The Statutory Requirement
Section 421(3) provides that an appeal to the NCLAT shall not be entertained unless the appellant has deposited twenty-five per cent of the amount of the order appealed against. The pre-deposit is a condition precedent to the maintainability of the appeal. The NCLAT has the power to dispense with the pre-deposit in appropriate cases, but the discretion is exercised sparingly.
The Computation of the Amount
The “amount of the order” is the amount that the appellant is directed to pay or deposit under the NCLT order. Where the order is not a monetary direction, the pre-deposit requirement may not apply. Where the order imposes a penalty, the pre-deposit is computed on the penalty amount. The appellant should obtain a clarity from the NCLAT registry on the computation before filing.
The Waiver Application
The NCLAT may waive or reduce the pre-deposit where the appellant establishes financial hardship or where the order is prima facie unsustainable. The application should be supported by the appellant’s financial statements, an affidavit of means, and the grounds of appeal. A bare assertion of hardship is not sufficient.
The Consequence of Non-Compliance
An appeal filed without the pre-deposit is liable to be dismissed as not maintainable. The NCLAT may grant time to deposit, but the failure to deposit within the extended time results in dismissal. The appellant should compute the pre-deposit and arrange the funds before filing the appeal.
The Refund
If the appeal succeeds, the pre-deposit is refunded with interest, unless the NCLAT directs otherwise. The appellant should retain the deposit challan and the NCLAT’s order for the refund application.
Call to Action: For NCLAT pre-deposit computation, waiver application, or appeal maintainability review, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.