Tribunals

Securitisation Application under Section 17, SARFAESI Act

A Securitisation Application (S.A.) is the primary legal remedy for a borrower, guarantor, or any aggrieved person to challenge the enforcement actions of a secured creditor under the SARFAESI Act, 2002. It seeks to set aside measures such as the taking of symbolic or physical possession of a secured asset, or the issuance of a sale or auction notice.

This application is filed before the Debts Recovery Tribunal (DRT) having jurisdiction over the secured asset. It derives its authority from Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and is governed by the Security Interest (Enforcement) Rules, 2002 and the Debts Recovery Tribunals (Procedure) Rules, 1993.

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Governing law
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 — Section 17 (application to DRT); Security Interest (Enforcement) Rules, 2002; Debts Recovery Tribunals (Procedure) Rules, 1993
Sections
s. Section 13(2), SARFAESI Act 2002 — demand notice by secured creditors. Section 13(3A), SARFAESI Act 2002 — right of borrower to make representations. Section 13(4), SARFAESI Act 2002 — enforcement measures by secured creditors. Section 17, SARFAESI Act 2002 — application to the Debts Recovery Tribunals. Rule 9, Security Interest (Enforcement) Rules 2002 — 30-day sale notice
Filed before
Debts Recovery Tribunal (DRT)

When this is the right filing

  • When a secured creditor has taken a measure under Section 13(4) of the SARFAESI Act, such as taking possession of the secured asset or publishing a sale notice.
  • When the applicant seeks to challenge the validity of the creditor's action on grounds like a defective demand notice under Section 13(2), non-consideration of the borrower's representation under Section 13(3A), or violation of the Security Interest (Enforcement) Rules, 2002.
  • When the applicant requires an urgent interim stay to prevent the creditor from selling or transferring the secured asset, pending final adjudication of the application.
  • When the grievance relates to the creditor's process, such as wrongful NPA classification, an incorrect reserve price, or undervaluation of the asset.
  • Do not use this application to challenge the original debt recovery proceedings before a civil court; it is specifically for post-enforcement measures under the SARFAESI Act.

What the court looks for

  • A clear statement of the specific measure taken under Section 13(4) that is being challenged, along with the date of that measure to establish the application is within the limitation period.
  • Detailed facts demonstrating a defect in the secured creditor's process, such as non-service of the Section 13(2) demand notice or a failure to follow the 30-day sale notice rule.
  • Specific grounds that link the creditor's actions to a violation of the SARFAESI Act or the Security Interest (Enforcement) Rules, 2002.
  • A compelling case for interim relief, establishing a prima facie case, balance of convenience in the applicant's favour, and the threat of irreparable injury if a stay is not granted.
  • A verifying affidavit supporting all factual assertions made in the application.

The structure the court expects

The components of the filed format, in the order they appear. LexPilot fills every one of them from your facts and papers.

  1. 1Securitisation application under section 17, sarfaesi act 2002
  2. 2Particulars of the secured asset & loan
  3. 3Facts of the case
  4. 4Grounds
  5. 5Interim relief
  6. 6Relief(s) sought
  7. 7Verifying affidavit
How it opens
The Applicant submits that a strong prima facie case has been made out; that the balance of convenience is overwhelmingly in favour of the Applicant; and that if the Respondent is not restrained from proceeding further — particularly from selling or transferring the secured asset — the Applicant will suffer irreparable injury that cannot be compensated in money. The Applicant therefore prays for an ad- interim stay…

Bracketed items are filled from your case.

Frequently asked questions

What is the time limit for filing a Securitisation Application under Section 17?

The application must be filed within 45 days from the date on which the measure under Section 13(4) was taken. The DRT may entertain an application after this period if it is satisfied that the applicant was prevented by sufficient cause from filing on time.

Can I file this application after the secured asset has been sold?

Yes, an application can be filed even after a sale or auction has taken place. However, the scope of relief may be limited, and the DRT will consider the rights of any third-party purchaser. Seeking an interim stay before the sale is generally more effective.

Is it mandatory to deposit any amount with the DRT to file this application?

No, there is no mandatory pre-deposit required to file an application under Section 17. This is a key distinction from an appeal under Section 18 of the Act, which requires a deposit of 50% of the claimed amount.

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