Recovery Proceedings before the Debts Recovery Tribunal, Explained

Two kinds of DRT matters

• Original applications (OA) under the Recovery of Debts and Bankruptcy Act, 1993, filed by banks and financial institutions to recover debts above the notified minimum amount.
• Securitisation applications (SA) under section 17 of the SARFAESI Act, filed by borrowers and others against enforcement measures.

Stages of an OA

1. Application with the statement of account and documents
2. Summons to the defendant and written statement
3. Counter-claim or set-off, if any
4. Evidence and hearing
5. Order and issue of a recovery certificate
6. Execution by the Recovery Officer

Appeal

Appeals from DRT orders lie to the Debts Recovery Appellate Tribunal. A pre-deposit is required for the borrower’s appeal, and time limits are strict.

Practical points for borrowers

• File a written statement within the time allowed, with the documents you rely on.
• Check the statement of account, charges and interest claimed.
• Consider negotiation or a settlement proposal alongside the proceedings.

Practical points for lenders

• File complete and accurate account statements and security documents.
• Seek interim protection of the secured assets where needed.

Related: Debt recovery and SARFAESI · All debt recovery guides · Send an enquiry

Important disclaimer: This article is general legal information, not legal advice. It does not create a lawyer-client relationship and is not an advertisement or solicitation under Bar Council of India rules. Verify current statutes, rules and judgments before relying on it.