Quick Links
Quick Links
UPSC Exams
Latest Update
UP Police Head Operator Result 2025 UPSSSC Junior Assistant Admit Card 2025 Fastag Annual Pass 2025 UGC NET Answer Key June 2025 UGC NET Exam Analysis 2025 UGC NET Question Paper 2025 AP LAWCET Result 2025 UGC NET City Slip 2025 UPSC DAF 1 2025 Rajasthan PTET Answer Key 2025 UPSC Prelims Result 2025 UPSC IFS Result 2025 8th Pay Commission Salary Hike News UPSC 2024 Prelims Answer Key UPSC 2026 Calendar UPSC Admit Card 2025 UPSC Prelims Result Date 2025 UPSC Prelims Answer Key 2025 UPSC Prelims 2025 Expected Cut Off UPSC Prelims Exam Analysis 2025 UPSC Final Result 2025 UPSC Topper Shakti Dubey UPSC Application Rejected List 2025 UPSC Application Date Re-Extended UPSC Interview Date 2024 UPSC Notification 2025 UPSC Admit Card 2025 for Prelims UPSC CSE Prelims 2025 Question Paper UPSC IFS Notification 2025 Indian Navy MR Result 2025 Indian Navy SSR Result 2025
Coaching
UPSC Current Affairs
Syllabus
UPSC Notes
Previous Year Papers
UPSC Mains Previous Year Question Papers Last 25 Years UPSC Prelims Question Papers Last 10 Years UPSC Question Papers UPSC CSE Prelims 2025 Question Paper UPSC Mains 2024 Model Answers UPSC 2024 Question Papers UPSC 2023 Question Papers UPSC 2022 Question Papers UPSC 2021 Question Papers UPSC 2020 Question Papers UPSC 2019 Question Papers UPSC 2018 Question Papers UPSC 2017 Question Papers UPSC 2016 Question Papers UPSC 2015 Question Papers UPSC 2014 Question Papers UPSC CSAT Question Papers UPSC IFS Previous Year Paper UPSC Assistant Labour Commissioner Previous Question Year Papers UPSC Combined Geo Scientist Previous Year Paper UPSC APFC Previous Year Question Papers UPSC CMS Previous Year Question Paper UPSC EPFO Previous Year Paper UPSC Air Safety Officer Previous Year Papers UPSC SO Steno Previous Year Paper UPSC IES ISS Previous Year Question Papers
Mock Tests
UPSC Editorial
Bilateral Ties
Albania India Relations India Algeria Relations Andorra India Relations India Angola Relations India Antigua Barbuda Relations India Argentina Relations Austria India Relations India Azerbaijan Relations Bahamas India Relations India Bahrain Relations Barbados India Relations India Belarus Relations Belgium India Relations Belize India Relations Benin India Relations Bolivia India Relations India Bosnia Herzegovina Relations India Botswana Relations Brazil India Relations Brunei India Relations Bulgaria India Relations Burundi India Relations Cabo Verde India Relations India Cambodia Relations India Cameroon Relations Canada India Relations India Cayman Islands Relations India Central African Republic Relations India Chad Relations Chile India Relations India Colombia Relations India Comoros Relations India Democratic Republic Of The Congo Relations India Republic Of The Congo Relations India Cook Islands Relations India Costa Rica Relations India Ivory Coast Relations India Croatia Relations India Cyprus Relations India Czech Republic Relations India Djibouti Relations India Dominica Relations India Dominican Republic Relations India Ecuador Relations India El Salvador Relations India Equatorial Guinea Relations India Eritrea Relations Estonia India Relations India Ethiopia Relations India Fiji Relations India Finland Relations India Gabon Relations India Gambia Relations India Georgia Relations Germany India Relations India Ghana Relations India Greece Relations India Grenada Relations India Guatemala Relations India Guinea Relations India Guinea Bissau Relations India Guyana Relations India Haiti Relations India Holy See Relations India Honduras Relations India Hong Kong Relations India