Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

DRT Procedure: Application, Recovery Certificate and Recovery Officer

Updated 11 October 2026 · Fact-checked

A bank or financial institution files an application in the Debts Recovery Tribunal to recover a debt. After the Tribunal decides, it issues a recovery certificate to a Recovery Officer. The Recovery Officer then recovers the amount by the modes in sections 25 and 28 of the RDB Act, such as attachment and sale, receiver and garnishee notice.

Understand DRT Procedure: Application, Recovery Certificate and Recovery Officer

The Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) lets banks and financial institutions recover large dues through a special Tribunal instead of a slow civil suit. The Tribunal is the Debts Recovery Tribunal (DRT).

The process has two stages. First, the bank files an application and the Tribunal decides whether the debt is due. Second, if the Tribunal finds an amount due, it issues a certificate under section 19(7) to a Recovery Officer. The certificate is the document that starts execution. Think of it as the decree of the civil court, and the Recovery Officer as the person who executes it.

The Recovery Officer does not decide whether the debt exists. His job is to realise the amount stated in the certificate. Section 25 gives the main modes. Section 28 adds further modes, without taking away those in section 25.

In exams, keep the two stages apart. Questions usually give a short fact pattern, such as a defaulting borrower with bank balances, a receivable and a factory, and ask how the Recovery Officer can recover. Match each asset to the right mode.

This page covers the recovery stage in detail. The text supplied here covers sections 25 and 28 of the RDB Act. For the filing details (forms, fees, limits, procedure before issue of the certificate), use the provisions of the RDB Act and Rules as in your study material.

Key rules to remember

Start of recovery: Certificate under section 19(7) → Recovery Officer → recovery of the amount specified in the certificate; Section 25 says the Recovery Officer proceeds on receipt of a copy of the certificate.
Modes of recovery under section 25: (a) attachment and sale of movable or immovable property of the defendant; (aa) taking possession of property over which security interest is created or any other property of the defendant, appointing a receiver and selling it; (b) arrest and detention in prison; (c) appointing a receiver for management of movable or immovable properties; (d) any other mode prescribed by the Central Government; Clause (aa) was inserted by Act 44 of 2016, w.e.f. 1-9-2016. Clause (d) is also an insertion.
Other modes under section 28: Section 28(2) deduction from amounts due to the defendant; 28(3) notice to persons holding or owing money; 28(4) application to court holding defendant's money; 28(4A) affidavit of assets; 28(5) distraint and sale of movable property; Section 28 works without prejudice to section 25. The Recovery Officer may use one or more modes.
Deduction under section 28(2): Amount due to defendant from any person → Recovery Officer requires deduction of debt → paid to credit of Recovery Officer; Does not apply to any part of the amount exempt from attachment under section 60 of the Code of Civil Procedure, 1908.
Notice under section 28(3): Notice in writing to any person from whom money is due or may become due to the defendant, or who holds or may hold money for the defendant → pay sufficient amount to Recovery Officer; A copy goes to the defendant (and to all joint holders in a joint account). Joint holders' shares are presumed equal until the contrary is proved.
Consequences of a section 28(3) notice: Claims arising after notice void against the demand; false objection on oath → personal liability; discharging liability after notice → personal liability; non-payment → deemed defendant in default; Liability is limited to the lesser of the person's own liability to the defendant and the defendant's liability for the debt. Receipt from Recovery Officer fully discharges the payer to that extent.
Affidavit of assets under section 28(4A): Recovery Officer may, by order at any stage of execution, require the defendant (and, for a company, any of its officers) to declare particulars of assets on affidavit; Inserted by Act 1 of 2000, w.e.f. 17-1-2000.
Distraint: Distraint and sale of movable property as per the Third Schedule to the Income-tax Act, 1961; Section 28(5). The text supplied refers to the 1961 Act, so quote it as written.

How to solve DRT Procedure: Application, Recovery Certificate and Recovery Officer questions

Use this order for any question on filing, certificate or recovery. It keeps the answer in the provision, analysis, conclusion format.

1Identify the stage. Is the question about the application before the Tribunal, the issue of the certificate, or execution by the Recovery Officer?
2State the trigger. For execution, say the Recovery Officer acts on receipt of the copy of the certificate under section 19(7), and recovers the amount specified in it.
3List the assets and persons in the facts: immovable property, movables, secured assets, bank accounts, debtors of the defendant, money in court.
4Match each asset to a mode: attachment and sale or receiver (section 25), possession of secured property (section 25(aa)), deduction or notice to a third party (section 28(2) and (3)), court money (section 28(4)), distraint (section 28(5)).
5Check conditions and exceptions, such as the section 60 CPC exemption, joint accounts, and the objection on oath.
6Add compliance points: copy of notice to defendant, receipt by Recovery Officer, affidavit of assets if the defendant hides assets.
7Conclude clearly: which modes are available, in what manner, and the effect on third parties.

Quickest way: Asset-to-mode matching

When to use it: Use this for fact-based questions asking how the Recovery Officer can recover from a defaulting borrower.

Write: certificate under section 19(7) → Recovery Officer → section 25 and section 28.
Draw two columns: asset or person, and mode.
Own property: attach and sell, or receiver (section 25). Secured asset: take possession, receiver, sell (section 25(aa)).
Money owed to the borrower or held for him: section 28(2) or section 28(3) notice.
Hidden assets: section 28(4A) affidavit. Movables: distraint, section 28(5). Money in court: section 28(4).
Close with the protections: section 60 CPC exemption and the third party's right to object on oath.

