When a bank or financial institution decides to pursue debt recovery through a formal legal channel, the process doesn’t begin with a courtroom drama – it begins with paperwork and fees. Filing an application before a Debt Recovery Tribunal (DRT) requires payment of prescribed fees, and understanding this fee structure is just as important as knowing the law itself. For co-operative banks and financial institutions, this knowledge translates directly into operational planning – because the cost of pursuing recovery matters as much as the recovery itself.
Table of Contents
- Legal basis for DRT application fees
- The fee schedule under Rule 7 of the DRT Procedure Rules
- Worked examples to understand the slab
- Fees for other types of applications
- Modes of payment accepted by DRTs
- Refund of fees – when does it apply?
- Strategic relevance for financial institutions and co-operative banks
- Jurisdiction and where to file
- Fees at the appellate stage (DRAT)
- Practical compliance checklist for institutions
Legal basis for DRT application fees
The Recovery of Debts and Bankruptcy Act, 1993 (originally titled the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and commonly referred to as the RDDBFI Act or RDB Act) established Debt Recovery Tribunals as the exclusive forum for banks and financial institutions to recover debts above ₹20 lakh. The procedural and fee-related framework is governed separately by the Debts Recovery Tribunal (Procedure) Rules, 1993, issued by the Ministry of Finance. Rule 7 of these rules specifically prescribes the fee schedule for filing applications before DRTs.
Every application filed under Section 19(1) of the Act – which is the primary provision under which banks and financial institutions initiate recovery proceedings – must be accompanied by a prescribed fee. The same applies to applications under Section 19(2) and Section 19(8), as well as interlocutory applications and applications for review of a Tribunal’s decision. Importantly, Rule 7(1) requires that this fee be remitted via a crossed Bank Demand Draft or an Indian Postal Order, both drawn in favour of the Registrar of the respective Tribunal.
The fee schedule under Rule 7 of the DRT Procedure Rules
The fee structure follows a graduated slab system – meaning the fee increases in proportion to the debt amount, but at a diminishing rate as the claim grows larger. This ensures that smaller claims aren’t prohibitively expensive to file while larger claims also bear a proportionate cost.
As per the current fee schedule prescribed under Rule 7(2) of the DRT Procedure Rules:
| Debt amount | Fee payable |
|---|---|
| Up to ₹10 lakhs | ₹12,000 (flat) |
| Above ₹10 lakhs | ₹12,000 + ₹1,000 for every ₹1 lakh (or part thereof) exceeding ₹10 lakhs, subject to a maximum of ₹1,50,000 |
This means the fee scales up from the base of ₹12,000 as the debt amount increases, but is capped at ₹1,50,000 regardless of how large the claim is. The cap is a significant feature – it prevents the filing fee from becoming a disproportionate burden in large-value recovery cases.
Worked examples to understand the slab
Let’s apply the formula to a few practical scenarios:
Example 1 – Debt of ₹8 lakhs: Since the amount is below ₹10 lakhs, the flat fee of ₹12,000 applies. Even though 1% of ₹8 lakhs would be ₹8,000, the minimum prescribed fee is ₹12,000.
Example 2 – Debt of ₹25 lakhs: The fee is calculated as ₹12,000 (base) + ₹1,000 × 15 (for ₹15 lakhs exceeding the ₹10 lakh threshold) = ₹12,000 + ₹15,000 = ₹27,000.
Example 3 – Debt of ₹1.5 crore (₹150 lakhs): Theoretically, the formula would give ₹12,000 + ₹1,000 × 140 = ₹1,52,000. But since the maximum is capped at ₹1,50,000, the payable fee is ₹1,50,000.
The cap kicks in at a debt amount of approximately ₹1.48 crore and applies uniformly to all claims above that threshold.
Fees for other types of applications
Not all filings before a DRT are primary recovery applications. The fee structure also covers several ancillary proceedings:
Review applications: When a party applies for a review of a Tribunal’s decision, the fee payable is fifty percent of the fee paid for the original application (OA). So if an institution paid ₹50,000 for its original filing, the review application fee would be ₹25,000.
Interlocutory applications (IA): These are applications made during the pendency of a case for interim directions or orders. The prescribed fee for an IA is a nominal ₹250, which reflects its procedural nature.
Vakalatnama: The fee for filing a vakalatnama (the document authorising legal representation) before the Tribunal is ₹5.
Appeals against Recovery Officer’s orders (Section 30): When an aggrieved party appeals to the DRT against an order passed by the Recovery Officer, the fee depends on the amount involved – ₹12,000 if the amount is below ₹10 lakhs, and ₹20,000 if it is between ₹10 lakhs and ₹30 lakhs, with higher fees prescribed for amounts above that.
Certified copies of orders: Parties who require certified copies of orders passed during proceedings may obtain them from the Registrar on payment of ₹5 per page, subject to a minimum of ₹100 per order.