Hungary Relations India Iceland Relations India Indonesia Relations India Iran Relations India Iraq Relations India Ireland Relations India Jamaica Relations India Kazakhstan Relations India Kenya Relations India Kingdom Of Eswatini Relations India Kiribati Relations India Kuwait Relations India Kyrgyzstan Relations India Laos Relations Latvia India Relations India Lebanon Relations India Lesotho Relations India Liberia Relations Libya India Relations Liechtenstein India Relations India Lithuania Relations India Luxembourg Relations India Macao Relations Madagascar India Relations India Malawi Relations India Mali Relations India Malta Relations India Marshall Islands Relations India Mauritania Relations India Micronesia Relations India Moldova Relations Monaco India Relations India Montenegro Relations India Montserrat Relations India Morocco Relations Mozambique India Relations India Namibia Relations India Nauru Relations Netherlands India Relations India Nicaragua Relations India Niger Relations India Nigeria Relations India Niue Relations India North Macedonia Relations Norway India Relations India Palau Relations India Panama Relations India Papua New Guinea Relations India Paraguay Relations Peru India Relations India Philippines Relations Qatar India Relations India Romania Relations Rwanda India Relations India Saint Kitts And Nevis Relations India Saint Lucia Relations India Saint Vincent And Grenadines Relations India Samoa Relations India Sao Tome And Principe Relations Saudi Arabia India Relations India Senegal Relations Serbia India Relations India Sierra Leone Relations India Singapore Relations India Slovak Republic Relations India Slovenia Relations India Solomon Islands Relations Somalia India Relations India South Sudan Relations India Spain Relations India Sudan Relations Suriname India Relations India Sweden Relations India Syria Relations India Tajikistan Relations Tanzania India Relations India Togo Relations India Tonga Islands Relations India Trinidad And Tobago Relations India Tunisia Relations India Turkmenistan Relations India Turks And Caicos Islands Relations India Tuvalu Relations India Uganda Relations India Ukraine Relations India Uae Relations India Uruguay Relations India Uzbekistan Relations India Vanuatu Relations India Venezuela Relations India British Virgin Islands Relations Yemen India Relations India Zambia Relations India Zimbabwe Relations
Books
Government Schemes
Production Linked Incentive Scheme Integrated Processing Development Scheme Rodtep Scheme Amended Technology Upgradation Fund Scheme Saathi Scheme Uday Scheme Hriday Scheme Samagra Shiksha Scheme India Nishta Scheme Stand Up India Scheme Sahakar Mitra Scheme Mdms Mid Day Meal Scheme Integrated Child Protection Scheme Vatsalya Scheme Operation Green Scheme Nai Roshni Scheme Nutrient Based Subsidy Scheme Kalia Scheme Ayushman Sahakar Scheme Nirvik Scheme Fame India Scheme Kusum Scheme Pm Svanidhi Scheme Pmvvy Scheme Pm Aasha Scheme Pradhan Mantri Mahila Shakti Kendra Scheme Pradhan Mantri Lpg Panjayat Scheme Mplads Scheme Svamitva Scheme Pat Scheme Udan Scheme Ek Bharat Shresth Bharat Scheme National Pension Scheme Ujala Scheme Operation Greens Scheme Gold Monetisation Scheme Family Planning Insurance Scheme Target Olympic Podium Scheme
Topics
NASA Space Missions