Common mistakes in DRT Procedure: Application, Recovery Certificate and Recovery Officer

Saying the Recovery Officer decides whether the debt is due.
Students blur the Tribunal's role and the Recovery Officer's role.
Fix: Say the Tribunal decides and issues the certificate. The Recovery Officer only executes the amount specified in it.
Listing only section 25 modes and ignoring section 28.
Section 25 is the headline provision, so section 28 gets forgotten.
Fix: Remember that section 28 operates without prejudice to section 25. Add garnishee notices, deductions, affidavit of assets and distraint.
Treating a section 28(3) notice as optional for the bank holding the defendant's money.
Students think the bank can ask for a court order first.
Fix: Under section 28(3)(iv), every person who receives the notice is bound to comply. A bank need not see a pass book or deposit receipt before paying.
Missing the consequences of paying the defendant after a notice.
Students stop at the duty to pay.
Fix: A person who discharges liability to the defendant after receiving the notice is personally liable to the lesser of his own liability so discharged and the defendant's liability. Non-payment makes him a defendant in default.
Applying section 28(2) deduction to all of the defendant's income.
The proviso is skipped.
Fix: State that amounts exempt from attachment under section 60 of the Code of Civil Procedure, 1908 are outside section 28(2).
Forgetting that a false objection on oath carries personal liability.
Students remember only that a person can object.
Fix: Say that a person may object by a statement on oath that nothing is due or held. If the statement is false in any material particular, he becomes personally liable to the lesser of his own liability to the defendant on the date of the notice and the defendant's liability.

Worked examples

Example 1

A Tribunal issues a recovery certificate against Sharma Textiles Ltd. for a debt due to a bank. The company has a factory, ₹40,00,000 receivable from Verma Traders and a current account with another bank. Advise how the Recovery Officer can recover.

Show the solution

Provision: on receipt of the copy of the certificate under section 19(7), the Recovery Officer proceeds under section 25 and may also use section 28, which is without prejudice to section 25.
Factory: he can attach and sell it under section 25(a), or appoint a receiver for its management under section 25(c). If the factory is the security interest property, he can take possession, appoint a receiver and sell under section 25(aa).
Receivable from Verma Traders: under section 28(2) he may require Verma Traders to deduct the debt from the amount due and pay it to his credit. He may also issue a written notice under section 28(3).
Current account: he may issue a notice under section 28(3) to the other bank to pay the money it holds for the company. The bank must comply without needing the pass book or deposit receipt.
Compliance: send a copy of the notice to the company at its last known address. Grant a receipt for amounts paid, which discharges the payer to that extent.
Conclusion: the Recovery Officer can proceed against all three assets together or one after another, using one or more modes.

Answer: The Recovery Officer can attach and sell the factory or appoint a receiver (section 25), use section 28(2) or 28(3) against Verma Traders, and issue a section 28(3) notice to the other bank. He must send a copy of each notice to the company and give a receipt for sums paid.

Example 2

The Recovery Officer serves a section 28(3) notice on Rao Finance, which holds ₹6,00,000 for the defendant. The defendant owes ₹10,00,000 under the certificate. Rao Finance pays the defendant ₹6,00,000 after receiving the notice. What is the position?

Show the solution

Provision: under section 28(3)(ix), a person who discharges any liability to the defendant after receiving the notice is personally liable to the Recovery Officer.
Measure of liability: it is the lesser of (i) his own liability to the defendant so discharged and (ii) the defendant's liability for the debt due under the Act.
Compute: own liability discharged = ₹6,00,000. Defendant's liability = ₹10,00,000. The lesser is ₹6,00,000.
Also, any claim arising after the date of the notice over the money is void against the demand under section 28(3)(v), so the payment to the defendant does not protect Rao Finance.
Further proceedings: if Rao Finance does not pay, it can be treated as a defendant in default under section 28(3)(x). The notice then has the effect of an attachment of a debt.

Answer: Rao Finance is personally liable to pay ₹6,00,000 to the Recovery Officer, being the lesser of ₹6,00,000 and ₹10,00,000. The payment to the defendant gives no discharge.

Exam tips

Write the chain in the first line: Tribunal, certificate under section 19(7), Recovery Officer, section 25 and 28.
Quote the clause letters of section 25, such as (a), (aa), (b), (c) and (d). Examiners reward exact modes.
In a fact-based question, make a short asset-by-asset list and name the mode for each.
Mention the protections: section 60 CPC exemption, copy of notice to defendant, receipt and discharge, and objection on oath.
Do not quote time limits or fees unless your study material gives them. State only what you are sure of.

Practice questions from Debt Recovery and SARFAESI

DRT Procedure: Application, Recovery Certificate and Recovery Officer in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

DRT Procedure: Application, Recovery Certificate and Recovery Officer: frequently asked questions

Who issues the recovery certificate under the RDB Act?

The Debts Recovery Tribunal issues it after deciding the application. It is a certificate under section 19(7) sent to a Recovery Officer for execution. The Recovery Officer recovers the amount specified in it.

What are the main modes of recovery under section 25?

They are attachment and sale of the defendant's movable or immovable property, taking possession of secured or other property with a receiver and sale, arrest and detention in prison, appointing a receiver for management, and any other mode prescribed by the Central Government. The Recovery Officer can use one or more of them.

Is section 28 different from section 25?

Yes. Section 28 gives additional modes and works without prejudice to section 25. These include deduction from amounts due to the defendant, a notice to persons holding money, an application to a court holding the defendant's money, an affidavit of assets and distraint.

Can the Recovery Officer ask the borrower to disclose assets?

Yes. Under section 28(4A) he may, at any stage of execution, order the defendant, and for a company any of its officers, to declare the particulars of assets on affidavit.