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Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

Appeals under the RDB Act: DRAT and Pre-deposit

Updated 11 October 2026 · Fact-checked

An appeal under the RDB Act goes to the Debts Recovery Appellate Tribunal (DRAT) against a Debts Recovery Tribunal order. The borrower must deposit 50% of the debt as determined by the Tribunal, which DRAT may reduce to not less than 25% for reasons recorded in writing. Appeals against Recovery Officer orders go first to the Tribunal under section 30, with a 50% deposit under section 30A.

Understand Appeals under the RDB Act: Appellate Tribunal and Pre-deposit

A recovery case starts before the Debts Recovery Tribunal (DRT). The DRT decides how much debt is due and issues a recovery certificate. The Recovery Officer then recovers the money. Both steps can be challenged, and you must know the correct forum for each.

The next forum above the DRT is the Appellate Tribunal (DRAT). A person who owes a debt to a bank or financial institution cannot simply file an appeal. Section 21 of the RDB Act says the appeal will not be entertained unless the person deposits 50% of the debt determined by the Tribunal under section 19. This is the pre-deposit. Its purpose is to stop borrowers from using appeals only to delay recovery.

DRAT has a limited power to ease the burden. For reasons recorded in writing, it may reduce the deposit, but not below 25% of the debt. Before the 2016 amendment, the deposit was 75% and DRAT could waive or reduce it. Remember the current position: 50% and a floor of 25%.

Orders of the Recovery Officer have their own route. An appeal against such an order is made under section 30 of the RDB Act, and it goes to the Tribunal, not to DRAT. Section 30A applies a 50% deposit here too, but the amount is as determined by the Tribunal, and the section has no proviso allowing reduction.

The SARFAESI Act has a parallel structure. Under section 17, a person aggrieved by a section 13(4) measure applies to the DRT within 45 days. Under section 18, a person aggrieved by the DRT's order under section 17 appeals to the Appellate Tribunal within 30 days of receiving the order. A borrower must deposit 50% of the debt, either as claimed by the secured creditor or as determined by the DRT, whichever is less. The Appellate Tribunal may reduce this to not less than 25%, for reasons recorded in writing.

Key rules to remember

RDB Act section 21: pre-deposit for appeal to DRAT
Deposit = 50% of the debt determined by the Tribunal under section 19; DRAT may reduce it, for reasons recorded in writing, to not less than 25%
Applies to a person from whom a debt is due to a bank, financial institution or consortium. Without the deposit the appeal is not entertained.
RDB Act section 30A: appeal against Recovery Officer order
Deposit = 50% of the debt due as determined by the Tribunal; appeal against an order under section 30 is not entertained without it
The section as supplied contains no power to reduce the deposit. The appeal is to the Tribunal.
SARFAESI section 18(1): appeal to Appellate Tribunal
Time limit = 30 days from the date of receipt of the DRT order under section 17
Along with the prescribed fee. Different fees may be prescribed for a borrower and for a person other than the borrower.
SARFAESI section 18: pre-deposit
Deposit = 50% of the debt due, as claimed by the secured creditor or as determined by the DRT, whichever is less; reducible to not less than 25%
The deposit is required of the borrower. The reduction needs reasons recorded in writing.
SARFAESI section 17: application to DRT
Time limit = 45 days from the date the section 13(4) measure was taken
Do not confuse it with the 30-day limit for the appeal under section 18.
SARFAESI section 17(5): disposal time
Disposal in 60 days; extendable for reasons recorded, but total pendency not more than 4 months
After 4 months, a party may apply to the Appellate Tribunal for a direction for expeditious disposal (section 17(6)).
SARFAESI section 30A and 30B: ARC penalty
Penalty up to ₹1 crore or twice the amount involved (if quantifiable), whichever is more; further up to ₹1 lakh per day for a continuing failure. The penalty is payable within 30 days of the show-cause notice (section 30A(3)). If an ARC does not pay, its registration is cancelled under section 30A(4), after it is given a hearing.
Applies where an ARC or person fails to comply with an RBI direction. The 30-day appeal under section 30B is not against the penalty order. It lies to the Appellate Authority only against the section 30A(4) order cancelling registration, within 30 days from the date of that order. The Appellate Authority may entertain a late appeal if there was sufficient cause for the delay.

