What is Debt Recovery Tribunal (DRT) and DRAT?

Debt Recovery TribunalDuring 1980s-90s, the banks in India did not have access to any specialised mechanism to recover the dues from the borrowers. In 1981, the Tiwari Committee examined the legal and other difficulties faced by banks and financial institutions (FI) and suggested the setting up of special tribunals for recovery of dues of banks and financial institution. Consequently in 1993, the Recovery of Debts due to Banks and Financial Institutions Act (RDDBFI Act), 1993 was enacted to establish the Debt Recovery Tribunal across the length and breadth of the country. Currently there are 39 DRTs and 5 DRATs operational in the country.

Objective of Debt Recovery Tribunal (DRT)

The objective of Debt Recovery Tribunal (DRT) is expeditious adjudication and recovery of debts due to banks and FIs.

What is minimum due amount to file case in DRT?

The minimum amount due to banks and FIs should be greater than 20 lac rupees.

Composition of DRT

It consists of one person only who is referred as Presiding officer.  The Presiding officer:

  • Should be qualified to work as district judge
  • Can have term of 5 years
  • Can hold the office till he attains the age of 62 years

To assist the Presiding officer, the government can appoint the recovery officers as deemed fit.

What is Debt Recovery Appellate Tribunal (DRAT)?

A person/entity aggrieved by orders of the DRT can appeal against its orders to Debt Recovery Appellate Tribunal (DRAT). The appeal must be made within 45 days of receiving the orders from DRT. The DRAT shall not entertain the appeal until such person deposits the 75% of amount of debt so due determined by the DRT. Both DRT and DRAT works on the principle of natural justice and have same powers as vested in any civil court.

Composition of DRAT

It consists of one person only who is referred as Chairperson of Appellate Tribunal. The Chairperson:

  • Should be qualified to be judge of high court
  • Should be member of legal service
  • Held office of Presiding officer for at least 3 years
  • Can have term of 5 years
  • Can hold the office till he attains the age of 65 years

Download this article as PDF

We hope you liked this article on functions of DRT and DRAT. Here are some useful articles for you to read next:

Click to go to RBI Grade B Preparation Page

Tags: debt recovery tribunal, drt act, debts recovery tribunal, debt recovery tribunal act, debt recovery appellate tribunal, recovery of debts due to banks and financial institutions act, bank drt, rddbfi act