When you study about Non-Performing Assets or NPA and NPA account settlement, you need to read a few terms associated with it. Two terms are very popular- DRT and DRAT. They are so similar, that people get confused and consider them one. In this blog, we are going to understand their meaning and difference.
What is DRT?
As mentioned in the blog previously, the main purpose of establishing DRT was to resolve issues related to tax-related disputes or administrative issues. The objective was to facilitate a quick collection of debt. It ensures fast adjudication and recovery of debts owed to financial institutions and banks. The minimum amount owed to banks or financial institutions should be more than 20 lac rupees. It has a Presiding Officer, who should be qualified to work as a district judge. He can have a term of five years and can serve until his age is 62 years. It may be possible that the government appoints a recovery officer (or officers) to assist the Presiding Officer.
As far as the scope and extent of the DRT are concerned, then it is possible to collect the debt of more than 10 Lakhs after contacting DRT. If the amount is less than that, then the banks or financial institutions (referred as creditors) should apply to a civil court under CPC (Civil Procedure Code). A law degree is not necessary to provide DRT legal solutions or present cases in DRTs. For amounts more than 1 Lakh, the Central Government may order that some cases can be dealt with by DRT. In case of disputes in foreign exchange, the amount in dollars needs to be specified.
What is DRAT?
A person or business that feels wronged by DRT orders may appeal those decisions to Debt Recovery Appellate Tribunal or DRAT. The appeal must be filed within 45 days of obtaining DRT orders. The appellate will not consider it until the person pays 75 percent of the debt that was judged.
Both DRT and DRAT operate by the notion of natural justice. Both are endowed with the same authority as any civil court. DRT also has only one member, who is called the Chairperson. He should be qualified to be the judge of the high court and he should be a member of legal service. He can have a term of five years and can serve in the position until the age of 65 years.