Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs)

Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs)

The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs) are specialized quasi-judicial bodies established under the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) to facilitate speedy adjudication and recovery of debts owed to banks and financial institutions.
They were created following the Narasimham Committee (1991) recommendations to address the rising problem of non-performing assets (NPAs) and to overcome delays in debt recovery through traditional civil courts.

Legal Framework

• Primary Law: Recovery of Debts and Bankruptcy Act, 1993
  (originally the Recovery of Debts Due to Banks and Financial Institutions Act, 1993)

• Related Laws:

  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002

  • Insolvency and Bankruptcy Code (IBC), 2016 — applicable to non-corporate insolvencies

• Proceedings are guided by principles of natural justice and are not bound by the strict procedures of the Code of Civil Procedure, 1908.

Debts Recovery Tribunals (DRTs)

Purpose

To adjudicate applications filed by banks and financial institutions for the recovery of debts exceeding ₹20 lakh (threshold raised from ₹10 lakh in 2020).

Structure

• Headed by a Presiding Officer, generally qualified to be a District Judge, appointed by the Central Government.

• Supported by Recovery Officers and administrative staff.

• Operate under the Ministry of Finance.

• 39 DRTs are functioning across India (as of 2025).

Jurisdiction and Powers

• Exclusive jurisdiction over the recovery of debts due to banks and financial institutions.

• Empowered to:

  • Summon witnesses and receive evidence.

  • Pass interim orders, attach or auction properties, and appoint receivers.

  • Issue recovery certificates enforceable like civil court decrees.

  • Hear applications under Section 17 of SARFAESI Act (borrower challenges to bank actions).

Procedure

• Summary in nature and aimed at disposal within six months (though delays persist).

• Governed by the Debt Recovery Tribunal (Procedure) Rules, 1993, as amended.

Debts Recovery Appellate Tribunals (DRATs)

Purpose

To act as appellate authorities over DRT orders, ensuring fair, efficient, and just redressal.

Structure

• Headed by a Chairperson, who is or has been a Judge of a High Court.

• Five DRATs function across India — located in Delhi, Mumbai, Kolkata, Allahabad, and Chennai.

Appeal Process

• Appeals must be filed within 30 to 45 days of the DRT order.

• Pre-deposit requirement:

  • 50% of the debt determined by the DRT (reducible to 25% at the Chairperson’s discretion).

• DRATs can:

  • Affirm, modify, or set aside DRT orders.

  • Grant interim reliefs and stay recovery proceedings.

• Their decisions are final, subject only to:

  • Writ jurisdiction under Articles 226/227, or

  • Appeal to the Supreme Court on substantial questions of law.

Structure and Jurisdiction Overview

Key Amendments and Reforms

• 2016: Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act

  • Streamlined DRT/DRAT functioning and digital procedures.

  • Enhanced Presiding Officer’s retirement age to 65 years.

  • Allowed flexible jurisdiction (based on bank branch location).

• 2020: Minimum debt threshold raised to ₹20 lakh.

• 2024–25 Digital Governance Reforms:

  • Electronic Filing Amendment Rules, 2025 introduced online filing and case management systems.

  • oneDRT platform enables centralized case tracking and e-DRT services.

Challenges and Current Developments

• High Pendency: Over 1.5 lakh cases pending (as of 2024).

• Vacancies: Frequent shortage of Presiding Officers and staff.

• Infrastructure Gaps: Need for additional benches and technological upgrades.

• Reform Efforts: The Ministry of Finance and Department of Financial Services held a 2025 colloquium with DRT/DRAT heads to enhance operational efficiency.

Significance

• Ensures speedy debt recovery and reduces the burden on civil courts.

• Strengthens financial discipline and the stability of the banking sector.

• Plays a key role in addressing non-performing assets (NPAs) and improving the credit ecosystem.

• Serves as the core institutional framework for debt recovery and creditor protection in India.

Together, DRTs and DRATs form the backbone of India’s debt recovery mechanism, promoting judicial efficiency, creditor rights, and financial stability.

With continued digital modernization and institutional reforms, these tribunals remain central to India’s efforts to maintain a robust and responsive financial system.

List of all DRTs in india | List of all DRATs in india

DRT full form: DRT stands for Debt Recovery Tribunal. It is a specialized quasi-judicial body established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, to provide speedy adjudication and recovery of debts due to banks and financial institutions in India.

DRAT full form: DRAT stands for Debt Recovery Appellate Tribunal. It is an appellate authority where parties aggrieved by the decisions of the Debt Recovery Tribunal (DRT) can file appeals. DRAT was established under the Recovery of Debts and Bankruptcy Act, 1993 to provide speedy adjudication and recovery of debts due to banks and financial institutions.

SARFAESI full form: SARFAESI stands for “Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act”. It is an Indian law enacted in 2002 to empower banks and financial institutions to recover non-performing assets (NPAs) by enforcing security interests without court intervention. The act allows lenders to take possession of secured assets like residential or commercial properties and auction them to recover defaulted loans, thus facilitating faster and more efficient loan recovery and reducing NPAs in the financial system.

NPA full form: NPA stands for Non-Performing Asset. It is a loan or advance given by a bank or financial institution on which the borrower has defaulted in making principal or interest payments for a specified period, typically 90 days or more. When a loan stops generating income for the lender because repayment is overdue beyond this period, it is classified as an NPA. This classification indicates that the asset has become non-performing and is not yielding any returns for the bank.

Debts Recovery Appellate Tribunals (DRATs): DRAT, Allahabad, DRAT, Chennai, DRAT, Delhi, DRAT, Kolkata, and DRAT, Mumbai.

DRATs in India:

DRAT Allahabad:
Handles appeals from DRTs in Allahabad, Dehradun, Jabalpur, Lucknow, Patna, and Ranchi.

DRAT Chennai:
Handles appeals from DRTs in Chennai (1, 2, 3), Bengaluru (1, 2), Coimbatore, Ernakulam (1, 2), and Madurai.

DRAT Delhi:
Handles appeals from DRTs in Delhi (1, 2, 3), Chandigarh (1, 2, 3), and Jaipur.

DRAT Kolkata:
Handles appeals from DRTs in Kolkata (1, 2, 3), Hyderabad (1, 2), Vishakhapatnam, Siliguri, Cuttack, and Guwahati.

DRAT Mumbai:
Handles appeals from DRTs in Mumbai (1, 2, 3), Ahmedabad (1, 2), Aurangabad, Nagpur, and Pune.