NASA Mercury-Redstone 3 (Freedom 7) Mission NASA Mercury-Redstone 4 (Liberty Bell 7) Mission NASA Mercury-Atlas 6 (Friendship 7) Mission NASA Mercury-Atlas 7 (Aurora 7) Mission NASA Mercury-Atlas 8 (Sigma 7) Mission NASA Mercury-Atlas 9 (Faith 7) Mission NASA Gemini 3 Mission NASA Gemini 4 Mission NASA Gemini 5 Mission NASA Gemini 7 Mission NASA Gemini 8 Mission NASA Gemini 9 Mission NASA Gemini 10 Mission NASA Gemini 11 Mission NASA Gemini 12 Mission NASA Apollo 1 (AS‑204) Mission NASA Apollo 7 Mission NASA Apollo 8 Mission NASA Apollo 9 Mission NASA Apollo 10 Mission NASA Apollo 11 Mission NASA Apollo 12 Mission NASA Apollo 13 Mission NASA Apollo 14 Mission NASA Apollo 15 Mission NASA Apollo 16 Mission NASA Apollo 17 Mission NASA Skylab Orbital Workshop Mission NASA Skylab 2 Mission NASA Skylab 3 Mission NASA Skylab 4 Mission NASA Apollo–Soyuz Test Project Mission NASA STS‑1 Columbia Mission NASA STS‑3 Columbia Mission NASA STS‑7 Challenger Mission NASA STS‑8 Challenger Mission NASA STS‑41B Challenger Mission NASA STS‑41G Discovery (1st female EVA) Mission NASA STS‑51L Challenger (accident) Mission NASA STS‑26 Discovery (Return‑to‑Flight) Mission NASA STS‑31 Discovery (Hubble Launch) Mission NASA STS‑49 Endeavour (first capture EVA) Mission NASA STS‑61 Endeavour (Hubble Servicing 1) Mission NASA STS‑73 Columbia (microgravity) Mission NASA STS‑95 Discovery (John Glenn returns) Mission NASA STS‑107 Columbia (accident) Mission NASA STS‑114 Discovery (RTF‑2) Mission NASA STS‑120 Discovery (Node 2) Mission NASA STS‑125 Atlantis (Final Hubble Service) Mission NASA STS‑132 Atlantis Mission NASA STS‑135 Atlantis (Final Shuttle flight) Mission NASA Artemis I (Orion/ SLS‑1) Mission NASA Artemis II (Planned) Mission NASA Artemis III (Planned lunar landing) Mission NASA Mariner 4 Mission NASA Mariner 6 Mission NASA Mariner 7 Mission NASA Mariner 9 Mission NASA Viking 1 Orbiter/Lander Mission NASA Viking 2 Orbiter/Lander Mission NASA Mars Pathfinder & Sojourner Mission NASA Mars Global Surveyor Mission NASA 2001 Mars Odyssey Mission NASA Mars Exploration Rover – Spirit Mission NASA Mars Exploration Rover – Opportunity Mission NASA Mars Reconnaissance Orbiter Mission NASA Phoenix Mars Lander Mission NASA InSight Mars Lander Mission NASA Mars 2020 (Perseverance & Ingenuity) Mission NASA Mars Sample Return – SRL (planned) Mission NASA Pioneer 10 Mission NASA Pioneer 11 Mission NASA Voyager 1 Mission NASA Voyager 2 Mission NASA Galileo Jupiter Orbiter/Probe Mission NASA Cassini–Huygens Mission NASA New Horizons (Pluto & KBO) Mission NASA Juno Mission NASA Europa Clipper (planned) Mission NASA Parker Solar Probe Mission NASA Solar Orbiter (ESA/NASA) Mission NASA Surveyor 1 Mission NASA Lunar Orbiter 1 Mission NASA Lunar Prospector Mission NASA LCROSS Mission NASA LADEE Mission NASA Lunar Reconnaissance Orbiter (LRO) Mission NASA CAPSTONE Mission NASA VIPER Rover (planned) Mission NASA NEAR Shoemaker Mission NASA Deep Space 1 Mission NASA Stardust Mission NASA Genesis Mission NASA Deep Impact Mission NASA Dawn (Vesta/Ceres) Mission NASA OSIRIS‑REx Mission NASA Lucy Mission NASA DART Mission NASA Landsat‑1 (ERTS‑1) Mission NASA Landsat‑5 Mission NASA Landsat‑9 Mission NASA Terra Mission NASA Aqua Mission NASA Aura Mission NASA Suomi NPP Mission NASA Sentinel‑6 Michael Freilich Mission NASA ICESat‑2 Mission NASA GRACE‑FO Mission NASA SMAP Mission NASA GPM Core Observatory Mission NASA CALIPSO Mission NASA CloudSat Mission NASA NISAR (NASA‑ISRO) Mission NASA Explorer 1 Mission NASA COBE Mission NASA Compton Gamma Ray Observatory Mission NASA Hubble Space Telescope Mission NASA Chandra X‑ray Observatory Mission NASA Spitzer Space Telescope Mission NASA WISE Mission NASA Kepler Mission NASA TESS Mission NASA Fermi Gamma‑ray Space Telescope Mission NASA NICER Mission NASA IXPE Mission NASA Roman Space Telescope (planned) Mission NASA NuSTAR Mission NASA GALEX Mission NASA