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of <h1>Court Upholds Tribunal's Rs. 50 Crore Pre-Deposit Rule, Emphasizes Necessity for Appeal Merits</h1> <h3>Capt. GR Gopinath And M/s. Deccan emerging Business Ventures Limited Versus Syndicate Bank, Deccan Cargo And Express, State Bank of India And Axis Bank</h3> Capt. GR Gopinath And M/s. Deccan emerging Business Ventures Limited Versus Syndicate Bank, Deccan Cargo And Express, State Bank of India And Axis Bank - ... Issues Involved:1. Requirement of pre-deposit under Section 21 of The Recovery of Debts due to Banks and Financial Institutions Act, 1993.2. Retrospective application of the 2016 Amendment to Section 21 of the Act.3. Financial capability of the petitioners to comply with the pre-deposit condition.4. Discretion of DRAT in waiving or reducing the pre-deposit amount.Issue-wise Detailed Analysis:1. Requirement of Pre-deposit under Section 21:The petitioners proposed to appeal against the Debt Recovery Tribunal (DRT) order dated 31.05.2016, which required a pre-deposit as per Section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. They sought a waiver of this condition via I.A.No.313/2016. The Debt Recovery Appellate Tribunal (DRAT) directed a deposit of Rs. 50 Crores, observing that the debt amount was Rs. 155.06 Crores and the pre-deposit could be reduced to 25% of the debt amount. The DRAT emphasized the necessity of this pre-deposit to entertain the appeal on merits.2. Retrospective Application of the 2016 Amendment:The petitioners argued that the 2016 Amendment to Section 21, which reduced the pre-deposit requirement from 75% to 50% and limited the waiver discretion to 25%, should not apply retrospectively. They contended that their right to appeal, a substantive right, accrued when the original proceedings commenced before the amendment. The court, however, held that the amendment was procedural, not substantive, and thus retrospective. The court cited several precedents, including the Supreme Court's ruling in Shiv Shakti Coop. Housing Society v. Swaraj Developers, which stated that procedural changes apply retrospectively unless specified otherwise.3. Financial Capability of the Petitioners:The petitioners claimed financial hardship and inability to comply with the pre-deposit condition. They provided material to support their claim but failed to furnish specific details about their agricultural properties and other assets. The court found the petitioners' submissions evasive and lacking in material particulars, which cast doubt on their bona fides.4. Discretion of DRAT in Waiving or Reducing the Pre-deposit Amount:The DRAT exercised its discretion to set the pre-deposit at Rs. 50 Crores, less than 25% of the debt amount. The court noted that the amendment did not eliminate the discretion to waive or reduce the pre-deposit but restricted it to no less than 25% of the decreetal amount. The court found that the DRAT's decision was within its discretionary powers and aligned with the amended provisions of Section 21.Conclusion:The court concluded that the writ petitions lacked substance and deserved dismissal. It upheld the DRAT's orders, emphasizing the retrospective application of the 2016 Amendment and the procedural nature of the pre-deposit requirement. The court also noted the petitioners' failure to provide sufficient details about their financial status, which undermined their claim for waiver. Consequently, the petitions were dismissed for lack of merit.
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