Debt Recovery Tribunal Proceedings — Both Sides of the Dispute
The Debt Recovery Tribunal was established under the Recovery of Debts and Bankruptcy Act, 1993 to provide banks and financial institutions with a dedicated, faster forum for recovering outstanding dues above ₹20 lakh. Over three decades, DRT proceedings have become a central feature of banking and credit litigation in India — and an increasingly important forum as the interaction between DRT jurisdiction, SARFAESI enforcement, and IBC proceedings has grown more complex.
August Attorneys LLP represents both lenders and borrowers before the Delhi DRT and the Debt Recovery Appellate Tribunal (DRAT). Mr. Shailendra Singh’s background in insolvency, banking law, and commercial litigation makes the firm particularly effective in DRT matters — where the legal issues routinely intersect with SARFAESI enforcement, PMLA attachment, and IBC proceedings involving the same borrower.
Our DRT Practice
SARFAESI Act — Rights and Remedies
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) gives secured creditors significant enforcement powers — including the right to take symbolic and physical possession of secured assets and to sell them through public auction without court intervention. These powers are subject to strict procedural requirements, and departures from those requirements are challengeable before the DRT.
The limitation period for a Section 17 SARFAESI challenge is 45 days from the measure being challenged. Missing this window can result in the loss of the right to challenge the bank’s action entirely. If you have received a SARFAESI notice or if a bank has taken possession of your property, legal advice should be sought immediately.
We advise borrowers on SARFAESI challenges at the earliest possible stage — the 45-day limitation period leaves very little time for a properly prepared application.
Interaction Between DRT and IBC
Where a borrower is a corporate entity, a lender may simultaneously pursue recovery before the DRT and initiate CIRP proceedings before the NCLT under the IBC. These proceedings interact in important ways: admission of CIRP triggers a moratorium under Section 14 that stays DRT proceedings against the corporate debtor; the resolution or liquidation of the borrower through IBC affects the lender’s ability to enforce security through SARFAESI.
August Attorneys LLP’s practice spans both DRT proceedings and NCLT/NCLAT IBC matters, giving the firm a complete understanding of how these parallel proceedings interact — and how to advise lenders and borrowers on strategy when both forums are in play.
- Free initial case consultation included
- Litigation value up to 2 million dollars
- Affordable legal representation options
- Client is legally challenged / under disability
- Case involves multiple legal links to be removed
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What is the minimum claim amount for DRT?
The Debt Recovery Tribunal has jurisdiction over claims of ₹20 lakh and above by banks and financial institutions. Claims below this threshold must be pursued before the appropriate civil court.
Can a borrower challenge the valuation in a SARFAESI auction?
Yes. A borrower can challenge the auction before the DRT on the ground that the property was undervalued, that the required procedure was not followed, or that the auction notice was inadequate. However, the 45-day limitation period applies from the date of the auction notice or other measure being challenged.
What happens to DRT proceedings if the borrower files for insolvency?
If the borrower is an individual or partnership, IBC proceedings are themselves filed before the DRT. If the borrower is a corporate entity and CIRP is admitted before the NCLT, the moratorium under Section 14 IBC stays DRT proceedings against the corporate debtor — though proceedings against personal guarantors continue.