Insolvency and Bankruptcy - Law and Practice · Debt Recovery and Securitization

Application to DRT and Recovery Procedure Explained

Q: What is the minimum debt for filing an application before the DRT?

Under section 1(4) of the RDB Act, the Act does not apply where the debt due is less than ten lakh rupees, save as otherwise provided. The Central Government may notify another amount, not less than one lakh rupees.

Q: What is a recovery certificate?

It is the certificate the Tribunal issues to a Recovery Officer so that the amount can be recovered. Under section 31A, the Recovery Officer treats a certificate for an old unexecuted court decree as a certificate for a debt recoverable under the Act.

Q: Within how many days must a borrower approach the DRT under SARFAESI?

Within forty-five days from the date on which the section 13(4) measure was taken, as per section 17(1). The application is filed with the prescribed fee.

Q: How are many pending DRT cases against one borrower handled?

Under section 5A of SARFAESI, an asset reconstruction company that acquired a financial asset with secured debts of more than one bank can apply to the Appellate Tribunal to transfer all pending applications to one DRT. The order binds all the DRTs concerned.

Updated 11 October 2026 · Fact-checked

A bank or financial institution files an application before the Debts Recovery Tribunal to recover a debt of ₹10 lakh or more. The Tribunal decides it and issues a recovery certificate to a Recovery Officer, who recovers the amount. Under SARFAESI, a borrower challenges the bank's measures by an application under section 17.

Understand Application to DRT and Recovery Procedure

Banks lend money and sometimes borrowers default. Ordinary civil courts are slow. So Parliament created the Debts Recovery Tribunals (DRTs) to recover dues of banks and financial institutions quickly. The law is the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act).

The RDB Act has a money threshold. Save as otherwise provided, it does not apply where the debt due to a bank or financial institution, or to a consortium of them, is less than ten lakh rupees. The Central Government can notify another amount, but not less than one lakh rupees. So first check the amount of debt. Below the threshold, the bank goes to the ordinary civil court.

The usual flow is: the bank files an application before the DRT, the Tribunal hears both sides and passes an order, and then issues a certificate for recovery to a Recovery Officer. The Recovery Officer then recovers the amount. The pre-deposit rule for appeals against the Recovery Officer's orders is in section 30A.

The SARFAESI Act, 2002 works differently. A secured creditor can take measures under section 13(4) itself, such as taking possession of the secured asset. The borrower, or any aggrieved person, can then apply to the DRT under section 17. Here the DRT reviews the bank's measures. It does not first decide the debt for recovery.

Two related provisions matter. Section 31A of the RDB Act lets a decree-holder of an old court decree apply to the Tribunal for recovery. Section 5A of SARFAESI lets an asset reconstruction company (ARC) consolidate pending DRT cases in one DRT.

Key rules to remember

Threshold for RDB Act: Debt due < ₹10,00,000 → Act does not apply (save as otherwise provided); The Central Government may notify another amount, not less than ₹1,00,000. Section 1(4).
SARFAESI section 17 application: Time limit = 45 days from the date the section 13(4) measure was taken; Filed by any person including the borrower, with prescribed fee, before the DRT.
Where to file under section 17(1A): DRT where (a) cause of action arises wholly or in part, (b) secured asset is located, or (c) the branch or office maintaining the account with the outstanding debt is located; Any one of the three grounds gives jurisdiction.
Disposal time for section 17 application: 60 days; extendable by recorded reasons; total not more than 4 months; After four months, any party may apply to the Appellate Tribunal for a direction for expeditious disposal (section 17(6)).
Appeal to Appellate Tribunal under SARFAESI section 18: Within 30 days of receipt of the DRT order; borrower deposits 50% of debt due (claimed or determined, whichever is less); can be reduced to not less than 25%; The Appellate Tribunal records reasons in writing for reduction.
Appeal against Recovery Officer's order, section 30A RDB Act: Pre-deposit = 50% of debt due as determined by the Tribunal; Applies to appeals under section 30 by the person from whom the debt is due.
Old decrees, section 31A RDB Act: Decree passed before the 2000 Amendment Act and not executed → decree-holder applies to Tribunal → certificate to Recovery Officer; The Recovery Officer recovers as if it were a certificate for a debt under the Act.

How to solve Application to DRT and Recovery Procedure questions

Use this order for any case-based question on DRT applications and recovery.

1Identify who is moving: a bank applying for recovery (RDB Act) or a borrower or other person challenging a secured creditor's measure (SARFAESI section 17).
2Check the threshold: is the debt ₹10 lakh or more, or the notified amount? If not, the RDB Act does not apply.
3Check the forum and time: for section 17, the DRT with jurisdiction under section 17(1A), and within 45 days of the measure.
4State what the Tribunal does: for RDB, decides and issues a recovery certificate to the Recovery Officer; for section 17, tests if the measures follow the Act and rules.
5State the outcome: valid measures allow the creditor to continue (section 17(4)); invalid ones can be declared invalid with possession or management restored (section 17(3)).
6Cover the appeal: time of 30 days under section 18 and the pre-deposit of 50%, reducible to 25%; or section 30A for Recovery Officer orders.
7Conclude in one clear sentence applying the rule to the given facts.

Quickest way: Number-and-forum checklist

When to use it: When the question gives facts with dates, amounts and a party, and asks whether the step is valid.