Swift Mission NASA SOHO (ESA/NASA) Mission NASA Cluster II (ESA/NASA) Mission NASA TIMED Mission NASA STEREO‑A/B Mission NASA MMS Mission NASA IRIS Mission NASA Solar Dynamics Observatory Mission NASA X‑37B OTV‑1 (USAF/NASA liaison) Mission NASA X‑59 QueSST Mission NASA Mars Helicopter Ingenuity Mission NASA Valkyrie R5 Robot Mission NASA Low‑Boom Flight Demo Mission NASA CRS‑1 Dragon Mission NASA CRS‑1 Cygnus Mission NASA Crew Dragon Demo‑2 Mission NASA Starliner OFT‑2 Mission NASA STS-2 (Shuttle flight) Mission NASA STS-4 (Shuttle flight) Mission NASA STS-5 (Shuttle flight) Mission NASA STS-6 (Shuttle flight) Mission NASA STS-41C (Shuttle flight) Mission NASA STS-41D (Shuttle flight) Mission NASA STS-51A (Shuttle flight) Mission NASA STS-61C (Shuttle flight) Mission NASA STS-26 (Shuttle flight) Mission NASA STS-27 (Shuttle flight) Mission NASA STS-29 (Shuttle flight) Mission NASA STS-30 (Shuttle flight) Mission NASA STS-32 (Shuttle flight) Mission NASA STS-34 (Shuttle flight) Mission NASA STS-38 (Shuttle flight) Mission NASA STS-45 (Shuttle flight) Mission NASA STS-60 (Shuttle flight) Mission NASA STS-70 (Shuttle flight) Mission NASA STS-71 (Shuttle flight) Mission NASA STS-73 (Shuttle flight) Mission NASA STS-88 (Shuttle flight) Mission NASA STS-92 (Shuttle flight) Mission NASA STS-97 (Shuttle flight) Mission NASA STS-99 (Shuttle flight) Mission NASA STS-100 (Shuttle flight) Mission NASA STS-104 (Shuttle flight) Mission NASA STS-106 (Shuttle flight) Mission NASA STS-110 (Shuttle flight) Mission NASA STS-112 (Shuttle flight) Mission NASA STS-115 (Shuttle flight) Mission NASA STS-116 (Shuttle flight) Mission NASA STS-117 (Shuttle flight) Mission NASA STS-118 (Shuttle flight) Mission NASA STS-120 (Shuttle flight) Mission NASA STS-122 (Shuttle flight) Mission NASA STS-123 (Shuttle flight) Mission NASA STS-126 (Shuttle flight) Mission NASA STS-130 (Shuttle flight) Mission NASA Vanguard 1 Mission NASA Transit 1B Mission NASA Echo 1 Mission NASA Telstar 1 Mission NASA Syncom 3 Mission NASA ATS‑6 Mission NASA Skynet Mission NASA Nimbus‑1 Mission NASA Nimbus‑7 Mission NASA ERS-1 Mission NASA SeaSat Mission NASA QuikSCAT Mission NASA Jason‑1 Mission NASA Jason‑3 Mission NASA ICESat Mission NASA Earth Observing‑1 Mission NASA Orbiting Carbon Observatory‑2 Mission NASA CYGNSS Mission NASA PACE Mission NASA TRMM Mission NASA Terrestrial Planet Finder (cxl) Mission NASA Laser Interferometer Space Antenna (LISA) Mission NASA Explorer 33 Mission NASA Voyager Interstellar Mission Mission NASA Helios‑A Mission NASA Helios‑B Mission NASA ISEE‑3 (ICE) Mission NASA ACE Mission NASA DSCOVR Mission NASA IBEX Mission NASA Solar Orbiter Heliospheric Imager Mission NASA SAGE‑III ISS Mission NASA SPACE Telescope Imaging Spectrograph Mission NASA ARIEL (ESA/NASA) Mission NASA OSAM‑1 (Restore‑L) Mission NASA Dragonfly (Titan rotorcraft) Mission NASA VERITAS (Venus orbiter) Mission NASA DAVINCI (Venus probe) Mission NASA SPHEREx Mission NASA MAGGIE (Mars Geophysical) Mission NASA CLPS – Peregrine Mission NASA CLPS – VIPER Delivery Mission NASA CAPSTONE Mission NASA Gateway (HALO / PPE) Mission NASA Mars Telecommunication Orbiter (cxl) Mission NASA Mars Polar Lander (MPL) Mission NASA Mars Climate Orbiter Mission NASA Pathfinder Mission Mission NASA SLS Block 1B (Exploration Upper Stage) Mission NASA Orion Crew Module Mission NASA Commercial LEO Destinations – Axiom Station Mission NASA ISS Expedition 1 Mission NASA ISS Expedition 70 Mission NASA CRS‑11 (Dragon) Mission NASA CRS‑21 (Dragon 2) Mission NASA Snoopy CubeSat Mission
Home / IAS Preparation / Debt Recovery Tribunal (DRT)

