Definition
The shortfall between the amount recovered by a secured creditor after enforcement (sale of secured assets) and the total outstanding debt. If the sale proceeds are less than the outstanding loan, the residual amount is the "deficiency." The creditor may file a fresh DRT application for the deficiency amount.
Example
If the outstanding debt is ₹5 crore but the secured asset sells for ₹3.5 crore, the deficiency of ₹1.5 crore can be separately recovered through a DRT application.
Related Terms
Recovery CertificateDRTSARFAESI Sale
Need Expert Advice on Deficiency?
For specific advice on how Deficiency applies to your debt recovery matter, consult Advocate Subodh Bajpai — LLM, MBA (XLRI Jamshedpur). 25+ years of exclusive banking and debt recovery practice across DRT, SARFAESI, IBC, and NI Act.
Defined by Advocate Subodh Bajpai, Senior Partner, Unified Chambers and Associates