Understanding SARFAESI & DRT/DRAT: A Complete Guide for Borrowers and Financial Institutions

What Is the SARFAESI Act?

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) allows banks and financial institutions to enforce their security interests without requiring lengthy court procedures.

Key Objectives of the SARFAESI Act:

• Speed up the recovery of non-performing assets (NPAs)
• Empower secured creditors to take possession of secured assets
• Strengthen asset reconstruction mechanisms
• Reduce the burden on civil courts

What Is the Debt Recovery Tribunal (DRT)?

The Debt Recovery Tribunal (DRT) is a specialized tribunal established to handle matters related to debt recovery. Borrowers can challenge the actions taken by lenders under the SARFAESI Act by approaching the DRT.

Functions of the DRT:

• Hearing borrower petitions against Section 13(4) actions
• Adjudicating disputes involving secured assets
• Ensuring lenders comply with statutory procedures
• Protecting borrower rights while enabling lawful recovery

What Is the Debt Recovery Appellate Tribunal (DRAT)?

The Debt Recovery Appellate Tribunal (DRAT) hears appeals against DRT orders. It acts as a higher forum for ensuring fairness and transparency in the debt recovery process.

Role of DRAT:

• Reviewing DRT judgments and procedural compliance
• Providing a platform for borrowers and lenders to appeal
• Ensuring lawful execution of recovery measures

Typically, appellants are required to deposit a percentage of the debt amount before filing an appeal, as mandated by law.

How ONEISOK Supports You

At ONEISOK, we provide guidance, clarity, and support by:

• Explaining SARFAESI notices and procedures
• Helping clients understand their legal options
• Assisting with documentation and representation requirements
• Supporting borrowers with DRT/DRAT filing guidance
• Offering compliance insights for lenders

Conclusion

The combined framework of SARFAESI, DRT, and DRAT helps balance efficient debt recovery with borrower protections. Knowing how these systems work empowers individuals and businesses to respond appropriately and uphold their legal rights.

At ONEISOK, our mission is to make complex financial and legal processes transparent, accessible, and manageable for everyone.