Debt Recovery Tribunal (DRT) UPSC Notes: Features and Powers

Last Updated on Apr 03, 2024
Also Read Debt Recovery Tribunal (DRT) in Hindi
Download As PDF
IMPORTANT LINKS
Agriculture Notes For UPSC Public Administration UPSC Notes Modern History Books For UPSC Overseas Citizen Of India Caste System & Panchayati Raj Godavari River Federalism In India Indira Point New Development Bank Battle Of Sinhagad Sankalp And Strive Schemes Digital India High Yielding Varieties Economic Growth Development League Of Nations Ease Of Doing Business Mid Day Meal Scheme Wildlife Protection Act 1972 UPSC Notes International Union Conservation Nature

Debt Recovery Tribunals (DRT) provide quick and effective adjudication in the debt recovery of banks and other financial institutions. These are established under the provisions of the Recovery of Debt and Bankruptcy Act 1993. DRTs are quasi-judicial institutions. The appeals against orders of DRTs are heard by DRATs (Debt Recovery Appellate Tribunals). Currently, 39 DRTs and 5 DRATs are functioning in the country.

 Debt Recovery Tribunal DRT is essential to the UPSC IAS exam syllabus. This topic comes under the Economy part of the Mains General Studies Paper 3 syllabus and General Studies Paper -1 of the UPSC Prelims syllabus.

UPSC Aspirants can improve their chances of selection through Testbook's UPSC CSE Coaching and boost their IAS preparation! Other significant topics related to the UPSC IAS exam can also be accessed here on Testbook!

Download important Economy notes for UPSC Exam with this link!

What is Debt Recovery Tribunal DRT?

A Debt Recovery Tribunal DRT functions as a quasi-judicial statutory body established under the Recovery of Debt and Bankruptcy Act 1993. Its purpose is to adjudicate cases and facilitate the recovery of loans from banks and financial institutions. In 2020, the Indian Government raised the minimum limit for filing cases under DRTs to 20 lakh rupees. The Presiding Officer, appointed by the Central Government, heads the Debt Recovery Tribunal DRT. Appeals against DRT orders can be made to the Debt Recovery Appellate Tribunal (DRAT), which a Chairman heads. Financial institutions and banks file loan recovery applications with the DRT having jurisdiction over the debtor's residence or business location. During adjudication, the DRT possesses powers akin to a District Court. Additionally, the Debt Recovery Tribunal (DRT) has recovery officers responsible for executing the orders it issues.

Read about the National Company Law Tribunal from here!

Background of Debt Recovery Tribunal

Before the enactment of the Recovery of Debt and Bankruptcy Act-1993, debt-related cases were filed in the Civil Courts. These cases were decided according to the provisions of the CPC (Civil Procedure Code). These used to take several years to resolve the case. Moreover, there was a lot of pendency in the cases. It would lead to unnecessary delays in the recovery of debts by the Banks. 

Observing these issues in the system, in 1981, a committee headed by Mr. T. Tiwari was appointed. It was tasked with recommending reform measures in this system. The committee observed that the Courts were already burdened with regular cases. This leads to the treatment of loan recovery cases as other ordinary cases. Hence, the problems of pendency and delay are arising. Amond different recommendations of the committee, one was the establishment of tribunals (quasi-judicial bodies) that would only handle the recovery cases.

It took a decade to accept the recommendations and establish such a body. The Recovery of Debt and Bankruptcy Act-1993 was introduced to solve the issue of delay and pendency. The legislation was brought after the 1991 Economic liberalisation of the Economy. 

Read about the Armed Forces Tribunal from here!

