{"id":49353,"date":"2026-04-23T12:27:07","date_gmt":"2026-04-23T06:57:07","guid":{"rendered":"https:\/\/dailynewsindia.co.in\/index.php\/2026\/04\/23\/received-a-drt-notice-know-your-legal-rights-and-defences-under-indias-debt-recovery-law\/"},"modified":"2026-04-23T12:27:07","modified_gmt":"2026-04-23T06:57:07","slug":"received-a-drt-notice-know-your-legal-rights-and-defences-under-indias-debt-recovery-law","status":"publish","type":"post","link":"https:\/\/dailynewsindia.co.in\/index.php\/2026\/04\/23\/received-a-drt-notice-know-your-legal-rights-and-defences-under-indias-debt-recovery-law\/","title":{"rendered":"Received a DRT Notice? Know Your Legal Rights and Defences Under India\u2019s Debt Recovery Law"},"content":{"rendered":"
\n

New Delhi [India], April 22:<\/strong> Each year, hundreds of thousands of individual borrowers, small business owners, and personal guarantors across India receive notices from Debt Recovery Tribunals \u2014 often without understanding that the law gives them significant rights, timelines to respond, and legal remedies that can fundamentally alter the outcome of recovery proceedings.<\/p>\n

Unified Chambers and Associates, a specialist debt recovery law firm appearing across all 39 Debt Recovery Tribunals and 5 Debt Recovery Appellate Tribunals in India, has published this guide to help borrowers, MSMEs, and guarantors understand what happens at DRT \u2014 and what they can do about it.<\/p>\n

What Is a DRT Notice and What Happens If You Ignore It?<\/strong><\/p>\n

When a bank or NBFC files an Original Application (OA) against a borrower under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act), the DRT issues a notice to the borrower requiring a response.<\/p>\n

Ignoring a DRT notice is the single costliest mistake a borrower can make.<\/strong> If no written statement is filed within the time permitted, the DRT may proceed ex parte \u2014 deciding the matter based solely on the bank\u2019s version. An ex parte Recovery Certificate can be issued, authorising the Recovery Officer to attach and sell the borrower\u2019s property, arrest the borrower, and take all steps permissible under the Code of Civil Procedure to recover the debt.<\/p>\n

A borrower who has received a DRT notice has 30 days<\/strong> from service to file a written statement. This deadline can be extended by the Presiding Officer on sufficient cause.<\/p>\n

Your First Line of Defence: The Written Statement<\/strong><\/p>\n

The written statement is the borrower\u2019s formal response to the bank\u2019s Original Application. It is not merely a denial \u2014 it is the document that places every available legal defence on record before the DRT.<\/p>\n

Key defences that borrowers and MSMEs commonly raise include:<\/p>\n

Limitation:<\/strong> The RDDBFI Act read with the Limitation Act, 1963 requires banks to file their OA within three years of the debt becoming due. If the bank has delayed filing, a limitation defence can result in the OA being rejected entirely.<\/p>\n

Wrong debt quantification:<\/strong> Banks frequently include penal interest, service charges, or insurance premiums that are not legally recoverable under the loan agreement. The written statement can challenge each head of the claimed amount.<\/p>\n

Improper NPA classification:<\/strong> Reserve Bank of India Master Directions specify precise criteria for classifying a loan account as a Non-Performing Asset. A premature or procedurally defective NPA classification is a valid ground of challenge.<\/p>\n

Defective notice under SARFAESI:<\/strong> If the DRT proceedings are linked to a SARFAESI enforcement, procedural defects in the Section 13(2) demand notice \u2014 incorrect outstanding amount, wrong borrower name, improper service \u2014 can be raised.<\/p>\n

If the Bank Is Taking Possession: Section 17 of SARFAESI<\/strong><\/p>\n

When a secured creditor (bank or NBFC) takes action to seize mortgaged property under Section 13(4) of the SARFAESI Act \u2014 by issuing a possession notice or taking symbolic or physical possession \u2014 the borrower has a specific remedy before the DRT.<\/p>\n

Under Section 17 of the SARFAESI Act<\/strong>, any person aggrieved by a secured creditor\u2019s enforcement action may approach the DRT within 45 days<\/strong> of the date the enforcement measure was taken. This is a strict deadline. Missing it bars the borrower from challenging the SARFAESI action before the DRT.<\/p>\n

The Section 17 application can seek:<\/p>\n