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Issues: (i) Whether, for the purpose of the pre-deposit under the appellate provision in SARFAESI proceedings, the relevant amount was the debt outstanding in the bank account on the date of appeal or only the amount stated in the notice under section 13(2); (ii) whether the petitioners were entitled to any further reduction or extension of time beyond the 25% deposit directed by the Appellate Tribunal.
Issue (i): Whether, for the purpose of the pre-deposit under the appellate provision in SARFAESI proceedings, the relevant amount was the debt outstanding in the bank account on the date of appeal or only the amount stated in the notice under section 13(2).
Analysis: The statutory scheme under section 18 requires deposit of fifty per cent of the amount of debt due from the borrower as claimed by the secured creditor or determined by the Debts Recovery Tribunal, whichever is less, with a limited power to reduce it to not less than twenty-five per cent. The expression "debt" is linked to section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, meaning liability inclusive of interest claimed as due. On that basis, the relevant figure was held to be the outstanding amount reflected in the bank account, not merely the amount mentioned in the section 13(2) notice. The secured creditor's statement showing the outstanding liability was accepted as the operative claim for pre-deposit purposes.
Conclusion: The relevant pre-deposit was correctly computed on the outstanding debt shown by the bank, and the direction to deposit 25% of that amount was upheld.
Issue (ii): Whether the petitioners were entitled to any further reduction or extension of time beyond the 25% deposit directed by the Appellate Tribunal.
Analysis: The statutory reduction power under section 18 cannot go below twenty-five per cent of the debt referred to in the second proviso. Since the petitioners had not complied with the earlier time granted by the Court and no legal basis existed to compel a further reduction below the statutory floor, no additional indulgence was warranted. The prayer for further relaxation was therefore not sustainable.
Conclusion: No further reduction below 25% and no further indulgence in time was granted.
Final Conclusion: The challenge to the Appellate Tribunal's pre-deposit direction failed, and the petition was dismissed while the time granted for compliance was extended for eight weeks.
Ratio Decidendi: For SARFAESI appeals, the pre-deposit is computed with reference to the debt due as claimed by the secured creditor in the borrower's outstanding account, and the appellate forum may reduce the deposit only up to the statutory minimum of twenty-five per cent.
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