How to solve Appeals under the RDB Act: Appellate Tribunal and Pre-deposit questions

For any question on appeals in debt recovery, identify the order, the forum, the time limit and the deposit, in that order.

  1. 1Identify which Act the dispute falls under: RDB Act (recovery of a debt by a bank or financial institution) or SARFAESI (enforcement of security under section 13(4)).
  2. 2Identify the order challenged: a DRT final order, a Recovery Officer order, a section 13(4) measure, or an order of the adjudicating authority cancelling an ARC's registration under section 30A(4). Section 30B allows an appeal only against the section 30A(4) cancellation order, not against the penalty order under section 30A(1).
  3. 3Name the forum: DRT order goes to DRAT; Recovery Officer order goes to the Tribunal under section 30; a section 13(4) measure goes to the DRT under section 17, and the DRT's order goes to the Appellate Tribunal under section 18. An order cancelling an ARC's registration under section 30A(4) goes to the Appellate Authority under section 30B, within 30 days from the date of the order.
  4. 4State the time limit: 45 days for the section 17 application, 30 days for the section 18 appeal, and 30 days from the date of the order for the section 30B appeal.
  5. 5Compute the pre-deposit: 50% of the correct base. Under section 18 SARFAESI, use the lower of the creditor's claim and the DRT's figure. Under sections 21 and 30A RDB, use the Tribunal's determined amount.
  6. 6Check whether reduction is possible: DRAT under section 21 and the Appellate Tribunal under section 18 can reduce to 25% with written reasons. Section 30A as supplied has no such power.
  7. 7Conclude clearly: appeal maintainable or not, and the amount to deposit. Add that the appeal is not entertained without the deposit.

Quickest way: Forum, days, deposit in one line

When to use it: When a short problem gives facts and asks whether the appeal is proper or what amount must be deposited.

  1. Write the chain: section 13(4) measure → DRT (45 days) → Appellate Tribunal (30 days).
  2. Write the RDB chain: DRT order → DRAT with 50% deposit; Recovery Officer order → Tribunal with 50% deposit.
  3. Pick the base for 50%: lower of the two figures under SARFAESI section 18; Tribunal-determined debt under the RDB Act.
  4. Apply the 25% floor only where a reduction is permitted and reasons are recorded.
  5. Write one line of conclusion with the rupee amount.

Common mistakes in Appeals under the RDB Act: Appellate Tribunal and Pre-deposit

  • Taking the pre-deposit as 75%

    Older books and notes mention 75% from before the 2016 amendment.

    Fix: Use 50% now. The reduction floor is 25% of the debt.

  • Sending a Recovery Officer order appeal to DRAT

    Students assume every appeal goes to the higher tribunal.

    Fix: Section 30A deals with an appeal against a Recovery Officer's order under section 30, which is preferred before the Tribunal. DRAT hears appeals against Tribunal orders.

  • Mixing the 45-day and 30-day limits

    Both limits sit in adjacent SARFAESI sections.

    Fix: Link 45 days to the section 17 application to the DRT and 30 days to the section 18 appeal.

  • Using the DRT's figure alone as the SARFAESI deposit base

    Section 21 RDB uses the Tribunal's figure, so students carry it over.

    Fix: Under section 18 SARFAESI, 50% is of the debt claimed by the secured creditor or determined by the DRT, whichever is less.

  • Saying the deposit can be waived completely

    The old wording allowed DRAT to waive or reduce the amount.

    Fix: The current text allows only a reduction, and never below 25%, with reasons recorded in writing.

  • Claiming section 30A allows reduction to 25%

    Students merge section 30A with the proviso to section 21.

