KOTAK MAHINDRA BANK PVT. LIMITEDversusAMBUJ A. KASLIWAL & ORS.

                        [2021] 3 S.C.R. 1001                              1001


          KOTAK MAHINDRA BANK PVT. LIMITED                                A
                                  v.
                  AMBUJ A. KASLIWAL & ORS.
                    (Civil Appeal No. 538 of 2021)
                        FEBRUARY 16, 2021                                 B
           [S. A. BOBDE, CJI, A. S. BOPANNA AND
                V. RAMASUBRAMANIAN, JJ.]
       Recovery of Debts and Bankruptcy Act, 1993 – s.21 – Appeal
before DRAT – Pre-deposit of the debt due – Waiver – Sustainability
                                                                          C
of – Held: In all cases fifty per cent of the decretal amount i.e. the
debt due is to be deposited before DRAT as a mandatory requirement,
but in appropriate cases for reasons to be recorded the deposit of
at least twenty-five per cent of the debt due would be permissible,
but not entire waiver – When further amount is due and payable in
discharge of decree/recovery certificate issued by DRT, the High          D
Court does not have the power to waive the pre-deposit in its entirety,
nor can it exercise discretion against the mandatory requirement of
the statutory provision –Any waiver of pre-deposit to the entire extent
would be against the statutory provisions – High Court not justified
in setting aside the order passed by DRAT – Order passed by High
                                                                          E
Court set aside – In the peculiar facts of the present case, the pre-
deposit of twenty-five per cent of the amount as taken note by the
DRAT is permitted – Order passed by the DRAT modified to this
extent.
      Words & Phrases – s.21 – “appeal shall not be entertained”
                                                                          F
– Held: Such phrase injuncts the Appellate Tribunal from
entertaining an appeal by a person from whom the amount of debt
is due to the Bank, unless such person has deposited with the
Tribunal, fifty percent of the amount of debt so due – Recovery of
Debts and Bankruptcy Act, 1993 – ss.21,19.
      Partly allowing the appeal, the Court                               G

     HELD: 1.1 A perusal of Section 21 of the Recovery of Debts
and Bankruptcy Act, 1993 (RDBA) which employs the phrase
“appeal shall not be entertained” indicates that it injuncts the
Appellate Tribunal from entertaining an appeal by a person from
                                                                          H
                                1001
1002           SUPREME COURT REPORTS                      [2021] 3 S.C.R.


 A     whom the amount of debt is due to the Bank, unless such person
       has deposited with the Appellate Tribunal, fifty percent of the
       amount of debt so due from him as determined by the Tribunal
       under Section 19 of the Act. The proviso to the said Section,
       however, grants the discretion to the Appellate Tribunal to reduce
       the amount to be deposited, for reasons to be recorded in writing,
 B
       but such reduction shall not be less than twenty-five per cent of
       the amount of such debt which is due. Hence the pendulum of
       discretion to waive pre-deposit is allowed to swing between fifty
       per cent and twenty-five per cent of the debt due and not below
       twenty-five per cent, much less not towards total waiver. It is in
 C     that background, keeping in perspective the said provision, the
       DRAT has in the instant case ordered deposit of fifty per cent of
       the amount. The respondents No.1 and 2 while seeking waiver
       of the deposit have essentially projected the case to indicate that
       the recovery certificate ordered by the DRT is for the sum of
       Rs.145 Crores with interest at 9% per annum and the amount
 D
       realised by the Bank from the compensation amount payable to
       respondent No.3 is itself a sum of Rs.152,81,07,159/- and as such
       there is no debt due. [Para 10][1008-E-H; 1009-A-B]
               1.2 The High Court has proceeded at a tangent while
       adverting to the aspect of recovery made towards the loan amount
 E     from the land acquisition compensation payable to respondent
       No.3. The conclusion appears to be that the receipt of the
       compensation amount even though was before passing of the
       decree, would wipe out the decretal amount of Rs.145 Crores
       with interest at 9% per annum, though it has not been expressly
 F     stated so. Per contra, the DRAT by its order dated 27.02.2019
       while directing the pre--deposit of fifty per cent of the amount
       had taken note of the fact that if the decretal amount as ordered
       by the DRT is taken into consideration and the amount received
       by the Bank towards the compensation amount is credited, the
       balance of the decretal amount payable by respondents No.1 to 3
 G     would work out to Rs.68,18,92,841/-. It is in that view, the DRAT
       has ordered pre-deposit of fifty per cent of the said amount which
       still remains to be a debt due. On that aspect, though the ultimate
       correctness of the actual amount due is a matter for calculation
       to be made in the execution proceedings, for the present, for the
 H     purpose of pre-deposit if the decree/recovery certificate issued
   KOTAK MAHINDRA BANK PVT. LIMITED v. AMBUJ A.                        1003
                KASLIWAL & ORS.

