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

Venkat Constructions Ltd is a debtor under a recovery certificate. The Recovery Officer passed an order under section 30 of the RDB Act, and Venkat Constructions appeals to the Tribunal. The debt due as determined by the Tribunal is Rs 12 crore. Which statement is correct?

Fifty per cent of the debt, which is Rs 6 crore, must be deposited with the Tribunal. Section 30A of the RDB Act bars the Tribunal from entertaining an appeal against a Recovery Officer's order unless this deposit is made. The old seventy-five per cent rate is obsolete.

  1. AFifty per cent, Rs 6 crore, must be deposited with the Tribunal, or the appeal is not entertainedCorrect
  2. BSeventy-five per cent, Rs 9 crore, must be deposited with the Tribunal
  3. CNo deposit is needed, since the appeal is against a Recovery Officer's order
  4. DTwenty-five per cent, Rs 3 crore, must be deposited with the Tribunal

Explanation

Section 30A of the RDB Act provides that an appeal against a Recovery Officer's order under section 30 by the debtor is not entertained unless fifty per cent of the debt due as determined by the Tribunal is deposited. 50% of Rs 12 crore is Rs 6 crore. Seventy-five per cent was the old section 21 rate before 2016 and no longer applies.

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