Introduction
The growth of the banking and finance sector has given rise to increasing financial disputes, particularly around debt recovery and default cases. To streamline and expedite such matters, Debt Recovery Tribunals (DRTs) were established under the Recovery of Debts and Bankruptcy Act, 1993. DRT practice is a specialized area of law focusing on recovery proceedings initiated by banks, financial institutions, and creditors against defaulting borrowers.
What is DRT?
A Debt Recovery Tribunal (DRT) is a quasi-judicial body that deals exclusively with cases related to recovery of debts exceeding ₹20 lakh owed to banks and financial institutions. Its objective is to ensure quick adjudication and enforcement of claims, minimizing delays common in civil courts.
Scope of DRT Practice in Banking & Finance
DRT practice broadly covers:
- Filing and defending applications for debt recovery
- Handling cases under the SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest)
- Challenging possession or auction of secured assets
- Representing borrowers and guarantors in recovery proceedings
- Appeals before the Debt Recovery Appellate Tribunal (DRAT)
- Advisory on restructuring, settlement, and compliance with financial regulations
Importance of Legal Support in DRT Matters
The complexities of debt recovery laws demand professional expertise. Lawyers specializing in DRT practice assist banks and financial institutions in recovering dues efficiently, while also protecting the rights of borrowers against arbitrary actions. They prepare petitions, draft responses, handle evidence, and provide representation before tribunals to ensure fair and speedy outcomes.
Why DRT Practice Matters
With rising financial disputes and non-performing assets (NPAs), DRTs play a critical role in maintaining financial discipline and stability. They offer a structured mechanism for recovery, balancing the interests of creditors while safeguarding borrowers’ rights.
FAQs on Banking & Finance – DRT Practice
1. What is the role of a Debt Recovery Tribunal (DRT)?
Answer: A DRT adjudicates cases related to recovery of debts owed to banks and financial institutions, ensuring quick and effective enforcement of claims.
2. What types of cases can be filed before a DRT?
Answer: Cases involving debt recovery exceeding ₹20 lakh, enforcement of security interests under the SARFAESI Act, and related financial disputes can be filed before a DRT.
3. Can a borrower challenge DRT proceedings?
Answer: Yes. Borrowers can contest claims, challenge possession notices, and appeal against DRT orders before the Debt Recovery Appellate Tribunal (DRAT).
4. Why should banks and borrowers hire a DRT lawyer?
Answer: DRT matters involve complex procedures and strict timelines. A specialized lawyer ensures proper representation, compliance with laws, and fair outcomes.
