Debts Recovery Appellate Tribunal (DRATs)
Why in News?
The Department of Financial Services (DFS) recently held a major meeting in New Delhi with DRAT Chairpersons to discuss reducing case pendency and accelerating recovery through high-value cases.
Purpose and Establishment
- Statute: Established under the Recovery of Debts and Bankruptcy Act (RDB Act), 1993.
- Objective: To provide a fast-track mechanism for banks and financial institutions to recover dues, bypassing the slow civil court system.
- Two-Tier System: DRT is the court of "first instance," and DRAT is the "appellate" court for those dissatisfied with DRT orders.
Structure and Composition
- Total Count: There are currently 5 DRATs in India (located in Delhi, Mumbai, Kolkata, Chennai, and Allahabad) overseeing 39 DRTs.
- Head: Each DRAT is headed by a chairperson who is (or has been) a Judge of a High Court.
- Independence: They are quasi-judicial bodies under the administrative control of the Ministry of Finance.
Jurisdiction and Powers
- Pecuniary Limit: They generally handle cases where the debt amount is ₹20 lakh or more.
- Statutory Reach: They adjudicate appeals under both the RDB Act, 1993 and the SARFAESI Act, 2002.
- Authority: DRATs can confirm, modify, or set aside DRT orders and grant interim stays on recovery actions.
The Appeal Process
- Timeline: An appeal must usually be filed within 30 to 45 days of the DRT order.
- Pre-Deposit Rule: To prevent frivolous delays, the borrower must often deposit 50% of the debt (which the tribunal can reduce to 25% in specific cases) before the appeal is even heard.
- Finality: DRAT decisions can only be challenged further in a High Court or the Supreme Court.
DRT vs. DRAT
| Feature |
Debts Recovery Tribunal (DRT) |
Debts Recovery Appellate Tribunal (DRAT) |
| Role |
Trial Court (First Instance) |
Appeals Court (Review) |
| Headed By |
Presiding Officer (District Judge level) |
Chairperson (High Court Judge level) |
| Number |
39 across India |
5 across India |
| Function |
Issues "Recovery Certificates" |
Reviews the legality of DRT orders |
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