Received a DRT Notice? Key Steps to Take Within 30 Days

Receiving a DRT notice from a bank or financial institution can be alarming. Many borrowers panic, ignore the notice, or delay taking legal action—often resulting in loss of property, freezing of accounts, or coercive recovery measures.

If you have received a DRT notice, SARFAESI notice, or recovery summons, the first 30 days are crucial. Proper legal action within this period can save your property, business, and creditworthiness.

What Is a DRT Notice?

A DRT (Debt Recovery Tribunal) Notice is issued when a bank or NBFC initiates recovery proceedings against a borrower due to:

  • Loan default

  • NPA classification

  • SARFAESI action

  • Recovery of secured or unsecured debt

Common notices include:

  • Notice under Section 13(2) of SARFAESI Act

  • Possession notice under Section 13(4)

  • DRT summons under Section 19 of RDDBFI Act

  • Auction or sale notice

Borrowers commonly search:

  • Received DRT notice what to do

  • DRT notice legal remedy

  • How to stop bank recovery

Why the First 30 Days Matter

Under the SARFAESI Act, 2002, once a notice is served:

  • Borrower has 30 days to respond or challenge the action

  • After 30 days, the bank can:

    • Take physical possession

    • Auction the property

    • Freeze accounts

    • Appoint a receiver

âť— Delay can result in irreversible loss of rights

Step 1: Do NOT Ignore the DRT or SARFAESI Notice

Ignoring a notice is the biggest mistake borrowers make.

Consequences include:

  • Ex-parte orders by DRT

  • Fast-tracked recovery proceedings

  • Weak defence later in court

📌 Every notice—whether by post, email, or affixture—should be taken seriously

Step 2: Verify Whether the Loan Was Wrongly Declared NPA

Many DRT cases are defensible because of illegal or premature NPA classification, such as:

  • RBI’s 90-day norm not followed

  • Wrong calculation of overdue amount

  • Pending restructuring or settlement ignored

  • Account regularised but still classified as NPA

Wrongful NPA classification is a strong ground to challenge bank action before DRT or High Court.

Step 3: Check for Procedural Violations by the Bank

Banks often commit technical and legal lapses, including:

  • Defective or vague SARFAESI notice

  • No proof of proper service

  • Non-consideration of borrower’s objections

  • Violation of RBI guidelines

  • Improper valuation of secured property

Such lapses can lead to quashing of recovery proceedings.

Step 4: File Objections / Representation Within 30 Days

Under Section 13(3A) of SARFAESI Act, borrowers have a statutory right to:

  • Submit objections to the bank

  • Demand justification for recovery action

  • Seek restructuring or settlement

Banks are legally bound to reply with reasons.

Failure to respond properly weakens the bank’s case before DRT.

Step 5: Approach DRT or High Court at the Right Time

Depending on the stage of proceedings:

  • DRT Application (S.A.) under Section 17 can be filed after possession notice

  • Writ Petition before High Court can be filed in cases of:

    • Gross illegality

    • Jurisdictional error

    • Violation of natural justice

Courts have repeatedly held that arbitrary recovery cannot be allowed.

Step 6: Seek Interim Stay to Protect Property

Timely legal action can result in:

  • Stay on auction proceedings

  • Protection from physical possession

  • Status quo orders on secured assets

  • Time for settlement or restructuring

Without interim relief, banks may proceed with auction within weeks.

Common Mistakes Borrowers Make

❌ Waiting for auction notice
❌ Trusting verbal assurances by bank officials
❌ Filing cases without legal strategy
❌ Missing limitation periods

A well-planned legal response is essential.

When Should You Contact a DRT Lawyer Immediately?

  • You received a SARFAESI or DRT notice

  • Possession or auction notice is issued

  • Property or factory is at risk

  • Bank refused settlement unfairly

  • Account wrongly classified as NPA

Conclusion

A DRT notice is not the end of the road—it is the beginning of your legal defence.

With timely action within 30 days, borrowers can:

  • Challenge illegal bank actions

  • Protect homes and businesses

  • Secure fair settlement or relief

  • Avoid distress sale of property

Need Urgent Legal Help After Receiving a DRT Notice?

I regularly represent borrowers and guarantors before DRT, DRAT, and High Courts, handling:

âś” SARFAESI challenges
âś” Wrongful NPA classification
âś” Auction & possession stay matters
âś” Recovery litigation & settlements

Advocate Ayush S. Jain
đź“Ť Practicing before DRT & High Court of Gujarat

đź“ž Phone: +91 74407 72911
📧 Email: [email protected]

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