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Delhi High Court sets aside debt recovery appellate tribunal

Published on November 08, 2023
Current Context: The Delhi High Court has recently overturned a decision by the Debt Recovery Appellate Tribunal (DRAT) that required Religare Finvest Ltd (RFL) to deposit 40% (approximately Rs 116.85 crore) of a Rs 306 crore debt due.
Delhi High Court sets aside debt recovery appellate tribunal
  • The court set aside the DRAT’s order that asked RFL to deposit 40% of the debt due along with interest for entertaining its petition.
  • However, the High Court clarified that the company shall deposit 25% of the entire debt (around Rs 380 crore) in three working days and the DRT shall consider the matter afresh.
  • The order was passed after RFL, through senior counsel Rajiv Nayyar and counsel Sandeep Devashish Das, told a division bench comprising Justice Vibhu Bakhru and Amit Mahajan that the DRAT has reached an “erroneous” conclusion and completely ignored the financial hardship being faced by it on account of fraud and siphoning of funds by the erstwhile management.
  • RFL, a subsidiary of Religare Enterprises Ltd (REL), said it cannot deposit any further sum beyond 25% (Rs 76.61 crore) that had already been deposited before the appellate tribunal and the pre-deposit of Rs 116.85 crore would “impair” the non-banking financial company and would render it unable to maintain operations as a going concern.

Question:

Q.1 What is the revised deposit amount set by the Delhi High Court for RFL?
a. 25% of the debt
b. 40% of the debt
c. 50% of the debt
d. 60% of the debt

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