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Insolvency and Bankruptcy - Law and Practice · Debt Recovery and Securitization

Appeals and Pre-deposit under the RDB Act

Updated 11 October 2026 · Fact-checked

An appeal against a DRT order goes to the Appellate Tribunal (DRAT) within 30 days under section 20 of the RDB Act. The borrower must first deposit 50% of the debt due, reducible to not less than 25% for recorded reasons. An appeal against a Recovery Officer order goes to the DRT, with a 50% deposit made there.

Understand Appeals and Pre-deposit under RDB Act

A debt recovery case does not end with the Debts Recovery Tribunal (DRT). The losing side can appeal to the Appellate Tribunal (DRAT). The law also protects banks from delay. A borrower who has lost cannot stall recovery by filing an appeal for free. He must put money on the table first. This is the pre-deposit.

There are three appeal routes you must keep apart. First, an appeal against a DRT order made under the RDB Act: section 20 gives the right, and section 21 sets the deposit. Second, an appeal against an order of the Recovery Officer under section 30 of the RDB Act: this appeal lies to the Tribunal (DRT), not to the DRAT, and it has its own deposit rule in section 30A. That deposit is made with the Tribunal, not with the DRAT. Third, an appeal against a DRT order under section 17 of the SARFAESI Act: section 18 of that Act gives the right and carries its own deposit provisos.

Section 20 of the RDB Act says any person aggrieved by an order of a Tribunal may appeal to the Appellate Tribunal. The time limit is 30 days from receipt of a copy of the order. The Appellate Tribunal may entertain a late appeal if there was sufficient cause. No appeal lies against an order made with the consent of the parties. The Appellate Tribunal can confirm, modify or set aside the order, and should try to dispose of the appeal within six months.

The deposit rule applies to the person from whom the debt is due to the bank or financial institution. Under section 21, the appeal is not entertained unless he deposits 50% of the debt as determined by the Tribunal under section 19. The Appellate Tribunal may reduce the amount, for reasons recorded in writing, but not below 25%. Before the 2016 amendment the figure was 75%, so do not quote that older number.

The SARFAESI route differs in detail. The appeal is filed within 30 days of receipt of the DRT order. The borrower must deposit 50% of the debt claimed by the secured creditor or determined by the DRT, whichever is less. The Appellate Tribunal may reduce this to not less than 25%, again for recorded reasons. Different fees may be prescribed for a borrower and for a person other than the borrower.

Key rules to remember

RDB Act s.20: appeal and time limit
Appeal to DRAT within 30 days of receipt of the Tribunal's order
Late appeal allowed if sufficient cause is shown. No appeal from a consent order.
RDB Act s.21: pre-deposit
Deposit = 50% of debt determined by the Tribunal under s.19; reducible to not less than 25%
Reduction needs reasons recorded in writing. Earlier figure was 75%.
RDB Act s.30A: appeal against Recovery Officer order
Appeal against a Recovery Officer's s.30 order lies to the Tribunal (DRT) and is not entertained unless 50% of debt due (as determined by the Tribunal) is deposited with the Tribunal
The appeal goes to the DRT, not the DRAT, and the deposit is made with the Tribunal. The text of s.30A has no proviso allowing reduction. Do not invent one.
SARFAESI s.18: appeal against DRT order under s.17
Appeal within 30 days; deposit = 50% of the lesser of (debt claimed by secured creditor, debt determined by DRT); reducible to not less than 25%
Borrower must deposit. Appellate Tribunal records reasons for any reduction.
Disposal of appeal
Endeavour to dispose of the appeal within 6 months of receipt (RDB Act s.20(6))
A directory target, not a hard bar.

How to solve Appeals and Pre-deposit under RDB Act questions

Use this order for any problem on appeals and deposits in debt recovery.

  1. 1Identify which order is challenged: a DRT order under the RDB Act, a Recovery Officer order, or a DRT order under section 17 of SARFAESI.
  2. 2Name the correct provision for the right of appeal: section 20 RDB Act, section 30 appeal with section 30A, or section 18 SARFAESI.
  3. 3Check who is appealing. The deposit duty falls on the person from whom the debt is due, that is, the borrower side.
  4. 4Check the time limit: 30 days from receipt of the order. Test for sufficient cause if there is delay (available under RDB s.20(3)).
  5. 5Compute the deposit: 50% of the correct base. For SARFAESI use the lesser of the claimed and the determined debt.
  6. 6Check whether reduction is possible: yes under section 21 and the SARFAESI proviso (floor 25%, reasons in writing); no reduction text in section 30A.
  7. 7State the consequence: without deposit the appeal is not entertained. Then conclude with the Appellate Tribunal's powers.

Quickest way: Three-line deposit check

When to use it: When a short case gives debt figures and asks how much must be deposited.

