"Debt due" under Section 18 SARFAESI Act includes interest for calculating mandatory pre-deposit amounts.

The petitioner challenged an order passed by the Chief Judicial Magistrate, Tiruvallur, under Section 14 of the SARFAESI Act before the Debts Recovery Tribunal (DRT) under Section 17

Following an adverse order from the DRT, the petitioner preferred an appeal before the Debts Recovery Appellate Tribunal (DRAT) under Section 18 of the SARFAESI Act

The DRAT, exercising its discretion under the third proviso to Section 18, reduced the mandatory pre-deposit from 50% to 25%

The petitioner filed the present Writ Petition under Article 226 of the Constitution, contending that the DRAT erroneously calculated the "debt due" by including interest accrued after the Section 13(2) demand notice dated 19.07.2019

The petitioner sought a direction that the "debt due" for adjudication and pre-deposit should be limited to the amount specified in the Section 13(2) notice only

1. Whether the term "debt due" for the purpose of mandatory pre-deposit under Section 18 of the SARFAESI Act is restricted to the amount claimed in the Section 13(2) demand notice or includes subsequent interest

2. Whether the calculation of the pre-deposit amount by the DRAT was in consonance with the statutory provisions

Section 18 of the SARFAESI Act, 2002, which mandates a pre-deposit of 50% (reducible to 25%) of the debt due for entertaining an appeal

Section 2(ha) of the SARFAESI Act, which incorporates the definition provided in Section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993

Section 2(g) defines "debt" as any liability inclusive of interest claimed as due from any person by a bank or financial institution during any business activity, whether secured or unsecured, and legally recoverable on the date of the application

The Court rejected the petitioner’s contention that "debt" should be frozen at the amount mentioned in the Section 13(2) notice

By reading Section 2(ha) of the SARFAESI Act in conjunction with Section 2(g) of the Act 51 of 1993, the Court observed that the statutory definition of "debt" is expansive and explicitly includes interest

The DRAT's inclusion of interest in the calculation of the "debt due" was held to be legally valid and in strict accordance with the statutory framework

The Court further noted that the DRAT had already exercised its judicial discretion by reducing the pre-deposit requirement to the statutory minimum of 25%

Since the pre-deposit is a mandatory statutory condition for entertaining an appeal, the Court found no merit in the petitioner’s request for further concessions or a narrow interpretation of "debt"

The Court affirmed that the DRAT’s calculation was correct and that the petitioner is liable to deposit the amount as ordered to maintain the appeal

All connected miscellaneous petitions were closed, and no costs were awarded