Practice note
Debts Recovery Tribunal and Appellate Tribunal (DRT and DRAT) Proceedings
Recovery of debts of twenty lakh rupees or more due to banks and financial institutions is adjudicated by the Debts Recovery Tribunal under the Recovery of Debts and Bankruptcy Act, 1993. Secured creditors may also enforce security without the intervention of a court under the SARFAESI Act, 2002; the borrower's remedy against such measures lies before the DRT under Section 17 and, in appeal, before the Debts Recovery Appellate Tribunal.
In brief
- A secured creditor must first issue a demand notice under Section 13(2) of the SARFAESI Act, giving the borrower sixty days to discharge the liability, and must reply to any representation within fifteen days (Section 13(3A)).
- Measures under Section 13(4), including taking possession, may be challenged by a securitisation application under Section 17 within forty-five days.
- An appeal to the DRAT under Section 18 requires a pre-deposit of fifty per cent of the debt claimed or determined, whichever is less, which the DRAT may reduce to twenty-five per cent.
- Under the amended Section 13(8), the borrower's right to redeem the secured asset is extinguished on publication of the notice of sale.
Governing law
- Recovery of Debts and Bankruptcy Act, 1993
- Section 1(4) (pecuniary threshold), 17 (jurisdiction of the DRT), 19 (original applications, counter-claim and set-off), 20 (appeal to the DRAT), 21 (pre-deposit), 25 to 28 (recovery certificate and modes of recovery).
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
- Sections 13(2), 13(3A), 13(4) and 13(8), 14 (assistance of the Chief Metropolitan Magistrate or District Magistrate), 17 (securitisation application), 18 (appeal), 34 (bar of civil court jurisdiction).
- Security Interest (Enforcement) Rules, 2002
- Rules 3, 8 and 9 (service of notices, possession and sale, including the thirty-day notice of sale).
- Debts Recovery Tribunal (Procedure) Rules, 1993
- Procedure for applications, hearings and evidence on affidavit.
How the matter is handled
| Stage | Steps taken | Indicative time |
|---|---|---|
| 1. Review of notices | Examination of the Section 13(2) notice, the classification of the account as a non-performing asset, the valuation and the notice of sale for statutory compliance. | On receipt |
| 2. Representation | Representation or objection under Section 13(3A), and negotiation of restructuring or one-time settlement. | Within 60 days of the notice |
| 3. Securitisation application | Application under Section 17 before the DRT against measures under Section 13(4), with an application for stay. | Within 45 days |
| 4. Original application | Defence of, or institution of, an original application under Section 19 of the RDB Act, including counter-claim and set-off. | Depends on the Tribunal |
| 5. Appeal | Appeal to the DRAT under Section 18 of the SARFAESI Act or Section 20 of the RDB Act with the prescribed pre-deposit; writ jurisdiction only in exceptional cases. | 30 to 45 days to file |
Leading judicial authorities
Latest judgments & updates
Recent judgments of the Supreme Court, the High Courts and tribunals, and court reports, concerning DRT & DRAT. Updated automatically through the day.
Documents to keep ready
- Loan and security documents, the sanction letter and statement of account
- The Section 13(2) and 13(4) notices, possession notice and notice of sale
- Valuation report and the terms of auction
- Correspondence with the bank, including any one-time settlement proposals
Frequently asked questions
Can the High Court be approached directly against a SARFAESI notice?
Ordinarily not. Following Satyawati Tondon and later decisions, the remedy lies before the DRT under Section 17; writ jurisdiction is exercised only in exceptional cases, such as where the action is wholly without jurisdiction.
What is the time limit for a securitisation application?
Forty-five days from the date on which the measure under Section 13(4) is taken. The DRT is required to dispose of the application within sixty days, extendable to an aggregate of four months.
This note states the law in general terms as on 19 October 2026. It is not legal advice and does not create an advocate–client relationship. Judgments are summarised for reference and should be read in full from the official reports; the facts of each matter may alter the position.
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