At a glance
| Governing law | Recovery of Debts and Bankruptcy Act, 1993 and SARFAESI Act, 2002 |
|---|---|
| Pecuniary threshold | Debt of ₹20 lakh or more for original applications by lenders |
| SARFAESI demand notice | Section 13(2): 60 days to pay before the bank can take measures |
| Borrower's remedy | Section 17 application to the DRT within 45 days of the Section 13(4) measure |
| Appeal | To the Debts Recovery Appellate Tribunal (DRAT) within 30 days |
| Pre-deposit for appeal | 50 percent of the amount due, which the DRAT may reduce to 25 percent |
DRT matters we handle
SARFAESI challenges
Section 17 applications against possession notices, auctions and other measures taken in breach of the Act or Rules.
Defending recovery OAs
Written statements and counter-claims in original applications filed by banks under Section 19 of the RDB Act.
Representations under Section 13(3A)
Objections to the Section 13(2) notice, which the bank must answer within 15 days.
Settlement and restructuring
One-time settlement proposals and negotiations with lenders and asset reconstruction companies.
Guarantor defences
Defending personal and corporate guarantors in recovery and enforcement proceedings.
DRAT appeals and writs
Appeals against DRT orders, pre-deposit waiver applications and High Court writs where appropriate.
SARFAESI timeline for borrowers
NPA classification
The account is classified as a non-performing asset after 90 days of overdue payment.
Section 13(2) notice
The bank demands payment within 60 days. You can file a representation or objection.
Bank's reply
The bank must respond to the objection within 15 days under Section 13(3A).
Section 13(4) measures
The bank can take symbolic or physical possession, often with a magistrate's order under Section 14.
Section 17 application
Challenge the measures before the DRT within 45 days, seeking a stay where justified.
Auction and redemption
The borrower can redeem the property by paying dues before the sale notice is published, under Section 13(8).
Common grounds to challenge SARFAESI action
- Account wrongly classified as NPA or demand amount incorrectly computed
- Objection under Section 13(3A) not answered with reasons
- Defects in the possession notice, valuation or 30-day sale notice under the Security Interest (Enforcement) Rules
- Agricultural land, or debt below the statutory threshold, which is outside SARFAESI
- Tenant's rights or third-party title over the secured asset
Frequently asked questions
What is the minimum amount for a DRT case?
Banks and financial institutions can file original applications before the DRT only for debts of ₹20 lakh or more. The threshold was raised from ₹10 lakh in 2018.
How long do I have to challenge a SARFAESI possession notice?
45 days from the date the bank takes a measure under Section 13(4), such as possession. The DRT can condone limited delay in some cases, but filing within time is far safer.
Can the DRT stop an auction?
Yes. The DRT can stay the sale if the borrower shows a prima facie case of illegality in the bank's action, often on terms such as depositing part of the dues.
Do I need to deposit money to appeal to the DRAT?
Yes. An appeal requires a pre-deposit of 50 percent of the amount due as determined. The DRAT can reduce it to 25 percent for recorded reasons.
Can I negotiate a one-time settlement during DRT proceedings?
Yes. Many cases are settled through OTS schemes or negotiated settlements, which are then recorded before the tribunal. A credible proposal backed by funding sources works best.
Talk to Inovatree about drt cases
Inovatree Consultants LLP works from Delhi NCR, Mumbai and Kolkata with clients across India. Learn more about the firm on inovatree.in:
Related services
Last reviewed 24 October 2026. This guide summarises the law in general terms. Every matter turns on its own facts, so take advice before acting.