Answer By law4u team
The Debt Recovery Tribunal (DRT) is a quasi-judicial body in India established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act). It primarily deals with the recovery of debts and loans by banks and financial institutions. If a person (individual, company, or organization) owes a debt to a bank or financial institution and the debt has remained unpaid for a certain period, the creditor can approach the DRT for recovery. Steps to File a Case in the Debt Recovery Tribunal (DRT) Eligibility to File a Case A bank or financial institution (i.e., creditor) can file a case in the DRT for the recovery of debts. The creditor must have a debt of at least ₹20 lakh (for individuals) or more to file a case in DRT (as per the RDDBFI Act, 1993). Individuals, companies, and other entities who owe money to banks and financial institutions can also be defendants in such cases. Preparation of Documents Debt Details: The creditor must have proper documentation that establishes the existence and amount of the debt. This includes loan agreements, promissory notes, security documents, or any other contracts proving the debt. Notice of Demand: Before approaching the DRT, the creditor must send a demand notice to the borrower, requesting payment of the overdue amount. The notice must specify the amount owed and give the borrower a certain time period to pay the debt. Default and Failure to Pay: If the borrower does not pay within the notice period, the creditor can then approach the DRT for legal action. Filing an Application The creditor must file an application in the DRT, which is known as an Original Application (OA). This application should be submitted along with the prescribed fee. The application should include: Details of the creditor and borrower (name, address, etc.). Details of the loan or debt (amount, interest, due dates). Documents supporting the debt (loan agreement, security documents, etc.). Proof of failure of payment or default by the borrower. A prayer (request) for the recovery of the outstanding amount, along with interest and any other claims. The DRT also provides forms for filing an OA, which must be filled out correctly and submitted. Payment of Court Fees The fee for filing the application depends on the amount of the debt. The fee structure is generally a percentage of the amount being claimed. The fee should be paid at the time of filing the application, and a receipt for the fee payment must be attached with the application. Admissibility of the Case Upon receiving the application, the DRT will examine the documents and evidence submitted. If the application meets all requirements, the DRT will admit the case and issue a notice to the borrower (defendant). Issuance of Notice to the Borrower The DRT issues a notice to the borrower, informing them of the application and the need to respond. The borrower is given a certain time (usually 30 days) to file their reply and defend the case. Hearing of the Case Once the borrower’s response is received, or if no response is filed within the stipulated time, the DRT will proceed with a hearing. Both parties (creditor and borrower) are required to present their evidence and arguments before the Tribunal. The DRT will consider documents, oral arguments, and other evidence before making a decision. Order of the DRT After hearing both parties and reviewing the evidence, the DRT will pass an order either for the recovery of the debt or for dismissing the case. If the DRT passes an order in favor of the creditor, it may issue directions for the recovery of the debt, including attachment of the borrower’s property or other assets. Appeal Process If either party is dissatisfied with the DRT's decision, they can appeal to the Debt Recovery Appellate Tribunal (DRAT) within 45 days of the DRT’s order. If a party is still dissatisfied with the DRAT’s decision, an appeal can be made to the Supreme Court. Enforcement of DRT Order Once the DRT passes a favorable order, it can be enforced by various means such as: Attachment of property: The DRT can order the attachment and sale of the borrower’s assets. Recovery Certificate (RC): If the borrower does not pay, the creditor can request a recovery certificate from the DRT, which can then be executed by a recovery officer. Arrest and detention: In some extreme cases, the debtor can be arrested and detained for non-payment. Conclusion Filing a case in the Debt Recovery Tribunal involves preparing the necessary documents, filing an application with the required fees, and following through the legal process. The DRT aims to expedite the recovery of debts owed to banks and financial institutions, providing a quicker alternative to regular civil courts. If the creditor succeeds, the DRT has the power to issue recovery orders to enforce payment.