by the DRT is taken into consideration the position is clear that      A
even if the amount of compensation is appropriated, either before
or after the decree, there would still be outstanding amount
payable which would be the subject matter of the appeal in DRAT,
apart from the fact that the appellant Bank in their appeal are
claiming the entire amount which has fallen due since the terms
                                                                       B
of settlement was not adhered to. [Para 12][1009-F-H; 1010-A-
D]
       1.3 When prima facie it was taken note by the DRAT that
further amount was due and the pre-deposit was ordered, without
finding fault with such conclusion the High Court was not justified
in setting aside the orders passed by the DRAT. All that the High      C
Court has concluded is that the benefit of the receipt of
Rs.152,81,07,159/- as against the decretal amount cannot be
denied though it was received before passing of the final
judgment. Such conclusion in any event could not have tilted the
balance in favour of the respondents No.1 and 2 to waive the           D
entire pre-deposit, unless the High Court had rendered a
categorical finding that the entire decretal amount stands satisfied
from such receipt and there was no debt due which in any event
was beyond the scope of consideration in a petition of the present
nature. On the other hand, the DRAT having taken note of the
decretal amount, the receipt of the amount credited as                 E
compensation and, having further noted the debt is still due, has
directed the pre-deposit limited to that extent. For the present,
the amount as indicated in the order passed by the DRAT is take
note of. Hence, for the purpose of determining the pre-deposit,
the decretal amount due is taken at Rs.68,18,92,841/-.[Paras 13,       F
16][1010-D-G; 1013-B-C]
      1.4 In the facts and circumstances arising herein, when
further amount is due and payable in discharge of the decree/
recovery certificate issued by the DRT in favour of the appellant/
Bank, the High Court does not have the power to waive the pre-         G
deposit in its entirety, nor can it exercise discretion which is
against the mandatory requirement of the statutory provision as
contained in Section 21. In all cases fifty per cent of the decretal
amount i.e. the debt due is to be deposited before the DRAT as
a mandatory requirement, but in appropriate cases for reasons
                                                                       H
1004            SUPREME COURT REPORTS                          [2021] 3 S.C.R.


 A     to be recorded the deposit of at least twenty-five per cent of the
       debt due would be permissible, but not entire waiver. Therefore,
       any waiver of pre-deposit to the entire extent would be against
       the statutory provisions and, therefore, not sustainable in law. A
       total waiver would be against the statutory provisions. The order
       passed by the High Court is set aside. However, in the instant
 B
       case, taking note that though the issue relating to the actual
       amount due is to be considered by the DRAT, keeping in view
       the fact that the DRT has taken into consideration the earlier
       settlement and has accordingly decreed the claim to that extent
       and towards such decree since payment of a major portion is made,
 C     though by appropriation of the compensation amount and
       admittedly since the remaining properties belonging to
       respondent No.3 is available by way of mortgage and the
       respondents No.1 and 2 are the personal guarantors, in the
       peculiar facts and circumstances of this case the respondents
       no.1 and 2 are permitted to pre-deposit twenty-five per cent of
 D
       the amount as taken note by the DRAT i.e. twenty-five per cent
       of Rs.68,18,92,841/-. To the said extent, the order passed by the
       DRAT is modified. [Paras 14, 17 and 20][1010-G-H; 1011-A-B;
       1013-D-G]
             Narayan Chandra Ghosh v. UCO Bank and Others
 E           (2011) 4 SCC 548 : [2011] 3 SCR 1024 – relied on.
                               Case Law Reference
       [2011] 3 SCR 1024                relied on                 Para 14
             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 538
 F     of 2021.
             From the Judgment and Order dated 16.07.2019 of the High Court
       of Delhi at New Delhi in Writ Petition (Civil) No. 7530 of 2019.
             With
 G           CONT.PET.(c)No. 569/2020 in SLP(c) No. 21555/2019
             V. Giri, Mukul Rohatgi, Ritin Rai, Mukul Rohatgi, Sr. Advs., Suresh
       D Dobhal, Shikhar Kumar, Gaurav Agrawal, Ankur Sood, Ms. Romila
       Mandal, Ankush Bhardwaj, Kaushik Laik, Sh. Ambuj Kasliwal, Sh. Vikas
       Kasliwal, Ms. Jayashree Shukla Dasgupta, Ms. Saloni Chowdhry, Karan
 H
   KOTAK MAHINDRA BANK PVT. LIMITED v. AMBUJ A.                                1005
                KASLIWAL & ORS.