Circle the amount: ₹10 lakh test.
Circle the dates: 45 days for section 17, 30 days for section 18 appeal.
Circle the forum: DRT versus Appellate Tribunal.
Circle the deposit: 50% (borrower's SARFAESI appeal and section 30A), floor 25% in SARFAESI appeal.
Write provision, facts, conclusion in three short paragraphs.

Common mistakes in Application to DRT and Recovery Procedure

Saying the RDB Act applies to every bank debt.
Students forget the monetary threshold in section 1(4).
Fix: Always test the amount first. Below ₹10 lakh (or the notified amount), the Act does not apply.
Treating a section 17 application as the bank's recovery application.
Both go to the DRT, so they get mixed up.
Fix: Section 17 is filed by the aggrieved person against measures under section 13(4). The bank's recovery application is under the RDB Act.
Writing 60 days as the limit to file under section 17.
60 days appears in section 17(5) for disposal.
Fix: Filing limit is 45 days from the measure. Disposal target is 60 days, with a four-month outer limit.
Saying the pre-deposit is always 50% with no relief.
Students remember only the second proviso of section 18.
Fix: Under section 18 the Appellate Tribunal may reduce it to not less than 25% for recorded reasons. Do not apply this reduction to section 30A, whose text has no such proviso.
Thinking a communication rejecting the borrower's objection gives a right to apply under section 17.
The borrower feels aggrieved at that stage.
Fix: The Explanation to section 17(1) says such communication of reasons does not entitle anyone to apply. The right arises when a section 13(4) measure is taken.
Naming the Civil Court as the forum for filing under section 17.
Students forget that the DRT is the specified forum.
Fix: Write that the application is made to the DRT with jurisdiction as per section 17(1A).

Worked examples

Example 1

Sunrise Textiles Ltd's secured asset was taken into possession by Bharat Bank on 1 March under section 13(4) of SARFAESI. The factory is in Surat. The loan account is at the bank's Mumbai branch. Sunrise wants to challenge the possession. Advise on the forum and the time limit.

Show the solution

Provision: section 17(1) lets any aggrieved person, including the borrower, apply to the DRT against a section 13(4) measure.
Time: the application must be made within 45 days from 1 March, the date the measure was taken.
Forum: under section 17(1A) the DRT may be one where the cause of action arises wholly or in part, where the secured asset is located, or where the branch maintaining the account with the outstanding debt is located.
Application: the Surat DRT (asset location) and the Mumbai DRT (account branch) both qualify.
Conclusion: Sunrise may file before either the DRT with jurisdiction over Surat or over Mumbai, within 45 days of 1 March, with the prescribed fee.

Answer: Sunrise can apply to the DRT having jurisdiction over Surat or Mumbai, within 45 days of 1 March.

Example 2

The DRT dismissed Ravi Traders' section 17 application. Ravi Traders, the borrower, claims the bank's debt is ₹80,00,000 while the DRT determined it at ₹72,00,000. It wants to appeal to the Appellate Tribunal. State the time limit and the minimum deposit.

Show the solution

Provision: section 18(1) allows an appeal to the Appellate Tribunal within 30 days from receipt of the DRT order.
Deposit: the borrower must deposit 50% of the debt due, as claimed by the secured creditor or determined by the DRT, whichever is less.
Compare: the bank claims ₹80,00,000 (assumed claim) and the DRT determined ₹72,00,000; the lesser is ₹72,00,000.
Compute: 50% of ₹72,00,000 = ₹36,00,000.
Relief: the Appellate Tribunal may, for reasons recorded in writing, reduce the deposit to not less than 25%, i.e. not less than ₹18,00,000.
Conclusion: without the deposit, the appeal will not be entertained.

Answer: Appeal within 30 days of receipt of the order, with a deposit of ₹36,00,000; it may be reduced, for recorded reasons, to not less than ₹18,00,000.

Exam tips

Start every answer with the provision, then facts, then conclusion. Examiners mark this structure.
Memorise the number set: ₹10 lakh, 45 days, 60 days, 4 months, 30 days, 50%, 25%.
Always separate RDB Act recovery applications from SARFAESI section 17 applications in the first line.
Quote section numbers only for those you know: 1(4), 17, 18, 30A, 31A, 5A.
In drafting-style questions, mention the prescribed fee and the Tribunal's jurisdiction.

Practice questions from Debt Recovery and Securitization

Application to DRT and Recovery Procedure: frequently asked questions

What is the minimum debt for filing an application before the DRT?

Under section 1(4) of the RDB Act, the Act does not apply where the debt due is less than ten lakh rupees, save as otherwise provided. The Central Government may notify another amount, not less than one lakh rupees.

What is a recovery certificate?

It is the certificate the Tribunal issues to a Recovery Officer so that the amount can be recovered. Under section 31A, the Recovery Officer treats a certificate for an old unexecuted court decree as a certificate for a debt recoverable under the Act.

Within how many days must a borrower approach the DRT under SARFAESI?

Within forty-five days from the date on which the section 13(4) measure was taken, as per section 17(1). The application is filed with the prescribed fee.

How are many pending DRT cases against one borrower handled?

Under section 5A of SARFAESI, an asset reconstruction company that acquired a financial asset with secured debts of more than one bank can apply to the Appellate Tribunal to transfer all pending applications to one DRT. The order binds all the DRTs concerned.