DRAT Appeal under Section 18 SARFAESI Complete Guide for Borrowers and Aggrieved Parties
Orders issued by the Debt Recovery Tribunal (“DRT”) can turn a SARFAESI dispute upside down in the blink of an eye.
The borrower may have opposed the possession of a secured asset, received a notice of auction, a confirmation of sale, action supported by the District Magistrate/Chief Metropolitan Magistrate or taken some other action by the secured creditor. When the DRT passes an order on the application filed under Section 17, the defeated /aggrieved party must consider if the issue should be escalated before the Debt Recovery Appellate Tribunal (“DRAT”).
This remedy is prescribed under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“Section 18”).
Filing an appeal before DRAT is not an extended version of what was argued before the DRT.
Appeals under Section 18 have their own limitation period, prescribed fee, grounds of appeal, required documents and, most importantly for borrowers, a statutory pre-deposit requirement.
Section 18 states that any person who is aggrieved by an order made by the DRT under Section 17 may file an appeal to the Appellate Tribunal within 30 days of receipt of such order. For borrowers, the second proviso to Section 18 ordinarily requires a pre-deposit of 50% of the amount of debt due as claimed by the secured creditor or as determined by DRT, whichever is less. The DRAT can direct that the amount be reduced for reasons to be recorded in the order but not below 25%.
That 25% threshold is crucial.
Someone may have tremendous grounds to challenge a DRT order, but still lose if the appeal is late, if an incorrect pre-deposit amount is calculated, specific DRT findings are not challenged or if the appellant believes that financial hardship entitles him to a full waiver.
As far as the law is concerned, the Appellate Tribunal does not work that way.
The Supreme Court has consistently upheld the requirement to pre-deposit a portion of the debt due before DRAT will hear an appeal. However, the Apex Court has also observed that DRAT has the powers to allow condonation of delay in filing an appeal under Section 18 if the appellant can show that there was sufficient cause for not filing it within the prescribed period.
For borrowers, guarantors, companies, secured creditors, auction buyers and others involved in DRT proceedings, the question is not always “Should I appeal the DRT Order?”
Questions such as:
- What is being appealed from the DRT order?
- When was the DRT order received?
- Who is the appellant?
- Does the borrower, appellant have to make a pre-deposit?
- How much is the debt due for purposes of calculating the pre-deposit?
- Can the pre-deposit amount be challenged to 25% of the amount due?
- Has time already expired to file an appeal?
- What type of interim relief is needed to protect the rights of the appellant pending final disposal of the appeal?
are far more important.
BK Singh Advocate and DRT Advocates have appeared for and represented clients in DRT and DRAT matters concerning SARFAESI possessions, auctions, secured assets, recovery disputes and appellate rights throughout Delhi NCR and elsewhere in India.
Why a Section 18 DRAT Appeal Matters in India in 2026
Rights relating to property, business operations, bank recovery and third parties can be impacted by a DRT order.
Imagine the DRT rejecting a borrower’s application filed under Section 17 opposing a possession action initiated by a bank. Assume also that the Tribunal declined interim protection.
The auction is already dated.
The borrower might have only a few days to reach out to DRAT, get documents in order, compute pre-deposit, prepare the appeal and file it along with a request for urgent interim relief.
Now imagine another scenario where the DRT grants the borrower’s application and stays an auction/possession proceeding. Here, the secured creditor/auction purchaser would consider an appeal.
Section 18 is thus invoked by more than just borrowers.
The opening text refers to “any person aggrieved” by an order of the DRT under Section 17.
This can mean a borrower, secured creditor, auction purchaser or any other person whose legal rights are affected by the DRT order, depending on the circumstances of the case.
However, for borrowers, one additional hurdle comes into play: Pre-Deposit.
Parliament intended on borrowers having to make this deposit to pursue their appellate remedy. The Supreme Court has viewed this condition as mandatory and not open for DRAT to waive away entirely.
