Oriental Bank of India (OBI) extended loan of ₹20 crore to Aamran Fabricators Ltd. (AFL). Debt Recovery Tribunal (DRT) has issued order against AFL for recovery of outstanding dues amounting to ₹28.5 crore as against the

Aamran Fabricators Ltd. (AFL) is aggrieved by the Debt Recovery Tribunal (DRT) order and wishes to file an appeal in the Debts Recovery Appellate Tribunal (DRAT) under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Pre-conditions to be fulfilled for filing an appeal against the order of DRT under Section 18 of SARFAESI Act, 2002: Aggrieved Person: Any person aggrieved by any order made by the Debts Recovery Tribunal under Section 17 of the SARFAESI Act may prefer an appeal to the Appellate Tribunal. AFL, being the borrower against whom the order is passed, is an aggrieved person. Time Limit: The appeal must be filed within thirty days from the date of receipt of the order of the Debts Recovery Tribunal. Form and Fee: The appeal must be in the prescribed form and accompanied by the prescribed fee. Pre-deposit Requirement: This is the most critical pre-condition for a borrower. Section 18(1) of the SARFAESI Act states that no appeal shall be entertained by the Appellate Tribunal unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or as determined by the Debts Recovery Tribunal, whichever is less . In this case: Amount of debt claimed by OBI: ₹30 crore Amount of debt determined by DRT: ₹28.5 crore The lesser of the two is ₹28.5 crore. Therefore, AFL must deposit 50% of ₹28.5 crore = ₹14.25 crore. Waiver/Reduction of Pre-deposit: The proviso to Section 18(1) allows the Appellate Tribunal, for reasons to be recorded in writing, to reduce the amount to be deposited to not less than twenty-five per cent of the debt referred above. If AFL seeks a reduction, the minimum deposit would be 25% of ₹28.5 crore = ₹7.125 crore. Conclusion for AFL: AFL must ensure that it files the appeal within 30 days of receiving the DRT order, in the correct format, and most importantly, deposits 50% of ₹28.5 crore (i.e., ₹14.25 crore) with the DRAT. If AFL wishes to deposit a lower amount, it must make a specific application to the DRAT, providing valid reasons, to seek a reduction to a minimum of 25% of the determined debt.