DRT
What is DRT ?
DRT stands for Debt Recovery Tribunal. DRTs are specialized tribunals in India that were established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act) to facilitate the speedy recovery of debts due to banks and financial institutions from borrowers.
The main objectives of Debt Recovery Tribunals include:
Efficient Debt Recovery: DRTs are tasked with expeditiously adjudicating cases related to the recovery of non-performing assets (NPAs) and bad debts owed to banks and financial institutions. They aim to provide a forum for creditors to recover dues from defaulting borrowers in a time-bound manner.
Jurisdiction: DRTs have jurisdiction over cases involving debt recovery of ₹20 lakhs or more. They handle cases related to the recovery of secured loans, unsecured loans, and other financial liabilities owed by individuals, partnerships, companies, and other entities.
Alternate Dispute Resolution: DRTs encourage the resolution of disputes between banks/financial institutions and borrowers through mechanisms such as conciliation, mediation, and settlement negotiations. These alternative dispute resolution methods aim to facilitate amicable settlements and avoid prolonged litigation.
Enforcement of Decrees: DRTs have the authority to issue decrees for the recovery of debts owed to banks and financial institutions. These decrees are enforceable as civil court decrees and can be executed through various means, including attachment of properties, garnishee orders, and other legal remedies.
Speedy Adjudication: One of the key features of DRTs is the emphasis on speedy adjudication of cases. The RDDBFI Act mandates time-bound disposal of cases within specified timelines to ensure swift resolution of debt recovery proceedings.
Appeals: Decisions of can be appealed before the Debt Recovery Appellate Tribunal by aggrieved parties who are dissatisfied with the rulings or orders passed by the DRTs.
Benefits of DRT
Speedy Resolution: DRTs are dedicated forums for resolving debt recovery cases efficiently and expeditiously. They are designed to streamline the legal process and provide swift resolution of disputes related to the recovery of debts, thereby reducing the time and resources required for litigation.
Specialized Expertise: DRTs consist of specialized judicial officers with expertise in banking and finance laws. They are equipped to handle complex debt recovery cases and ensure adherence to legal principles and procedures governing debt recovery.
Exclusive Jurisdiction: DRTs have exclusive jurisdiction over debt recovery cases involving banks and financial institutions. This ensures that such cases are adjudicated by specialized tribunals familiar with the intricacies of banking laws and procedures, leading to more informed and effective decisions.
Efficient Enforcement: DRTs have the authority to issue orders and directions for the recovery of debts, including attachment and sale of properties, garnishee orders, and other enforcement measures. This enables efficient enforcement of recovery proceedings and ensures compliance with court orders.
Reduced Legal Costs: By providing a dedicated forum for debt recovery cases, DRTs help minimize legal costs and expenses associated with prolonged litigation in regular courts. The streamlined procedures and expedited resolution offered by DRTs result in cost savings for both creditors and debtors.
Creditor Protection: DRTs provide a mechanism for creditors, such as banks and financial institutions, to recover their dues in a timely manner. The tribunal process helps protect the interests of creditors by facilitating the enforcement of their rights and entitlements under the law.
Debtor Rehabilitation: While the primary focus of DRTs is debt recovery, they also aim to promote debtor rehabilitation and financial restructuring where feasible. DRTs may explore options for debt restructuring, settlement negotiations, or other mechanisms to facilitate the repayment of debts by debtors.
Systemic Stability: By expediting the resolution of debt recovery cases, DRTs contribute to the overall stability of the banking and financial system. Timely recovery of debts helps mitigate financial losses for banks and financial institutions, thereby promoting systemic stability and confidence in the financial sector.
Documents of DRT
Original Debt Documents: Copies of the original loan agreements, promissory notes, loan documents, security documents, and other relevant agreements establishing the debt owed by the borrower to the creditor (bank or financial institution).
Default Notice: A notice issued by the creditor (bank or financial institution) to the borrower informing them of the default in repayment and demanding the payment of the outstanding debt amount within a specified period.
Loan Account Statement: A statement of the borrower’s loan account showing details of the principal amount, interest accrued, repayments made, and outstanding balance as of the date of filing the case.
Security Documents: Copies of documents establishing the security or collateral provided by the borrower to secure the loan, such as mortgage deeds, hypothecation agreements, pledge agreements, or guarantees.
Legal Notice and Correspondence: Copies of legal notices, demand letters, and correspondence exchanged between the creditor and the borrower regarding the default in repayment and attempts to recover the debt amicably.
Affidavit: An affidavit signed by an authorized representative of the creditor (bank or financial institution) affirming the accuracy and authenticity of the documents submitted and the facts stated in the petition.
Power of Attorney: A power of attorney authorizing an advocate or legal representative to represent the creditor (bank or financial institution) in proceedings before the DRT.
Evidence of Default: Any documentary or electronic evidence substantiating the default in repayment by the borrower, such as bank statements, payment schedules, repayment records, or communication records.
Witness Affidavits: Affidavits of witnesses, if any, providing testimony or evidence relevant to the debt recovery case, such as witnesses to the default or the execution of loan agreements.
Case Filing Fee: Payment of the requisite fee for filing the case with the DRT, as prescribed by the tribunal’s rules and regulations.
