New Delhi, April 22, 2026 — With DRT (Debt Recovery Tribunal) filings across India continuing to rise into FY2026–27, Unified Chambers and Associates has released this advisory to inform borrowers and guarantors of the legal rights and procedural defences available to them under the Recovery of Debts and Bankruptcy Act, 1993 (RDDB Act) and the SARFAESI Act, 2002.
What Is a DRT Notice and Why Does It Matter?
A DRT notice typically arises when a bank or notified financial institution files an Original Application (O.A.) under Section 19 of the RDDB Act, 1993, claiming recovery of dues above Rs. 20 Lakhs. Upon filing, the DRT serves a notice (summons) on the borrower, guarantors, and other defendants requiring them to appear and file a written statement within the time specified — generally 30 days from service.
The critical fact most borrowers miss: silence is not an option. Failing to respond results in an ex-parte Recovery Certificate — the DRT equivalent of a civil court decree — which the bank's Recovery Officer can execute against any asset of the borrower or guarantor nationwide.
Immediate Steps Upon Receiving a DRT Notice
- Do not ignore the notice: The 30-day window to file a written statement begins from the date of service. Missing this deadline gives the bank an automatic ex-parte order.
- Engage a specialist DRT lawyer immediately: DRT practice is highly specialised. Engage counsel with specific DRT experience — not a general litigator — within 7 days of service.
- Audit the claim amount: Obtain a fresh statement of account from the bank. DRT claims frequently contain errors in principal, interest rate application, penal interest, and processing charges.
- Review all loan and security documents: Identify any procedural infirmities in the loan agreement, security creation documents, or NPA classification notice that may affect the bank's claim.
- Check the limitation position: If more than 3 years have elapsed from the date the cause of action first arose without any acknowledgement of debt or payment of interest, the claim may be time-barred.
Legal Defences Available to Borrowers
The RDDB Act and the Indian Contract Act together provide borrowers with a robust framework of defences. The written statement before the DRT is not a formality — it is a full pleading in which the defendant bank or FI can be put to strict proof on every element of the claim.
Challenge the principal outstanding, the rate of interest applied, penal interest charges, processing fees, and any miscellaneous debits. The bank must prove each component of the claim amount.
If the NPA classification was premature, without proper demand notice, or contrary to RBI Master Directions on income recognition and asset classification (IRAC norms), the O.A. itself may be premature.
An O.A. filed beyond 3 years from the cause of action, without any valid acknowledgement of debt or payment of interest extending the limitation period, is liable to be dismissed in limine.
Borrowers and guarantors may file a counter-claim for excess interest, wrongful asset possession, tortious conduct by recovery agents, or unlawful NPA reporting to CIBIL causing reputational damage.
If the bank has simultaneously invoked SARFAESI, the borrower may apply under Section 17 of the SARFAESI Act before the DRT for stay of possession and sale, on grounds of procedural infirmity in the Section 13(2) or 13(4) notice.
Guarantors may invoke discharge under Sections 133–139 of the Indian Contract Act: material alteration of loan terms, release of co-surety, failure of consideration, and discharge of principal debtor by time-bar.
About Unified Chambers and Associates
Unified Chambers and Associates is a debt recovery law practice with an exclusive focus on proceedings before Debt Recovery Tribunals, SARFAESI courts, the National Company Law Tribunal (IBC/CIRP matters), and the National Company Law Appellate Tribunal. The firm is led by Senior Partner Advocate Subodh Bajpai (LLM, MBA, XLRI Jamshedpur), with 8+ years of dedicated debt recovery practice and over 500 DRT appearances across all major benches including DRT-I Delhi, DRT-II Delhi, DRT Mumbai, and DRT Kolkata.
The firm advises both creditors (banks, NBFCs, ARCs) and borrowers/guarantors on DRT and SARFAESI proceedings, IBC Section 7 and Section 95 matters, and cheque bounce prosecutions under Section 138 of the Negotiable Instruments Act.
Unified Chambers and Associates
Lawyers Chambers Block, Delhi High Court Complex, New Delhi 110003
legal@unifiedchambers.com · +91 84008 60008