OA Procedure, Recovery Certificate, and Asset Attachment
Executive Summary
| Metric |
Value |
| Established |
1993 |
| Statute |
RDDBFI Act, 1993 |
| Benches |
39 across India |
| Monetary Threshold |
Rs. 20 lakh |
| Appeal To |
DRAT |
Debt Recovery Tribunals provide a specialized forum for banks and financial institutions to recover debts, bypassing the time-consuming civil court system.
1. Statutory Framework
Recovery of Debts and Bankruptcy Act, 1993
| Provision |
Subject |
| Section 17 |
Jurisdiction of Tribunal |
| Section 19 |
Application to Tribunal |
| Section 22 |
Procedure of Tribunal |
| Section 25 |
Mode of recovery |
| Section 27 |
Issue of certificate |
SARFAESI Integration
| SARFAESI |
DRT Role |
| Section 13 |
Notice stage |
| Section 14 |
Asset possession |
| Section 17 |
Appeal against possession |
| Section 18 |
DRAT appeal |
2. Jurisdiction
Pecuniary Jurisdiction
| Amount |
Forum |
| Below Rs. 20 lakh |
Civil Court |
| Rs. 20 lakh and above |
DRT |
| No upper limit |
DRT |
Territorial Jurisdiction
| Test |
Application |
| Defendant resides |
Where defendant is |
| Cause of action |
Where loan taken |
| Property location |
Where security situated |
Subject Matter
| Matter |
Jurisdiction |
| Recovery of debt |
Yes |
| SARFAESI appeals |
Yes |
| Counter-claims |
Yes |
| Set-offs |
Yes |
| Guarantee enforcement |
Yes |
3. Original Application (OA) Procedure
Filing Requirements
| Document |
Purpose |
| OA in Form I |
Main application |
| Documents of debt |
Proof of liability |
| Security documents |
Mortgage/charge proof |
| Limitation evidence |
Acknowledgment etc. |
| Valuation report |
For attachment |
Contents of OA
| Element |
Details |
| Parties |
Bank + all defendants |
| Loan account |
Complete details |
| Outstanding amount |
Principal + interest |
| Security details |
All collaterals |
| Prior proceedings |
If any |
Fee Structure
| Claim Amount |
Fee |
| Rs. 20 lakh - Rs. 1 crore |
0.5% |
| Rs. 1 crore - Rs. 10 crore |
0.25% |
| Above Rs. 10 crore |
0.1% |
| Maximum fee |
Rs. 1,50,000 |
4. Procedure Before DRT
Stages
| Stage |
Timeline |
| Filing |
Day 1 |
| Notice |
Within 15 days |
| Written statement |
30 days |
| Rejoinder |
15 days |
| Evidence |
As directed |
| Arguments |
On completion |
| Order |
180 days target |
Interim Relief
| Relief |
Grounds |
| Asset attachment |
To prevent alienation |
| Injunction |
Against transfer |
| Bank account freeze |
To secure claim |
| Receiver appointment |
Asset preservation |
Section 19(12) Attachment
| Aspect |
Provision |
| Before judgment |
Permitted |
| Without notice |
In emergencies |
| Bank account |
May be attached |
| Immovable property |
May be attached |
| Movable assets |
May be attached |
5. Recovery Certificate
Section 27 - Issuance
| Condition |
Requirement |
| Debt established |
Proven in proceedings |
| Amount determined |
Principal + interest |
| Time given |
For voluntary payment |
| Default |
Certificate issued |
Contents of Certificate
| Element |
Details |
| Amount |
Principal + interest + costs |
| Defendant details |
All liable parties |
| Property details |
For execution |
| Recovery Officer |
Authorized person |
Effect of Certificate
| Effect |
Consequence |
| Decree equivalent |
Same as civil decree |
| Execution |
Through Recovery Officer |
| Time limit |
None for execution |
| Multiple modes |
Simultaneously available |
6. Recovery Modes
Section 25 - Recovery Methods
| Mode |
Description |
| (a) |
Attachment and sale of movable property |
| (b) |
Attachment and sale of immovable property |
| (c) |
Arrest and detention |
| (d) |
Appointment of receiver |
Attachment Procedure
| Stage |
Action |
| Certificate issued |
Recovery Officer empowered |
| Attachment order |
Property attached |
| Proclamation |
Sale notice published |
| Sale |
Auction conducted |
| Confirmation |
Sale confirmed |
| Title |
Passes to purchaser |
Arrest and Detention
| Aspect |
Rule |
| Last resort |
After other modes fail |
| Civil prison |
Detention location |
| Maximum period |
As per law |
| Maintenance |
To be provided |
| Release |
On payment/order |
7. Defences Available
Section 19(10) - Counter-Claims
| Defense |
Availability |
| No debt |
Full defense |
| Debt discharged |
Full defense |
| Limitation |
Procedural defense |
| Illegality |
Goes to root |
| Counter-claim |
Up to Rs. 20 lakh |
Common Defences
| Defence |
Standard |
| Account manipulation |
Must prove |
| Excessive interest |
Legal limits |
| Coercion/fraud |
Clear evidence |
| Discharge |
Documentation |
| Prior payment |
Receipt evidence |
Limitation
| Period |
Application |
| 3 years |
From default/acknowledgment |
| Acknowledgment |
Fresh limitation |
| Part payment |
Fresh limitation |
| Balance confirmation |
Fresh limitation |
8. Appeals to DRAT
Section 20 - Appeal
| Aspect |
Rule |
| Forum |
DRAT |
| Period |
45 days |
| Condonation |
45 days more |
| Pre-deposit |
75% or amount directed |
Pre-Deposit Requirement
| Rule |
Position |
| Statutory |
75% of debt amount |
| Waiver |
Tribunal discretion |
| Supreme Court |
May reduce |
| Hardship |
Ground for reduction |
Narayan Chandra Ghosh v. UCO Bank (2011):
"The pre-deposit requirement under Section 21 is mandatory but the Tribunal has discretion to reduce it in cases of genuine hardship."
9. Compliance Checklist
Before Filing OA
OA Contents
Post-Certificate
10. Key Takeaways
For Banks/FIs
| Aspect |
Strategy |
| Documentation |
Maintain meticulously |
| Limitation |
Act within 3 years |
| Multiple defendants |
Implead all |
| Recovery |
Use multiple modes |
| Appeal preparation |
Anticipate defenses |
For Borrowers
| Aspect |
Defense |
| Document review |
Check all claims |
| Counter-claim |
If entitled |
| Pre-deposit |
Seek waiver/reduction |
| Settlement |
Consider options |
| Legal advice |
Essential |
Case Citations
| Case |
Citation |
Principle |
| Narayan Chandra Ghosh v. UCO Bank |
(2011) 4 SCC 548 |
Pre-deposit |
| ICICI Bank v. Sidco Leathers |
(2006) 5 SCC 500 |
Limitation |
| State Bank of India v. Ranjan Chemicals |
(2007) 1 SCC 97 |
Attachment |
| Allahabad Bank v. Canara Bank |
(2000) 4 SCC 406 |
DRT jurisdiction |
