Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

Debt Recovery Tribunals under the RDB Act, 1993

Q: What is the minimum amount for filing an application in the DRT?

Under section 1(4) of the RDB Act, the Act does not apply where the debt due to a bank or financial institution, or a consortium, is less than ten lakh rupees. The Central Government may notify another amount, which cannot be less than one lakh rupees.

Q: Who can file an application before the DRT under the RDB Act?

Section 17(1) allows applications from banks and financial institutions for recovery of debts due to them. Other creditors cannot use this route.

Q: What is the difference between the DRT and the Appellate Tribunal?

The DRT entertains and decides the original applications for recovery. The Appellate Tribunal entertains appeals against orders made by a Tribunal under the Act, as per section 17(2).

Q: Does the DRT deal with insolvency cases?

Section 17(1A) says the DRT will hear applications under Part III of the Insolvency and Bankruptcy Code, 2016, from a date appointed by the Central Government. Part III covers individuals and partnership firms, not companies.

Q: Can a borrower go to a civil court against a SARFAESI action?

No, where the matter is one the DRT or Appellate Tribunal can decide. Section 34 of the SARFAESI Act bars civil court suits and injunctions in such matters.

Updated 11 October 2026 · Fact-checked

A Debts Recovery Tribunal (DRT) is a special tribunal under the Recovery of Debts and Bankruptcy Act, 1993. It decides applications by banks and financial institutions to recover debts due to them. The Act applies only if the debt is ₹10 lakh or more, unless the Central Government notifies a different limit of at least ₹1 lakh.

Understand Debt Recovery Tribunals under the RDB Act, 1993

Banks used to recover dues through ordinary civil suits, which took years. The Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) created special tribunals so that banks and financial institutions can recover dues faster. The Act was earlier titled the Recovery of Debts Due to Banks and Financial Institutions Act. It was renamed after the Insolvency and Bankruptcy Code, 2016 amended it.

The core power is in section 17(1). A Tribunal (the DRT) exercises jurisdiction, powers and authority to entertain and decide applications from banks and financial institutions for recovery of debts due to them. Notice who the applicant is: a bank or financial institution. An ordinary company cannot use the DRT to recover its trade dues.

There is a two-tier structure. The DRT is the first tier. The Appellate Tribunal (DRAT) hears appeals against orders made by a Tribunal under the Act (section 17(2)). Civil courts are kept away: for SARFAESI matters, section 34 of that Act bars civil courts from entertaining any suit in respect of a matter the DRT or Appellate Tribunal is empowered to determine, and bars injunctions against action taken under the Act.

The Act has a threshold. Under section 1(4), save as otherwise provided, it does not apply where the debt due to a bank or financial institution, or a consortium of them, is less than ten lakh rupees. The Central Government may notify another amount, but not less than one lakh rupees.

The DRT also has links to other laws. Under section 17(1A), it is to exercise jurisdiction over applications under Part III of the Insolvency and Bankruptcy Code (individuals and firms) from a date appointed by the Central Government, and it has circuit sittings in all district headquarters. It also hears applications under section 17 of the SARFAESI Act against secured creditor measures. Study the constitution of the Tribunal and the Presiding Officer's qualifications from your study material, as the text supplied here does not cover them.

Key rules to remember

Core jurisdiction (RDB Act, section 17(1)): DRT decides applications by banks and financial institutions for recovery of debts due to them; Applicant must be a bank or financial institution. The Act's section 1(4) threshold applies to debt due to a bank, financial institution or a consortium.
Threshold limit (RDB Act, section 1(4)): Act does not apply if debt < ₹10,00,000 (or notified amount, not less than ₹1,00,000); Save as otherwise provided. A debt of exactly ₹10 lakh is not below the limit.
Appellate Tribunal (section 17(2)): Appeals against orders of a Tribunal go to the Appellate Tribunal; Section 17(2A) adds appeals against Adjudicating Authority orders under Part III of the IBC from a date to be appointed.
IBC Part III jurisdiction (section 17(1A)): DRT hears Part III IBC applications from a date appointed by the Central Government; circuit sittings at all district headquarters; Operative only from the notified date.
SARFAESI application to DRT (section 17, SARFAESI Act): Application within 45 days from the date the section 13(4) measure was taken; Disposal is to be within 60 days, extendable, with total pendency not over 4 months.
Territorial jurisdiction under SARFAESI section 17(1A): Cause of action arises, or secured asset located, or branch maintaining the account where debt is outstanding; Any of the three places can found jurisdiction.
Civil court bar (SARFAESI section 34): No civil court suit or injunction on matters the DRT or Appellate Tribunal can decide; Applies to matters under the SARFAESI Act and the RDB Act.

How to solve Debt Recovery Tribunals under the RDB Act, 1993 questions

Most questions give a bank or a borrower scenario and ask whether the DRT can act. Use a fixed sequence so you do not miss a condition.

