The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs) were established under the Recovery of Debts and Bankruptcy Act (RDB Act), 1993 with the specific objective of providing expeditious adjudication and recovery of debts due to Banks and Financial Institutions.
At present, 39 Debts Recovery Tribunals (DRTs) and 5 Debts Recovery Appellate Tribunals (DRATs) are functioning across the country. Each DRT and DRAT are headed by a Presiding Officer and a Chairperson respectively.
Monetary Limit:
As per the notification of finance ministry, Government of India dated September 6, 2018 the monetary limit increased up to Rs.20 lakh from earlier limit of Rs.10 lakh for filing loan recovery application in the Debt Recovery Tribunals (DRT) by banks and financial institutions. As per the plan, a common e-auction platform will be set up for all state owned banks with effect from October1, 2018 where details of the property, photos, loan amount, title, auction amount and all other details will be available. The above move is expected to draw more bids and better prices for auctioned properties. The government has also advised chief secretaries of states to ask the district magistrates to pass orders on assets seized by banks within 60 days.
Functions of DRT:
The DRTs function under the provisions of the Recovery of Debts Due to Banks and Financial Institutions(RDDBFI) Act, 1993 and as per the Debts Recovery Tribunal (Procedure) Rules, 1993. The Banks and financial institutions may approach the Debts Recovery Tribunal (DRT) for recovery of the dues from any person provided the amount of debt due to bank or financial institution or to a consortium of banks is more than 20 lakhs rupees or such other amount, being not less than 1 lakh rupees, as the Central Government may, by notification, specify.There is no upper monetary ceiling for filing application with DRT for interim order. Whereas, under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002 borrowers, guarantors, and any other person aggrieved by the actions of the bank may also approach the Debts Recovery Tribunal (DRT) for redressal.
DRT Proceedings:
The bank would file application before the tribunal seeking interim order for recovery of its due. The DRT sends notice to the defendants (Bank borrower/s) to show cause within 30 days, why action should not be taken against them to recover Bank’s dues. If notice could not be served for any reason, even after one or two summons, DRT would publish the notice against the defendants in the newspapers.
The DRT would pass exparte order if the defendants do not appear before the Tribunal at the time and date mentioned in the notice served to them. In case the defendants appear before the Tribunal and file reply statement through their advocate, wherever necessary an interim order will be passed by DRT. The applicant bank is required to file proof affidavit and loan documents and statements of account at DRT.
Passing of orders by DRT:
The procedure of passing of orders by DRT is similar to proceedings taking place in any other court of law. There will be cross examination of Bank Manager and defendants/ defendant’s witness by opposite side lawyers. The written arguments will also be submitted by both applicant bank’s and defendant’s counsels. After perusal of arguments submitted by opposite counsels, DRT passes order on merit of the case.
Application for ‘Recovery Certificate’ and appointment of Recovery Officer:
On receipt of order in its favour, the bank would files application with DRT for Recovery Certificate. The DRT issues Recovery certificate and endorses the same to Recovery Officer.
Action by Recovery Officer:
The Recovery Officer issue notice to the defaulter/s and demands them to clear the dues as per Recovery Certificate issued by DRT, within 15 days from the date of notice. Recovery Officer attaches the property of the defaulters on default of payment within the notice period. The attached property would be auctioned after due notice and publication in two newspapers (one in vernacular language) and bank’s dues are recovered from the sale proceeds of the attached property.
Action for recovery of balance amount: If there is shortfall in recovery, Bank may identify the other properties of the defendants for recovery of balance amount. The Recovery Officer would proceed against such identified properties on the basis of request made by the Bank.
Closing of DRT application: Application made by the bank for recovery will be recovered by Recovery Officer after full recovery of Bank’s dues.
RDBBFI Act amendment 2016:
The RDDBFI (Recovery of Debts Due to Banks and Financial Institutions) Act 2016 amendment, officially known as the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, primarily aimed to streamline debt recovery proceedings and enhance the ease of doing business in India. It made changes to the RDDBFI Act (1993) and the SARFAESI Act (2002), as well as the Indian Stamp Act and the Depositories Act, with a focus on improving efficiency and facilitating investment. The Bill also increases the retirement age of Presiding Officers of Debt Recovery Tribunals from 62 years to 65 years.
Originally posted 12.09.2014 updated on24.05.2025
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