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Issues involved: Challenge to the constitutional validity of the Second Proviso to Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 on the ground of violation of Article 14 of the Constitution of India.
Summary: 1. The petitioner challenged the Second Proviso to Section 18 of the Securitisation Act, arguing that requiring a pre-deposit for entertaining an appeal makes the remedy illusory and oppressive. The petitioner contended that such a stipulation is onerous and unreasonable, citing a previous judgment by the Apex Court. The respondent, representing the Union of India, argued that the right of appeal is not inherent but a statutory creation, and conditions can be imposed for its exercise. The respondent highlighted that similar provisions in other enactments have been upheld by the courts. 2. The Court examined the arguments presented by both sides and found that the Second Proviso to Section 18(1) of the Securitisation Act does not create discrimination or violate the principle of equality under Article 14 of the Constitution. The Court emphasized that the right of appeal is a statutory creation, and conditions can be imposed to regulate its exercise and prevent abuse. Referring to the provisions of the Act, the Court noted that the Appellate Tribunal has the discretion to reduce the required deposit to not less than 25% of the debt claimed. 3. The Court further clarified that there is no provision in the statute allowing the secured creditor to appropriate the amount deposited by the borrower for filing an appeal. In case of appeal dismissal, the deposited amount will be refunded to the appellant, ensuring no prejudice. The Court upheld the validity of the Second Proviso to Section 18(1) of the Securitisation Act, citing a previous decision by the Delhi High Court that also supported the provision. Ultimately, the Court dismissed the petitions, finding no merit in the petitioner's contentions regarding discrimination or violation of Article 14.
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