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SUPPLEMENT
Flowcharts & Practice Charts
Complex procedural laws are easier to understand through visual representations. The following flowcharts illustrate the major stages of proceedings before the Debt Recovery Tribunal, enforcement under the SARFAESI Act, appellate remedies and recovery proceedings. These charts are intended to provide practitioners, bankers, borrowers and students with a quick reference to the procedural framework governing banking recovery litigation.
Contents
- DRT Litigation Process
- Original Application
- Recovery Proceedings
- SARFAESI Proceedings
- Appeals
- IBC Interaction
- Practice Charts
Flowchart 1 – Complete DRT Litigation Process
Loan Sanctioned
↓
Borrower Commits Default
↓
Recall / Demand Notice
↓
Original Application filed before DRT
↓
Written Statement by Borrower
↓
Evidence & Hearing
↓
Final Order
↓
Recovery Certificate
↓
Recovery Officer Proceedings
↓
Recovery of Debt
Practice Note:
Every stage should be supported by complete documentation. Delay at the initial stages often affects the entire recovery process.
Flowchart 2 – Original Application (OA) Process
Identify Jurisdiction
↓
Collect Loan Documents
↓
Verify Limitation
↓
Prepare Original Application
↓
Annex Documents
↓
File before DRT
↓
Issue of Summons
Practice Note:
Before filing the OA, verify jurisdiction, limitation, authorisation, computation of dues and certification of the Statement of Account.
Flowchart 3 – Proceedings after Filing of OA
Service of Summons
↓
Written Statement
↓
Counter-Claim / Set-Off (if any)
↓
Interlocutory Applications
↓
Evidence by Parties
↓
Final Arguments
↓
Final Judgment
Practice Note:
Maintain a complete chronology of events and indexed paper book throughout the proceedings. Proper preparation significantly reduces adjournments and improves presentation before the Tribunal.
Flowchart 4 – Recovery Certificate Process
Final Order passed by DRT
↓
Debt Quantified
↓
Recovery Certificate Issued
↓
Recovery Certificate transmitted to Recovery Officer
↓
Execution Proceedings Commence
↓
Recovery by Statutory Modes
↓
Debt Realised / Proceedings Closed
Practice Note:
A Recovery Certificate is not the end of litigation. Effective execution before the Recovery Officer is equally important. Delays frequently occur because of inadequate identification of recoverable assets.
Flowchart 5 – Proceedings before the Recovery Officer
Recovery Certificate Received
↓
Demand Notice to Certificate Debtor
↓
Voluntary Payment?
↓
NO
↓
Identification of Assets
↓
Attachment Proceedings
↓
Sale / Auction Proceedings
↓
Distribution of Sale Proceeds
↓
Recovery Certificate Satisfied
Practice Note:
The Recovery Officer possesses several statutory modes of recovery. Advocates should identify attachable assets at the earliest stage to avoid prolonged execution proceedings.
Flowchart 6 – Attachment and Auction Process
Property Identified
↓
Attachment Order
↓
Valuation of Property
↓
Reserve Price Fixed
↓
Auction Notice Published
↓
Public Auction Conducted
↓
Highest Bid Accepted
↓
Sale Confirmed
↓
Sale Certificate Issued
↓
Distribution of Sale Proceeds
Practice Note:
Before confirming an auction, verify compliance with statutory notice requirements, valuation reports, reserve price, publication of sale notice and all mandatory procedural safeguards. Procedural defects at this stage frequently result in litigation challenging the auction.
Flowchart 7 – Complete SARFAESI Enforcement Process
Loan Account becomes NPA
↓
Demand Notice under Section 13(2)
↓
60 Days for Borrower's Representation / Payment
↓
Representation Considered by Secured Creditor
↓
Measures under Section 13(4)
↓
Possession of Secured Asset
↓
Valuation & Reserve Price
↓
Auction / Sale of Asset
↓
Appropriation of Sale Proceeds
↓
Balance Recovery / Closure
Practice Note:
At every stage of SARFAESI proceedings, strict compliance with the statutory provisions and the Security Interest (Enforcement) Rules, 2002 is essential. Procedural defects frequently become the basis of successful challenges before the Debt Recovery Tribunal.
Flowchart 8 – Section 13 Proceedings under the SARFAESI Act
Borrower Commits Default
↓
Account Classified as NPA
↓
Demand Notice under Section 13(2)
↓
Borrower's Representation / Objection
↓
Bank Communicates Decision under Section 13(3A)
↓
Action under Section 13(4)
↓
Symbolic / Physical Possession
↓
Sale Process Initiated
Practice Note:
Although rejection of the borrower's representation does not itself confer a right to challenge, the measures taken under Section 13(4) can ordinarily be questioned before the Debt Recovery Tribunal under Section 17.
Flowchart 9 – Borrower's Remedy before the Debt Recovery Tribunal
Bank takes Measures under Section 13(4)
↓
Borrower files Application under Section 17
↓
Notice issued by DRT
↓
Reply by Secured Creditor
↓
Documents & Evidence
↓
Final Hearing
↓
DRT examines Legality of SARFAESI Measures
↓
Application Allowed or Dismissed
↓
Appeal before DRAT (where maintainable)
Practice Note:
A successful challenge under Section 17 generally depends upon establishing procedural irregularities, violation of mandatory statutory requirements, lack of jurisdiction or other legal infirmities in the action taken by the secured creditor.
