Mandatory pre-deposit under SARFAESI Section 18 applies to borrowers, guarantors, and mortgagors alike.

An appeal to the Debt Recovery Appellate Tribunal under Section 18 of the SARFAESI Act is conditional on a statutory pre-deposit of fifty per cent of the debt due, with only limited reduction for recorded reasons to not less than twenty-five per cent. The provision permits no total waiver, and the appellate tribunal cannot entertain the appeal unless this condition precedent is met. A guarantor or mortgagor is treated on the same footing as a borrower for compliance with the deposit requirement. The text also notes that a High Court cannot dispense with the statutory mandate by directing otherwise.

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Issues: Whether an appeal before the Debt Recovery Appellate Tribunal under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 could be entertained without the statutory pre-deposit, and whether a guarantor or mortgagor stands on a different footing from a borrower for that purpose.

Analysis: Section 18 makes entertainment of the appeal conditional upon deposit of fifty per cent of the debt due, subject only to reduction, for recorded reasons, to not less than twenty-five per cent. The provision admits of no total waiver. The Court applied the settled position that the appellate tribunal cannot entertain the appeal unless the condition precedent is satisfied. It also held that a guarantor or mortgagor who has secured repayment by mortgaging property is in the same position as a borrower for purposes of compliance with Section 18. The High Court's observation that no pre-deposit was required was therefore contrary to the statute. The Court further noted that the High Court had no power comparable to Article 142 of the Constitution of India to issue directions contrary to law.

Conclusion: The requirement of pre-deposit under Section 18 was mandatory, and the High Court was incorrect in holding otherwise; the appeals were therefore allowed in favour of the appellant.

Final Conclusion: The statutory right of appeal under SARFAESI is subject to the deposit condition, with only limited reduction permissible, and the writ court cannot dispense with that mandate.

Ratio Decidendi: An appeal under Section 18 of the SARFAESI Act cannot be entertained unless the borrower, including a guarantor or mortgagor treated as such, makes the statutory pre-deposit, subject only to reduction to not below twenty-five per cent for recorded reasons.

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