DRAT Appeal and Stay Order —
Complete Procedure Guide for Debtors and Banks

What Is the DRAT — Structure and Jurisdiction

The Debt Recovery Appellate Tribunal (DRAT) is established under Section 8 of the Recovery of Debts and Bankruptcy Act, 1993 (RDDB Act). It serves as the appellate forum for orders passed by the Debt Recovery Tribunals (DRTs). Every DRT in India — there are 39 DRTs across the country — falls under the appellate jurisdiction of one of the five DRATs.

The DRAT is presided over by a Presiding Officer, who must be a person qualified to be a Judge of a High Court. DRAT hearings follow a quasi-judicial procedure — appeals are argued by counsel, evidence on record from DRT proceedings is the basis for DRAT adjudication, and DRAT has the power to take additional evidence if necessary. DRAT decisions are appealable to the High Court under Article 226/227 of the Constitution or to the Supreme Court under Article 136.

The DRAT’s jurisdiction covers appeals from DRT orders in: (a) Original Applications under Section 19 of the RDDB Act (bank’s claim for recovery); (b) Section 17 SARFAESI challenges; (c) Section 30 (appeal against Recovery Officer’s order in execution proceedings); and (d) any other order of the DRT that aggrieved a party.

Five DRAT Locations and Their Territorial Jurisdiction

As of 2026, there are five functional DRAT locations in India:

• DRAT Allahabad: Appellate jurisdiction over DRTs in Delhi (DRT-I, DRT-II, DRT-III), Chandigarh, Jaipur, Lucknow, Dehradun, Cuttack, and Guwahati. Note: The earlier DRAT Delhi bench has been integrated into DRAT Allahabad.
• DRAT Mumbai: Appellate jurisdiction over DRTs in Mumbai (DRT-I, DRT-II), Pune, Ahmedabad, Nagpur, and Aurangabad.
• DRAT Kolkata: Appellate jurisdiction over DRTs in Kolkata, Patna, Ranchi, and Bhubaneswar.
• DRAT Chennai: Appellate jurisdiction over DRTs in Chennai (DRT-I, DRT-II), Bengaluru, Hyderabad, Coimbatore, and Ernakulam.
• DRAT Delhi: While formally distinct, DRAT Delhi and DRAT Allahabad share jurisdiction in practice — practitioners filing appeals from Delhi DRTs should confirm the current operationally active bench at the time of filing.

For parties involved in DRT proceedings in Delhi, the applicable DRAT is in Allahabad. Filing before the wrong DRAT is a jurisdictional defect that can result in dismissal of the appeal — counsel must verify the territorial jurisdiction before filing.

Who Can Appeal and Against Which Orders

Any person aggrieved by an order of the Debt Recovery Tribunal can appeal to the DRAT under Section 20 of the RDDB Act. “Any person aggrieved” includes: the secured creditor (bank, NBFC, ARC); the borrower; personal guarantors; and any third party whose rights are affected by the DRT order.

Appealable orders include: the DRT’s final decree in an Original Application (the Recovery Certificate and amount decreed); any interlocutory order of the DRT that causes prejudice to a party (including an interim attachment order or an ex-parte order of attachment); an order under Section 17 SARFAESI (allowing or dismissing the borrower’s challenge to SARFAESI enforcement); and an order under Section 30 of the RDDB Act (appeal against Recovery Officer’s order in execution).

Purely administrative orders of the DRT — such as adjournment orders, orders relating to court fees, or orders about the format of pleadings — are typically not appealable to DRAT, though they may be challenged by writ before the High Court in exceptional cases.

The 45-Day Limitation Period and Condonation

Section 20(1) of the RDDB Act specifies that an appeal to DRAT must be filed within 45 days of the DRT order. This is distinct from the general limitation under the Limitation Act, 1963, which provides 30 days for appeals to many tribunals. The RDDB Act’s 45-day period is the specific limitation applicable to DRAT appeals.

Section 20(3) empowers the DRAT to condone delay beyond 45 days if the appellant satisfies the DRAT that there was sufficient cause for the delay. Courts have construed “sufficient cause” to mean: genuine difficulty in obtaining the certified copy of the DRT order; illness of the party or counsel; bona fide error in computing the limitation period; and other circumstances that prevented the party from filing within time. A delay of up to 30 days beyond the 45-day period is usually condoned if the explanation is credible and the appeal is not frivolous.

Practitioners note: the 45-day clock runs from the date of the DRT order, not from the date of the party’s actual notice of the order, unless the party was not served with the DRT order at all. Banks that receive DRT orders in open court should immediately instruct their appellate counsel to assess whether an appeal to DRAT is warranted.

Pre-Deposit Requirement Under Section 21

Section 21 of the RDDB Act is the most distinctive feature of DRAT proceedings for borrowers. It provides that no appeal by the borrower (i.e., the person against whom the DRT has passed a Recovery Certificate) shall be entertained by DRAT unless the borrower deposits 50% of the amount of debt due as determined by the DRT.

The proviso to Section 21 gives DRAT discretion to reduce the pre-deposit to not less than 25% of the DRT decree amount, for reasons to be recorded in writing. DRAT exercises this discretion when: the borrower demonstrates that the DRT decree is prima facie erroneous (for example, the interest calculation was incorrect); the borrower has already made substantial payments that reduce the effective outstanding to below 50% of the decree; or the borrower demonstrates genuine financial inability to deposit 50% while having a meritorious appeal.

