SARFAESI Act, 2002
SARFAESI Sections 17A to 18C: J&K, Fees and the Caveat
Between Sections 17 and 19 sit four short provisions that examiners use for objective questions. Two created a separate route for borrowers in Jammu and Kashmir and have since been omitted; one validated past fees; and one, the caveat, remains in active use. This note sets out each, with its date and present status.
1. The Four Provisions
Figure 1: What each did, and where it stands
- The J&K route, s.17A. Inserted in 2004: a borrower residing in Jammu and Kashmir applied to the Court of the District Judge, not the DRT, against SARFAESI measures.
- Appeal to the High Court, s.18B. An appeal from the District Judge lay to the High Court, on depositing 50% of the debt, reducible to 25%, mirroring s.18 (Topic 39)
- Omitted in 2020. Both were omitted by the J&K Reorganisation (Adaptation of Central Laws) Order 2020, from 18 March 2020; borrowers there now use the DRT and DRAT under ss.17 and 18.
- Validation of fees, s.18A. Fees collected for appeals before the 2004 amendment are deemed always validly levied, as if the amended ss.17 and 18 had been in force.
2. The Caveat, s.18C
Figure 2: Inserted with effect from 15 January 2013
- Purpose. Ensures the secured creditor is heard before the Tribunal makes an ex parte interim order on a borrower's application (Topic 65)
- Mechanics. The caveator serves notice on the expected applicant; once a s.17 or s.18 matter is filed, the forum must notify the caveator, and the applicant must supply copies.
- Duration. The caveat lapses after 90 days from lodging unless the application or appeal is made within that time.
⚠ Exam trap State the status of each section, not just its content: ss.17A and 18B were inserted in 2004 and omitted from 18 March 2020, so a J&K borrower now goes to the DRT; s.18A is a spent validation of fees; and s.18C, the caveat, was inserted by the amendment in force from 15 January 2013 and lapses after 90 days. Do not cite s.18B as the caveat provision. |
3. Frequently Asked Questions
Where does a borrower in Jammu and Kashmir challenge SARFAESI action today?
Before the Debt Recovery Tribunal under Section 17, like any other borrower. Sections 17A and 18B, inserted in 2004, once required borrowers residing in Jammu and Kashmir to apply to the District Judge and appeal to the High Court, but both were omitted by the Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order 2020 with effect from 18 March 2020.
What is a caveat under Section 18C of SARFAESI?
Section 18C allows a secured creditor, or any person claiming a right to appear, to lodge a caveat where an application under Section 17 or an appeal under Section 18 is expected or has been made. The caveator serves notice of it on the expected applicant, and once the matter is filed the Tribunal must serve notice on the caveator. The caveat lapses after ninety days unless the application or appeal is made within that period.
4. Related Topics
- Topic 35: Section 17 Application. The route J&K borrowers now use.
- Topic 91: Miscellaneous Provisions. The closing sections of the Act.