Mandatory pre-deposit under SARFAESI is jurisdictional; an appeal decided on merits without compliance is without competence.

Where Section 18 of the SARFAESI Act makes pre-deposit a mandatory condition for entertaining an appeal, the Debts Recovery Appellate Tribunal cannot decide the appeal on merits unless the statutory deposit requirement is satisfied or validly reduced for recorded reasons. A complete waiver of deposit is impermissible, and non-compliance goes to the Tribunal's competence rather than being a mere procedural irregularity. The appellate order passed on merits without compliance with the pre-condition was therefore without jurisdiction and liable to be quashed.

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Issues: Whether the Debts Recovery Appellate Tribunal could decide the appeal on merits when the borrower had not complied with the mandatory pre-deposit requirement under Section 18 of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002, and whether the resulting order was without jurisdiction.

Analysis: Section 18 makes deposit of fifty per cent of the debt due a condition for entertaining the appeal, with discretion only to reduce it to not less than twenty-five per cent for recorded reasons. The Tribunal had proceeded on a complete waiver of deposit, which was impermissible. Non-compliance with the statutory pre-condition did not amount to a mere irregularity in the exercise of jurisdiction; it went to the very competence of the Appellate Tribunal to entertain and decide the appeal on merits. The requirement was treated as mandatory, and failure to satisfy it left the appeal incompetent.

Conclusion: The order passed by the Debts Recovery Appellate Tribunal on merits was without jurisdiction and could not stand.

Final Conclusion: The writ petition succeeded and the impugned appellate order was quashed, with interim status quo protection granted for a limited period.

Ratio Decidendi: Where a statute makes pre-deposit a mandatory condition for entertaining an appeal, a decision on merits rendered without compliance with that condition is without inherent jurisdiction and is liable to be set aside.

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