Secured lenders can enforce security without going to a civil court under the SARFAESI Act, and can seek recovery before a Debts Recovery Tribunal. Borrowers and guarantors have specific remedies, but the deadlines are short.
Debts Recovery Tribunals sit at Hyderabad and Visakhapatnam. The correct tribunal depends on the current territorial notification and the facts of the case, so it should be confirmed for each matter.
What this covers
- SARFAESI notices and replies
- Securitisation applications
- Original applications for recovery
- Possession and auction challenges
- Guarantor liability
- One-time settlement documents
- Appeals to the Appellate Tribunal
- Related writ petitions
Principal laws
| Law | Relevance |
|---|---|
| SARFAESI Act, 2002 | Section 13 (enforcement), Section 17 (application to the DRT), Section 18 (appeal). |
| Recovery of Debts and Bankruptcy Act, 1993 | Recovery before the DRT, generally for debts of Rs. 20 lakh and above. |
Where it is heard
Debts Recovery Tribunals at Hyderabad and Visakhapatnam, the Appellate Tribunal with jurisdiction, and the High Court in limited cases.
Usual steps
- Review the loan, security and notice documents
- Calculate the deadline that applies
- Reply to the notice or prepare the application
- Seek interim protection if needed
- Hearing before the Tribunal
- Settlement, order or appeal
Documents that are often relevant
- Sanction letter and loan agreement
- Mortgage and guarantee documents
- Section 13 notices and replies
- Account statement
- Auction notices
Please keep these safe, but do not send confidential documents until we have confirmed that we will act for you.
Time limits and key points
| Item | Position |
|---|---|
| Borrower to pay under Section 13(2) notice | 60 days |
| Lender's reply to objections | 15 days (Section 13(3A)) |
| Application against measures, Section 17 | 45 days |
| Pre-deposit for appeal to the Appellate Tribunal | 50% of the debt, which may be reduced to 25% |
Common questions
Can a bank take possession without a court order?
A secured creditor can take measures under Section 13 of the SARFAESI Act after following the notice procedure. The borrower can challenge these measures before the DRT within the time allowed.
Does SARFAESI apply to agricultural land?
Section 31(i) excludes security interests in agricultural land, but whether particular land qualifies depends on the facts.
This is general information, not legal advice. The law may have changed, and the answer may differ on your facts.