The pre-deposit is a condition precedent — without depositing the required amount (50% or the DRAT-reduced percentage), the appeal is not maintainable and will be dismissed. Borrowers who cannot arrange the pre-deposit within the 45-day limitation period should file the appeal in time and simultaneously seek a direction from DRAT permitting them to deposit within a short extension period — DRAT has held that the limitation for filing and the pre-deposit condition can be separately addressed.

Importantly, banks and financial institutions appealing DRT orders — for example, where the DRT dismissed the Original Application or where the DRT granted an unfair concession to the borrower — do not face any pre-deposit requirement under Section 21. The pre-deposit is only imposed on the borrower/defendant.

Stay Application Procedure Before DRAT

Filing an appeal before DRAT does not, by itself, stay the DRT decree or stay ongoing SARFAESI enforcement. The appellant must separately apply for a stay (technically, an order of “no further proceedings” against the DRT order) before the DRAT.

The stay application procedure:

• Mention for urgency: On the date of filing the appeal, the appellant’s counsel mentions the matter before the DRAT Presiding Officer for urgent hearing of the stay application, particularly if SARFAESI enforcement or auction proceedings are imminent.
• Stay application filed simultaneously: The stay application should be filed on the same day as the main appeal. It should contain: the specific order sought to be stayed; grounds showing prima facie case in the appeal; balance of convenience; and irreparable injury if stay is not granted.
• DRAT’s approach: DRAT is more willing to grant a stay if the borrower has deposited the full Section 21 pre-deposit amount. Where the borrower has sought a reduction in pre-deposit, DRAT may condition the stay on a higher interim payment or on the borrower’s undertaking not to alienate assets.
• Notice to bank: DRAT typically issues notice to the bank (respondent) before granting a final stay, though ex-parte stays can be obtained in urgent matters. Banks should arrange for counsel at DRAT to resist stay applications promptly — an ex-parte stay of a SARFAESI auction can be very damaging if the auction has been scheduled after extensive preparation.

DRAT’s Powers — Modify, Set Aside, or Confirm

The DRAT’s appellate powers are plenary — it can confirm, modify, or set aside any order of the DRT. Specific powers that DRAT exercises in practice:

• Modify the decree amount: DRAT commonly modifies DRT decrees by correcting interest rate calculations, reducing compound interest to simple interest where the loan agreement did not provide for compounding, or restoring amounts that the DRT incorrectly deducted.
• Set aside and remand: Where the DRT procedure was defective — for example, where a party was not served with the DRT notice and was unable to appear — DRAT sets aside the order and remands to the DRT for fresh hearing.
• Grant stay of Recovery Certificate: DRAT can stay the operation of a Recovery Certificate pending the appeal, which stays all execution proceedings by the Recovery Officer.
• Additional evidence: DRAT can permit additional evidence to be led before it (under Order XLI Rule 27 of the CPC, as applicable to DRAT proceedings) if the evidence could not have been produced before the DRT despite due diligence, or if the DRT improperly refused to receive the evidence.

High Court and Supreme Court Jurisdiction After DRAT

After exhausting the DRAT remedy, a further appeal lies to the High Court. DRAT decisions can be challenged before the High Court under Article 226 (writ jurisdiction) or Article 227 (supervisory jurisdiction) of the Constitution. The High Court’s interference is not a right of appeal — it exercises discretionary writ jurisdiction and will generally not re-appreciate facts on which the DRT and DRAT have concurrent findings.

Grounds for High Court interference with DRAT orders include: jurisdictional errors; perversity of findings (no reasonable tribunal could have reached the conclusion); and violation of natural justice in the DRAT proceedings. A High Court Division Bench hearing a writ against a DRAT order has full power to set aside the DRAT order and restore the DRT order, or vice versa.

From the High Court, a further appeal lies to the Supreme Court under Article 136 (Special Leave Petition). Supreme Court practice in DRAT matters: the SC does not ordinarily interfere with concurrent DRT/DRAT factual findings; it reserves interference for pure questions of law or where there is a manifest miscarriage of justice.

Strategic Use of DRAT by Banks and Borrowers

From the bank’s perspective, DRAT is a tool to rectify DRT orders that undervalue the claim or grant excessive concessions to the borrower. Banks that obtain DRT decrees at less than the claimed amount — because the DRT accepted the borrower’s argument on interest rate or principal reduction — should routinely assess whether a DRAT appeal is warranted. The absence of any pre-deposit requirement makes DRAT appeals by banks essentially costless from a working capital perspective.

From the borrower’s perspective, a DRAT appeal combined with a stay application is the most effective tool for creating a structured environment in which a settlement can be negotiated. A DRAT stay of the Recovery Certificate, combined with the bank’s awareness that the DRAT proceedings could last 1–2 years, frequently creates the conditions for a one-time settlement on favourable terms. Borrowers who approach DRAT purely for delay — without a meritorious appeal — risk having their stay vacated summarily and the pre-deposit amount forfeited if the appeal is dismissed.

For advice on DRT and DRAT proceedings from either the lender or borrower side, contact Unified Chambers.