Reiterating the dictum laid down in in Axis bank vs. SBS Organics Private Limited, the Supreme Court in KUMAR ALUMINIUM LTD. VS. ASSET RECONSTRUCTION COMPANY INDIA has set aside a Delhi High Court Judgment which had refused to interfere with DRAT order which turned down the prayer for refund of the amount deposited in compliance of the requirement of the second proviso to section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, for maintaining an appeal.
In Axis Bank case, the Apex Court had held that the partial deposit before the Debt Recovery Appellate Tribunal (DRAT) as a pre-condition for considering the appeal on merits in terms of Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), is neither a secured asset, nor a secured debt, and hence refundable to the appellant on disposal of appeal.
Remitting back the case to DRAT, the Bench comprising of Justices Kurian Joseph and RF Nariman said: “we dispose of this appeal, set aside the impugned judgment of the High Court as well as the order of the DRAT impugned before the High Court and remit the matter to DRAT for consideration afresh.”
Read the Judgment here.