Debt Recovery Tribunal Auctions A Legal Process for Debt Recovery

A Debt Recovery Tribunal (DRT) auction is a legal process aimed at recovering debts owed to banks and financial institutions by selling properties. The DRT ensures that the auction process follows the provisions of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act (SARFAESI Act).

The auction process begins with the bank serving a notice to the borrower and interested parties, informing them of the default in repayment and offering an opportunity to rectify the default. If the borrower does not comply, the bank may take possession of the secured assets. These properties are then listed for auction and sold to recover the debt.

The DRTs were established under the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act), to provide a speedy resolution for both lenders and borrowers. Individuals or their legal representatives can file cases in DRTs, facilitating a quicker and more efficient recovery process.