Batura, Ms. Akhil P. Chhabra, Ms. Ritu Chhabra, Sumeer Sodhi, Advs.            A
for the appearing parties.
      The Judgment of the Court was delivered by
      A. S. BOPANNA, J.
      1. Leave granted.                                                        B
       2. The appellant is before this Court assailing the order dated
16.07.2019 passed in W.P.(C) No.7530 of 2019 whereby the High Court
of Delhi has permitted the respondents No. 1 and 2 herein to prosecute
the appeal before the Debts Recovery Appellate Tribunal (‘DRAT’ for
short) without pre-deposit of a portion of the debt determined to be due,      C
as provided under Section 21 of the Recovery of Debts and Bankruptcy
Act, 1993 (‘RDBA Act’ for short). The appellant/Bank claiming to be
aggrieved by the said order is before this Court in the instant appeal.
       3. This Court while taking note of the matter at the first instance,
had through the order dated 22.11.2019 directed the respondents No.1           D
and 2 to deposit an amount of Rs.20 Crores before the Registry of this
Court within a period of 8 weeks. In the said order it was indicated that
the further proceedings in the appeal before the DRAT shall remain
stayed till the next date of hearing or till the date of deposit of the said
amount by the respondents No.1 and 2, whichever is earlier. The deposit
as directed by this Court has not been made by the respondents No.1            E
and 2. The appellant/Bank, therefore, alleging that there is disobedience
of the order passed by this Court has filed the accompanying Contempt
Petition seeking action against respondents 1 and 2. In that background,
since both these matters pertain to the same issue, they are taken up
together, considered and disposed of by this common order.                     F
       4. The brief facts leading to the present proceedings is that the
respondent No.3, namely, Hindon River Mills Ltd. had availed financial
assistance from the respondent No.6-IFCI Ltd. The respondents No.1
and 2 had offered their personal guarantee in respect of the said financial
assistance. The respondents No.1 to 3 had defaulted in re-payment of
                                                                               G
the dues and the account having been classified as non-performing asset
was thereafter auctioned by respondent No.6-IFCI Ltd. wherein the
appellant herein was the successful bidder and accordingly, the unpaid
debt and non-performing asset was assigned in their favour. The
assignment as made was assailed by the respondents No. 1 to 3 before
the High Court in WP(C) No.14999 of 2006 which came to be dismissed            H
1006            SUPREME COURT REPORTS                          [2021] 3 S.C.R.


