What is the Debts Recovery Tribunal and when can a bank approach it?

Question

My bank has filed an Original Application against me before the DRT for loan recovery. What powers does the DRT have and how does the process work? I would rather settle this without going to court if the law allows it, but I need to know my rights before I sign anything. Please tell me what to do first and what document to keep.

MyVakeel Legal Desk · Accepted Answer

Under Indian law, Recovery of Debts and Bankruptcy Act 1993, Section 19 is the starting point for this banking law question. What follows is the position in substance, together with the steps that usually make the difference in practice.

Banks and financial institutions with claims of Rs 20 lakh or more must file an Original Application before the DRT under Section 19 to recover dues, rather than a regular civil suit.

The DRT follows summary procedure and is not bound by the Code of Civil Procedure, allowing faster disposal compared to civil courts, though in practice cases can still take years.

The Presiding Officer can pass a Recovery Certificate under Section 19(22) once the claim is established, which is then executed by the Recovery Officer attached to the Tribunal.

An appeal against a DRT order lies to the Debts Recovery Appellate Tribunal under Section 20 within 45 days, and a pre-deposit of 50% of the amount due may be required, which can be reduced by the DRAT for reasons recorded.

The borrower can raise counter-claims, dispute the amount, or challenge the validity of the loan documents within the DRT proceedings itself.

In practice, in this order: 1) File a written statement to the Original Application within the time allowed, denying incorrect claims with supporting documents; 2) Raise any counter-claim you may have against the bank in the same proceeding; 3) Attend all hearings; ex-parte recovery certificates are common when defendants do not appear; 4) If a recovery certificate is passed against you, consider settlement with the Recovery Officer or an appeal to the DRAT.

Timing matters here: Recovery of Debts and Bankruptcy Act 1993, Section 19 works on limitation periods, so a drt claim that is right on the merits can still fail if it is brought late. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in banking law.