DRT & SARFAESI

Matters handled

Section 13(2) demand notice: A notice requiring the borrower to discharge the liability within 60 days. The borrower may raise objections under Section 13(3A), and the lender must communicate its reasons for rejecting them.
Section 13(4) measures: Taking possession of the secured asset, taking over management, or appointing a manager, if the dues remain unpaid.
Section 14 proceedings: Applications by the lender to the Chief Metropolitan Magistrate or District Magistrate for help in taking physical possession.
Section 17 applications: Applications to the DRT by any person aggrieved by measures under Section 13(4), within 45 days. The DRT may set aside unlawful measures and restore possession.
Sale of secured assets: Notices of sale and auction under the Security Interest (Enforcement) Rules, 2002, and challenges to procedural defects.
Recovery applications: Original applications by banks under the Recovery of Debts and Bankruptcy Act, 1993, written statements, counter-claims and recovery proceedings.
Appeals to the DRAT: Appeals under Section 18 of the SARFAESI Act, which require a pre-deposit of 50% of the debt (reducible by the DRAT to 25%).

How proceedings typically run

Review of notices and the account Section 13(2) and 13(4) notices, loan documents, statements of account and the date of NPA classification.
Objections to the lender Where the Section 13(2) stage is open, a reasoned representation under Section 13(3A).
Section 17 application Filed before the DRT having jurisdiction within 45 days of the measure, with any application for interim relief.
Hearing before the DRT Reply by the lender, arguments and orders. No pre-deposit is required to file a Section 17 application.
Appeal An appeal to the DRAT within the period prescribed, with the statutory pre-deposit.

Documents usually needed

Section 13(2) demand notice and Section 13(4) possession notice
Sale or auction notice, if issued
Loan agreement, sanction letter and security documents
Statements of account and repayment records
Any representation made under Section 13(3A) and the lender’s reply

Please do not send original documents or confidential material through this website. Documents are reviewed only after the chamber has agreed to consider a matter.

Watch

DRT & SARFAESI · In Hindi

SARFAESI notices under Sections 13(2) and 13(4): approaching the DRT

An explanation of what the Section 13(2) demand notice and Section 13(4) possession notice mean for a borrower, and how the procedure before the Debts Recovery Tribunal works.

Watch on YouTube (external site)

DRT & SARFAESI · In Hindi

When a bank moves to take possession: challenging SARFAESI measures before the DRT

What a borrower can consider when a bank acts under Sections 13(2) and 13(4) to take possession of a home, and how relief is sought from the Debts Recovery Tribunal.

Watch on YouTube (external site)

Common questions

Can a bank take possession without a court order?

Under Section 13(4) of the SARFAESI Act a secured creditor can take possession after the 60-day notice period expires, without a court decree. It may seek the help of the Magistrate under Section 14 for physical possession.

How long do I have to approach the DRT?

An application under Section 17 is to be filed within 45 days from the date the measure under Section 13(4) was taken.

Can I file a writ petition in the High Court instead?

High Courts ordinarily decline to entertain writ petitions against SARFAESI measures because Section 17 provides an effective remedy before the DRT, as the Supreme Court held in United Bank of India v. Satyawati Tondon (2010).

Does SARFAESI apply to every loan?

No. Section 31 excludes certain cases, including security over agricultural land.

Related areas

General information only, not legal advice. The law stated is subject to change; reviewed by Hanmat Lodhi Advocate.