GLENNY C.J. Vs. AUTHORISED OFFICER, CANARA BANK

JUDGEMENT

(1.) The petitioners approached this Court challenging Ext.P12 Order of the Debt Recovery Appellate Tribunal, Chennai, which mandated them to pay 40% of the debt due, as a predeposit to entertain the appeal preferred by the petitioners before the said Appellate Tribunal, which is numbered as AIR (S.A.) No.1111/2025.

(2.) Learned counsel for the petitioners would submit that for realization of the amount due from the petitioners, one among the properties offered as security was sold in auction for a price of Rs.3.39 crores. It was pointed out that, going by Sec. 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), discretion has been granted to the Appellate Authority to direct a pre-deposit ranging from 25% up to 50% of the debt due. In the instant case, no reason, whatsoever, has been stated in Ext.P12 as to why 40% has been fixed, is the contention raised by the learned counsel for the petitioners. Learned counsel would also point out that the subject matter of appeal is the auction sale made in respect of the petitioners' property for a consideration of Rs.3.39 crores, and therefore, a direction to pay an amount, more than the said sum of Rs.3.39 crores, will be onerous, besides being improper, if not illegal.

(3.) Learned counsel for the 1st respondent would submit that, going by the second proviso to Sec. 18 of the SARFAESI Act, the amount to be deposited is 50%. Discretion is afforded to the Appellate Tribunal to reduce the same to 25% for reasons to be recorded in writing. In cases, where the amount of debt has been determined by the Debt Recovery Tribunal or claimed by the secured creditors, 50% of the said amount, whichever is less, has to be paid. Therefore, there is no justification for the petitioners to insist that the pre-deposit amount to maintain the appeal should be limited to 25% of the debt due.