 A     and the SLP(C) No. 35004 of 2011 filed was taken note by this Court
       and in the said proceedings the settlement which was entered into
       between the parties was recorded and disposed of. As per the settlement,
       the respondents No. 1 to 3 had agreed to repay the sum of Rs.145
       Crores with interest at 15% per annum subject to the same being repaid
       on or before 31.07.2012. The respondents No. 1 to 3 are stated to have
 B
       not adhered to the terms of settlement and the re-payment was not
       made. The appellant Bank, therefore, instituted recovery proceedings
       by filing an application before the Debts Recovery Tribunal (‘DRT’ for
       short), New Delhi in O.A. No.281 of 2015. In the said proceedings the
       appellant Bank claimed that the respondents No. 1 to 3 would be liable
 C     to pay the entire outstanding since the benefit of the settlement wherein
       the outstanding amount was frozen had not been availed within the time
       frame. Accordingly, the sum of Rs. 572,18,77,112/- (Rupees Five Hundred
       Seventy-Two Crores Eighteen Lakhs Seventy-Seven Thousand and One
       Hundred Twelve), which was due as on 31.12.2014 along with interest
       and other charges was claimed before the DRT.
 D
              5. When this was the position, during the pendency of O.A.No.281
       of 2015 before the DRT the respondent No.7/National Highways
       Authority of India (‘NHAI’ for short), acquired a portion of the mortgaged
       property belonging to respondent No.3 and deposited the compensation
       amount of Rs.62,31,87,312/- (Rupees Sixty-Two Crores Thirty-One
 E     Lakhs Eighty-Seven Thousand and Three Hundred Twelve), before the
       DRT. The compensation was thereafter enhanced by the District
       Magistrate (Arbitrator) Ghaziabad and a further sum of
       (Rupees Seventy-Two Crores Ninety-Six Lakhs Twelve Thousand and
       Eight-Hundred Twenty-Seven) was deposited. Thus, in all a sum of
 F     Rs.152,81,07,159/-(Rupees One Hundred Fifty-Two Crores Eighty-One
       Lakhs Seven Thousand and One Hundred Fifty-Nine) was the
       compensation amount which was deposited on behalf of respondent No.3
       relating to the mortgaged property, which was credited to the account of
       respondent No.3. With these developments in the background, the DRT
       had proceeded to consider the claim application and ultimately ordered
 G     issue of recovery certificate through the order dated 15.03.2018. Through
       the said order, as against the claim, the DRT had limited the decretal
       amount to Rs.145 Crores with future interest at 9% per annum till the
       realisation, on reducing balance. It was further ordered therein that the
       amount would be payable after taking into consideration the amount of
 H     Rs.152,81,07,159/-(Rupees One Hundred Fifty-Two Crores Eighty-One
   KOTAK MAHINDRA BANK PVT. LIMITED v. AMBUJ A.                               1007
        KASLIWAL & ORS. [A. S. BOPANNA, J.]

Lakhs Seven Thousand and One Hundred Fifty-Nine) paid during the              A
pendency of the proceedings.
       6. The appellant/Bank as well as respondents No. 1 to 3 claiming
to be aggrieved by the order dated 15.03.2018 passed by DRT have
preferred appeals before the DRAT. This Court at this juncture is not
required to consider the merits of the rival contentions relating to the      B
loan transaction and the quantum of recovery thereof etc., which is the
matter arising in the appeal before DRAT. The present proceeding is
limited only with regard to the issue pertaining to the pre-deposit
contemplated in law insofar as the appeal filed by the respondents No.1
and 2 herein, before the DRAT. In that regard, the respondents No.1
and 2 herein, in their Appeal No.311 of 2018 before the DRAT had also         C
filed an application in IA No.511 of 2018 seeking waiver of pre-deposit
amounting to fifty per cent of the debt determined by the DRT. The
DRAT having noticed the contentions on the said aspect and also taking
into consideration that the amount of Rs.152,81,07,159/-(Rupees One
Hundred Fifty-Two Crores Eighty-One Lakhs Seven Thousand and One              D
Hundred Fifty-Nine) was received by the appellant Bank, had in that
context noted that the balance of the debt due works out to
Rs.68,18,92,841/- (Rupees Sixty-Eight Crores Eighteen Lakhs Ninety-
Two Thousand and Eight Hundred Forty-One). Hence, DRAT through
the order dated 27.02.2019 directed that fifty per cent of the said amount
is to be deposited. Review filed against the same was dismissed on            E
09.04.2019.
       7. The respondents No.1 and 2 claiming to be aggrieved by the
orders dated 27.02.2019 and 09.04.2019 approached the High Court of
Delhi in WP(C) No.7530 of 2019. The High Court having adverted to
the rival contentions and being swayed by the fact that the appellant/        F
Bank has recovered the sum of Rs.152,81,07,159/-(Rupees One Hundred
Fifty-Two Crores Eighty-One Lakhs Seven Thousand and One Hundred
Fifty-Nine), arrived at the conclusion that the respondents No.1 and 2
are to be permitted to prosecute the appeal without pre-deposit and
directed accordingly. It is in that view, the appellant/Bank claiming to be   G
aggrieved by such order dated 16.07.2019 passed by the High Court is
before this Court in the instant appeal.
      8. Heard Mr. V.Giri, learned Senior Advocate for the appellant,
Mr. Mukul Rohtagi and Mr. Ritin Rai, learned Senior Advocates for the
respondents and perused the appeal papers.                                    H
1008             SUPREME COURT REPORTS                           [2021] 3 S.C.R.