FREEMentorship Program by
Ravi Kapoor, Ex-IRS
UPSC Exam-Hacker, Author, Super Mentor, MA
100+ Success Stories
Key Highlights
Achieve your Goal with our mentorship program, offering regular guidance and effective exam strategies.
Cultivate a focused mindset for exam success through our mentorship program.
2 Lakh+ Students Mentored Get
Get Free Mentorship Now
UPSC Beginners Program

Get UPSC Beginners Program SuperCoaching @ just

₹50000

Claim for free
Want to know more about this pass ?
Explore SuperCoaching

Jurisdiction of Debt Recovery Tribunal DRT

Debt Recovery Tribunals (DRTs) have the authority to consider applications from banks and financial institutions seeking the recovery of owed debts. Banks can submit applications to the Tribunal within the geographical boundaries where the defendant resides or conducts business. The Act explicitly prohibits all other courts, except the Supreme Court and High Court, from adjudicating matters pertaining to debt recovery.

Read about the National Green Tribunal from here!

Features of DRT 
  • The Debt Recovery Tribunal (DRT) is established to settle cases to restore the unpaid amounts of the NPAs (Non Performing Assets). The Banks declare these as per RBI guidelines.
  • Under Section 4 of the Recovery of Debt and Bankruptcy Act-1993, the DRT shall have only one member (called Presiding Officer).
    • The notification of the Central Government shall appoint him.
    • The Presiding Officer of one Tribunal can also preside over other Tribunals if the Central Government authorizes it.
    • The Presiding Officer will have a term of 5 years or till the age of 65 years, whichever is earlier. He shall be eligible for reappointment.
    • He should be qualified enough to be the District Judge.
  • For cases of recovery of debt greater than 20 Lakh Rs, Banks, and Financial Institutions can approach the DRT.
    • For amounts lower than this, Banks and Financial Institutions approach the Civil Courts.
  • DRT and DRAT need to maintain the Principles of Natural Justice.
    • However, they can regulate their own procedures. For this, they are not bound by the CPC (Civil Procedure Code) provisions.
  • One does not need a degree in Law to argue cases before the DRT.
  • DRTs are mandated to resolve the cases within 6 months.
    • The appeals against the orders passed by DRT can be made before a DRAT within 45 days of such judgment. 
    • In the case of the SARFAESI Act, the time duration to dispose of the cases is 60 days to 4 months.
    • The appeals before the Appellate Tribunal (DRAT) shall be disposed of within 6 months from the receiving date.
  • Before approaching the DRAT against the order of DRT, the aggrieved party needs to deposit 75% of the amount fixed by the order.
  • The Centre can appoint one or more Recovery Officers as an employee of the Tribunal.
    • They will discharge their duties under the superintendence of the Presiding Officer of the DRT.

Read about the Payments Banks in India from here!

Powers and Functions of DRT 
  • A Debt Recovery Tribunal DRT is empowered to enforce the provisions of the Recovery of Debt and Bankruptcy Act-1993 and the SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement Of Security Interests) Act 2002.
  • DRT gets the authority to entertain debt recovery-related applications from financial institutions and banks from section 17 of the Recovery of Debt and Bankruptcy Act-1993.
  • While deciding the cases, the Debt Recovery Tribunal (DRT) acts as a District Court. 
  • Section 18 of the Recovery of Debt and Bankruptcy Act-1993 imposes restrictions on all the Courts from adjudicating on debt recovery-related matters except the Supreme Court and High Courts.
    • It means that relief against the orders of DRAT can only be given by the Supreme Court and High Courts. 
  • Supreme Court, in its judgment, has specified that the DRT and the DRAT have jurisdiction strictly confined to those cases that are mentioned in Section 17 of the Recovery of Debt and Bankruptcy Act-1993.
    • Thus the Debt Recovery Tribunals (DRTs) cannot decide over the cases like property rights, succession issues, issuance of receipts, etc.
  • Section 17A was inserted in the act by an amendment in 2000. It specifies the powers of the Chairperson of the DRAT. Its general powers include.
    • Superintendence and control of Tribunals under his jurisdiction.
    • Reviewing the ACRs (Annual Confidential Reports) from various Presiding Officers.
    • Direct Tribunals to present the status of cases under both the RDB Act and the SARFAESI Act.
    • Review the performance of Presiding Officers.
    • Organise meetings with Presiding Officers.
    • Recommend disciplinary action against Presiding Officers to Centre through his report in case of misconduct or incapacity.

Read about the Insolvency and Bankruptcy Code from here!