1Identify the applicant. Check it is a bank or financial institution (or a consortium of them) and the claim is a debt due to it.
2Check the amount. Compare the debt with the ₹10 lakh threshold in section 1(4), and note any notified amount of not less than ₹1 lakh.
3Name the forum. State that the DRT has jurisdiction under section 17(1) of the RDB Act and that the Appellate Tribunal hears appeals under section 17(2).
4Check any special route. If the facts involve measures under section 13(4) of SARFAESI, use section 17 of that Act and its 45-day limit and territorial rules.
5Check the civil court bar. If the borrower files a civil suit, cite section 34 of the SARFAESI Act where the matter falls within the Tribunal's powers.
6Apply the law to the facts and give a clear conclusion in one sentence, then add the practical compliance point, such as filing in the right DRT.

Quickest way: Three-check shortcut for DRT questions

When to use it: Use when a short case question gives the parties and amount and asks if the DRT can hear the matter.

Who: bank or financial institution as applicant?
How much: is the debt at least ₹10 lakh, or the notified limit?
Where and when: right DRT by cause of action, asset location or account branch, and within 45 days if it is a SARFAESI challenge.

Common mistakes in Debt Recovery Tribunals under the RDB Act, 1993

Saying the limit is more than ₹10 lakh.
Students round the rule to a simple 'above 10 lakh'.
Fix: Remember the Act does not apply if the debt is less than ₹10 lakh. So ₹10 lakh itself is covered.
Believing the ₹1 lakh figure is the threshold.
The section mentions both amounts.
Fix: ₹10 lakh is the default. The Central Government can notify a different amount, but never below ₹1 lakh.
Letting any creditor file before the DRT.
Students treat the DRT as a general debt court.
Fix: Section 17(1) covers applications from banks and financial institutions for debts due to them.
Mixing up the DRT and the Appellate Tribunal.
Both are in the same Act and both are called tribunals.
Fix: The DRT hears original applications. Appeals against its orders go to the Appellate Tribunal under section 17(2).
Giving the 30-day appeal period for the SARFAESI application to the DRT.
The 30-day and 45-day limits both appear in the SARFAESI Act.
Fix: An application to the DRT under section 17 is within 45 days. An appeal to the Appellate Tribunal under section 18 is within 30 days of receipt of the DRT order.
Saying the DRT's IBC jurisdiction applies to companies.
Students link all IBC matters to the NCLT.
Fix: Section 17(1A) refers to Part III of the IBC, which is for individuals and firms. It operates from the date appointed by the Central Government.

Worked examples

Example 1

Sunrise Traders Pvt Ltd owes ₹8,50,000 to a private supplier. The supplier plans to file a recovery application before the DRT. Can it do so under the RDB Act, 1993?

Show the solution

Provision: section 17(1) gives the DRT power to decide applications from banks and financial institutions for recovery of debts due to them.
Facts: the applicant is a private supplier, not a bank or financial institution.
Amount: ₹8,50,000 is also below the ₹10 lakh limit in section 1(4), unless a lower amount of at least ₹1 lakh has been notified.
Conclusion: the DRT route is unavailable on both grounds.

Answer: No. The applicant is not a bank or financial institution, so the DRT has no jurisdiction under section 17(1). The supplier must use other remedies such as a civil suit or the Insolvency and Bankruptcy Code.

Example 2

Nova Bank issues a section 13(4) SARFAESI notice and takes possession of a factory of Bharat Metals Ltd on 1 March. Bharat Metals wants to challenge it before the DRT and also files a civil suit for injunction. Advise on the forum and the time limit.

Show the solution

Provision: section 17(1) of the SARFAESI Act lets any aggrieved person, including the borrower, apply to the DRT within 45 days from the date the measure was taken.
Forum: under section 17(1A), it files before the DRT where the cause of action arises, where the secured asset is located, or where the branch maintaining the account with the outstanding debt is.
Civil suit: section 34 bars civil courts from entertaining a suit on matters the DRT is empowered to determine, and bars injunctions against action under the Act.
Conclusion: the proper remedy is the DRT application within 45 days of 1 March. The civil suit is not maintainable.

Answer: Bharat Metals should apply to the competent DRT within 45 days from 1 March. The civil suit for injunction is barred by section 34 of the SARFAESI Act.

Exam tips

Write the section number with every rule: 17(1) for jurisdiction, 17(2) for appeals, 1(4) for the threshold.
In case questions, check the applicant and the amount first. Many answers turn on those two facts.
Keep the numbers apart: ₹10 lakh and ₹1 lakh in the RDB Act; 45 days, 60 days, 4 months and 30 days in SARFAESI.
Add a drafting or compliance point, such as naming the correct DRT by cause of action, asset location or account branch.
For the Presiding Officer's qualifications and the constitution of the Tribunal, revise your study material, and state only what you are sure of.

Practice questions from Debt Recovery and SARFAESI