Pre-deposit under SARFAESI includes accrued interest and is based on debt due at the appeal date.

For a pre-deposit under the second proviso to Section 18(1) of SARFAESI, the amount is to be computed on the debt due as on the date of filing the appeal, not merely the figure mentioned in the Section 13(2) notice. The expression "debt due" is treated as wide enough to include interest accrued and claimed by the secured creditor, so accrued interest forms part of the deposit base. A short time granted to make the deposit was also upheld because it reflected the appellants' own undertaking, the appeal was delayed, and possession proceedings were imminent.

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Issues: (i) Whether, for the purpose of the pre-deposit under the second proviso to Section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the amount to be deposited is confined to the figure stated in the notice under Section 13(2) or includes interest accrued up to the date of filing of the appeal. (ii) Whether the direction granting a short time to make the deposit was unjustified.

Issue (i): Whether, for the purpose of the pre-deposit under the second proviso to Section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the amount to be deposited is confined to the figure stated in the notice under Section 13(2) or includes interest accrued up to the date of filing of the appeal.

Analysis: The statutory expression "debt due" is of wide amplitude. Read with the definition of "debt" under the Recovery of Debts and Bankruptcy Act, 1993, it includes any liability inclusive of interest claimed as due by the secured creditor. The pre-deposit under the second proviso to Section 18(1) must therefore be computed on the basis of the debt due on the date of filing of the appeal, and not merely on the amount mentioned in the Section 13(2) notice. Where the creditor's claim includes accrued future interest, that component is also part of the amount relevant for pre-deposit. The earlier precedent relied upon does not support exclusion of accrued interest, and the challenge to the sale notice in the securitization proceedings also supported the wider computation of debt due.

Conclusion: The amount for pre-deposit was rightly computed by including accrued interest, and the contention that only the Section 13(2) figure could be used was rejected.

Issue (ii): Whether the direction granting a short time to make the deposit was unjustified.

Analysis: The limited time granted was linked to the petitioners' own undertaking to deposit a sum by a specified date so that possession of the secured asset would not be taken. The appeal had been filed very late, the period for challenge had already expired, and possession proceedings were imminent. In those circumstances, the grant of two days for deposit was not found to be erroneous or unfair.

Conclusion: The challenge to the time granted for deposit was rejected.

Final Conclusion: The writ petition failed in its challenge to the pre-deposit direction, and the order of the Debts Recovery Appellate Tribunal was sustained.

Ratio Decidendi: For an appeal under Section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the pre-deposit is to be calculated on the debt due as on the date of filing of the appeal, which includes accrued interest and is not confined to the amount stated in the Section 13(2) notice.

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