Expert Answers to Your DRT Legal Questions

Ans. Some of the common documents required are loan sanction letter, account statements, mortgage/security documents, notice(s) served under SARFAESI, notice of possession, notice of sale, valuation report, auction proceedings, DRT order and copies of documents served along with proof of service, carefully drafted explanation of limitation, application for pre-deposit, etc. Correspondence with the bank is also helpful. 

Ans. In most cases, even the High Courts have advised parties to first exhaust the statutory remedy before DRT/DRAT, especially in SARFAESI and bank recovery disputes. Thus Writ jurisdiction of High Courts are normally not available, except in rare cases where there is no jurisdiction before DRT/DRAT, gross violation of principles of natural justice, or in cases of extreme illegality.

Ans. Yes, if he or she can prove to be aggrieved by the action of the secured creditor. Section 17 refers to “any person” and Section 17(4A) specifically empowers DRT to adjudicate upon certain tenancy/ leasehold claims relating to the secured asset.

Ans.

Ans. On receipt of final Recovery order from DRT, the Presiding Officer will issue Recovery Certificate to the Recovery Officer, specifying the amount of debt recoverable by him. The Recovery Officer may then recover the certified debt amount by attachment and sale of movable/ immovable property belonging to judgment debtor, or secured assets, or by taking management or possession of the secured assets, or appointing receiver, or any other mode as may be prescribed.

Ans. Neither DRT nor DRAT is strictly bound by the provisions of CPC, however they shall be guided by principles of natural justice and may regulate their own procedures in such manner as may be just and fair, subject to Act/Rules.

Ans. Yes. Section 23 of the RDB Act allows banks/financial institutions, defendants/parties to appear personally or by their authorised counsel, legal practitioners or officers before DRT/DRAT.

Ans.

Ans.

Ans.

Ans. DRT should dispose of application as expeditiously as possible and ordinarily within 60 days from the date of receipt. However, it can exceed the 60 days period if it records reasons for the delay and the overall delay should not exceed four months from the date of filing of application.

Ans. Yes. If an DRT concludes that bank has proceeded in violation of the provisions of the SARFAESI Act, it may declare such measures void, direct possession of the secured asset to be returned to borrower and/or management of the same be returned to borrower, and issue any other order it thinks fit.

Ans. Yes. Section 17 of the SARFAESI Act provides that any person aggrieved by any action taken under Section 13(4), including borrowers, may approach the DRT within 45 days from the date of the action.

Ans. The pecuniary jurisdiction of DRT for filing RDB Act recovery proceedings was enhanced from ₹10 lakh to ₹20 lakh vide notification issued under Section 7(1) of the RDB Act.

Ans.

Ans. Typical cases seen before DRT are bank recovery suits, loan defaults, Recovery Certificate appeals, SARFAESI grievances, possession notice objections, auction-sale objections, liability of guarantors, enforcement of mortgage deed, borrower objections, third party objections, etc.

Ans. DRAT means Debts Recovery Appellate Tribunal. DRATs are set up to hear appeals from orders passed by the DRTs. There are presently 39 DRTs and 5 DRATs as per the Department of Financial Services.

Ans. DRT stands for Debts Recovery Tribunal. The tribunal was set up with the primary objective to adjudicate and recover debts quickly. Debts Recovery Tribunal is established primarily under the Recovery of Debts and Bankruptcy Act, 1993 for banks and financial institutions.