Written and reviewed by Adv. Tanmay S. Shirsat, Advocate, High Court of Bombay. Consultations in English, Hindi and Marathi, in person or by video call. Last updated October 2026.
What the Debt Recovery Tribunal Decides
- Recovery applications: Banks and financial institutions file original applications to recover debts of ₹20 lakh or more under the Recovery of Debts and Bankruptcy Act, 1993.
- SARFAESI challenges: Borrowers and other affected persons can challenge measures taken by a secured creditor under Section 17 of the SARFAESI Act, 2002.
- Recovery certificates: After a recovery application succeeds, the Recovery Officer enforces the certificate, including through attachment and sale.
The SARFAESI Process and the Borrower's Options
- Demand notice (Section 13(2)): After the account is classified as a non-performing asset, the lender demands repayment within 60 days.
- Representation: The borrower may object to the notice, and the lender must respond to the objection within the time prescribed.
- Possession (Section 13(4)): If the dues are not paid, the lender may take possession of the secured asset, with the assistance of the Magistrate where required.
- Securitisation application: The borrower may challenge the measures before the DRT within 45 days.
- Sale: The lender may sell the asset after notice, and the borrower's right to redeem the property is affected by the timing of the sale notice.
The 45-day period for approaching the DRT is strict. Delay can seriously limit the options available.
Grounds Commonly Raised
- Defects in the demand notice or in the classification of the account as a non-performing asset
- Failure to consider the borrower's objections
- Errors in the amount claimed, interest or charges
- Irregularities in valuation and the sale process
- Protection available for agricultural land and to lawful tenants
Appeals Before the DRAT
An order of the DRT can be appealed to the Debt Recovery Appellate Tribunal. In SARFAESI appeals, the borrower is ordinarily required to make a pre-deposit of 50 percent of the debt claimed or determined, which the Appellate Tribunal may reduce to 25 percent.
Settlement with the lender, including one-time settlement proposals, is explored alongside the litigation wherever it serves the client's interests.
Documents to Keep Ready
- Loan agreement, sanction letter and security documents
- Demand notice under Section 13(2) and any reply sent
- Possession notice and sale notice, if issued
- Account statements and correspondence with the bank
- Valuation reports and property documents