Quiz on DRT and DRAT

DRTs were established to provide a specialised and relatively expeditious forum for adjudicating applications by banks and financial institutions for recovery of debts.

The framework was established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, now titled the Recovery of Debts and Bankruptcy Act, 1993.

Following amendment, the legislation is titled the Recovery of Debts and Bankruptcy Act, 1993.

The Central Government establishes DRTs by notification under section 3 of the RDB Act.

A DRT is headed by a Presiding Officer.

A DRAT is headed by a Chairperson.

DRATs hear appeals against orders of DRTs, subject to the applicable statute and exceptions.

Section 17 deals with the jurisdiction, powers and authority of Tribunals and Appellate Tribunals.

Section 3 provides for establishment of Tribunals by the Central Government.

Section 8 deals with establishment of Debts Recovery Appellate Tribunals.

Banks and financial institutions file OAs seeking recovery of debts due to them.

OA commonly stands for Original Application.

An application under section 17 of the SARFAESI Act is used by an aggrieved person to challenge specified measures taken under section 13(4).

The application is generally to be made within 45 days from the date on which the measure was taken. Case-specific legal advice may be needed for limitation questions.

Section 20 generally prescribes 30 days from receipt of a copy of the DRT order, with power to admit a delayed appeal for sufficient cause.

DRAT may admit a delayed appeal if it is satisfied that there was sufficient cause for not filing it within time.

The standard deposit is 50% of the debt determined by the DRT under section 19, subject to the statutory power to reduce it.

For reasons recorded in writing, DRAT may reduce the deposit, but it cannot be reduced below 25% of the debt so due.

Section 21 specifically addresses an appeal by a person from whom debt is due to a bank or financial institution. It should not be generalised to every possible appellant or appeal.

Under section 22, Tribunals are not bound by the procedure laid down by the Code of Civil Procedure, 1908, but are guided by natural justice and the Act/rules.

Section 22 gives specified civil-court-like powers for matters such as summoning persons and requiring documents.

Section 20 excludes an appeal against an order made by the Tribunal with the consent of the parties.

After determining the amount due, the DRT may issue a recovery certificate, which is then executed through the recovery machinery under the Act.

The Recovery Officer carries out recovery in accordance with the Act and applicable rules.

The Act‘s recovery machinery includes measures such as attachment and sale of property, subject to statutory requirements.

They are separate statutes with related but distinct mechanisms: the RDB Act provides tribunal-based debt recovery, while SARFAESI governs specified enforcement of security interests and related remedies.

The DRT is the forum under section 17 for such applications, subject to the Act‘s provisions.

Section 18 provides for an appeal to the DRAT, subject to statutory conditions including the applicable pre-deposit.

The borrower is generally required to deposit 50% of the debt due from the borrower as claimed by the secured creditors or determined by the DRT, whichever is less; DRAT may reduce it to not less than 25%, as specified by the Act.

The DRT adjudicates the bank or financial institution‘s recovery application and can determine the amount due under the Act.

The Central Government establishes DRATs by notification under section 8.

Their powers and procedures come from the governing statutes and rules; they are not general-purpose courts for every dispute.

The period is generally 30 days from the date the appellant receives a copy of the DRT order, subject to the Act‘s condonation provision.

DRTs are not bound by the CPC procedure but have specified powers similar to a civil court for enumerated matters.

An OA is a formal application seeking adjudication and recovery of a debt under the RDB Act, where the Act‘s jurisdictional requirements are met.

DRAT stands for Debts Recovery Appellate Tribunal.

DRT stands for Debts Recovery Tribunal.

The DRAT may reduce the deposit for reasons recorded in writing, but the deposit cannot be below 25% of the debt so due.

Section 20 expressly states that no appeal lies from a Tribunal order made with the consent of the parties.

The Act aims to provide expeditious adjudication and recovery of debts due to banks and financial institutions.

Section 1(4) contains a statutory threshold framework and allows the Central Government to specify another amount by notification. Questions should use the currently applicable notification rather than assume the original figure in the Act is the operative threshold.

The 2025 amendment substituted the e-filing rule to require prescribed pleadings to be filed electronically through the e-DRT system; the government annual report says the need for subsequent physical filing was removed.

The electronic filing rules refer to filing through the e-DRT system.

The Department of Financial Services website currently reports 39 DRTs and 5 DRATs; such counts can change, so verify against the current official website before an exam.

Section 21 deals with deposit of the amount of debt due on filing an appeal.

Section 22 addresses procedure and powers of the Tribunal and Appellate Tribunal.

Section 22 says the Tribunals are guided by principles of natural justice, although not bound by CPC procedure.

A DRT generally hears original recovery applications and SARFAESI section 17 applications, while a DRAT hears statutory appeals from DRT decisions.

The remedy is provided by section 17 of the SARFAESI Act, 2002.

The Government‘s 2025 notification amended the e-filing rules, and the 2025–26 Department of Economic Affairs annual report describes removal of the need for subsequent physical filing after e-filing.

DRTs/DRATs are specialised statutory tribunals for matters assigned by law; they are not substitutes for criminal courts handling criminal prosecution.

The deposit cannot be reduced below 25% of the debt so due under section 21.

The Central Government establishes DRTs and DRATs by notification under the relevant provisions of the RDB Act.

The Department of Financial Services and India Code / official Gazette publications are appropriate primary sources for current official information and legislation.