In Brief
The Supreme Court addressed the interpretation of pre-deposit requirements under Section 18 of the SARFAESI Act when a borrower appeals against a Debt Recovery Tribunal's order. The Court held that a borrower must deposit 50% of the "debt due"—calculated as the liability including interest claimed by the bank in its notice—to appeal to the Appellate Tribunal. Crucially, the Court ruled that auction sale proceeds deposited by the auction purchaser cannot be adjusted against this mandatory pre-deposit, especially when the borrower simultaneously challenges the auction sale. The borrower cannot both attack the sale and claim benefit from its proceeds. The Court allowed appeals by the financial institution and auction purchasers while dismissing the borrower's appeal.
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