In Brief
Kotak Mahindra Bank successfully challenged a High Court order that waived the pre-deposit requirement for an appeal by debtors before the Debt Recovery Appellate Tribunal. The Bank had acquired a non-performing asset and obtained a recovery decree for Rs.145 crores. The Supreme Court held that the pre-deposit requirement under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 is mandatory and cannot be entirely waived. The Court modified the order to require twenty-five per cent deposit of the balance debt (Rs.68.19 crores) rather than fifty per cent, recognizing that substantial compensation had already been appropriated towards the debt. The judgment reaffirmed that statutory pre-deposit conditions are not optional, though DRAT retains discretion to reduce (not eliminate) the requirement for recorded reasons.
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