What is Section 18 (Appeal to DRAT)?
Section 18 of SARFAESI provides for an appeal against a DRT order in a Section 17 matter to the Debt Recovery Appellate Tribunal (DRAT). The borrower must usually pre-deposit 50% of dues (reducible to 25% at DRAT's discretion) before the appeal can be heard.
| Meaning | Section 18 of SARFAESI provides for an appeal against a DRT order in a Section 17 matter to the Debt Recovery Appellate Tribunal (DRAT). The borrower must usually pre-deposit 50% of dues (reducible to 25% at DRAT's discretion) before the appeal can be heard. |
|---|---|
| Category | SARFAESI |
| Related Laws | SARFAESI Section 18 |
| Who Uses It | Borrowers, banks, DRAT |
| Why It Matters | Appellate stage in SARFAESI proceedings. |
Section 18 (Appeal to DRAT) explained in plain English
A practitioner's view written for borrowers and advisors — not a textbook definition.
Section 18 of SARFAESI provides for an appeal against a DRT order in a Section 17 matter to the Debt Recovery Appellate Tribunal (DRAT). The borrower must usually pre-deposit 50% of dues (reducible to 25% at DRAT's discretion) before the appeal can be heard.
In practice, Section 18 (Appeal to DRAT) is used most often by borrowers, banks, drat. Each of them sees the term from a slightly different angle: borrowers care about protection and outcomes, lenders care about classification and recovery, regulators care about consistency and disclosure.
The legal anchor for Section 18 (Appeal to DRAT) is SARFAESI Section 18. RBI master directions, the SARFAESI Act 2002, the RDB Act 1993 and the IBC 2016 commonly interplay, depending on the loan size, security and stage of stress.
Why does it matter? Appellate stage in SARFAESI proceedings. For a stressed borrower, getting this concept right early often saves several months of penal interest, legal cost and credit-score damage.
A real example: Borrower appeals DRT order to DRAT with 25% pre-deposit. The mechanics may look complex, but the underlying logic — the bank wants closure, the borrower wants a fair outcome — is straightforward once the right framework is in place.
If you are facing a situation involving Section 18 (Appeal to DRAT), the safest first step is a structured case review with a senior ex-banker who has handled comparable matters across banks and ARCs in India.
Where you'll encounter Section 18 (Appeal to DRAT)
Whenever a loan moves from "Standard" to "stressed", Section 18 (Appeal to DRAT) is one of the words that starts appearing in notices, bank emails and lawyers' opinions.
Sanctioning committees, recovery teams and risk officers use Section 18 (Appeal to DRAT) to classify accounts, decide provisioning and approve resolution paths.
Section 18 (Appeal to DRAT) appears in pleadings, securitisation applications, OAs, Section 7/9 petitions and SARFAESI writs as part of the dispute record.
When stressed loans are sold to ARCs or special-situations investors, Section 18 (Appeal to DRAT) is used in term sheets, assignment agreements and due-diligence reports.