Pre-deposit under SARFAESI Section 18 cannot be imposed on a non-borrower appellant aggrieved by enforcement measures.

The pre-deposit condition in the second proviso to Section 18 of the SARFAESI Act applies only to the borrower and cannot be extended to a third party appellant who is neither a borrower nor a guarantor and has created no security in favour of the secured creditor. Section 18 allows an appeal by any person aggrieved, and reading the deposit requirement against a non-borrower would make that appeal right illusory. The statutory scheme therefore confines the deposit obligation to the borrower, and insistence on deposit from such appellants was set aside.

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Issues: Whether the pre-deposit requirement in the second proviso to Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 applies to an appellant who is neither a borrower nor a guarantor and who has not created any security in favour of the secured creditor.

Analysis: Section 18 permits an appeal by any person aggrieved by an order under Section 17, and the first proviso distinguishes between a borrower and a person other than the borrower in prescribing fees. The second proviso, by its terms, requires deposit only by the borrower. Reading that condition as applicable to a third party would make the right of appeal illusory for a person who never obtained the loan and is not liable for the debt. The statutory scheme therefore confines the deposit obligation to the borrower and does not extend it to a third party appellant.

Conclusion: The pre-deposit condition under the second proviso to Section 18 does not apply to a non-borrower appellant, and the insistence on deposit from such appellants was set aside.

Ratio Decidendi: A statutory pre-deposit condition expressed to apply to the borrower cannot be extended by interpretation to a third party appellant who is only aggrieved by measures taken under the Act.

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