By S&S Co. Advocates & Solicitors · Published 28 September 2026 · Informational content, not legal advice: see our disclaimer
Overview
A guide for banks, NBFCs and borrowers on when a lender can approach the Debts Recovery Tribunal, the pecuniary threshold, and how DRT proceedings differ from a SARFAESI sale.
What You Need to Know
- DRTs are constituted under the Recovery of Debts and Bankruptcy Act, 1993 (RDDBFI Act) for banks and financial institutions to recover dues outside ordinary civil courts
- Pecuniary threshold: banks/FIs can file an Original Application before a DRT only for debts of ₹20 lakh or above (raised from ₹10 lakh by a 2018 notification; no upper cap)
- Procedure: filing an Original Application, written statement, evidence and final Recovery Certificate/order, followed by execution via the Recovery Officer
- How DRT proceedings interact with a parallel SARFAESI Section 13(2)/13(4) enforcement action against the same secured asset
- Appeal route to the Debts Recovery Appellate Tribunal (DRAT) and the pre-deposit requirement
- Borrower defences commonly raised before a DRT and where they typically fail
Frequently Asked Questions
What is the minimum debt amount a bank can pursue before a DRT?
Rs. 20 lakh, raised from Rs. 10 lakh by a 2018 notification: there is no upper monetary cap on DRT jurisdiction.
Can a bank pursue DRT proceedings and SARFAESI enforcement on the same debt at once?
Yes, the two routes can run in parallel: a DRT Original Application over the debt doesn't preclude a simultaneous Section 13(2)/13(4) SARFAESI enforcement action against the same secured asset.
Where does a borrower appeal an adverse DRT order?
To the Debts Recovery Appellate Tribunal (DRAT), subject to a pre-deposit requirement of the amount determined to be due.
References & Further Reading
This guide references the following statutes, rules and sources, cross-checked at the time of writing.
- ₹20 lakh pecuniary threshold effective from Notification S.O. 4312(E) dated 6 September 2018: confirmed; underlying Section 1(4) text still literally says ten lakh because the change was made by notification, not re-enactment
- No upper monetary cap on DRT jurisdiction: confirmed
- See also our Banking & Finance Notable Judgments and Legal Updates, Banking & Finance archive.