Debts Recovery Tribunal (DRT) India

Debts Recovery Tribunal (DRT) India

The Debts Recovery Tribunal (DRT) is a special judicial body in India that deals with cases related to the recovery of debts due to banks and financial institutions. It was established under the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) to ensure faster adjudication of debt recovery matters.

Debt Recovery Tribunals (DRTs) in India are quasi-judicial bodies constituted under the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), 1993, to provide a specialized and expeditious mechanism for the recovery of debts owed to banks and financial institutions. The DRTs have jurisdiction to handle cases where the debt amount is above a specified threshold, which is currently set at ₹20 lakh or more. Their role is to adjudicate disputes in relation to the recovery of loans classified as non-performing assets (NPAs) and to facilitate the enforcement of recovery orders.

DRTs have powers equivalent to a district court in terms of trying and settling debt recovery cases, including issuing recovery certificates executed by recovery officers. Appeals against the orders of DRTs lie before the Debt Recovery Appellate Tribunals (DRATs). The jurisdiction of DRTs is exclusive for debt recovery matters under the RDDBFI Act, barring all other courts except the Supreme Court and the High Courts through constitutional jurisdiction.

Each DRT is headed by a Presiding Officer, typically a qualified district judge appointed by the Central Government for a term of five years or up to 62 years of age. Currently, there are 39 DRTs and 5 DRATs functioning across various locations in India. The DRT system was set up to reduce the burden on civil courts and ensure speedy recovery of bad loans by banks and financial institutions.

Key functions include accepting applications from banks/financial institutions for debt recovery within their territorial jurisdiction, conducting hearings where borrowers can defend themselves, and passing legally binding recovery orders. The process emphasizes swift disposal and execution of debt recovery to address the challenges posed by NPAs and the lengthy civil litigation process.

Under the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) and the SARFAESI Act, 2002, appeals against orders of Debts Recovery Tribunals (DRTs) are filed before the Debts Recovery Appellate Tribunals (DRATs). India currently has 5 DRATs supervising 39 DRTs, all of which are single-member tribunals.

Recovery of Debts and Bankruptcy Act, 1993 (RDB Act)

The RDB Act, 1993 was enacted to provide a speedy and specialized mechanism for adjudication of debt recovery cases.
Under this Act:

• Banks and financial institutions can file Original Applications (OAs) before Debts Recovery Tribunals (DRTs) for recovery of debts.

• Appeals against DRT orders can be filed before Debts Recovery Appellate Tribunals (DRATs).

• The Act aims to reduce delays that typically occur in civil courts and ensure faster recovery proceedings.

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

The SARFAESI Act, 2002 empowers secured creditors—mainly banks and financial institutions—to recover their secured debts without court intervention, by allowing them to:

• Take possession of secured assets

• Take over management of the borrower’s business

• Lease, assign, or sell secured assets to recover dues

Borrowers or other aggrieved parties can challenge such measures by filing a Securitisation Appeal (SA) before the DRT under Section 17 of the Act.

Relationship Between the Two Acts

• RDB Act → Provides the tribunal framework for debt recovery (DRTs & DRATs).

• SARFAESI Act → Allows banks to enforce security interests directly; disputes go to DRTs for judicial review.

• Both Acts work together to ensure efficient, tribunal-based recovery and to reduce burden on civil courts.

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.