  1. Pick the base: Tribunal-determined debt (RDB), or the lesser of claimed and determined (SARFAESI).
  2. Multiply by 50%. That is the deposit. The minimum after reduction is 25% of the same base.
  3. Write that the appeal is not entertained until the deposit is made, and that any reduction needs written reasons.

Common mistakes in Appeals and Pre-deposit under RDB Act

  • Quoting 75% as the pre-deposit.

    Older books and notes still carry the pre-2016 figure.

    Fix: Write 50% for section 21 and section 30A of the RDB Act. In section 21, 75% was substituted by 50% w.e.f. 1-9-2016; section 30A was inserted in 2016 with 50%.

  • Using the debt claimed by the bank as the base in a SARFAESI appeal.

    Students forget the 'whichever is less' wording.

    Fix: Compare the amount claimed by the secured creditor with the amount determined by the DRT and take the lower one.

  • Saying the Appellate Tribunal can waive the deposit fully.

    The old text said 'waive or reduce'.

    Fix: Under the current text it can only reduce, and not below 25%, with reasons in writing.

  • Applying the 45-day limit.

    The old limit under section 20 of the RDB Act was 45 days.

    Fix: Write 30 days under section 20 of the RDB Act, where 'forty-five days' was replaced by 'thirty days' w.e.f. 1-9-2016. For an appeal under section 18 of the SARFAESI Act, also write 30 days from receipt of the DRT order.

  • Mixing section 30A of the RDB Act with section 30A of SARFAESI.

    Both Acts have a section 30A inserted in 2016.

    Fix: RDB s.30A is the deposit for appeals against Recovery Officer orders. SARFAESI s.30A is RBI's penalty power. Always name the Act.

  • Forgetting that no appeal lies against a consent order.

    Students focus on the deposit and skip section 20(2).

    Fix: Check first whether the DRT order was made with the consent of the parties.

Worked examples

Example 1

The DRT determined under section 19 of the RDB Act that Rao Steels Ltd owes ₹8,40,00,000 to a bank. Rao Steels wants to appeal to the DRAT. State the time limit, the deposit required, and the least amount the Appellate Tribunal may accept.

Show the solution
  1. The appeal lies under section 20 of the RDB Act, within 30 days of receiving the order.
  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. The Appellate Tribunal may reduce the deposit for reasons recorded in writing, but not below 25%.
  5. 25% of ₹8,40,00,000 = ₹2,10,00,000.
  6. Without the deposit, the appeal will not be entertained.

Answer: Appeal within 30 days; deposit ₹4,20,00,000; on reduction, not less than ₹2,10,00,000.

Example 2

A bank claims ₹5,00,00,000 from Mehta Traders under SARFAESI. The DRT, hearing Mehta's application under section 17, determines the debt at ₹4,60,00,000 and dismisses it. Mehta wishes to appeal. Advise on the deposit and the minimum after reduction.

Show the solution
  1. The appeal lies to the Appellate Tribunal under section 18 SARFAESI Act within 30 days of receipt of the DRT order.
  2. The borrower must deposit 50% of the debt claimed or determined, whichever is less.
  3. Lesser of ₹5,00,00,000 and ₹4,60,00,000 is ₹4,60,00,000.
  4. 50% of ₹4,60,00,000 = ₹2,30,00,000.
  5. The Appellate Tribunal may reduce it, with written reasons, to not less than 25% of ₹4,60,00,000, which is ₹1,15,00,000.
  6. No appeal will be entertained until the deposit is made.

Answer: Mehta must deposit ₹2,30,00,000, reducible by the Appellate Tribunal to not less than ₹1,15,00,000, and file within 30 days.

Exam tips

  • Write the section number and the Act in the first line of the answer. Examiners look for it.
  • Show the arithmetic for the deposit and the 25% floor. Marks are often given for the working.
  • Keep three routes separate: RDB s.20 and s.21, RDB s.30A, SARFAESI s.18. Use a one-line comparison if the question is theory.
  • For case questions, follow provision, facts, conclusion. Check delay and consent order before the deposit.
  • Mention that the Appellate Tribunal may condone delay for sufficient cause only where the provision says so, as in RDB section 20(3).

Practice questions from Debt Recovery and Securitization

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

How much pre-deposit is needed to appeal to the DRAT?

Under section 21 of the RDB Act, 50% of the debt determined by the Tribunal. The Appellate Tribunal may reduce it for reasons recorded in writing, but not below 25%.

What does section 30A of the RDB Act say?

It covers appeals against Recovery Officer orders under section 30. Such an appeal lies to the Tribunal (DRT), not the DRAT. The person from whom the debt is due must deposit 50% of the debt as determined by the Tribunal with the Tribunal, or the appeal is not entertained.

What is the time limit for appeal under section 18 of SARFAESI?

30 days from the date of receipt of the DRT order made under section 17. The section itself has no condonation proviso, so do not assume one.

Who must make the pre-deposit?

The borrower, that is, the person from whom the debt is due to the bank or financial institution. A bank appealing does not deposit.