DRT & DRAT Practice

The Debt Recovery Tribunals (DRTs) were established under the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) to provide an exclusive forum for speedy adjudication and recovery of debts due to banks and financial institutions. Each DRT is headed by a Presiding Officer with the powers of a District Judge.

The Debt Recovery Appellate Tribunals (DRATs), headed by a Chairperson (usually a High Court Judge or equivalent), hear appeals against orders of DRTs. Both DRTs and DRATs operate with simplified procedures and overriding powers to ensure effective debt recovery.

Jurisdiction of DRT

Monetary Threshold: DRTs have jurisdiction over recovery of debts above ₹20 Lakhs owed to banks and financial institutions.

Matters Covered:

Applications by banks/financial institutions for debt recovery (OAs)

Appeals against measures taken by secured creditors under the SARFAESI Act, 2002

Proceedings involving guarantors, mortgagors, and pledged securities

Powers:

Attachment and sale of property, appointment of receivers, and other recovery measures

Issuance of Recovery Certificates (RCs) to the Recovery Officer

Jurisdiction of DRAT

Appellate Body: Hears appeals against final orders passed by DRTs.

Pre-Deposit Requirement: Appellant must deposit 50% of the debt amount determined by DRT (reducible to 25% at DRAT’s discretion).

Scope: Ensures fairness and checks arbitrariness in DRT orders.

Key Proceedings Before DRT

Original Application (OA) – Section 19, RDB Act

Filed by banks/financial institutions for recovery of debts above the statutory threshold

Procedure includes filing OA, notice to defendants, written statements, evidence, final hearing, and issuance of RC

RC is executable like a civil court decree

Securitisation Applications (SA) – Section 17, SARFAESI Act

Filed by borrowers/guarantors to challenge measures like possession of secured assets, auction sales, or recovery actions

Procedure: Filing within 45 days, interim applications for stay, evidence, arguments, and final adjudication

Relief: DRT may set aside or modify creditor’s actions

Interim / Miscellaneous Applications (IA/MA)

Purpose: Interim relief like stay on auction, condonation of delay, additional documents, impleadment of parties

Provides immediate protective relief pending final adjudication

Review, Execution & Recovery Proceedings

Review applications correct errors apparent on the record

Execution: Post RC issuance, the Recovery Officer enforces recovery via attachment, sale, or arrest

Ensures banks realize debts after tribunal orders

Key Proceedings Before DRAT

Appeals: Filed against final DRT orders within 30 days

Pre-Deposit: Mandatory deposit of 50% of debt (relaxable to 25%)

Procedure: Filing of memorandum of appeal, interim stay applications, arguments on merits, and final adjudication

Outcome: DRAT can affirm, modify, or set aside DRT orders

Our DRT & DRAT Practice Areas

Banks & Financial Institutions

Filing and pursuing OAs for debt recovery

Execution of Recovery Certificates

Defending challenges to SARFAESI measures

Borrowers & Guarantors

Filing SAs against illegal recovery actions

Seeking interim stay on possession and auction

Defending OAs and negotiating settlements

Corporate Clients

Advising on restructuring, OTS (One Time Settlements), and insolvency overlaps

Cross-proceedings involving IBC and DRT

Appeals Before DRAT

Drafting and filing appeals

Arguing interim stay applications

Ensuring compliance with pre-deposit requirements

Why Choose AVP Legis Chambers for DRT/DRAT Matters?

Specialized Knowledge: In-depth expertise in debt recovery, banking laws, SARFAESI, and insolvency overlaps

Balanced Representation: Representing both lenders and borrowers, anticipating and countering strategies effectively

Quick Action: Time-sensitive approach in filing, stay applications, and hearings

Pan-India Reach: Handling matters before DRTs and DRATs across India, including Patna, Delhi, Kolkata, and other major centers