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

Debts Recovery Tribunals: Constitution and Jurisdiction

Updated 11 October 2026 · Fact-checked

Debts Recovery Tribunals (DRTs) are tribunals set up by the Central Government under the Recovery of Debts and Bankruptcy Act, 1993 to decide recovery applications from banks and financial institutions. Debts Recovery Appellate Tribunals (DRATs) hear appeals against DRT orders. Each notification fixes the areas a DRT covers and the Tribunals a DRAT covers.

Understand Debt Recovery Tribunals: Constitution and Jurisdiction

Before 1993, banks recovered dues through ordinary civil suits. These were slow. Parliament created special tribunals so that banks and financial institutions could recover debts faster. The Recovery of Debts and Bankruptcy Act, 1993 (the RDB Act) is the law that does this.

The Central Government sets up the tribunals by notification. Under section 3(1), it establishes one or more Debts Recovery Tribunals. Under section 3(2), the same notification specifies the areas in which each Tribunal may exercise jurisdiction to entertain and decide applications. So a DRT's territorial reach comes from the notification, not from the parties' choice.

The second tier is the appellate tribunal. Under section 8(1), the Central Government establishes one or more Debts Recovery Appellate Tribunals. Under section 8(2), the notification also specifies the Tribunals over which each Appellate Tribunal exercises jurisdiction.

Keep two Chairperson provisions apart:

The proviso to section 8(1) lets the Central Government authorise the Chairperson of any other Appellate Tribunal, established under any other law, to discharge the functions of the Chairperson of the DRAT in addition to being the Chairperson of that other Appellate Tribunal.
Section 8(3), notwithstanding sections 8(1) and 8(2), lets the Central Government authorise the Chairperson of one Appellate Tribunal to discharge also the functions of the Chairperson of another Appellate Tribunal.

Jurisdiction is set out in section 17. A Tribunal decides applications from banks and financial institutions for recovery of debts due to them (section 17(1)). An Appellate Tribunal entertains appeals against orders made, or deemed to have been made, by a Tribunal under the Act (section 17(2)). Since the Insolvency and Bankruptcy Code was enacted, the RDB Act also gives the DRT the powers of the Adjudicating Authority for Part III of the Code (individuals and partnership firms), and the DRAT hears appeals from those orders. These provisions are in sections 3(1A), 8(1A), 17(1A) and 17(2A), inserted with effect from 1-12-2019. Keep two points apart: the date of insertion is 1-12-2019, but the Part III jurisdiction under sections 17(1A)(a) and 17(2A) begins from the date appointed by the Central Government. Under section 17(1A)(b), the Tribunal also holds circuit sittings in all district headquarters.

The RDB Act works together with the SARFAESI Act, 2002. Under section 34 of SARFAESI, no civil court can entertain a suit on any matter which a DRT or the Appellate Tribunal is empowered to determine under that Act. Civil courts also cannot grant injunctions against action taken under SARFAESI or the RDB Act. Section 18 of SARFAESI gives an appeal to the Appellate Tribunal against a DRT order under section 17, within thirty days of receipt of the order. This topic covers the constitution and jurisdiction. The definitions of 'bank' and 'financial institution' in section 2 of the RDB Act, any bar on civil courts under the RDB Act itself, composition, qualifications, procedure, recovery officers and pre-deposit are not in the text relied on here, so confirm them from your study material.

