operative effect is that the statutory deposit is calculated on the reduced debt outstanding, including interest where claimed.

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Issues: Whether, for entertaining an appeal under section 18 of the SARFAESI Act, the pre-deposit is to be computed only on the amount stated in the section 13(2) notice or on the debt due as on the date of appeal, including accrued interest and giving credit for part-payments.

Analysis: The second proviso to section 18(1) bars entertainment of the appeal unless the borrower deposits 50% of the debt due as claimed by the secured creditor or determined by the DRT, whichever is less. The expression "debt" is defined broadly to include liability inclusive of interest. On that footing, the relevant amount is not confined to the bare figure mentioned in the section 13(2) notice; if the notice claims future interest, that interest forms part of the debt due for computing the pre-deposit. At the same time, any amount already paid by the borrower before the appeal is considered must be given credit, because the debt outstanding stands reduced accordingly. Applying these principles, the DRAT was justified in taking the reduced outstanding liability into account and in fixing the deposit amount.

Conclusion: The challenge to the DRAT's order failed; the direction to deposit Rs. 20,00,000/- was upheld and the review was not warranted.

Final Conclusion: The Court held that the statutory pre-deposit under section 18 must be worked out on the debt due as reduced by payments already made and including interest where claimed, and on that basis declined to interfere with the DRAT's order.

Ratio Decidendi: For the purpose of the second proviso to section 18(1) of the SARFAESI Act, the amount required to be deposited is the debt due as claimed by the secured creditor on the relevant date, including accrued interest where part of the claim, less credit for payments already made.

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