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Module: | Operational Procedures & Miscellaneous

Q18: When a borrower files an application (appeal) before the Debt Recovery Tribunal (DRT) challenging the bank's action under the SARFAESI Act, what is the immediate legal effect on the bank's enforcement proceedings?

A
The bank's proceedings are automatically stayed (stopped) until the case is decided.
B
The bank's proceedings continue unless the DRT specifically passes an order granting a stay.
C
The bank is legally required to withdraw the possession notice immediately.
D
The enforcement action is automatically converted into a criminal complaint.
✅ Correct Answer: B
Filing an application under Section 17 does not operate as an automatic stay.
The bank can continue its enforcement measures unless the Tribunal, upon examining the merits, specifically issues an interim order restraining the bank from proceeding further.
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