The Debt Recovery Appellate Tribunal under SARFAESI

Above the Debt Recovery Tribunal sits its appellate body, the DRAT. Like the DRT, it was not created by SARFAESI but by the 1993 recovery law, and the Act simply routes Section 18 appeals to it. It conducts a full appellate review of the DRT's order, guarded by a mandatory pre-deposit, and its decision is largely the end of the road, with only a writ to the High Court beyond. This note sets out the DRAT's constitution, its role, and the finality of its orders.

1. Constitution

Figure 1: The appellate tier above the DRTs

• Born under the RDB Act 1993. The DRAT was set up under the Recovery of Debts Due to Banks and Financial Institutions Act 1993, as the appellate tier above the DRTs (Topic 34)
• A Chairperson. Each DRAT is headed by a Chairperson qualified to be, or who has been, a Judge of a High Court, a single appellate authority of senior standing.
• Over the DRTs in its area. A DRAT supervises the DRTs within its jurisdiction, hearing appeals from their orders in both the recovery and the SARFAESI regimes.
• Adopted by SARFAESI. As with the DRT, SARFAESI did not create a new appellate body: it routes s.18 appeals to the existing DRAT, borrowing the 1993 Act's structure.

2. Role under SARFAESI

Figure 2: The second tier of the remedy

• Hears s.18 appeals. Under SARFAESI the DRAT hears appeals from a DRT's order under s.17, the second tier of the borrower's remedy against enforcement (Topic 38)
• RDB appeals too. Under the RDB Act the same DRAT hears appeals from DRT orders in recovery proceedings, so it wears two hats as the DRT does.
• A full appellate review. It may reappraise the facts and the law of the DRT's order, not merely correct a point of law, making it a genuine appeal.
• The pre-deposit gate. A borrower's s.18 appeal is entertained only on the mandatory pre-deposit, the condition that guards access to the appeal (Topic 39)

3. Finality of the DRAT's Orders

Figure 3: The end of the statutory ladder

• The DRAT's order. The DRAT may confirm, modify or set aside the DRT's order, disposing of the appeal on the merits before it.
• Writ to the High Court. No further statutory appeal lies from the DRAT; the only recourse is a writ under Articles 226 and 227 of the Constitution.
• A narrow review. The High Court interferes sparingly in such writs, on a question of jurisdiction or a clear illegality, not as a routine third appeal on the facts.
• Why the ladder is short. The two-tier structure, DRT then DRAT, is meant to resolve enforcement disputes quickly, which is why further appeal is confined to writ jurisdiction.

4. Frequently Asked Questions

What is the Debt Recovery Appellate Tribunal and what does it do under SARFAESI?

The Debt Recovery Appellate Tribunal is the appellate body above the Debt Recovery Tribunals, constituted under the Recovery of Debts Due to Banks and Financial Institutions Act 1993 and headed by a Chairperson qualified to be, or who has been, a Judge of a High Court. SARFAESI did not create a new appellate forum; it routes appeals under Section 18 to the existing DRAT. Under SARFAESI the DRAT hears appeals from a DRT's order under Section 17, conducting a full review of both the facts and the law, and under the 1993 Act it hears appeals in recovery proceedings as well. A borrower's appeal is entertained only on the mandatory pre-deposit.

Can a DRAT order be challenged further?

There is no further statutory appeal from an order of the Debt Recovery Appellate Tribunal. The DRAT's order, which may confirm, modify or set aside the DRT's order, is largely the end of the statutory ladder. The only recourse beyond it is a writ petition to the High Court under Articles 226 and 227 of the Constitution. The High Court exercises this jurisdiction sparingly, intervening on a question of jurisdiction or a clear illegality rather than re-examining the facts as a third appeal. The short two-tier structure of DRT and DRAT is deliberate, intended to resolve enforcement disputes quickly without prolonged litigation.

5. Related Topics

• Topic 38: Section 18 Appeal to the DRAT. The appeal the DRAT hears under SARFAESI.
• Topic 39: Section 18 Pre-Deposit. The condition that guards the appeal.