How a DRT Case Proceeds: A Plain Guide to Debt Recovery Tribunal Procedure

A summons from the Debt Recovery Tribunal usually arrives after months of branch notices, recall letters and settlement talks that went nowhere. For a borrower or guarantor it lands as a shock. For the bank it is the start of a process built to move faster than an ordinary civil suit. Either way, the first question we hear in our Jabalpur offices is the same: what happens now, and how long will it take.

This guide walks through a DRT case in the order the stages actually occur, from the filing of the claim to the Recovery Certificate and the appeal. We have written it for both sides of the dispute, because we act for lenders as well as borrowers and guarantors, and the procedure looks the same from either chair.

What the DRT is and which cases it hears

The Debt Recovery Tribunal is a specialised forum created by the Recovery of Debts and Bankruptcy Act, 1993, commonly called the RDB Act. It is not a civil court. It is a tribunal headed by a Presiding Officer, and it follows its own procedure, which is shorter and more document-driven than the Civil Procedure Code.

Three points fix its boundaries:

1. Only banks and notified financial institutions can file a recovery claim before the DRT. This includes asset reconstruction companies that have taken over a loan by assignment. A private lender or an individual cannot, whatever the amount involved. Those disputes go to the civil court.
2. The claim must be Rs 20 lakh or more. Below that figure, even a bank must sue in the ordinary civil court.
3. For claims that meet both tests, the civil court’s jurisdiction is barred. The DRT is the only forum.

The DRT also hears a second kind of case: applications under Section 17 of the SARFAESI Act, filed by borrowers or other affected persons to challenge enforcement steps such as possession of a secured asset. That application must be filed within 45 days of the measure complained of, and it is a separate proceeding with its own rules. This guide deals with the first kind, the bank’s own recovery claim, which the Act calls an Original Application or OA. Matters arising in Madhya Pradesh come before DRT Jabalpur, where our work concentrates and where we appear regularly.

Filing the Original Application

The OA is filed under Section 19 of the RDB Act. Filing is now electronic through the eDRT portal, with physical copies following as the registry directs.

Territorial jurisdiction is wider than most people expect. The bank may file where the defendant resides or carries on business, where the cause of action arose wholly or in part, or, since the 2016 amendment, where the branch of the bank maintaining the account is located. In practice this means a loan disbursed from a Jabalpur branch will usually be pursued before DRT Jabalpur even if the borrower has since moved.

The application fee runs on a slab fixed by the DRT rules: Rs 12,000 where the claim is Rs 10 lakh, rising by Rs 1,000 for every additional lakh or part of it, with a ceiling of Rs 1,50,000. Since the threshold is Rs 20 lakh, the smallest OA in practice carries a fee of Rs 22,000.

The OA itself must carry the loan documents, the statement of account, the interest working and every paper the bank relies on. This front-loading matters. Because evidence later goes in by affidavit, the case is largely won or lost on what is annexed at this stage, and on how precisely the defence answers it.

The stages, from summons to Recovery Certificate

Once the registry numbers the OA, the case moves through a fixed sequence:

1. Summons. The tribunal issues summons to each defendant, typically the borrower and every guarantor, requiring them to disclose their assets and to answer the claim.
2. Written statement. The defendant must file a written statement within thirty days of service. The tribunal can extend this only in exceptional cases, for reasons recorded in writing, and only by a further fifteen days. A defendant may also raise a set-off or a counterclaim in the same proceeding, on which the tribunal adjudicates alongside the OA.
3. Evidence by affidavit. There is no long trial with witnesses in the box as a matter of course. Both sides file their evidence on affidavit. Cross-examination happens only if the tribunal permits it on specific grounds, for instance where the authenticity of a document is squarely disputed.
4. Final hearing. Arguments are heard on the pleadings, the affidavits and the documents. Interest, both past and future, is argued here too, and tribunals do scrutinise the bank’s interest calculations.
5. Judgment and Recovery Certificate. If the tribunal allows the claim, it passes a final order and issues a Recovery Certificate to the Recovery Officer for the amount found due.
6. Execution. The Recovery Officer, an officer of the tribunal, executes the certificate. The modes include attachment and sale of movable and immovable property, appointment of a receiver to manage the defendant’s property or business, and in defined situations arrest and detention of the defaulter.

The Recovery Officer’s stage is a proceeding in its own right. Objections to attachment, claims by third parties who assert rights over the property, and settlement during execution all play out before him, with a further challenge available to the tribunal itself.

Interim orders and attachment before judgment

The RDB Act gives the tribunal sharp interim powers, and banks use them early. On the bank’s application the tribunal can restrain a defendant from transferring or disposing of property, order attachment before judgment where it is satisfied the defendant is trying to defeat the eventual recovery, and appoint a receiver over secured assets.

Defendants are also under a statutory duty to disclose their properties at the summons stage, and the tribunal can restrict dealings in the disclosed assets while the case runs. A transfer made in breach of such a restraint does not protect the buyer; it can be treated as void against the bank’s claim. For a borrower, the practical lesson is blunt: selling or encumbering assets after the OA is served invites contempt-type consequences and rarely helps. For a bank, moving quickly for interim protection is often the difference between a paper decree and an actual recovery.

Appeal to the DRAT and the pre-deposit

An order of the DRT is appealable to the Debts Recovery Appellate Tribunal, the DRAT, within thirty days of receiving a copy of the order.

The feature that decides most appellate strategy is the pre-deposit. A borrower or guarantor appealing against a determination of debt must deposit 50 percent of the amount found due before the appeal is entertained. The DRAT may reduce this for reasons recorded in writing, but never below 25 percent. There is no power to waive it entirely. On a Rs 2 crore determination, that means finding at least Rs 50 lakh before the appeal is even heard.

We advise clients to price this into strategy from the first hearing, not after judgment. It shapes whether to fight the OA fully, to press a counterclaim, or to open one-time settlement talks while the case is pending. A settlement can be recorded at any stage, including before the Recovery Officer, and tribunals encourage it.

How long it really takes, and what slows cases down

The Act tells the tribunal to make an endeavour to decide an OA within 180 days. Few contested cases finish that fast. From our files at DRT Jabalpur and elsewhere, the honest ranges look like this:

Stage	What the Act expects	What contested cases commonly take
Service and written statement	30 days, plus 15 in exceptional cases	Three to nine months
Evidence and final hearing	Disposal endeavour of 180 days overall	One to two years
Appeal before DRAT	Disposal endeavour of six months	Six months to two years
Execution by Recovery Officer	No fixed period	Six months to several years

The usual causes of delay are unglamorous. Service on multiple guarantors at scattered addresses takes months. Interlocutory skirmishes over documents and cross-examination consume hearings. Presiding Officer vacancies periodically stall entire boards. On the execution side, property that is disputed, jointly held or already encumbered slows the Recovery Officer far more than any legal argument does.

Two closing thoughts. First, a DRT case rewards preparation over oratory: the side whose documents are complete and whose account working is clean starts far ahead. Second, the process is not a straight line to auction. Settlement, restructuring and part-payment arrangements surface at every stage, and knowing when to take them is as much a part of the work as contesting the claim. If you have received a summons, or your bank is weighing an OA, the earlier the file is put in order the more options remain open. You can read about how we handle this work at our banking and DRT practice.