Dismissal for pre-deposit non-compliance is procedural and amenable to recall by the Appellate Tribunal.

The respondent bank initiated recovery proceedings against the appellants, resulting in a recovery certificate for over Rs. 1.53 crores issued by the DRT, Patna, in 2012.

The appellants challenged this before the Debt Recovery Appellate Tribunal (DRAT), Allahabad.

On 13.02.2015, the DRAT directed a 50% pre-deposit under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993, which the appellants failed to satisfy, leading to the dismissal of their appeal on 23.03.2015.

A subsequent writ petition challenging the pre-deposit condition was dismissed by the High Court in June 2023.

Following this, the appellants deposited approximately Rs. 76 lakhs and sought restoration of the appeal.

The DRAT restored the appeal on 29.09.2023.

However, upon a writ petition by the Bank (CWJC No. 1388 of 2024), a learned Single Judge set aside the restoration, holding that the DRAT lacked jurisdiction to recall its order after eight years and that the dismissal had attained finality.

The appellants filed the present intra-court appeal against that judgment.

Section 21 of the Recovery of Debts and Bankruptcy Act, 1993, which mandates a pre-deposit for entertaining an appeal.

Section 22(2)(e) and (g), which grants the DRAT the same powers as a Civil Court to review decisions and set aside dismissals for default.

Grindlays Bank Ltd. v. Central Government Industrial Tribunal, distinguishing "procedural review"—the inherent power to correct procedural defects ex debito justitiae—from "merit review".

The court further applied the principle from Kapra Mazdoor Ekta Union v. Birla Cotton Spinning and Weaving Mills Ltd., stating that tribunals can recall orders vitiated by procedural illegalities without entering merits.

Regarding the statutory term "entertain," the court applied the interpretation from Lakshmi Rattan Engineering Works Ltd. v. Assistant Commissioner Sales Tax, defining it as "admitting to consideration" rather than a final adjudication.

The court reasoned that the DRAT's dismissal of the appeal in 2015 was not an adjudication on merits but a procedural order due to non-compliance with a statutory condition.

Consequently, such a dismissal falls under the category of "default" contemplated by Section 22(2)(g), meaning the DRAT is not functus officio and retains the power to recall the order.

The Division Bench found that the learned Single Judge erred by ignoring the express statutory powers of recall granted to the Tribunal to prevent procedural lapses from causing irreparable prejudice.

Interpreting Section 21, the court held that while the statute prevents the "entertainment" of an appeal without deposit, it does not prescribe a limitation period for the deposit or mandate irrevocable dismissal.

Therefore, once the appellants complied with the pre-deposit, the DRAT was within its jurisdiction to restore the appeal to ensure the matter is decided on merits rather than technicalities.

The Division Bench set aside the learned Single Judge’s judgment dated 04.09.2024.

Consequently, the DRAT’s restoration order dated 29.09.2023 was affirmed, and Appeal No. R-99/2014 was restored to its original number.