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CS Professional · Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

Rao Steels Ltd owes a bank a debt determined by the Tribunal at Rs 8 crore. Rao Steels wants to appeal to the Tribunal against an order of the Recovery Officer passed under section 30 of the Recovery of Debts and Bankruptcy Act, 1993. What must it do for the appeal to be entertained?

Rao Steels must deposit Rs 4 crore, which is fifty per cent of the Rs 8 crore debt determined by the Tribunal, with the Tribunal. Under section 30A, the appeal against the Recovery Officer's order will not be entertained without this deposit.

  1. ADeposit with the Tribunal fifty per cent of the debt due as determined by the Tribunal, i.e. Rs 4 croreCorrect
  2. BDeposit twenty-five per cent of the debt, i.e. Rs 2 crore
  3. CDeposit the full Rs 8 crore with the Recovery Officer
  4. DNo deposit is needed because the appeal is against a Recovery Officer's order

Explanation

Section 30A provides that an appeal by a person from whom the debt is due against a Recovery Officer's order under section 30 is not entertained unless that person deposits with the Tribunal fifty per cent of the debt due as determined by the Tribunal. Fifty per cent of Rs 8 crore is Rs 4 crore. Twenty-five per cent is incorrect.

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