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

Powers of Recovery Officer and Modes of Recovery under RDB Act

Updated 11 October 2026 · Fact-checked

Once a Debts Recovery Tribunal issues a recovery certificate, the Recovery Officer recovers the debt from the defendant. Section 25 lists the main modes: attachment and sale, taking possession and appointing a receiver to sell, arrest and detention, a receiver for management, and prescribed modes. Section 28 adds further modes, such as debt-deduction notices.

Understand Recovery Officer and Modes of Recovery

A Debts Recovery Tribunal (DRT) decides whether a bank or financial institution is owed money. A decision alone does not put money in the lender's hand. The Tribunal Presiding Officer issues a certificate under section 19(7) of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) and sends it to a Recovery Officer. From then on, the Recovery Officer carries out the recovery.

Section 25 gives the core toolkit. You can remember it as five modes. The first is attachment and sale of the defendant's movable or immovable property. The second, clause (aa), is taking possession of property over which a security interest is created, or any other property of the defendant, and appointing a receiver for that property and selling it. The third is arrest of the defendant and detention in prison. The fourth is appointing a receiver for the management of movable or immovable properties. The fifth is any other mode prescribed by the Central Government. The Recovery Officer may use one or more of these.

Section 28 adds more modes. It works without prejudice to section 25. The Recovery Officer may require anyone who owes money to the defendant to deduct the debt from that amount and pay it over. He may issue a written notice to anyone who holds or will hold money for the defendant, such as a bank. He may apply to a court holding the defendant's money. He may also recover by distraint and sale of movable property under the Third Schedule to the Income-tax Act, 1961.

Section 28(4A) is a useful tool for tracing assets. At any stage of execution, the Recovery Officer may order the defendant, or the officers of a defendant company, to declare their assets on affidavit.

In the exam, treat this as a toolkit question. Name the mode, state what it allows, then match it to the facts. Do not mix section 25 modes with section 28 modes.

Key rules to remember

Source of the Recovery Officer's power: Certificate under section 19(7) → Recovery Officer → modes under sections 25 and 28; The Recovery Officer acts on receipt of the copy of the certificate. No certificate, no recovery proceedings.
Section 25 modes: (a) attachment and sale; (aa) possession, receiver and sale; (b) arrest and detention; (c) receiver for management; (d) other prescribed mode; One or more modes may be used. Clauses (aa) and (d) were inserted by Act 44 of 2016.
Section 28(2) deduction requisition: Amount due to defendant → deduct debt → pay to Recovery Officer; Does not apply to the part exempt from attachment under section 60 of the Code of Civil Procedure, 1908.
Section 28(3) notice to a third party: Written notice → pay so much as covers the debt, or the whole sum if it is equal to or less than the debt; A copy goes to the defendant. Joint holders' shares are presumed equal until the contrary is proved.
Liability of the noticed person: Discharging liability after notice, or false objection → personal liability up to the lesser of own liability to defendant and defendant's debt; Failure to pay makes that person a defendant in default, and the notice has the effect of an attachment of a debt.
Asset declaration, section 28(4A): Order at any stage → defendant (or officers of a company) declare assets on affidavit; Applies to any person against whom, or company against which, the certificate is issued.

How to solve Recovery Officer and Modes of Recovery questions

Use this method for any question on the Recovery Officer's powers. It keeps you in the provision, analysis, conclusion format.

1Confirm the starting point: a certificate under section 19(7) has been issued and a copy has reached the Recovery Officer.
2Identify what the facts show: secured property, other property, money held by a third party, or a defendant hiding assets.
3Match each fact to a mode. Use section 25 for attachment, possession, arrest, receiver. Use section 28 for deduction, notices, court-held money, distraint and asset declaration.
4State the rule in plain words, with the section number only where you are sure of it.
5Apply any condition or limit, such as the section 60 CPC exemption in section 28(2), or the notice and copy requirements in section 28(3).
6Check consequences for third parties: personal liability, objection on oath, deemed defendant in default.
7Conclude with the mode or modes the Recovery Officer may use, and note that more than one may be combined.

Quickest way: Two-bucket sort: section 25 versus section 28

When to use it: Use this when you have 10 minutes for a short-note or scenario question and must list powers fast.

Draw two columns: section 25 (acts on the defendant and his property) and section 28 (reaches money owed to or held for the defendant).
In section 25, write: attach and sell; possess, receiver and sell; arrest; receiver for management; prescribed mode.
In section 28, write: deduction requisition; third-party notice; court-held money; asset affidavit; distraint under the Third Schedule to the Income-tax Act, 1961.
Pick the facts in the question and tick the matching modes.
Add one line on safeguards: section 60 CPC exemption, copy of notice to defendant, oath objection.

