DRT Order Appealable u/s 18 SARFAESI Act before DRAT: AP HC Dismisses Writ Petition [Read Order]

The Andhra Pradesh High Court at Amaravati has held that orders passed by the Debts Recovery Tribunal (DRT) under Section 17(1) of the SARFAESI Act, 2002, are appealable before the Debts Recovery Appellate Tribunal (DRAT) under Section 18, and that writ jurisdiction cannot be invoked in such a case.

The writ petition filed by Haridasu Srinivasa Rao challenged the order of the Debts Recovery Tribunal (DRT), Visakhapatnam, which had dismissed his securitisation application under Section 17(1) of the SARFAESI Act, 2002. The application had questioned recovery measures initiated by the respondent and the Magistrate’s direction appointing an Advocate Commissioner to take possession of the secured asset.

The Andhra Pradesh High Court observed that every order of the DRT, including those under Section 17(1), is appealable before the Debts Recovery Appellate Tribunal (DRAT) under Section 18 of the SARFAESI Act, subject to the mandatory deposit of 50% of the debt amount. Since the petitioner bypassed this statutory remedy and directly invoked writ jurisdiction, the Court held that the writ petition was not maintainable.

The bench of Justice Cheekati Manavendranath Roy and Justice Tuhin Kumar Gedela noted that:

“Every order that is passed by the Debts Recovery Tribunal, including the order passed under Section 17(1) of the SARFAESI Act, is an appealable order and an appeal lies against the said order by an aggrieved person to the Debts Recovery Appellate Tribunal. But, without preferring the appeal, the petitioner has invoked the writ jurisdiction of this Court.

In fact, as per the procedure prescribed under Section 18 of the SARFAESI Act, deposit of 50% of the debt amount is a condition precedent for preferring an appeal. Therefore, in the said facts and circumstances of the case, as an appeal lies against the impugned order, this writ petition is not maintainable.”

Accordingly, the petition was disposed of with a direction to the petitioner to file an appeal before the DRAT within one week. Until then, the Advocate Commissioner was restrained from taking possession of the asset.

The court also clarified that if the petitioner fails to file the appeal within the stipulated time and obtain orders from the Appellate Tribunal, the interim protection will automatically lapse and all pending interlocutory applications will be closed, with no order as to costs.

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