DRT- Debt Recovery Tribunal

During the 1980s-90s, the banks in India did not have access to any specialized mechanism to recover the dues from the borrowers. In 1981, the Tiwari Committee examined the legal and other difficulties faced by banks and financial institutions (FI) and suggested the setting up of special tribunals for recovery of dues of banks and financial institutions. Consequently in 1993, the Recovery of Debts due to Banks and Financial Institutions Act (RDDBFI Act), 1993 was enacted to establish the Debt Recovery Tribunal across the length and breadth of the country. Currently there are 39 DRTs and 5 DRATs operational in the country.

Objective of Debt Recovery Tribunal (DRT)

The objective of Debt Recovery Tribunal (DRT) is expeditious adjudication and recovery of debts due to banks and FIs.

What is the minimum due amount to file case in DRT?

The minimum amount due to banks and FIs should be greater than 20 lac rupees.

Composition of DRT

It consists of one person only who is referred to as Presiding officer. The Presiding officer:

  • Should be qualified to work as district judge
  • Can have term of 5 years
  • Can hold the office till he attains the age of 62 years

  • To assist the Presiding officer, the government can appoint the recovery officers as deemed fit.

What is the Debt Recovery Appellate Tribunal (DRAT)?

A person/entity aggrieved by orders of the DRT can appeal against its orders to Debt Recovery Appellate Tribunal (DRAT). The appeal must be made within 45 days of receiving the orders from DRT. The DRAT shall not entertain the appeal until such person deposits the 75% of the amount of debt so due determined by the DRT. Both DRT and DRAT work on the principle of natural justice and have the same powers as vested in any civil court.

Composition of DRAT

It consists of one person only who is referred as Chairperson of Appellate Tribunal. The Chairperson:

  • Should be qualified to be judge of high court
  • Should be member of legal service
  • Held office of Presiding officer for at least 3 years
  • Can have term of 5 years
  • Can hold the office till he attains the age of 65 years
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Negotiable Instruments (NI-Act 1881)

In the world of business and finance, negotiable instruments are a very important tool. They provide the parties with an ease of doing business. And they can also be a source of finance when in need of funds. Let us learn more about negotiable instruments and their advantages.

What are Negotiable Instruments?

A negotiable instrument is actually a written document. This document specifies payment to a specific person or the bearer of the instrument at a specific date. So we can define a bill of exchange as “a document signifying an unconditional promise signed by the person giving promise, requiring the person to whom it is addressed to pay on demand, or at a fixed date or time, a certain sum to or to the order of a specified person, or to bearer.”

Features of Negotiable Instruments

  • 01 Easily Transferable

    A negotiable instrument is easily and freely transferable. There are no formalities or much paperwork involved in such a transfer. The ownership of an instrument can transfer simply by delivery or by a valid endorsement.

  • All negotiable instruments must be in writing. This includes handwritten notes, printed, engraved, typed, etc.

  • If the order is to pay when convenient then such an order is not a negotiable instrument. Here the time period has to be certain even if it is not a specific date. For example, it is acceptable if the time of payment is linked with the death of a specific individual. As death is a certain event.

  • The person to whom the payment is to be made must be a specific person or persons. Also, there can be more than one payee for a negotiable instrument. And “person” includes artificial persons as well, like body corporates, trade unions, chairman, secretary etc.

Types of Negotiable Instruments

Let us take a look at some of the most common types of negotiable instruments.

Promissory Note

In this case, the debtor is the one who makes the instrument. And he promises unconditionally to the creditor (or the bearer of the document) a certain sum of money on a specific date.

Bills of Exchange

This is an order from the creditor to the debtor. This instrument instructs the drawee (debtor) to pay the payee a certain amount of money. The bill will be made by the drawer (creditor)


This is just another form of a bill of exchange. Here the drawer is a bank. And such a cheque is only payable on demand. It is basically the depositor instructing the bank to pay a certain amount of money to the payee or the bearer of the cheque.


There are other instruments such as government promissory notes, railway receipts, delivery orders, etc. These can be negotiable instruments by custom or practice of the trade.

Legal Vetting

Legal Vetting means making a careful and critical examination of documents to be executed in terms of law. Therefore, it is always advised to go for a legal vetting of an agreement/documents in order to save unforeseen losses which could be averred if a proper action of legal vetting by a law firm is executed in time.

Legal Searching Report

The company has developed an application inhouse called Legal Scrutiny Report. This captures all information required to prepare a LSR, like property document, customer information, recommendations of legal viability, etc.

Property Registry

Registration of the property is a full and final agreement signed between two parties. Once a property is registered, it means that the property buyer in whose favor the property is registered is the lawful owner of the premises and is fully responsible for it in all respects.

Type of Registry
  • Sale Deed
  • Lease Deed
  • Partition Deed
  • Gift Deed
  • Partnership Deed

  • Will
  • Lease Deed
  • Development Agreement
  • Power of Antony
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Affidavit Services

An affidavit is a type of verified statement or showing, or in other words, it contains a verification, meaning it is under oath or penalty of perjury, and this serves as evidence to its veracity and is required for court proceedings.

Legal Audit

RBI asks banks to do a legal audit in case of loans above Rs 5 crore. This move was prompted by an RBI study of large value frauds, especially in the housing loan segment. RBI has reviewed the norm and decided to introduce legal audits in such cases as part of regular audit exercise till the loan stands fully repaid.