Debt Recovery Tribunal

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The Debt Recovery Tribunal (DRT) system in India was introduced as a response to the growing issue of Non-performing Assets (NPAs) and the need for a dedicated mechanism to resolve disputes related to debt recovery.
- The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act) led to the establishment of DRTs.
These tribunals were set up to provide a quicker and more efficient alternative to civil courts for adjudicating matters related to the recovery of debts by banks and financial institutions.
- Its Appellate Tribunal is Debt Recovery Appellate Tribunal (DRAT).
As per Section 22 RDDBFI Act, 1993, DRT and DRAT shall be guided by the principles of natural justice and proceeding before DRT and DRAT shall be deemed to be a judicial proceeding.

DRTs in India are quasi-judicial bodies with specific jurisdiction over matters pertaining to the recovery of debts.
They have the authority to hear cases filed by banks, financial institutions, and other entities to recover dues.
DRTs handle cases where the debt amount exceeds a specified threshold, and their decisions are enforceable as decrees of civil courts.
No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter dealt by DRT.
The jurisdiction of DRTs extends to a wide range of financial claims, including loans, advances, and financial assistance granted by banks and financial institutions.

As per Section 22 (2) of the RDDBFI Act, 1993 DRT has the following powers:

summoning and enforcing the attendance of any person and examining him on oath;
requiring the discovery and production of documents;
receiving evidence on affidavits;
issuing commissions for the examination of witnesses or documents;
reviewing its decisions;
dismissing an application for default or deciding it ex parte;
setting aside any order of dismissal of any application for default or any order passed by it ex parte;
any other matter which may be prescribed.

DRTs operate under the Ministry of Finance, and their structure is similar to that of a court.
Each DRT is headed by a Presiding Officer and shall be qualified as a District Judge.
The PO shall be appointed for a term of 5 years or till 62 years of age, whichever is earlier.
PO is appointed by the Central Government.

The functioning of DRTs involves the initiation of proceedings by filing an application by the banks or financial institutions seeking the recovery of debts.
The respondent, usually the borrower, has the opportunity to present their case and defend against the claims made.
DRTs are vested with the authority to pass orders for the recovery of debts, and their decisions are legally binding.

The Insolvency and Bankruptcy Code (IBC) introduced in 2016 represents reform in debt recovery procedure.
The IBC provides a structure for insolvency resolution, and the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) were established to address corporate insolvency and bankruptcy cases.
While the IBC has absorbed some functions related to insolvency, DRTs continue to play an important role in the recovery of debts or bankruptcy of individuals and partnership firms.

There are 39 DRTs and 5 DRATs. The jurisdiction of DRATs and list of DRTs is mentioned below: -

DRAT Allahabad has jurisdiction over:
- DRT Allahabad
- DRT Dehradun
- DRT Jabalpur
- DRT Lucknow
- DRT Patna
- DRT Ranchi
DRAT Chennai has jurisdiction over:
- DRT Chennai 1, 2, 3
- DRT Bengaluru 1, 2
- DRT Coimbatore
- DRT Ernakulam 1, 2
- DRT Madurai
DRAT Delhi has jurisdiction over:
- DRT Delhi 1, 2, 3
- DRT Chandigarh 1, 2, 3
- DRT Jaipur
DRAT Kolkata has jurisdiction over:
- DRT Kolkata 1, 2, 3
- DRT Hyderabad 1, 2
- DRT Visakhapatnam
- DRT Siliguri
- DRT Cuttack
- DRT Guwahati
DRAT Mumbai has jurisdiction over:
- DRT Mumbai 1, 2, 3
- DRT Ahmedabad 1, 2
- DRT Aurangabad
- DRT Nagpur
- DRT Pune