Preparing a Section 18 appeal therefore usually means that two cases need to be prepared simultaneously.
One case is on the merits of the DRT order.
The second is on maintainability of the appeal. This includes limitation and pre-deposit.
The latter can be fatal if ignored and stop the former from even being heard.
Clients located in Delhi, New Delhi, Ghaziabad, Noida, Greater Noida, Gurugram, Faridabad, Meerut, Hapur, Lucknow, Prayagraj, Jaipur, Chandigarh, Mumbai, Pune, Ahmedabad, Bengaluru, Hyderabad, Chennai or Kolkata will also have to have their matter vetted for jurisdiction because DRAT territorial seats differ from regular district courts.
BK Singh Advocate typically starts the appellate analysis by looking at the DRT order itself, its received date, the nature of appellant and amount involved before deciding on the final grounds.
Quick Facts About Section 18 SARFAESI Appeals
- Appeal against an order of DRT under Section 17
- Such person aggrieved by an order of DRT under section 17 can prefer an appeal to DRAT under section 18 of SARFAESI Act.
- Time limit for filing appeal
- Appeal must be filed within a period of 30 days statutorily specified from the date of receipt of the order of DRT.
- Supreme Court Decisions
- Condonation of delay in filing Section 18 appeal: - Supreme Court has held that DRAT can condone the delay in filing an appeal under Section 18 if sufficient cause for not filing within the prescribed time is shown to them. [See State Bank of India vs M.S. Dhoni].
- Deposit of 50%: borrower has to make a pre deposit of 50% of debt due; as per statutory formula.
- Reasonable reduction of pre-deposit
- DRAT has held that it can direct reduction of borrower’s pre deposit below 50% (as mandated) if reasons are recorded in writing, however, the pre-deposit cannot be lowered below 25%. Lowering of pre-deposit below statutory mandate of 50% is left to the discretion of DRAT. Complete waiver cannot be allowed below statutory minimum. [See NCR Enterprise Ltd vs Canara Bank]
- Fee Prescribed under Section 18
- Fee for filing under section 18 is prescribed under Rule 13 of Security Interest (Enforcement) Rules, 2002 vide their fees correspond with the prescribed fees categories for filing under section 17.
What Is the Time Limit for Filing a Section 18 Appeal?
Section 18 specifies 30 days from the date of receipt of the DRT order.
Look at the language used.
Limitation period is calculated from the date of receipt of the order.
Consequences..The following dates could be important.
- date of passing of order by DRT;
- date of uploading of order;
- date on which a copy is communicated;
- date of filing of application for certified-copy if at all any;
- date of actual receipt;
- date of email/portal sending and their reports; and
- date on which advocate or authorised representative received the order.
- NEVER back-of-the-envelope calculate limitation.
Days can make all the difference. Sometimes where appeal is already time-barred you may even have to file a separate application for condonation.
SC in Baleshwar Dayal Jaiswal v. Bank of India considered if DRAT had powers to entertain an appeal beyond the period specified in Section 18 and responded to the query affirmatively upholding the power to do so within the statute.
This however does not imply that everydelayed appeal will be condoned.
Appellant is still required to show sufficient cause.
Can DRAT Completely Waive the Pre-Deposit?
Normally it doesn’t.
DRAT can statutorily reduce the deposit only upto 50%. Minimum the deposit has to be 25% of the admitted claim.
Treatment of this provision by SC itself makes it amply clear that pre-deposit requirement can’t be treated as discretionary condition which can be wiped off.
This may come as a surprise to borrowers.
An applicant may find himself without liquidity just because his business account turned into NPA or because secured asset has been attached.
But financial stress of itself doesn’t change section 18.
Applicants’ counsels therefore should consider invoking exemption from pre-deposit at an early stage itself.
Don’t leave it for the day of filing. It only makes an urgent application that much tougher..
What Documents Are Needed for a DRAT Appeal?
