Erroneous balance sheet reading can vitiate a pre-deposit condition; Tribunal order quashed and stay matter remitted.

An erroneous assessment of financial capacity can invalidate a pre-deposit condition where the Tribunal relies on a mistaken reading of the balance sheet. The High Court noted that the audited and unaudited accounts reflected profits of only Rs. 34,000 for the relevant year, not Rs. 41 lakhs as assumed by the Tribunal. Because that factual premise went to the basis of the stay direction, the deposit condition could not stand. The Tribunal's order was quashed and the stay application was remitted for fresh consideration.

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Issues: Whether the Tribunal's order directing deposit of Rs. 10 lakhs as a condition for waiver of pre-deposit and stay could be quashed on the ground that it was based on a /incorrect reading of the petitioner's balance sheet, and whether the matter should be remitted for fresh consideration of the stay application.

Analysis: The petitioner showed that the audited and unaudited balance sheets reflected profits of only Rs. 34,000 for the relevant year, not Rs. 41 lakhs as recorded by the Tribunal. The discrepancy went to the very basis of the Tribunal's assessment of financial capacity for fixing the pre-deposit condition. Since the factual premise underlying the impugned order was demonstrably erroneous and remained uncontroverted, the condition imposed could not stand.

Conclusion: The writ petition was allowed, the Tribunal's order was quashed, and the matter was remitted to the Tribunal for fresh decision of the stay application.

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