Introduction

Bank recovery proceedings and financial enforcement actions require specialised adjudication mechanisms. To ensure speedy disposal of cases involving recovery of debts due to banks and financial institutions, Parliament established the Debts Recovery Tribunal (DRT).

For borrowers, guarantors, companies, and financial institutions, proceedings before DRT are serious and time-sensitive. Orders may involve attachment of properties, issuance of recovery certificates, and enforcement actions that directly affect financial stability.

A DRT Practitioner is a qualified legal professional authorised to represent parties before the Tribunal and provide strategic advisory in banking and recovery litigation.

This article explains:

• What is the Debts Recovery Tribunal

• Jurisdiction and powers of DRT

• Who can practice before DRT

• DRT Kochi address and jurisdiction

• Appeal provisions

• Importance of professional representation

What is the Debts Recovery Tribunal?

The Debts Recovery Tribunal (DRT) was established under the Recovery of Debts and Bankruptcy Act, 1993 (formerly RDDBFI Act).

The objective of the Act is to provide a specialised mechanism for:

• Expeditious adjudication

• Recovery of debts

• Enforcement of claims by banks and financial institutions

Over time, DRT jurisdiction has expanded, particularly in matters under the SARFAESI Act.

Jurisdiction of DRT

DRT primarily handles:

1. Recovery Applications by Banks and Financial Institutions

Banks may file Original Applications (OAs) before DRT for recovery of dues exceeding the statutory threshold.

The Tribunal examines:

• Loan documentation

• Security documents

• Default details

• Interest calculations

2. SARFAESI Applications (Section 17)

Borrowers and guarantors may challenge measures taken under the SARFAESI Act before DRT, including:

• Possession notices

• Auction proceedings

• Asset classification as NPA

Time sensitivity is critical, as statutory timelines are strict.

3. Counterclaims and Set-offs

Defendants may raise counterclaims or challenge calculation of liability.

Powers of DRT

The Tribunal has powers similar to a civil court, including:

• Summoning and enforcing attendance

• Requiring production of documents

• Granting interim orders

• Confirming attachment

• Issuing Recovery Certificates

Once a Recovery Certificate is issued, it is executed by a Recovery Officer with authority to:

• Attach movable and immovable property

• Conduct auction

• Arrest and detention (in certain circumstances)

Given the seriousness of these powers, professional legal guidance becomes essential.

Who Can Practice Before DRT?

Representation before DRT is typically undertaken by:

• Advocates

• Authorised legal representatives

Since DRT proceedings involve banking law, contract law, and procedural law, practitioners must possess strong litigation experience and understanding of financial documentation.

DRT Kochi – Address and Jurisdiction

 

Address:

Debts Recovery Tribunal
5th Floor, Kerala State Housing Board
Panampilly Nagar
Ernakulam, Kerala – 682036

DRT Kochi has jurisdiction over banking and recovery matters arising within its notified territorial limits in Kerala.

For borrowers and companies in Kochi and surrounding districts, this Tribunal is the primary forum for debt recovery litigation.

Appeal Mechanism – DRAT

Orders passed by DRT can be challenged before the Debts Recovery Appellate Tribunal (DRAT).

Appeals must generally be filed within 30 days from the date of receipt of order, subject to statutory conditions including pre-deposit requirements.

Failure to act within limitation may result in loss of appellate remedy.

Common Issues in DRT Matters

In practice, disputes before DRT often involve:

• Incorrect classification of account as NPA

• Excessive interest calculation

• Non-compliance with SARFAESI procedure

• Improper service of notices

• Disputed guarantee liability

• Settlement negotiations

Strategic review of loan documents and procedural compliance is essential before initiating or defending proceedings.

Importance of Early Legal Intervention

Borrowers often approach legal counsel after receiving auction notice. By that stage, options may be limited.

Early consultation allows:

• Examination of loan documents

• Negotiation of restructuring

• One-time settlement advisory

• Challenge to procedural irregularities

• Application for interim protection

Timely action can prevent irreversible financial consequences.

Strategic Representation in DRT Matters

Effective DRT representation involves:

1. Detailed review of loan and security documents

2. Calculation audit and liability verification

3. Procedural compliance analysis under SARFAESI

4. Drafting of written statements and counterclaims

5. Filing interim applications

6. Representation during hearings

7. Appeal strategy, if required

DRT litigation is document-intensive and technically nuanced.

Corporate Borrowers and DRT

For companies, DRT proceedings may:

• Impact credit rating

• Affect director reputation

• Trigger insolvency proceedings

• Lead to attachment of corporate assets

Coordinated advisory is required, particularly where:

• Insolvency proceedings are contemplated

• Settlement discussions are ongoing

• Parallel civil or criminal proceedings exist

Integrated strategy prevents fragmented defence.

DRT vs Civil Court – Key Differences

• DRT procedure is summary and faster

• Technical rules of Civil Procedure Code are relaxed

• Recovery Certificate mechanism expedites enforcement

• Specialised focus on banking recovery

However, speed of proceedings means that delays in response can be costly.

Frequently Asked Questions (FAQ)

Can a borrower challenge SARFAESI action before DRT?

Yes. Section 17 application can be filed challenging possession or auction proceedings.

Is there a pre-deposit requirement for appeal?

Yes. Appeals to DRAT typically require deposit of a percentage of the debt amount, subject to reduction at Tribunal discretion.

Can DRT grant interim stay?

Yes, depending on merits and urgency.

Can settlement be recorded before DRT?

Yes. Parties may settle and record compromise before the Tribunal.

Role of JV & Associates in DRT Matters

In banking and recovery matters, structured advisory includes:

• Preventive consultation upon default notice

• Strategic defence against recovery action

• SARFAESI compliance review

• Settlement structuring

• Tribunal representation

• Appellate advisory

The focus remains on protecting financial interests while ensuring procedural compliance.

Conclusion

The Debts Recovery Tribunal plays a central role in banking litigation and financial enforcement in India. Its powers directly impact businesses, individuals, and guarantors.

Because of the technical and time-bound nature of proceedings, professional legal representation is essential to safeguard rights and financial stability.

For borrowers and financial stakeholders in Kerala, structured DRT advisory ensures informed decision-making and effective defence within the statutory framework.