Key rules to remember

Establishment of DRT: Section 3(1): Central Government, by notification, establishes one or more Debts Recovery Tribunals; Section 3(2): the notification also specifies the areas of jurisdiction of each Tribunal.
Establishment of DRAT: Section 8(1): Central Government, by notification, establishes one or more Debts Recovery Appellate Tribunals; Section 8(2): the notification specifies the Tribunals over which the Appellate Tribunal has jurisdiction.
Original jurisdiction of DRT: Section 17(1): entertain and decide applications from banks and financial institutions for recovery of debts due to them; The applicant must be a bank or financial institution.
Appellate jurisdiction of DRAT: Section 17(2): entertain appeals against any order made, or deemed to have been made, by a Tribunal under the Act; Includes deemed orders.
IBC jurisdiction (Part III): Sections 3(1A), 17(1A)(a): DRT acts as Adjudicating Authority; sections 8(1A), 17(2A): DRAT hears appeals; These provisions were inserted w.e.f. 1-12-2019 per the text supplied. The Part III jurisdiction under sections 17(1A)(a) and 17(2A) begins from the date appointed by the Central Government.
Circuit sittings: Section 17(1A)(b): Tribunal has circuit sittings in all district headquarters; Linked to the Part III jurisdiction clause.
Chairperson of another Appellate Tribunal acting as DRAT Chairperson: Proviso to section 8(1): Central Government may authorise the Chairperson of any other Appellate Tribunal, established under any other law, to discharge the functions of the DRAT Chairperson in addition to his own office; This concerns a Chairperson under another law, not a move between DRATs.
Chairperson of one Appellate Tribunal acting for another: Section 8(3): Central Government may authorise the Chairperson of one Appellate Tribunal to discharge also the functions of the Chairperson of another Appellate Tribunal; Operates notwithstanding sections 8(1) and 8(2).
SARFAESI appeal to DRAT: Section 18(1) SARFAESI: appeal within 30 days of receipt of the DRT order under section 17; Borrower must deposit 50% of the debt (the lower of the amount claimed or determined by the DRT); DRAT may reduce this to not less than 25%, with written reasons.
Bar on civil courts: Section 34 SARFAESI: no civil court jurisdiction and no injunction; Covers matters the DRT or DRAT can determine under SARFAESI, and action under SARFAESI or the RDB Act.
Transfer of pending applications: Section 5A SARFAESI: ARC applies to a DRAT having jurisdiction over any one of the DRTs concerned; Used when secured debts of more than one bank are pending in two or more DRTs. The DRAT order binds all those DRTs.

How to solve Debt Recovery Tribunals: Constitution and Jurisdiction questions

Use this method for any question on the constitution or jurisdiction of DRTs and DRATs. The paper is case-based, so link every conclusion to a provision and the facts.

1Identify the forum asked about: DRT (first tier), DRAT (appellate tier) or civil court.
2Identify the parties. Check whether the applicant is a bank or financial institution, and whether the claim is a debt due to it.
3State the rule: the Central Government establishes the tribunal by notification, and the notification fixes territorial areas (sections 3 and 8).
4Apply the jurisdiction section: section 17(1) for original applications, section 17(2) for appeals, and section 17(1A) or 17(2A) if the matter concerns individuals or firms under Part III of the IBC.
5Check for interacting laws: section 34 of SARFAESI for the civil court bar, section 18 of SARFAESI for time limit and pre-deposit, and section 5A for transfer of pending cases.
6Apply the facts to the rule, point by point. Note the area, the nature of the applicant and the stage of the case.
7Conclude clearly: which forum has jurisdiction, what relief is available, and any practical compliance step such as the 30-day appeal time or the deposit.

Quickest way: Forum, Party, Section

When to use it: Use when time is short and the question asks which tribunal or court can hear a matter.

Write the forum in one line: DRT, DRAT or civil court.
Write the test: the applicant is a bank or financial institution, and the claim is a debt due to it. Then DRT under section 17(1).
If it is against a DRT order, DRAT under section 17(2). For SARFAESI, add 30 days and the 50% deposit (reducible to 25%).
Add section 34 of SARFAESI if someone has approached a civil court.
Finish with one line of conclusion tied to the facts.

Common mistakes in Debt Recovery Tribunals: Constitution and Jurisdiction

Saying any creditor can file a recovery application before the DRT.
Students think of the DRT as a general debt court.
Fix: Section 17(1) covers applications from banks and financial institutions for debts due to them. Check the applicant first against the definitions of 'bank' and 'financial institution' in section 2 of the RDB Act (not in the text relied on here, so verify them from your study material). Do not assume a civil court is automatically open or barred for an applicant outside those definitions.
Saying the DRT's territorial jurisdiction is chosen by the parties or fixed in the Act itself.
Students mix up the Act with the notification.
Fix: State that the Central Government specifies areas in the notification under section 3(2). Section 8(2) does the same for the DRAT.
Ignoring the Part III IBC role of the DRT and DRAT.
Students link DRTs only to recovery and the NCLT only to the IBC.
Fix: Mention that DRT is the Adjudicating Authority for individuals and partnership firms, and DRAT hears appeals (sections 17(1A) and 17(2A)).
Quoting the wrong appeal period or pre-deposit under SARFAESI.
Students mix SARFAESI numbers with those of other statutes.
Fix: Section 18: thirty days from receipt of the order; 50% deposit, reducible by the DRAT to not less than 25% with reasons recorded in writing.
Saying a civil court can grant an injunction against SARFAESI action.
Students forget section 34.
Fix: Section 34 bars civil court jurisdiction and bars injunctions against action under SARFAESI or the RDB Act.
Treating section 5A transfer as an application to the DRT.
Students assume the first tier decides transfers.
Fix: The asset reconstruction company applies to the Appellate Tribunal having jurisdiction over any one of the DRTs concerned, after which the parties are heard.

