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      Question

      For an appeal to the Appellate Tribunal (DRAT) under

      Section 18 of SARFAESI, the borrower is required to make a pre-deposit. The Appellate Tribunal has the power to reduce this amount. What is the minimum percentage to which the Appellate Tribunal may reduce the pre-deposit?
      A Ten per cent Correct Answer Incorrect Answer
      B Twenty-five per cent Correct Answer Incorrect Answer
      C Thirty per cent Correct Answer Incorrect Answer
      D Forty per cent Correct Answer Incorrect Answer
      E Fifteen per cent Correct Answer Incorrect Answer

      Solution

      Section 18(1) provides that no appeal to the Appellate Tribunal (DRAT) shall be entertained unless the borrower has deposited with the Appellate Tribunal 50% of the amount of debt due from him as claimed by the secured creditor or as determined by the DRT, whichever is less. However, the second proviso to Section 18(1) states that the Appellate Tribunal may, for reasons to be recorded in writing, reduce this amount to NOT LESS THAN 25% of the debt referred to in the second proviso. Thus, the floor is 25% - the DRAT has discretion to reduce the pre-deposit from 50% to anywhere between 25% and 50%, but cannot reduce it below 25%. This pre-deposit condition is a significant financial barrier for borrowers challenging enforcement actions.

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