Understanding the Complete SARFEASI Act DART Procedure

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, provides a mechanism for banks and financial institutions to recover their dues without the intervention of courts. If a borrower or any aggrieved party wishes to challenge the actions taken by a secured creditor under the SARFAESI Act, they may appeal to the Debt Recovery Tribunal (DRT) and subsequently, if necessary, to the Debt Recovery Appellate Tribunal (DRAT). Below is a detailed guide on the procedure for filing an appeal in the DRAT under the SARFAESI Act:

Procedure for Filing an Appeal in the Debt Recovery Appellate Tribunal (DRAT)

1. Understanding the Grounds for Appeal

Before filing an appeal with the DRAT, it is essential to understand the grounds upon which the appeal can be filed. The grounds typically include:

• Improper or illegal actions taken by the secured creditor.
• Violation of the procedures established under the SARFAESI Act.
• Non-compliance with the principles of natural justice.
• Incorrect valuation or sale of the secured asset.

2. Eligibility to File an Appeal

An appeal can be filed with the DRAT by:

• Any person aggrieved by an order passed by the DRT under the SARFAESI Act.
• Borrowers, guarantors, or third parties who have a legitimate interest in the property or proceedings.

3. Filing the Appeal

The process to file an appeal with the DRAT is as follows:

a. Filing of Appeal:

• The appeal must be filed in the prescribed format as per the rules and regulations of the DRAT.
• The appeal must include all relevant documents, such as the DRT order being appealed against, grounds of appeal, affidavits, and evidence supporting the appeal.
• A copy of the appeal and all documents must be served to all respondents involved in the original case.

b. Limitation Period:

• The appeal must be filed within 30 days from the date of receipt of the DRT order.
• If the appeal is filed beyond this period, an application for condonation of delay must be filed, explaining the reasons for the delay.

c. Court Fees and Deposit:

• The appellant must pay the prescribed court fees at the time of filing the appeal.
• Additionally, the appellant is required to deposit 50% of the amount of debt due as determined by the DRT or the secured creditor, whichever is lower. However, the DRAT has the discretion to reduce this amount to not less than 25% of the debt.

4. Pre-Hearing Proceedings

• Once the appeal is filed, the DRAT will issue a notice to the respondents, asking them to file their replies within a specified period.
• The appellant may file a rejoinder, responding to the points raised by the respondents in their reply.
• The DRAT may also call for additional documents or affidavits from either party if deemed necessary.

5. Hearing of the Appeal

• The DRAT will schedule a hearing date, and both parties will be given an opportunity to present their case.
• The appellant and respondents may be represented by advocates who will argue the case on their behalf.
• The DRAT may also allow oral evidence if it finds it necessary for deciding the appeal.

6. Order of the DRAT

• After hearing both parties, the DRAT will pass an order, which could either confirm, modify, or set aside the order of the DRT.
• The order of the DRAT is binding and enforceable; however, it can be challenged in the High Court under Article 226 of the Constitution of India through a writ petition if any substantial question of law is involved.

7. Implementation of the DRAT Order

• Upon receiving the order of the DRAT, the concerned parties must comply with the directives.
• In case of non-compliance, the party in whose favor the order is passed may seek enforcement through legal means, including contempt proceedings.

Call to Action

If you or your organization is aggrieved by an order under the SARFAESI Act, it is crucial to act swiftly and decisively. Filing an appeal in the Debt Recovery Appellate Tribunal (DRAT) is a right available to you, but it requires careful preparation and adherence to procedural requirements. Do not delay; consult with experienced legal professionals who specialize in debt recovery and financial disputes. They will guide you through every step of the appeal process, ensuring your case is presented effectively.

Contact Zumosun Legal Work Engine - TheLegalCourt today for expert legal assistance. Our team of seasoned advocates and consultants is here to help you protect your rights and achieve the best possible outcome. Call us now at 9116098980/9119112929 or visit our website at www.zumosun.com or www.thelegalcourt.com to schedule a consultation.

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