Copies of these documents may form part of a well maintained file.
- Order of DRT against which appeal is filed.
Get a clean copy. Date stamp it when received.
- Application under Section 17.
If DRAT needs to refer to the arguments made in the original SARFAESI appeal, this would be necessary.
Reply filed by Bank before DRT.
To know the stance taken by the secured creditor during the first stage of litigation, this may be required by the appellate tribunal.
- Rejoinder and other pleadings.
Attach those pleadings which were on record of DRT.
- Interim orders passed by DRT.
Prior interim orders may shed light on why possession or auction or some other procedural step was ordered.
- Demand Notice served u/s 13(2).
If at all it forms any part of debt demanded.
- Representation made by Borrower / Reply under Section 13(3A).
Representation made by borrower under section 13(3A).
- Notice of possession sent under Section 13(4).
Keep a copy of Section 13(4) notice, record of affixation and newspaper copies if any.
Documents used for obtaining possession u/s 14.
Any application/order/photos of possession handed over by magistrate should be appended if available.
Notice of Auction.
Attach all relevant notices of sale and any corrigendum.
Documents related to Valuation & Reserve price.
If the matters pertaining to Valuation/Reserve price were contested before DRT, then keep those papers handy for DRAT.
Sale Certificate.
If the property was already sold in an auction, the sale certificate would become an important document.
Proof that DRT Order was received.
Email IDs, Download slip of orders from bank’s portal, post stamps and postal order/doculy attested copies would help you prove limitation.
Documents related to Pre deposit.
Prove that you have paid the required deposit or order reducing the amount.
Application for Condonation of delay.
Any documents supporting the reasons for delay should also be attached.
Documents authorising person filing appeal.
Any company, LLP, bank or other body must have documentary evidence authorising the person filing the appeal.
Vakalatnama.
If the appellant is represented by an attorney, a vakalatnama has to be filed.
When Should You Consult a DRAT Lawyer?
Jurisdiction & Time:
Legal opinion must be sought urgently where :-
- your application under Section 17 has been rejected;
- SARFAESI action by a bank has been sustained;
- auction is fixed post adverse DRT order;
- Interim protection has been denied by the DRT;
- DRT has annulled an auction & you are a purchaser at auction;
- secured creditor wants to appeal against borrower favourable order passed by DRT;
- more than 30 days may have already passed;
- pre deposit cannot be easily quantified;
- Reduction from 50% to 25% is required;
- auction amount has already been collected by bank;
- Sale certificate has been executed;
- actual possession is sought to be taken;
- ex parte DRT order has been passed; etc.,
- Jurisdiction of DRAT is questionable;
multiple properties or multiple borrowers.
Timelines are critical to be treated seriously post receipt of order from DRT.
How DRT Advocates Can Help with Section 18 Appeals
DRT Advocates can handle DRT / DRAT cases pertaining to SARFAESI enforcement and banking recovery litigation.
Preparations can start towards filing of Section 18 appeal on the following basis:
The order of DRT may be analyzed by BK Singh Advocate for review of findings, computation of limitation, statutory pre-deposit requirement, if any, evaluation if reduction can be sought and documents compilation required for filing of appeal.
Legal work would include:
- Review of Section 17 proceedings;
- Drafting of grounds of appeal;
- Computation of limitation and filing of application for condonation of delay if needed;
- Filing of application for pre-deposit; and
- Application for reduction;
- Application for interim stay;
- Grounds for appeal challenging auction proceedings;
- Grounds pertaining to possession;
- Documents compilation;
Filings of replies and rejoinders before DRAT.
No advocate can assure the client that DRAT will admit the appeal or allow reduction of deposit or grant interim stay.
An advocate will present the case that is available to him by the correct procedural law and support it with best available arguments from facts of record and law.
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Frequently Asked Questions
1. What is a DRAT appeal under Section 18 of the SARFAESI Act?
A ‘Section 18 appeal’ is a statutory appeal against an order passed by DRT under Section 17 SARFAESI.
