In plain words: if the DRT rules against you, the next step is the Appellate Tribunal (DRAT) — but there's a catch: you usually have to deposit a large part of the dues first.
The Section 18 appeal
A borrower aggrieved by the DRT's order under Section 17 can appeal to the Debts Recovery Appellate Tribunal (DRAT) within the prescribed time — generally 30 days.
The pre-deposit rule
Here is the hurdle: to have the appeal entertained, the borrower must deposit a share of the amount due — the law sets this at 50% of the dues, which the DRAT may, for recorded reasons, reduce to not less than 25%. Without the deposit, the appeal is not heard.
Why the pre-deposit exists
It is meant to deter frivolous appeals and protect recovery — but it can be a real barrier for a distressed borrower, so planning for it matters.
Managing the pre-deposit
- Seek reduction to 25% with cogent reasons.
- Factor the deposit into any settlement strategy.
- Weigh whether the appeal is worth it versus an OTS.
What the DRAT can do
The DRAT can confirm, modify or set aside the DRT's order. From the DRAT, a further challenge can lie to the High Court on appropriate grounds.
Frequently asked questions
Do I have to pay to appeal to the DRAT? Yes — a pre-deposit of 50% of the dues, reducible to not less than 25% for recorded reasons.
How long to file the appeal? Generally 30 days from the DRT's order.
Can I go higher than the DRAT? A further challenge can lie to the High Court.
How Vakil Help Desk helps
Vakil Help Desk advises borrowers and guarantors on SARFAESI notices, DRT and DRAT proceedings, auctions, one-time settlements and stressed-asset disputes. If your bank has issued a demand or possession notice, or you are facing recovery, we can help you respond in time.
This article is for general legal awareness, not individual legal advice. SARFAESI and DRT procedure, time limits and thresholds are set by statute and RBI norms and can change, and the right step depends on your facts and the current position. Please consult a lawyer before acting on a recovery notice.