Debt Recovery Tribunal (DRT) is a specialized forum established under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 in India to resolve disputes related to secured debts. The DRT is empowered to hear and resolve cases related to recovery of debts due to banks and financial institutions, and also has the authority to enforce the security interest of banks and financial institutions in a more efficient manner.

The DRT has jurisdiction over cases involving debts of more than 10 lakh rupees and provides a quicker and less expensive alternative to the traditional court system for the resolution of disputes related to secured debt. The DRT hears and decides cases on the basis of the evidence presented by the parties and the provisions of the SARFAESI Act and relevant laws.

The DRT plays an important role in the functioning of the banking sector by enabling banks and financial institutions to effectively and efficiently recover their NPAs, reducing the time and cost involved in the recovery process.

How the DRT resolve disputes

The DRT, or Debt Recovery Tribunal, resolves disputes related to recovery of debt in India. The DRT resolves disputes through a judicial process where both the borrower and the lender present their arguments and evidence before the tribunal. The tribunal then makes a ruling based on the evidence presented and the provisions of the relevant laws, such as the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The ruling of the DRT is binding and enforceable, and parties may appeal the decision in a higher court if necessary.

Proceedings of DRT

The proceedings of the Debt Recovery Tribunal (DRT) can be explained as follows:

1. Filing of Application: The lender, usually a bank or financial institution, files an application for recovery of debt before the DRT within the limitation period.
2. Service of Notice: The DRT serves a notice to the borrower, who must appear before the tribunal on the specified date.
3. Hearing: Both the lender and the borrower present their arguments and evidence in the hearing. The DRT may also examine witnesses, if any, and consider any documents submitted by the parties.
4. Interim Orders: The DRT may issue interim orders during the proceedings, such as a freeze on the borrower’s assets or a stay on the recovery proceedings.
5. Ruling: After considering all the evidence and arguments, the DRT delivers its ruling. The ruling may either be in favor of the lender or the borrower, or a compromise agreement may be reached between the parties.
6. Execution: If the ruling is in favor of the lender, the DRT issues an order for the recovery of debt. The lender can execute the order and recover the debt, with the assistance of the DRT if necessary.
7. Appeal: Either party may appeal the DRT’s ruling in a higher court, such as the Debts Recovery Appellate Tribunal (DRAT), within 45 days of the ruling.

It is important to note that the DRT proceedings are judicial in nature and are governed by the rules of evidence and procedure applicable to civil courts in India. The DRT proceedings are conducted in a timely and efficient manner, and the tribunal is empowered to make its own rules to ensure speedy disposal of cases.