The mandatory nature of the pre-deposit condition for entertaining an appeal under Section 18 of the SARFAESI Act, as established by the Supreme Court, and the discretion of the Appellate Tribunal to reduce the pre-deposit amount.

INDIRA BANERJEE, J

1. This writ petition is directed against an order dated 27.11.2015, passed by the learned Debt Recovery Appellate Tribunal (DRAT), Delhi in IA No.811/2015 in Appeal No.6015/2015, whereby the learned DRAT dismissed an appeal against an order dated 20.08.2013, of the Debt Recovery Tribunal (DRT) II, Delhi, under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, hereinafter referred to as the SARFAESI Act, on the ground of non-compliance with an earlier direction issued on 13.10.2015 to the petitioner for deposit of 25% of the amount directed to be paid by the order under appeal.

2. The petitioner No.1 is a proprietorship concern of B.M.Sarin (HUF), a Hindu Undivided Family, of which the petitioner No.2 Shri B.M. Sarin is the karta. The petitioner nos. 3 and 4 are co-parceners of BM Sarin (HUF). The petitioner no.1 is duly registered with the Export Promotion Council since 11.12.1998, its registration number being AEPC/REG/MFG-21406. The petitioner No.1 had for its business purposes, availed credit facilities from Indian Bank, predecessor-in-interest of the respondent Edelweiss Asset Reconstruction Company Ltd.

3. The Haryana State Industrial Development Corporation (HSIDC), had allotted the property being Plot No.23, Sector-4, Industrial Estate, IMT Manesar, Gurgaon to BM Sarin (HUF). A Deed of Conveyance was executed by HSIDC through the petitioner no.2, in favour of the petitioner no.1.

4. By way of security for the credit facilities, the petitioner no.1 mortgaged the said property to Indian Bank.

5. Section 13 (1), (2), (3), (3A), (4) and (5) of the SARFAESI Act provides as follows:-

“13. Enforcement of security interest

(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of court or tribunal, by such creditor in accordance with the provisions of this Act.

(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4).

(3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower.

(3A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower:

PROVIDED that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A.

(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:--

(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the sec