RDDB Act (Recovery of Debts and Bankruptcy Act)

RDDB Act, 1993 (as amended by the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016)

The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (renamed in 2016 to include "Bankruptcy"), which established the Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs). Banks and financial institutions file Original Applications before DRTs for recovery of debts above ₹20 lakhs. The Act provides a faster alternative to civil court proceedings.

In practice, the RDDB Act, 1993 is the procedural backbone for bank recovery above Rs 20 lakhs. It created the DRTs and DRATs and gives banks and financial institutions a summary forum, far quicker than an ordinary civil suit, to obtain a Recovery Certificate against a defaulting borrower. Counsel for a creditor chooses between filing an Original Application under this Act and enforcing security directly under SARFAESI — often both run in parallel, with the OA capturing the personal liability and the deficiency while SARFAESI realises the secured asset. The 2016 amendment renamed the statute to add Bankruptcy and tightened timelines and the Recovery Officer's powers. Borrowers engage the Act mainly through objections at the OA stage and before the Recovery Officer. Filing in the wrong DRT (jurisdiction follows the cause of action and the branch) or below the monetary threshold gets the application returned. Well-advised creditors confirm jurisdiction and the threshold before presenting the OA.