Retrospective pre-deposit rules under debt recovery law apply to pending appeals, and non-compliance can justify refusal of restoration.

The 2016 amendment to section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, was treated as procedural because it changed only the condition for entertaining an appeal, not the substantive right of appeal, and therefore operated retrospectively. The Court held that the amended pre-deposit regime, including the limited scope for waiver, applied to the pending appeal. It also upheld the Debt Recovery Appellate Tribunal's insistence on statutory pre-deposit, rejecting unsupported claims of financial hardship and confirming that the Tribunal could refuse restoration, enlargement of time, and related relief where compliance was not shown.

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Issues: (i) Whether the 2016 amendment to section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, restricting waiver of pre-deposit, applied retrospectively to the pending appeal. (ii) Whether the Debt Recovery Appellate Tribunal was justified in directing deposit of Rs. 3,101 crore as a condition for entertaining the appeal and in declining restoration and enlargement of time.

Issue (i): Whether the 2016 amendment to section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, restricting waiver of pre-deposit, applied retrospectively to the pending appeal.

Analysis: The right of appeal was treated as substantive, but the condition governing entertainment of the appeal was held to be procedural. The amendment reduced the pre-deposit requirement from seventy-five per cent to fifty per cent and limited waiver to not below twenty-five per cent. The Court held that a change in the condition for exercising the right of appeal falls within procedural law and therefore operates retrospectively. Even otherwise, the amendment was by substitution and, on settled principles, was to be read as if incorporated from the inception of the provision.

Conclusion: The amendment to section 21 was held to be retrospective, and the petitioner's challenge on that ground failed.

Issue (ii): Whether the Debt Recovery Appellate Tribunal was justified in directing deposit of Rs. 3,101 crore as a condition for entertaining the appeal and in declining restoration and enlargement of time.

Analysis: The Court found that the appeal had been dismissed for non-compliance of objections and non-prosecution, and the restoration request was made later. In that setting, the Tribunal was entitled to insist on the statutory pre-deposit for maintaining the appeal. The plea of financial hardship was rejected for want of reliable material, and the alleged deposits in other proceedings did not amount to compliance with the statutory condition. The Court also held that the Tribunal's refusal to extend time and its dismissal of the applications could not be faulted.

Conclusion: The Tribunal's orders were upheld, and the challenge to the pre-deposit direction and the refusal to extend time failed.

Final Conclusion: The writ petitions were found to be without merit, and the statutory pre-deposit requirement under the amended regime was enforced against the petitioner.

Ratio Decidendi: An amendment that alters only the statutory condition for entertaining an appeal, without extinguishing the right of appeal itself, is procedural and operates retrospectively; where the statutory condition is not satisfied, the appellate forum may insist on compliance and decline restoration or extension of time.

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