An appeal shall lie to the Debt Recovery Appellate Tribunal (DRAT) against the order of the Tribunal, by any person aggrieved by the order of DRT, subject to compliance with statutory conditions.
2. What is the limitation period for filing a Section 18 DRAT appeal?
Appeals must be filed within 30 days from the date of receipt of the DRT order.
If the appeal is not filed within time, a condonation of delay application must be filed along with the appeal. DRAT has the power to condone delay for filing a Section 18 appeal.
3. Is 50% pre- deposit mandatory for borrower?
As per Section 18, before entertaining the appeal, the borrower has to deposit at least 50% of the debt due.
However, the DRAT has powers to reduce the pre- deposit amount but not below 25%.
4. Can DRAT waive off pre- deposit required under Section 18?
No. Section 18 does not empower DRAT to waive off borrower’s pre- deposit below 25%.
Indian Supreme Court has also held this requirement to be mandatory.
5. Can auction proceeds be adjusted against borrower’s pre- deposit?
No. Proceeds from auction sale cannot automatically be adjusted as on-behalf pre- deposit of borrower.
Indian Supreme Court has clarified that if borrower has filed an appeal challenging the very auction, then the Tribunal cannot simply say that the money received by the auction purchaser from the sale is to be treated as received by the borrower for the purpose of Section 18 pre deposit.
6. Can DRAT condone delay of more than 30 days in filing a Section 18 appeal?
Yes. DRAT can condone the delay in filing a Section 18 appeal if sufficient cause is shown by the appellant.
The Supreme Court has held that an Appellate Tribunal has powers to condone delay in filing a Section 18 appeal.
Reasons for delay must accompany the appeal when filed after 30 days. The appellant must include a date- wise explanation of the delay along with the appeal.
7. Does filing of Section 18 appeal automatically stay the DRT order?
No. Just filing an appeal before DRAT will not automatically stay the DRT order.
If you require a stay of enforcement measures like possession, auction, sale confirmation or any other measure being taken by the bank, you must approach DRAT separately for seeking interim relief.
Grant of stay is at the discretion of DRAT and would depend upon the facts of each case and applicable law.
8. Minimum amount of pre- deposit which can be ordered by DRAT?
For borrowers to whom second proviso of Section 18 applies, DRAT can order a pre- deposit lower than 50% but not less than 25% of the total debt due.
Reasons for such reduction must be recorded in writing by DRAT.
9. Is the Section 18 Appeal fee different from pre- deposit?
Yes. Appeal fee and pre- deposit are two separate requirements.
Appeal fee is decided under Rule 13 of Security Interest (Enforcement) Rules, 2002. Pre- deposit is a statutory condition which can be imposed on borrowers.
Payment of appeal fee is not substitution for pre- deposit requirement under Section 18.
10. Who can help me file a Section 18 SARFAESI appeal?
An advocate who practices DRT/DRAT matters can help you in filing an appeal under Section 18.
BK Singh Advocate and DRT Advocates can help clients in filing Section 18 DRAT appeals. We handle DRAT appeals in Delhi NCR and other Indian cities based on jurisdiction and expertise of the firm.
11. Can a guarantor also file appeal under Section 18 of SARFAESI?
Yes. Guarantor can file an appeal under Section 18 where guarantor is aggrieved by the order passed by DRT.
Based on the facts and meaning of “borrower” under Section 18, borrower- pre deposit requirement may also apply on guarantor.
12. Can DRAT order a pre- deposit below 25%?
No. DRAT can order pre- deposit less than the usual 50% but not below 25%.
Limit prescribed under Section 18 for reduction below 50% is ordinarily not waigable by DRAT.
13. What if borrower is unable to make the pre- deposit required under Section 18?
Request for reduction of pre- deposit amount from 50% to 25% can be made to DRAT.