Concerns Related to DRT 
  • One of the significant issues with the Debt Recovery Tribunal (DRT) is a large number of pendency and slow resolution of cases.
    • According to the World Bank report, it takes nearly 4.3 years in India to resolve insolvency-related cases under old laws.
    • More than 1.6 lakh cases were pending in various DRTs across India till February 2022.
  • Procedural Bottlenecks: the Supreme Court held that the jurisdiction of the DRTs is strictly limited to Section 17 of the Act. 
    • Thus, related matters like succession, KYC issues, issuance of receipts, etc., are taken up by Civil Courts. This leads to unnecessary delay. 
  • DRTs are overburdened by the ever-increasing cases. 
    • At the time of inception, it was conceptualized that at any point in time, the average number of cases handled by any DRT would be around 30. But in reality, in major cities, this number went to more than 4000 cases per DRT.
  • As per reports, the average loan recovery rate of the DRTs is just around 25%. 
  • At present, there are only 39 DRTs and 5 DRATs across India. These are insufficient in number to handle a large number of cases.

Read about the National Development Council here!

Measures towards Correcting DRT

As corrective measures related to the issues faced by the Debt Recovery Tribunals (DRTs), the Government amended the Recovery of Debt and Bankruptcy Act-1993 in 2016. Following are the significant changes brought in the act:

  • The retirement age of the Presiding Officers has been increased from 62 to 65 years. And that of the Chairpersons of DRATs is increased from 65 to 67 years.
  • The amended act empowers the Central Government to establish a uniform procedure for all the DRTs and DRATs across India.
  • Banks are authorized to file cases in Tribunals having jurisdiction over the area of the Bank’s branch where the debt is pending.

Read about Non-Banking Financial Institutions from here!

Conclusion 

The Debt Recovery Tribunals (DRTs) have helped Banks and other Financial Institutions somewhat to solve the problem of NPAs (Non-Performing Assets). But these Tribunals are also facing the same problems earlier faced by regular Courts. These include pendency of cases, low recovery, delay in resolution, etc. There need to be more DRTs and DRATs established in the country. The Recovery Officials and other staff need to be well-trained and equipped for better execution. 

Testbook provides the best and most comprehensive study material for several government exams. It is a one-stop center for UPSC and other exam preparation because we have mocks, current affairs materials, live lectures and tests, detailed study material, and much more here. UPSC aspirants can avail the benefits by downloading the Testbook App from here.

More Articles for IAS Preparation

Debt Recovery Tribunals (DRT) UPSC FAQs

The Debt and Bankruptcy Act-1993 is applicable to cases where the due amount to any bank or Financial Institution is greater than or equal to Rs 20 lakh.

As per Rule 18 of the Debt Recovery Tribunal (Procedure) Rules, 1993, The Tribunal may make such orders and decisions, that are necessary to give effect to its orders. Such orders are also given to prevent abuse of its process and to secure the ends of justice.

As per the Gazette notification of 31st January 2023, it is mandatory to file the cases in the DRT in online modes only.

As per the Bombay High Court judgment, the borrower can file a counterclaim to the application initially filed by the Banks and Financial Institutions. But he is not permitted to file any civil suit to raise an independent claim against the Bank or Financial Institution.

The Debt Recovery Tribunals (DRTs) are vested with inherent powers to recall any of their orders if sufficient reason exists for that.

The Debt Recovery Tribunal (DRT) is a specialized quasi-judicial body in India that adjudicates and resolves disputes related to debt recovery and the enforcement of security interests.

The primary purpose of the Debt Recovery Tribunal (DRT) is to facilitate the expeditious recovery of outstanding debts by providing a legal forum for creditors to recover their dues from defaulting borrowers.

Creditors, such as banks, financial institutions, and individuals, who have outstanding debts or claims against defaulting borrowers, are eligible to approach the Debt Recovery Tribunal (DRT) for seeking recovery.

The Debt Recovery Tribunal (DRT) has jurisdiction over cases involving outstanding debts or claims of 20 lakhs Indian Rupees or more, as specified under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

The fee for filing a case or application with the Debt Recovery Tribunal (DRT) can vary and is subject to the specific rules and regulations of the DRT. The minimum fee can depend on factors such as the nature of the case and the relief sought.

The time limit for resolution of cases in the Debt Recovery Tribunal (DRT) can vary depending on the complexity of the case and various other factors. It is advisable to consult the specific rules and procedures of the DRT for more accurate time limits.
Report An Error
Exams Tests Super Practice