 A            9. As seen, though the sequence which led to the proceedings
       before the DRT and DRAT is taken note and referred in some detail, the
       short issue for consideration is with regard to the correctness or otherwise
       of the order passed by the DRAT and the High Court of Delhi in the
       matter relating to pre-deposit of the debt due, in an appeal before the
       DRAT. In order to address the said issue, it would be appropriate to take
 B
       note of Section 21 of the Recovery of Debts and Bankruptcy Act, 1993
       which provides for deposit of the amount of debt due on filing the appeal.
       Section 21 of the RDBA reads as hereunder: -
             “Deposit of amount of debt due, on filing appeal – Where an
             appeal is preferred by any person from whom the amount of debt
 C           is due to a bank or a financial institution or a consortium of banks
             or financial institutions, such appeal shall not be entertained by
             the Appellate Tribunal unless such person has deposited with the
             Appellate Tribunal [fifty per cent.] of the amount of debt so due
             from him as determined by the Tribunal under section 19:
 D           Provided that the Appellate Tribunal may, for reasons to be
             recorded in writing, [reduce the amount to be deposited by such
             amount which shall not be less than twenty-five per cent. of the
             amount of such debt so due] to be deposited under this section.”
                                                           (emphasis supplied)
 E
              10. A perusal of the provision which employs the phrase “appeal
       shall not be entertained” indicates that it injuncts the Appellate Tribunal
       from entertaining an appeal by a person from whom the amount of debt
       is due to the Bank, unless such person has deposited with the Appellate
       Tribunal, fifty percent of the amount of debt so due from him as
 F     determined by the Tribunal under Section 19 of the Act. The proviso to
       the said Section, however, grants the discretion to the Appellate Tribunal
       to reduce the amount to be deposited, for reasons to be recorded in
       writing, but such reduction shall not be less than twenty-five per cent of
       the amount of such debt which is due. Hence the pendulum of discretion
 G     to waive pre-deposit is allowed to swing between fifty per cent and
       twenty-five per cent of the debt due and not below twenty-five per cent,
       much less not towards total waiver. It is in that background, keeping in
       perspective the said provision, the DRAT has in the instant case ordered
       deposit of fifty per cent of the amount. The respondents No.1 and 2
       while seeking waiver of the deposit have essentially projected the case
 H
   KOTAK MAHINDRA BANK PVT. LIMITED v. AMBUJ A.                              1009
        KASLIWAL & ORS. [A. S. BOPANNA, J.]

