CS Professional · Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI
Under a SARFAESI appeal, the secured creditor claimed Rs 8 crore as debt due from the borrower, Kapoor Steels Ltd. The DRT determined the debt at Rs 6 crore. Without any reduction by the Appellate Tribunal, what minimum deposit must Kapoor Steels make for its appeal to be entertained?
The deposit is Rs 3 crore. The SARFAESI Act requires fifty per cent of the debt as claimed by the secured creditor or determined by the DRT, whichever is less. The lesser amount is Rs 6 crore, and half of it is Rs 3 crore.
- ARs 3 croreCorrect
- BRs 4 crore
- CRs 2 crore
- DRs 1.5 crore
Explanation
Section 18(1) second proviso requires 50% of the debt as claimed by the secured creditor or as determined by the DRT, whichever is less. The lesser figure is Rs 6 crore, so 50% is Rs 3 crore. Using Rs 8 crore would give Rs 4 crore, which is the wrong base.
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