Judges gavel and law books stacked behind
The court passed the ruling while hearing a petition filed by Bengaluru-based Ittiam Systems Pvt Ltd, which claimed to be a long-standing tenant in three office units and five car parking spaces in Consulate-1 building on Richmond Road in central business district. DRAT directed the company to deposit over Rs 3.3 crore (25% of the bank’s demand) as a pre-condition for hearing the appeal While entertaining the appeal. Therefore, it could not be asked to make the statutory pre-deposit required of borrowers.
Bengaluru : In a significant ruling, the high court held that a person who is not a borrower cannot be compelled to make a pre-deposit to file an appeal under SARFAESI Act against an order affecting his or her rights. The company then challenged the DRT order before Debts Recovery Appellate Tribunal (DRAT), Chennai. Ittiam Systems challenged this direction before high court, arguing that it was merely a tenant and not the borrower who had taken the loan. Accepting the contention, the high court examined the provisions of SARFAESI Act and held that the obligation to make a pre-deposit is restricted to borrowers alone. Setting aside DRAT’s order, the high court directed the appellate tribunal to hear Ittiam Systems’ appeal on merits without insisting on any pre-deposit and dispose of the matter within eight weeks.