The Government of India is committed to helping financial institutions recover their bad debt in a fast and efficient way, as per the global trends. Hence, it has constituted five [5] Debt Recovery Appellate Tribunals and thirty-three [33] Debt Recovery Tribunals (DRT) in India. There are different numbers of Debt Recovery Tribunals in different cities of India, depending on the number of cases in a particular city. There are three [3] Debt Recovery Tribunals in Mumbai and New Delhi, where two [2] are present in the cities of Kolkata and Chennai. Just one [1] Debt Recovery Tribunal is constituted at Visakhapatnam, Ranchi, Pune, Patna, Nagpur, Lucknow, Jaipur, Jabalpur, Hyderabad, Guwahati, Ernakulam, Cuttack, Coimbatore, Chandigarh, Bangalore, Aurangabad, Allahabad, and Ahmedabad.

What Does Corpsage Legal LLP Do?

We are a professional and trustworthy DRT Law Firm in Delhi, India. For many years, we have been practicing law before The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs). Mostly, we appear for borrowers who are going through a recovery procedure which is instituted by banks, and all the measures of SARFAISI are taken. Both the tribunals (DRT & DRAT) are governed & established under the Recovery of Debts and Bankruptcy Act (RDB Act), 1993 with the clear and precise objective of providing speedy adjudication along with recovery of debts due to Banks and Financial Institutions.

What Is the Recovery of Debts and Bankruptcy Act (RDB Act), 1993?

The RDB Act, 1993 provides for setting up the Debts Recovery Tribunals (DRTs) with original jurisdiction and Debts Recovery Appellate Tribunals (DRATs) to swiftly handle and receive the debts owed to the banks and/or financial institutions. These tribunals also handle the cases of insolvency resolution and bankruptcy of individuals & partnership firms along with related matters that are not mentioned here. The aim of the RDB Act, 1993 is to protect the interests of banks & financial institutions as lenders without demoralizing the borrowers. Currently, the provisions related to insolvency resolution and bankruptcy are not in force, so Tribunals have not started handling such cases.

What Are Jurisdictions of Recovery of Debts and Bankruptcy Act (RDB Act), 1993?

The RDB Act, 1993 is applicable to cases where the debt owed to any bank and/or financial institution (as defined by the Act) or a group of banks and/or financial institutions amounts to INR 20 Lakh or more. When any bank and/or financial institution has to collect a debt from an individual, it can proceed as per section 19 of the Recovery of Debts and Bankruptcy Act (RDB Act) by submitting an application to the tribunal which is located within the jurisdiction where:

• The bank’s or financial institution’s office or branch where an account with outstanding debt is maintained (for the time being);
• The defendant or all of the defendants actually & voluntarily resides or conducts business or personally works for money (during the time of the application);
• The cause of action, completely or in parts, arises.

In case any individual is unhappy with an order issued, or considered to have been made, by a Tribunal under this RDB Act, 1993, can appeal to an Appellate Tribunal that has jurisdiction over the matter. It is done under section 20 of the Recovery of Debts and Bankruptcy Act.

If an individual appeals a case where he owes a debt to a bank, financial institution, or a group of banks/financial institutions, the Appellate Tribunal will entertain it only if the individual has deposited 50% of the debt amount as finalized by the Tribunal under section 19. However, the Appellate Tribunal has the authority (reasons recorded in writing), to reduce this deposit amount to no less than twenty-five [25] percent of the debt amount for depositing under this section.

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests Act (SARFAESI Act), 2002

The purpose of the SARFAESI Act, 2002 is to regulate the securitization as well as reconstruction of the financial assets along with enforcing the security interest. The Act also aims to create a Central database of security interests that are made on property rights & to connect the matters therewith. With this Act, it has become simple for banks & specified financial institutions to recover the secured debts from borrowers with no intervention of Courts at the 1st stage. Under this act, the borrowers have the option of filing an application in the Debts Recovery Tribunals (DRTs) opposing the measures implemented to enforce security interests. For such applications, the Debts Recovery Appellate Tribunals (DRATs) have the appellate jurisdiction.

• The SARFAESI Act, 2002 applies where the amount due and the security interest are over Rs.1 lakh and the principal amount and interest owed are 20% or more.
• The SARFAESI Act, 2002 does not apply to security interests made in agricultural land & a few specific properties that are not liable to attachment under specified Acts.

How Does Corpsage Legal LLP Help You?

We are a professed and creditworthy DRT Law Firm in Delhi, India. We are doing DRT Practice in the Banking & Finance domain according to the Recovery of Debts and Bankruptcy Act (RDB Act), 1993. Also, we advise our clients on recovery & insolvency, partnership, agency & distribution arrangements, among others. Since our commencement, we have become the best law firm in Noida, India with rich experience in handling legal matters related to:

• Complaints under section 138 of N.I. Act,
• Consumer Cases before the District Consumer Court, State Consumer Commission, and National Consumer Commission
• Debt recovery matters under the SARFAISI Act and RDDBFI Act (before DRT / DRAT)
• Insolvency procedure before NCLT under the Insolvency and Bankruptcy Act and Companies Act,
• Ordinary civil suit for recovery of money and damages,
• Petition u/s 34 of the Arbitration and Conciliation Act,
• Petitions u/s 9 of the Arbitration and Conciliation Act,
• Recovery proceeding under section 19 of RDDBFI Act, before the Debt Recovery Tribunal
• Representation before the Arbitration Tribunal,
• A summary suit under Order XXXVII of the CPC should be filed in the Civil Court, which can include a Civil Judge, a District Judge, or a High Court, as appropriate based on the pecuniary jurisdiction of the court,
• Winding up petition before NCLT.