SARFAESI Act 2002 Section 18: Appeal to DRAT (2026)
What Section 18 of the SARFAESI Act, 2002 does: it is the appeal from a DRT order to the Debts Recovery Appellate Tribunal, filed within 30 days, and a borrower must first deposit 50 percent of the debt, reducible to 25 percent. Last verified October 2026.
Explainer · Debt Recovery · SARFAESI
Section 18 of the SARFAESI Act, 2002 is the appeal stage. If the Debts Recovery Tribunal decides your Section 17 application against you, you can appeal to the Debts Recovery Appellate Tribunal, usually called the DRAT, within 30 days. But there is a catch that surprises many borrowers: before the appeal is even heard, a borrower must deposit 50 percent of the debt, which the DRAT can reduce to no less than 25 percent for reasons in writing. This pre-deposit is a real gate. It is why the Section 17 stage before the Tribunal matters so much, and why the figure to be deposited is often fought over. This explainer sets out what Section 18 says, how the deposit works, key case law, and a practical note. Last verified October 2026.
- What it is: Section 18 of SARFAESI is the appeal from a DRT order to the Debts Recovery Appellate Tribunal.
- When: within 30 days from receipt of the DRT order under Section 17.
- Pre-deposit: a borrower must deposit 50 percent of the debt due, reducible by the DRAT to not less than 25 percent for reasons.
- No full waiver: the deposit is mandatory; the DRAT cannot waive it entirely, and it is refundable if the borrower wins.
01What Section 18 says
Section 18 lets any person aggrieved by an order of the Debts Recovery Tribunal under Section 17 appeal to the Debts Recovery Appellate Tribunal within 30 days from the date of receipt of the order. The DRAT is the appeal body above the Tribunal, and its decision can itself be taken further only to the High Court in limited circumstances.
The idea in one line
Section 18 is the appeal from the DRT, but a borrower has to put real money on the table before the DRAT will hear it.
The appeal is the normal next step after the Section 17 remedy. For that earlier stage, see Section 17 application to the DRT.
02The pre-deposit rule
The key feature of Section 18 is the pre-deposit. No appeal by a borrower is entertained by the DRAT unless the borrower deposits with the Appellate Tribunal 50 percent of the amount of debt due, as claimed by the secured creditor or as determined by the Tribunal, whichever is less. The DRAT can reduce this, but to no less than 25 percent, and only for reasons recorded in writing.
| Point | Position |
|---|---|
| Default deposit | 50 percent of the debt due. |
| Which amount | The amount claimed by the creditor, or determined by the DRT, whichever is less. |
| Minimum after reduction | Not less than 25 percent, and only for reasons recorded in writing. |
| Applies to | A borrower's appeal; it does not bar the creditor in the same way. |
This deposit is a condition for the appeal to be heard at all, not a payment of the debt. Where the borrower ultimately succeeds, the deposit is refundable.
03Which debt figure applies
A common dispute is what the 50 percent is calculated on. The Supreme Court has clarified the base figure depends on what is being challenged:
- where the borrower challenges the Section 13(2) or 13(4) steps, the amount in the Section 13(2) demand notice is the base;
- where the borrower challenges the auction sale, the sale certificate amount is the base; and
- where both are challenged, the higher of the two figures is taken.
This matters because the deposit can be large, and getting the base figure right can change what you must pay to be heard.
04No complete waiver
The DRAT can reduce the deposit from 50 percent to 25 percent for reasons in writing, but it cannot waive it completely. Courts have held the pre-deposit is mandatory, so an appeal filed without any deposit, or with a request for a full waiver, is not maintainable.
Plan for the deposit
A borrower who cannot arrange at least 25 percent of the debt usually cannot pursue a Section 18 appeal, which is why the Section 17 stage is so important.
This is a deliberate design. SARFAESI is meant to speed up recovery, and the pre-deposit discourages appeals that only delay it.
05Key case law
The Supreme Court has settled the main points on Section 18.
- Base figure: The Court has explained that the 50 percent is of the debt due, using the Section 13(2) notice amount, the sale certificate amount, or the higher of the two, depending on what is challenged.
- No full waiver: Courts have held the pre-deposit is mandatory and the DRAT cannot grant a complete waiver, only a reduction to 25 percent for recorded reasons.
- Refund: Where the borrower succeeds, the deposit is to be refunded, since it is a condition for hearing the appeal and not a recovery of the debt.
Pull the current rulings on the specific point before you rely on them.
06A practical note
Treat the Section 17 stage before the Tribunal as your best chance, because the Section 18 appeal costs real money up front. Before you appeal, work out the base figure for the 50 percent, decide whether to ask the DRAT to reduce it to 25 percent, and arrange the funds, because an appeal without the deposit will not be heard.
Mind the 30-day limit from receipt of the DRT order. To follow the appeal and the related proceedings, see how to track DRT case status in India and the DRAT at case search for the DRAT.
07Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
How the pre-deposit is calculated, when the DRAT reduces it, and how appeals are decided are all questions the Appellate Tribunal and courts have addressed many times. Claw lets you search more than 30 crore judgments on Section 18 appeals and the pre-deposit, with results in under 5 seconds, so you can line up the authorities for your facts. You can also track a live DRAT or DRT matter, with its orders and hearings, by party or advocate name across 9,102 courts, benches and forums, with reported authority from Supreme Court rulings of 1950 and High Court rulings of 1990. Claw does not use your case documents to train its AI models.
Create a free Claw account to find Section 18 decisions on point and to follow a DRAT appeal, and use case search across Indian courts to search the wider body of debt recovery law.
08Sources and further reading
- India Code (SARFAESI Act, 2002, bare text): indiacode.nic.in
- Reserve Bank of India (NPA norms and SARFAESI circulars): rbi.org.in
- Claw: clawlaw.in
This explainer is general information, not legal advice. The law changes through amendments and judgments, so check the current text and take advice from an advocate before you act.
09Frequently asked questions
What is Section 18 of the SARFAESI Act?
Section 18 provides an appeal from an order of the Debts Recovery Tribunal under Section 17 to the Debts Recovery Appellate Tribunal, within 30 days. A borrower must first deposit 50 percent of the debt due before the appeal is entertained.
How much must a borrower deposit to appeal?
Fifty percent of the debt due, as claimed by the creditor or determined by the Tribunal, whichever is less. The DRAT can reduce it to no less than 25 percent for reasons recorded in writing, but it cannot waive it completely.
What amount is the 50 percent calculated on?
The Supreme Court has clarified it is the Section 13(2) notice amount where the 13(2) or 13(4) steps are challenged, the sale certificate amount where the sale is challenged, and the higher of the two where both are challenged.
Can the pre-deposit be fully waived?
No. The pre-deposit is mandatory. The DRAT can only reduce it from 50 percent to 25 percent for recorded reasons. An appeal filed without any deposit is not maintainable.
Is the deposit refundable?
Yes. The pre-deposit is a condition for hearing the appeal, not a recovery of the debt, so where the borrower ultimately succeeds it is to be refunded.
Can I research Section 18 decisions in Claw?
Yes. Claw lets you search more than 30 crore judgments on Section 18 appeals and the pre-deposit by party or advocate, with results in under 5 seconds, and track orders and hearings across 9,102 courts, benches and forums. It researches and tracks the matter but does not give legal advice.