DRAT can ordinarily not waive off the pre- deposit below the statutory minimum of 25% simply because the borrower is unable to make the said deposit.
14. Can Part of DRT order be challenged in Section 18 appeal?
Yes. Only parts of DRT order affected can be challenged in DRAT.
An appellant is not required to challenge every finding made by DRT in the appeal. It can challenge those findings which affect its rights and seek a reliefs against those specific findings. But relief sought must be against DRT order, not whole SARFAESI process.
The memorandum of appeal must specify the findings of DRT being challenged and reliefs sought against those findings.
15. Can auction purchaser file DRAT appeal?
Auction purchaser can file DRAT appeal against the DRT order, if such order affects the rights of the purchaser arising out of auction process.
Mere purchase at auction would not entitle the purchaser to appeal before DRAT. He must be aggrieved by the DRT order.
Maintainability of such appeals would be decided based on the DRT order and facts of each case.
16. Is certified copy of DRT order mandatory for filing DRAT appeal?
Appeal must be filed along with DRT order from which relief is sought.
Along with the order, documents required under the filing procedure must be submitted. Requirement of certified copy and procedures for electronic filing must be read directly from DRAT rules.
17. Can DRAT hear new arguments not made before DRT?
DRAT hears appeals against the orders made by DRT. Tribunal will prima facie not hear arguments and evidence which were not presented before DRT.
Legal arguments can arise first time in DRAT on points of law. However, DRAT will not hear new case which was not argued before DRT and evidence on behalf of which was not adduced before DRT.
18. During pendency of DRAT appeal, can borrower continue OTS negotiations?
OTS negotiations and discussions can continue during the pendency of DRAT appeal.
OTS proposal will not automatically stay DRT order, auction/sale, possession or other enforcement actions under SARFAESI.
There must be a binding agreement between the parties or separate order from DRAT staying the matters.
19. Can DRAT restore an appeal dismissed for non- prosecution?
Application for restoration of appeal dismissed for non- prosecution can be filed before DRAT.
The appellant must file application explaining the reasons for non- appearance and seek restoration of appeal. Such applications are entertained by DRAT on merits and appellant must act expeditiously.
20. What are the things to check before filing a Section 18 DRAT appeal?
Check limitation period of 30 days, jurisdiction of DRAT, Order of DRT, Grounds of appeal, Filing fee, Borrower pre-deposit and Interim relief.
BK Singh Advocate and DRT Advocates can help you check all these requirements before filing a Section 18 appeal before DRAT.
Final Thoughts
Appeal before Debt Recovery Appellate Tribunal (“DRAT”) under Section 18 SARFAESI is a statutory right. However, there are technical requirements that need to be kept in mind.
The skeleton is simple.
A person aggrieved by a DRT order made under Section 17 can file an appeal before the DRAT.
The appeal should ideally be filed within 30 days from the date of receipt of the order.
If the appellant is a borrower, Section 18 mandates a pre-deposit of 50% of the amount as calculated under the statute. DRAT has the power to lower this amount for reasons to be recorded but cannot lower it below 25%.
Extension of time is possible on proof of sufficient cause. This has been recognized by the Supreme Court as well.
Amounts received from an auction sale do not automatically exempt the appellant from pre-deposit requirement especially if the borrower is challenging the very legality of the auction. Several Supreme Court judgments dated up to year 2026 have held that amount has to be calculated as per the nature of challenge raised and the statutory definition of debt.
Five things to check before filing:
An appeal that is filed immediately but without verifying these points is likely to get rejected on technical objections.
An appeal that is drafted keeping the above points in mind can place the matter appropriately before DRAT.
BK Singh Advocate and DRT Advocates help borrowers with SARFAESI appeals, DRT orders, DRAT proceedings, pre deposits, condonation of delay, disputes related to possession and auction orders throughout Delhi, New Delhi, Ghaziabad, Noida, Greater Noida, Gurugram, Faridabad and other cities in India.
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