to indicate that the recovery certificate ordered by the DRT is for the      A
sum of Rs.145 Crores with interest at 9% per annum and the amount
realised by the Bank from the compensation amount payable to
respondent No.3 is itself a sum of Rs.152,81,07,159/-(Rupees One
Hundred Fifty Two Crores Eighty One Lakhs Seven Thousand and One
Hundred Fifty Nine) and as such there is no debt due.
                                                                             B
      11. In that regard the High Court has concluded as hereunder: -
      “9. Having heard learned senior counsels for the parties, we are
      of the considered view that learned DRAT has not viewed the
      aspect of pre-deposit correctly in the present case. The amount
      of Rs.152,81,07,159/- was received by the respondent-bank during       C
      the pendency of the Original Application. The respondent-bank
      did not amend its Original Application to claim that it has adjusted
      the said amount, and did not limit its claim for the balance amount.
      Consequently, while adjudicating the Original Application, the DRT
      has proceeded on the basis that the respondent-bank is bound by
      the settlement amount of Rs.145 crores, and is entitled to future      D
      interest thereon at the rate of 9% per annum from 5th July, 2012
      onwards till realization on the reducing balance, after taking into
      account the amount of Rs.152,81,07,159/- received during the
      pendency of the Original Application.
      10. Aforesaid being the position, merely because the amount of         E
      Rs.152,81,07,159/- was received by the respondent-bank before
      passing of the final judgment, and not thereafter, would make no
      difference while considering the aspect of pre-deposit that the
      debtor, or the guarantor would have to deposit in terms of Section
      21 of the aforesaid Act.”                                              F
       12. The extracted portion indicates that the High Court has
proceeded at a tangent while adverting to the aspect of recovery made
towards the loan amount from the land acquisition compensation payable
to respondent No.3. The conclusion appears to be that the receipt of the
compensation amount even though was before passing of the decree,            G
would wipe out the decretal amount of Rs.145 Crores with interest at
9% per annum, though it has not been expressly stated so. Per contra,
the DRAT by its order dated 27.02.2019 while directing the pre-deposit
of fifty per cent of the amount had taken note of the fact that if the
decretal amount as ordered by the DRT is taken into consideration and
                                                                             H
1010            SUPREME COURT REPORTS                          [2021] 3 S.C.R.


 A     the amount received by the Bank towards the compensation amount is
       credited, the balance of the decretal amount payable by respondents
       No.1 to 3 would work out to Rs.68,18,92,841/- (Rupees Sixty Eight Crores
       Eighteen Lakhs Ninety Two Thousand and Eight Hundred Forty One).
       It is in that view, the DRAT has ordered pre-deposit of fifty per cent of
       the said amount which still remains to be a debt due. On that aspect,
 B
       though the ultimate correctness of the actual amount due is a matter for
       calculation to be made in the execution proceedings, for the present, for
       the purpose of pre-deposit if the decree/recovery certificate issued by
       the DRT is taken into consideration the position is clear that even if the
       amount of compensation is appropriated, either before or after the decree,
 C     there would still be outstanding amount payable which would be the
       subject matter of the appeal in DRAT, apart from the fact that the
       appellant Bank in their appeal are claiming the entire amount which has
       fallen due since the terms of settlement was not adhered to.
              13. Thus, when prima facie it was taken note by the DRAT that
 D     further amount was due and the pre-deposit was ordered, without finding
       fault with such conclusion the High Court was not justified in setting
       aside the orders passed by the DRAT. As noted from the extracted
       portion of the order passed by the High Court, all that the High Court
       has concluded is that the benefit of the receipt of Rs.152,81,07,159/-
       (Rupees One Hundred Fifty Two Crores Eighty One Lakhs Seven
 E     Thousand and One Hundred Fifty Nine) as against the decretal amount
       cannot be denied though it was received before passing of the final
       judgment. Such conclusion in any event could not have tilted the balance
       in favour of the respondents No.1 and 2 to waive the entire pre deposit,
       unless the High Court had rendered a categorical finding that the entire
 F     decretal amount stands satisfied from such receipt and there was no
       debt due which in any event was beyond the scope of consideration in a
       petition of the present nature. On the other hand, as stated, the DRAT
       having taken note of the decretal amount, the receipt of the amount
       credited as compensation and, having further noted the debt is still due,
       has directed the pre-deposit limited to that extent.
 G
              14. Therefore, in the facts and circumstances arising herein, when
       further amount is due and payable in discharge of the decree/recovery
       certificate issued by the DRT in favour of the appellant/Bank, the High
       Court does not have the power to waive the pre-deposit in its entirety,
       nor can it exercise discretion which is against the mandatory requirement
 H
   KOTAK MAHINDRA BANK PVT. LIMITED v. AMBUJ A.                               1011
        KASLIWAL & ORS. [A. S. BOPANNA, J.]

