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CS Professional · Insolvency and Bankruptcy - Law and Practice · Debt Recovery and Securitization

Sunrise Textiles Ltd, a borrower, loses before the Debts Recovery Tribunal, which determines the debt due to Canara Bank at Rs 8,00,000. Sunrise wants to appeal to the Appellate Tribunal against that order under the RDB Act. What must it deposit with the Appellate Tribunal for the appeal to be entertained, before any reduction is considered?

The borrower must deposit Rs 4,00,000. Section 21 requires deposit of fifty per cent of the debt determined by the Tribunal before the Appellate Tribunal will entertain the appeal, and fifty per cent of Rs 8,00,000 is Rs 4,00,000.

  1. ARs 2,00,000, being 25 per cent of the debt
  2. BRs 4,00,000, being 50 per cent of the debtCorrect
  3. CRs 6,00,000, being 75 per cent of the debt
  4. DNothing, as the deposit is only required for appeals against Recovery Officer orders

Explanation

Section 21 bars the Appellate Tribunal from entertaining the appeal unless the debtor deposits fifty per cent of the debt determined by the Tribunal. 50% of Rs 8,00,000 is Rs 4,00,000. The 75 per cent figure was the earlier rate, replaced by 50 per cent with effect from 1-9-2016.

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