Worked examples

Example 1

Alpha Finance Ltd., an NBFC that is not a bank or notified financial institution, lends ₹50,00,000 to a trader in Pune and sues for recovery in a civil court. State the position, applying the RDB Act framework, and the effect of the facts on jurisdiction before a DRT.

Show the solution

Rule: under section 17(1), a DRT entertains applications from banks and financial institutions for recovery of debts due to them.
Analysis: the DRT's jurisdiction depends on the applicant being a bank or financial institution. The definitions are in section 2 of the RDB Act, which is outside the text relied on here, so verify them from your study material before concluding.
If Alpha Finance falls within the definition of bank or financial institution, section 17(1) applies. The application goes to the DRT whose area covers the matter, as fixed in the notification under section 3(2).
If Alpha Finance falls outside the definition, section 17(1) does not give the DRT jurisdiction over its application. Whether the civil court can then hear the suit depends on the RDB Act's provision on civil courts, which is not covered in the text relied on here. Check it from your study material.
Do not rely on section 34 of SARFAESI alone. It bars civil courts only for matters a DRT or the Appellate Tribunal is empowered to determine under SARFAESI, and for injunctions against action under SARFAESI or the RDB Act.

Answer: The forum turns on whether Alpha Finance is a bank or financial institution as defined in section 2 of the RDB Act (verify the definition). If yes, the DRT under section 17(1) has jurisdiction in the area notified under section 3(2). If no, the DRT route under section 17(1) is not available, and the position of the civil suit depends on the RDB Act's bar on civil courts, which this extract does not cover.

Example 2

A borrower is aggrieved by an order of the DRT under section 17 of SARFAESI. The lender claimed ₹8,00,00,000 and the DRT determined the debt at ₹6,00,00,000. What is the appeal route, time limit and minimum pre-deposit?

Show the solution

Forum: appeal lies to the Appellate Tribunal (DRAT) under section 18(1) of SARFAESI.
Time limit: thirty days from the date of receipt of the DRT order.
Pre-deposit base: the lower of the amount claimed by the secured creditors (₹8,00,00,000) and the amount determined by the DRT (₹6,00,00,000), which is ₹6,00,00,000.
Statutory deposit: 50% of ₹6,00,00,000 = ₹3,00,00,000.
Reduction: the DRAT may, for reasons recorded in writing, reduce the amount to not less than 25% of ₹6,00,00,000 = ₹1,50,00,000.
So the deposit required by the Act is ₹3,00,00,000. The lowest possible deposit is ₹1,50,00,000, and it applies only if the DRAT allows the reduction.

Answer: Appeal to the DRAT within 30 days of receiving the order. The statutory pre-deposit is ₹3,00,00,000 (50% of ₹6,00,00,000). The DRAT may reduce it, with written reasons, to not less than ₹1,50,00,000 (25%). That lower figure is the minimum possible deposit, and it is reached only if the DRAT exercises this discretion.

Exam tips

Quote section numbers for the establishment provisions (3, 8) and jurisdiction (17). A one-line citation earns marks in a case-based answer.
Always state that the notification fixes the area of jurisdiction. Examiners like this detail.
In SARFAESI questions, give the 30-day period and the 50% and 25% deposit figures exactly, and say which base amount applies.
Mention the DRT's Part III IBC role in any answer on its jurisdiction. It shows you have the current law.

Practice questions from Debt Recovery and Securitization

Debt Recovery Tribunals: Constitution and Jurisdiction: frequently asked questions

Who establishes the Debts Recovery Tribunal and how?

The Central Government establishes one or more DRTs by notification under section 3(1) of the RDB Act. The same notification specifies the areas in which each Tribunal exercises jurisdiction.

What is the difference between DRT and DRAT jurisdiction?

A DRT hears applications from banks and financial institutions for recovery of debts due to them. A DRAT hears appeals against orders made, or deemed to have been made, by a DRT. Both also have roles under Part III of the IBC.

Can a civil court hear a matter that falls under SARFAESI?

No. Section 34 of SARFAESI bars civil courts from entertaining suits on matters a DRT or the Appellate Tribunal can decide under that Act. It also bars injunctions against action taken under SARFAESI or the RDB Act.

Can the Chairperson of one Appellate Tribunal act for another?

Yes, in two ways under section 8 of the RDB Act. Under section 8(3), notwithstanding sections 8(1) and 8(2), the Central Government may authorise the Chairperson of one Appellate Tribunal to discharge also the functions of the Chairperson of another Appellate Tribunal. Separately, the proviso to section 8(1) lets it authorise the Chairperson of any other Appellate Tribunal established under another law to discharge the functions of the DRAT Chairperson as well.