of the statutory provision as contained in Section 21, which is extracted     A
above. In all cases fifty per cent of the decretal amount i.e. the debt due
is to be deposited before the DRAT as a mandatory requirement, but in
appropriate cases for reasons to be recorded the deposit of at least
twenty-five per cent of the debt due would be permissible, but not entire
waiver. Therefore, any waiver of pre-deposit to the entire extent would
                                                                              B
be against the statutory provisions and, therefore, not sustainable in law.
The order of the High Court is, therefore, liable to be set aside.
       15. It is noticed that this Court while considering an analogous
provision contained in Section 18 of the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002
(‘SARFAESI’ for short) relating to pre-deposit in order to avail the remedy   C
of appeal has expressed a similar opinion in the case of Narayan
Chandra Ghosh vs. UCO Bank and Others (2011) 4 SCC 548, which
reads as hereunder: -
      7. Section 18(1) of the Act confers a statutory right on a person
      aggrieved by any order made by the Debts Recovery Tribunal              D
      under Section 17 of the Act to prefer an appeal to the Appellate
      Tribunal. However, the right conferred under Section 18(1) is
      subject to the condition laid down in the second proviso thereto.
      The second proviso postulates that no appeal shall be entertained
      unless the borrower has deposited with the Appellate Tribunal           E
      fifty per cent of the amount of debt due from him, as claimed by
      the secured creditors or determined by the Debts Recovery
      Tribunal, whichever is less. However, under the third proviso to
      the sub-section, the Appellate Tribunal has the power to reduce
      the amount, for the reasons to be recorded in writing, to not less
      than twenty-five per cent of the debt, referred to in the second        F
      proviso. Thus, there is an absolute bar to entertainment of an
      appeal under Section 18 of the Act unless the condition precedent,
      as stipulated, is fulfilled. Unless the borrower makes, with the
      Appellate Tribunal, a pre-deposit of fifty per cent of the debt due
      from him or determined, an appeal under the said provision cannot       G
      be entertained by the Appellate Tribunal. The language of the
      said proviso is clear and admits of no ambiguity.
      8. It is well-settled that when a Statute confers a right of appeal,
      while granting the right, the Legislature can impose conditions for
      the exercise of such right, so long as the conditions are not so        H
1012      SUPREME COURT REPORTS                            [2021] 3 S.C.R.


 A     onerous as to amount to unreasonable restrictions, rendering the
       right almost illusory. Bearing in mind the object of the Act, the
       conditions hedged in the said proviso cannot be said to be onerous.
       Thus, we hold that the requirement of pre-deposit under sub-section
       (1) of Section 18 of the Act is mandatory and there is no reason
       whatsoever for not giving full effect to the provisions contained
 B
       in Section 18 of the Act. In that view of the matter, no court,
       much less the Appellate Tribunal, a creature of the Act itself, can
       refuse to give full effect to the provisions of the Statute. We have
       no hesitation in holding that deposit under the second proviso
       to Section 18(1) of the Act being a condition precedent for
 C     preferring an appeal under the said Section, the Appellate Tribunal
       had erred in law in entertaining the appeal without directing the
       appellant to comply with the said mandatory requirement.
       9. The argument of learned counsel for the appellant that as the
       amount of debt due had not been determined by the Debts
 D     Recovery Tribunal, appeal could be entertained by the Appellate
       Tribunal without insisting on pre-deposit, is equally fallacious. Under
       the second proviso to sub-section (1) of Section 18 of the Act the
       amount of fifty per cent, which is required to be deposited by the
       borrower, is computed either with reference to the debt due from
       him as claimed by the secured creditors or as determined by the
 E     Debts Recovery Tribunal, whichever is less. Obviously, where
       the amount of debt is yet to be determined by the Debts Recovery
       Tribunal, the borrower, while preferring appeal, would be liable to
       deposit fifty per cent of the debt due from him as claimed by the
       secured creditors. Therefore, the condition of pre-deposit being
 F     mandatory, a complete waiver of deposit by the appellant with the
       Appellate Tribunal, was beyond the provisions of the Act, as is
       evident from the second and third provisos to the said Section. At
       best, the Appellate Tribunal could have, after recording the reasons,
       reduced the amount of deposit of fifty per cent to an amount not
       less than twenty-five per cent of the debt referred to in the second
 G     proviso. We are convinced that the order of the Appellate Tribunal,
       entertaining appellant’s appeal without insisting on pre-deposit was
       clearly unsustainable and, therefore, the decision of the High Court
       in setting aside the same cannot be flawed.”
                                                     (emphasis supplied)
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   KOTAK MAHINDRA BANK PVT. LIMITED v. AMBUJ A.                               1013
        KASLIWAL & ORS. [A. S. BOPANNA, J.]