Flowchart 10 – Appeal before the Debt Recovery Appellate Tribunal (DRAT)
Order Passed by DRT
↓
Examine Grounds of Challenge
↓
Calculate Limitation
↓
Prepare Memorandum of Appeal
↓
Comply with Statutory Pre-deposit (where applicable)
↓
File Appeal before DRAT
↓
Stay Application (if required)
↓
Notice to Respondents
↓
Hearing
↓
Appeal Allowed / Dismissed / Modified
Practice Note:
Before filing an appeal, verify limitation, maintainability, statutory pre-deposit requirements, certified copy of the impugned order and all supporting documents. Weak appeals often fail because procedural requirements are overlooked rather than because of lack of legal merit.
Flowchart 11 – Judicial Review of DRT / DRAT Orders
Order of DRT
↓
Statutory Appeal before DRAT
↓
Final Order of DRAT
↓
Exceptional Grounds for Judicial Review?
↓
Yes
↓
High Court under Articles 226 / 227
↓
Supreme Court (where maintainable)
Important Principles
- Exhaust statutory remedies before approaching the High Court.
- Writ jurisdiction is discretionary and exercised only in exceptional cases.
- Jurisdictional error, breach of natural justice or patent illegality are the most common grounds for judicial review.
- High Courts ordinarily avoid interference where an effective statutory remedy exists.
Flowchart 12 – Choosing between DRT, SARFAESI and the Insolvency & Bankruptcy Code
Financial Default Occurs
↓
Is Security Interest Available?
↓
YES → Consider SARFAESI Proceedings
↓
Need Adjudication of Debt?
↓
YES → Original Application before DRT
↓
Corporate Insolvency Exists?
↓
YES → Examine Proceedings under the Insolvency & Bankruptcy Code
↓
Personal Guarantor Involved?
↓
Consider Proceedings under Part III of the IBC
Strategic Guidance:
The Recovery of Debts and Bankruptcy Act, the SARFAESI Act and the Insolvency and Bankruptcy Code are complementary statutory mechanisms. The appropriate remedy depends upon factors such as the existence of security, the nature of the borrower, insolvency status, urgency of recovery, availability of assets and overall litigation strategy. Every case should be assessed individually before selecting the appropriate legal course.
Flowchart 13 – Personal Guarantor Insolvency Process
Default by Corporate Debtor
↓
Personal Guarantee Invoked
↓
Default by Personal Guarantor
↓
Application under Part III of the Insolvency & Bankruptcy Code
↓
Appointment of Resolution Professional
↓
Report of Resolution Professional
↓
Admission / Rejection by NCLT
↓
Repayment Plan or Bankruptcy Proceedings
Practice Note:
Banks frequently pursue remedies under the Recovery of Debts and Bankruptcy Act, the SARFAESI Act and proceedings against Personal Guarantors under the Insolvency and Bankruptcy Code. Before initiating action, examine the effect of any pending insolvency proceedings on the proposed recovery strategy.
Flowchart 14 – Advocate's Litigation Strategy Roadmap
Receive Brief from Client
↓
Examine Loan Documents
↓
Verify Limitation
↓
Identify Securities
↓
Choose Appropriate Remedy
↓
Prepare Pleadings
↓
Collect Evidence
↓
Conduct Hearing
↓
Execute Final Order
↓
Advise on Appeal / Settlement
Professional Tip:
Successful DRT practice begins long before filing the Original Application. Proper documentation, limitation analysis, jurisdictional verification and strategic selection of remedies significantly improve the prospects of successful recovery.
Flowchart 15 – Master Documents Checklist
Client Instructions
↓
Authorisation / Board Resolution
↓
Loan & Security Documents
↓
Certified Statement of Account
↓
Recall / Demand Notice
↓
Chronology of Events
↓
Index & Paper Book
↓
Original Application / Reply
↓
Affidavits & Annexures
↓
Final Verification before Filing
Practice Note:
Most Registry objections arise because of missing authorisations, defective affidavits, incomplete annexures or improper pagination. A final filing checklist should always be completed before presentation before the Tribunal.
Key Takeaways
- Flowcharts simplify complex statutory procedures into practical working guides.
- Proper sequencing of procedural steps helps avoid costly procedural mistakes.
- The Recovery of Debts and Bankruptcy Act, the SARFAESI Act and the Insolvency and Bankruptcy Code frequently operate together and should be considered as part of a comprehensive recovery strategy.
- Preparation, documentation and procedural compliance are as important as substantive legal arguments.
- Advocates should maintain updated procedural checklists for every stage of DRT litigation.
Conclusion
These flowcharts are intended to provide a visual understanding of the procedural framework governing proceedings before the Debt Recovery Tribunal, the Debt Recovery Appellate Tribunal, Recovery Officers and related proceedings under the SARFAESI Act and the Insolvency and Bankruptcy Code. While no diagram can replace a careful reading of the statute and applicable rules, visual process maps greatly assist practitioners in identifying the correct procedural sequence and avoiding common procedural errors.
Advocates, bankers, insolvency professionals and students are encouraged to use these charts as quick-reference tools while preparing pleadings, advising clients and conducting proceedings before specialised tribunals.
Professional Disclaimer
These flowcharts have been prepared by AVP Legis Chambers solely for educational and informational purposes. They present simplified procedural overviews and should not be treated as exhaustive statements of law.
Actual proceedings may vary depending upon statutory amendments, Tribunal Rules, judicial precedents and the facts of each case. Readers should consult the applicable legislation and obtain independent legal advice before acting upon any procedural guidance contained in this publication.
Neither AVP Legis Chambers nor the authors accept any responsibility or liability arising from reliance upon these illustrative flowcharts without appropriate professional advice.