No waiver of pre-deposit condition for sick units

The Delhi high court has dismissed the appeal of Swadeshi Cement Ltd. against the order of the Debt Recovery Appellate Tribunal asking it to deposit 25 per cent of the dues before moving the court. The creditor, Asset Care Enterprises, had invoked the power under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act against the cement firm.

The latter moved the tribunal, which asked it to deposit 25 per cent of the dues before hearing it. It pleaded that it was a ‘BIFR company’ and therefore the pre- deposit condition should be relaxed. The high court rejected this request and declared that sick companies are not entitled to such benefit under the Act.

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