       16. Having arrived at the above conclusion the issue is also with      A
regard to the extent to which pre-deposit is to be ordered in the instant
case. Though the learned Senior Advocates on either side have indicated
different figures as the actual debt due as on today, we do not propose to
enter into that aspect of the matter since the actual amount due is a
matter which would be taken note by the DRAT while considering the
                                                                              B
appeal on merits and at the point of recovery if any, in the execution
proceedings. However, for the present we would take note of the amount
as indicated in the order dated 27.02.2019 passed by the DRAT. Hence,
for the purpose of determining the pre-deposit, the decretal amount due
is taken at Rs.68,18,92,841/- (Rupees Sixty-Eight Crores Eighteen Lakhs
Ninety-Two Thousand and Eight Hundred Forty-One). Mr. Mukul                   C
Rohtagi, learned Senior Advocate would contend that a portion of property
belonging to respondent No.3 has been acquired and the remaining
property is still under mortgage and as such pre-deposit would be
burdensome to the respondents No.1 and 2, more particularly when the
entire compensation amount is deposited and major portion of the debt
                                                                              D
due is discharged.
        17. As already noted, a total waiver would be against the statutory
provisions. However, in the instant case, taking note that though the
issue relating to the actual amount due is to be considered by the DRAT,
keeping in view the fact that the DRT has taken into consideration the
earlier settlement and has accordingly decreed the claim to that extent       E
and towards such decree since payment of a major portion is made,
though by appropriation of the compensation amount and admittedly since
the remaining properties belonging to respondent No.3 is available by
way of mortgage and the respondents No.1 and 2 are the personal
guarantors, we deem it appropriate that in the peculiar facts and             F
circumstances of this case to permit the pre-deposit of twenty-five per
cent of the amount as taken note by the DRAT i.e. twenty-five per cent
of Rs.68,18,92,841/-(Rupees Sixty Eight Crores Eighteen Lakhs Ninety
Two Thousands and Eight Hundred Forty One). To the said extent, the
order dated 27.02.2019 passed by the DRAT on IA No.511 of 2018 is
liable to be modified.                                                        G

      18. It is clarified that the consideration made herein and debt due
quantified is limited to the aspect relating to pre-deposit. All other
contentions including as to the actual amount of debt due is left open to
be urged in the pending appeals.
                                                                              H
1014            SUPREME COURT REPORTS                           [2021] 3 S.C.R.


 A            19. In view of the above conclusion the interim direction to deposit
       the amount of Rs.20 Crores as ordered on 22.11.2019 would lose its
       relevance at this point of time. Though as per the said direction dated
       22.11.2019 the amount was to be deposited within the time frame and
       there is non-compliance, in view of the subsequent development of the
       final order being passed in the appeal, we see no reason to proceed
 B
       further in the Contempt Petition initiated by the appellant, though at an
       earlier point of time notice was ordered to the respondent.
             20. In the result;
             (i) The order dated 16.07.2019 passed by the High Court of Delhi
 C           in WP(C) No.7530 of 2019 is set aside;
             (ii) The order dated 27.02.2019 passed by the DRAT, Delhi on
             IA No.511 of 2018 in Appeal No.311 of 2018 is modified. The
             respondents No. 1 and 2 are permitted to deposit twenty-five per
             cent of Rs.68,18,92,841/-(Rupees Sixty-Eight Crores Eighteen
 D           Lakhs Ninety-Two Thousand and Eight Hundred Forty-One) and
             prosecute the Appeal No.311 of 2018, subject to such deposit
             being made within 8 weeks, failing which the appeal shall not
             subsist in the eye of law;
             (iii) The appeal is accordingly allowed in part. No costs;
 E           (iv) The Contempt Petition No.569 of 2020 is closed as
             unnecessary;
             (iv) Pending application, if any, shall stand disposed of.


       Divya Pandey                                           Appeal partly allowed.
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