August 18, 2026

Limitation Periods for DRT and SARFAESI Actions

Limitation Periods for DRT and SARFAESI Actions

The DRT limitation period can decide a debt recovery dispute before the merits of the claim are even examined. A claim may fail if it is filed after the applicable limitation period has expired, while enforcement action taken beyond the prescribed period may also be challenged on limitation grounds.

The Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) and the SARFAESI Act, 2002 are both subject to the Limitation Act, 1963, but limitation operates differently under each statute. The RDB Act applies the Limitation Act to applications before the Debt Recovery Tribunal (DRT), while the SARFAESI Act contains its own limitation provision for enforcement and separate statutory deadlines for challenges before the DRT and appeals to the DRAT.

The general law applies

Neither statute displaces the Limitation Act, 1963.

Under the RDB Act, Section 24 applies the provisions of the Limitation Act, 1963 to an application made to a Tribunal. A bank’s Original Application under Section 19 is therefore governed by the ordinary periods, computed in the ordinary way.

Under the SARFAESI Act, Section 36 provides that no secured creditor shall be entitled to take the measures under Section 13(4) unless its claim in respect of the financial asset is made within the period of limitation prescribed under the Limitation Act, 1963. Enforcement of security under SARFAESI is not, therefore, a way around a time-barred debt.

DRT Limitation Period: Key Rules

For a money claim founded on a written contract of loan, the period is generally three years, computed from the date on which the cause of action accrues. Where the claim is to enforce a mortgage or otherwise against secured immovable property, the Limitation Act prescribes a longer period for suits of that nature, and the applicable article depends on the relief sought.

Two mechanisms commonly extend the period, and both must be documented rather than asserted.

Acknowledgement of liability. Under Section 18 of the Limitation Act, 1963, a written acknowledgement of liability signed by the party against whom the right is claimed, made before the expiry of the period, starts a fresh period from the date of the acknowledgement. In banking practice, a balance confirmation letter, a revival letter, or an acknowledgement in a duly signed balance sheet is what banks rely upon.

Part payment. Under Section 19, payment on account of a debt made before expiry, and evidenced in the manner the section requires, likewise starts a fresh period.

A borrower defending on limitation should examine each such document closely: whether it was signed by a person authorised to bind the borrower, whether it was made before expiry, and whether it is an acknowledgement of liability rather than a mere statement of account.

Time spent in the wrong forum

Section 14 of the Limitation Act, 1963 excludes time spent prosecuting, in good faith and with due diligence, a proceeding in a forum unable to entertain it for want of jurisdiction or other cause of a like nature.

This has real significance in recovery practice, because creditors frequently move between statutes. In Sesh Nath Singh v. Baidyabati Sheoraphuli Cooperative Bank Ltd., (2021) 7 SCC 313, decided on 22 March 2021, the Supreme Court held that Section 14 applies to proceedings under the Insolvency and Bankruptcy Code, 2016 and permitted exclusion of the period during which the creditor had pursued proceedings under the SARFAESI Act in good faith. The Court also held that delay may be considered even where no formal application for condonation has been made.

The Court was careful about the limits of the exclusion. Section 14 excludes time spent in a forum unable to entertain the proceeding; where those proceedings have ended, the outer limit of the exclusion is the date on which they ended. Time subsequently spent on meritless or frivolous applications is not excluded. And the benefit is not automatic — good faith and due diligence must be shown.

The internal deadlines

Alongside the general limitation law, the RDB Act and SARFAESI Act prescribe their own statutory deadlines, which are critical to the DRT limitation period and often catch parties out.

ActionPeriodSource
Borrower’s application against enforcement measuresForty-five days from the date the measure under Section 13(4) was takenSARFAESI Act, Section 17(1)
Appeal from the Tribunal’s order under Section 17Thirty days from receipt of the orderSARFAESI Act, Section 18
Appeal from the Tribunal’s order on an Original ApplicationForty-five days from receipt of a copy of the order, condonable on sufficient causeRDB Act, Section 20
Appeal from an order of the Recovery OfficerThirty days from the date a copy of the order is issuedRDB Act, Section 30

The forty-five day period under Section 17 deserves particular attention. It runs from the date the measure was adopted, not from the date of the demand notice and not from the date the borrower appreciated its significance. Where successive measures are taken — symbolic possession, then physical possession, then the sale notice — each may found its own grievance with its own computation, so the application must identify precisely which measure is challenged and when it was taken.

Where limitation arguments actually arise

Limitation disputes can arise against both banks and borrowers, depending on whether the underlying claim, enforcement measure, DRT application or appeal was filed within the applicable time period.

Against the bank. That the claim was brought after the period expired; that the acknowledgement relied upon was signed by someone without authority, or after expiry; that the date of default has been shifted to suit the filing; that enforcement under Section 13(4) was initiated after the claim had become time-barred, contrary to Section 36.

Against the borrower. That the Section 17 application was filed beyond forty-five days; that the appeal to the Appellate Tribunal was late and no sufficient cause has been shown; that the challenge is to a measure taken long ago, dressed up as a challenge to a later step.

Practical guidance

Build the chronology first in every debt recovery matter. Record the last undisputed payment, NPA classification, every acknowledgement of liability, each notice, and the date of every SARFAESI enforcement measure. This timeline helps determine the DRT limitation period and whether the claim or enforcement action is time-barred.

That chronology can decide the limitation issue before the merits of the debt are ever reached.

Frequently Asked Questions

1. What is the DRT limitation period?

The DRT limitation period depends on the nature of the proceeding. A bank’s Original Application is generally governed by the Limitation Act, 1963.

2. What is the limitation period for a Section 17 SARFAESI application?

A borrower generally has 45 days from the date on which the Section 13(4) measure is taken to approach the DRT.

3. Can limitation be extended by acknowledgement of debt?

Yes. A valid written acknowledgement made before expiry of the limitation period can start a fresh period under Section 18 of the Limitation Act, 1963.

4. Does SARFAESI apply to a time-barred debt?

Section 36 of the SARFAESI Act restricts enforcement measures under Section 13(4) where the claim is beyond the limitation period prescribed by the Limitation Act.

5. What is the limitation period for an appeal to the DRAT?

The applicable period depends on the statute. Under Section 18 of SARFAESI, the appeal period is 30 days from receipt of the DRT order. Under Section 20 of the RDB Act, the appeal period is also 30 days.

Legal Information Disclaimer

This article is published for general legal information and educational purposes only. It reflects the position of Indian law as researched up to 10 August 2026 and may not account for subsequent amendments, notifications, rule changes or judicial developments. It is not legal advice, does not take into account any individual’s particular facts or circumstances, and no advocate-client relationship arises from reading it. Limitation depends closely on the facts and on the documents in each case. Readers dealing with an actual dispute should obtain independent professional advice from a qualified advocate of their own choosing before acting on any information contained here.

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