Common mistakes in Recovery Officer and Modes of Recovery

Saying the Recovery Officer acts on the DRT's final order directly.
Students merge the DRT's decision and the execution stage.
Fix: State that the Recovery Officer acts on receipt of the copy of the certificate under section 19(7).
Listing arrest and detention as the only or main mode.
It is the most dramatic mode and is easy to remember.
Fix: Present it as one of several modes. Lead with attachment and sale, and mention that modes can be combined.
Putting the third-party notice under section 25.
Both sections deal with recovery, so they blur together.
Fix: Deduction requisitions and notices to banks and debtors sit in section 28. Section 28 operates without prejudice to section 25.
Forgetting the exemption in the deduction requisition.
Students learn the power but skip the proviso.
Fix: Add that section 28(2) does not apply to any part of the amount exempt from attachment under section 60 of the Code of Civil Procedure, 1908.
Ignoring the consequence for a third party who ignores the notice.
Students stop at what the Recovery Officer can do.
Fix: Add that a person who fails to pay is deemed a defendant in default, and one who pays the defendant after notice is personally liable up to the lesser of the two amounts.
Omitting clause (aa) and the asset-affidavit power.
They were inserted by amendments and are less prominent in older notes.
Fix: Include possession and sale of secured property, and the section 28(4A) affidavit of assets in your list.

Worked examples

Example 1

A DRT has issued a recovery certificate against Meridian Textiles Pvt Ltd for a bank's dues. The company's factory is mortgaged to the bank, and it also owns unencumbered vehicles. Advise on the modes the Recovery Officer may use.

Show the solution

Provision: on receipt of the certificate copy under section 19(7), the Recovery Officer may use one or more modes in section 25.
Mortgaged factory: under section 25(aa), he may take possession of property over which a security interest is created, appoint a receiver and sell it.
Vehicles: under section 25(a), he may attach and sell the movable property of the defendant.
Management option: under section 25(c), he may appoint a receiver for the management of the properties.
Conclusion: the modes can be combined, so he may take possession of the factory and attach and sell the vehicles.

Answer: The Recovery Officer may take possession of the mortgaged factory, appoint a receiver and sell it under section 25(aa), and attach and sell the vehicles under section 25(a). He may use these together, and may appoint a receiver for management under section 25(c).

Example 2

A Recovery Officer issues a written notice to Sunrise Bank, where the defendant Mr Rao holds an account, asking it to pay ₹8,00,000 towards the debt. The bank pays Mr Rao ₹3,00,000 after receiving the notice. Mr Rao's own deposit with the bank was ₹10,00,000, and his debt under the certificate is ₹8,00,000. Examine the bank's position.

Show the solution

Provision: under section 28(3), the Recovery Officer may by written notice require a person holding money for the defendant to pay the amount needed to cover the debt.
Bank's duty: the notice is binding. A pass book or deposit receipt need not be produced for the payment.
Payment after notice: under section 28(3)(ix), a person who discharges a liability to the defendant after receiving the notice is personally liable to the Recovery Officer.
Measure of liability: the lesser of the liability so discharged and the defendant's debt. Discharged amount = ₹3,00,000. Debt = ₹8,00,000. The lesser is ₹3,00,000.
Remaining position: the bank must still pay the Recovery Officer the money covered by the notice. It holds ₹7,00,000 of Mr Rao's deposit, which is below the debt, so the whole ₹7,00,000 is payable. Failure makes the bank a defendant in default under section 28(3)(x).

Answer: The bank is personally liable for ₹3,00,000 paid to Mr Rao after the notice, being the lesser of ₹3,00,000 and ₹8,00,000. It must also pay the Recovery Officer the ₹7,00,000 still held, since that is less than the debt. Non-payment makes it a defendant in default.

Exam tips

Begin every answer with the certificate under section 19(7). It shows you understand how the Recovery Officer gets power.
In scenario questions, match each asset or fact to one mode and name the clause, for example section 25(aa) or section 28(3).
Always state that modes can be used one or more at a time, and that section 28 is without prejudice to section 25.
Add the safeguards: section 60 CPC exemption, copy of notice to the defendant, oath objection and its consequences.
For a short note, list modes in a tidy sequence of section 25 then section 28, and avoid quoting sections you cannot recall exactly.

Practice questions from Debt Recovery and Securitization

Recovery Officer and Modes of Recovery in other exams

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

Recovery Officer and Modes of Recovery: frequently asked questions

Who is the Recovery Officer under the RDB Act?

The Recovery Officer is the officer who executes the DRT's recovery certificate. He acts on receipt of the copy of the certificate issued under section 19(7). He recovers the debt by the modes in sections 25 and 28.

Can the Recovery Officer arrest the defendant?

Yes. Section 25(b) allows arrest of the defendant and detention in prison as one mode of recovery. It is one of several modes and can be used along with others.

What is the difference between section 25 and section 28 modes?

Section 25 lists the main modes, such as attachment and sale, possession by a receiver, arrest and a receiver for management. Section 28 adds other modes without prejudice to section 25, such as deduction requisitions, notices to persons holding money, applications to courts and distraint.

Can the Recovery Officer ask the defendant to disclose assets?

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