    Fix: Section 30A as given only states the 50% deposit. The reduction proviso is in section 21 (and in section 18 SARFAESI).

Worked examples

Example 1

Sundaram Textiles Ltd owes Bharat Bank a debt. The DRT determines the debt under section 19 at ₹8,40,00,000 and passes a final order. Sundaram wishes to appeal to DRAT. What must it deposit, and what is the least DRAT can reduce it to?

Show the solution
  1. The appeal is against a DRT order, so it lies to DRAT under the RDB Act.
  2. Section 21 requires a deposit of 50% of the debt determined by the Tribunal under section 19.
  3. 50% of ₹8,40,00,000 = ₹4,20,00,000.
  4. DRAT may, for reasons recorded in writing, reduce the deposit, but not below 25% of the debt.
  5. 25% of ₹8,40,00,000 = ₹2,10,00,000.

Answer: Sundaram must deposit ₹4,20,00,000, or the appeal will not be entertained. DRAT may reduce this, with written reasons, to not less than ₹2,10,00,000.

Example 2

Kaveri Agro Pvt Ltd's secured asset is taken into possession by Metro Bank under section 13(4) of SARFAESI. The DRT, on Kaveri's application, upholds the bank's action. The bank claimed ₹5,00,00,000 as debt, that is ₹5 crore, and the DRT determined the debt at ₹4,60,00,000. Kaveri wants to appeal. State the forum, time limit and pre-deposit.

Show the solution
  1. The order is made by the DRT under section 17, so the appeal lies to the Appellate Tribunal under section 18.
  2. The time limit is 30 days from the date of receipt of the DRT order, with the prescribed fee.
  3. The deposit base is the lower of the amount claimed by the secured creditor (₹5,00,00,000) and the amount determined by the DRT (₹4,60,00,000). The lower is ₹4,60,00,000.
  4. 50% of ₹4,60,00,000 = ₹2,30,00,000.
  5. The Appellate Tribunal may reduce this, with reasons recorded in writing, to not less than 25%, that is ₹1,15,00,000.

Answer: Kaveri must appeal to the Appellate Tribunal within 30 days of receiving the order, depositing ₹2,30,00,000. This can be reduced, for written reasons, to not less than ₹1,15,00,000.

Exam tips

  • Write the section numbers with the forum: sections 17 and 18 of SARFAESI; sections 21 and 30A of the RDB Act.
  • In a numerical problem, show the base, the 50% and the 25% floor on separate lines for easy marking.
  • Always state that the appeal is not entertained without the deposit. This is the core legal consequence.
  • For a Recovery Officer order question, name section 30 as the appeal provision and section 30A as the deposit condition.
  • If the facts give no date, state the limit (30 or 45 days) and explain how it runs, rather than guessing.

Practice questions from Debt Recovery and SARFAESI

Appeals under the RDB Act: Appellate Tribunal and Pre-deposit in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Appeals under the RDB Act: Appellate Tribunal and Pre-deposit: frequently asked questions

What is the difference between an appeal to the DRT and to DRAT?

The DRT hears original applications for recovery and applications under section 17 of SARFAESI. DRAT hears appeals against DRT orders. Appeals against Recovery Officer orders go to the Tribunal under section 30 of the RDB Act.

How much must be deposited to appeal to DRAT?

Under section 21 of the RDB Act, 50% of the debt determined by the Tribunal under section 19. DRAT may reduce it, with reasons recorded in writing, to not less than 25%.

What does section 30A of the RDB Act say?

It applies to an appeal against a Recovery Officer's order under section 30 by a person owing a debt to a bank or financial institution. The Tribunal will not entertain the appeal unless that person has deposited 50% of the debt due, as determined by the Tribunal.

What is the time limit for a SARFAESI appeal to the Appellate Tribunal?

Thirty days from the date of receipt of the DRT's order under section 17. The application to the DRT itself must be made within 45 days of the section 13(4) measure.