Modes of payment accepted by DRTs
As per Rule 7(1) of the DRT Procedure Rules, fees must be submitted through one of the following modes:
Crossed Bank Demand Draft: Drawn on a scheduled bank and made payable to “The Registrar, Debt Recovery Tribunal” at the location of the Tribunal. This remains the most commonly used method.
Indian Postal Order (IPO): Made out in favour of the Registrar and payable at the Central Post Office in the city where the Tribunal is located.
Online/electronic payments: The e-DRT portal, developed under the Ministry of Finance’s digital initiative, now supports e-filing with integrated payment gateways through BharatKosh. This allows institutions to submit applications and pay fees electronically, reducing the need for physical visits to the Tribunal.
Refund of fees – when does it apply?
The RDB Act itself, under Section 19(3B), provides for refund of fees in certain situations. If a recovery application is settled before the commencement of hearing or at any stage before the final order is passed, the applicant may be granted a refund at rates prescribed by the Central Government. This provision acknowledges that where parties resolve their dispute without a full trial, a portion of the fee paid should be returned.
In practice, two broad scenarios tend to attract refunds:
Rejection at the filing stage: If the Tribunal rejects the application before it is formally admitted (for reasons such as lack of jurisdiction or technical defects), a significant portion – typically around 75% – of the fee paid may be refunded.
Settlement before hearing: If both parties arrive at a one-time settlement (OTS) or compromise before the hearing commences, the applicant institution can apply for a partial refund of the fees paid. The exact percentage is governed by the rules notified for this purpose.
Strategic relevance for financial institutions and co-operative banks
For banks and co-operative financial institutions managing a portfolio of non-performing assets (NPAs), the DRT fee schedule is not just a procedural footnote – it directly influences the cost-benefit analysis of each recovery action. The flat minimum of ₹12,000 means that even a small debt of ₹20-25 lakhs will attract the same minimum fee as a ₹5 lakh claim, potentially making the DRT route economically inefficient for borderline cases.
Moreover, the fee cap of ₹1,50,000 effectively subsidises large-value recoveries. An institution filing for ₹50 crore pays the same tribunal fee as one filing for ₹5 crore – a feature that benefits lenders handling bulk NPAs.
For secured loans, financial institutions also have the alternative of proceeding under the SARFAESI Act, 2002, which allows direct enforcement of security interests without first approaching the DRT. In SARFAESI proceedings initiated by the bank itself, there is no upfront filing fee to the Tribunal – though if the borrower challenges the bank’s action under Section 17 of SARFAESI, the borrower is required to deposit 50% of the debt amount (or such lesser amount as the DRT may permit) before the appeal is entertained. This asymmetry makes SARFAESI a cost-efficient first resort for secured creditors, with DRT proceedings serving as the preferred route for unsecured debts or supplementary relief.
Jurisdiction and where to file
The fee schedule operates alongside the jurisdictional framework for DRTs. As of now, India has 39 DRTs and 5 Debt Recovery Appellate Tribunals (DRATs) functioning across the country. The application must be filed at the DRT within whose territorial jurisdiction – the defendant resides, carries on business, or the cause of action arises. Getting the jurisdiction right is critical, because a filing in the wrong DRT would require re-filing – along with fresh fees.
Fees at the appellate stage (DRAT)
If a party is aggrieved by a DRT’s order, they may prefer an appeal before the Debt Recovery Appellate Tribunal (DRAT) under Section 20 of the RDB Act. The DRAT fee structure is separate and also follows a slab system:
For amounts less than ₹10 lakhs – fee is ₹12,000. For amounts ₹10 lakhs or more but less than ₹30 lakhs – fee is ₹20,000. For amounts of ₹30 lakhs or more – the fee is as prescribed by the Central Government from time to time.
There is also a critical precondition for filing an appeal at the DRAT level: under Section 21 of the RDB Act, the appellant (if it is the borrower or a person other than the bank) is required to deposit 50% of the amount of the debt due as determined by the DRT, or such lesser amount (but not less than 25%) as the DRAT may direct. This pre-deposit requirement acts as a filter against frivolous appeals.
Practical compliance checklist for institutions
Before filing before a DRT, financial institutions should ensure the following with respect to fees:
Calculate the correct slab: Identify whether the debt falls under ₹10 lakhs (flat ₹12,000) or above (₹12,000 + ₹1,000 per lakh exceeding ₹10 lakhs, capped at ₹1,50,000).
Use correct payment instrument: Prepare a crossed Demand Draft in favour of the Registrar of the specific DRT where the application will be filed, or use the e-DRT portal for online payment.
Account for ancillary applications: If interim relief is sought in the same application, a separate IA fee of ₹250 may apply unless it is prayed for within the original application itself, in which case Rule 8(2) of the DRT Procedure Rules clarifies that no separate application is needed.
Retain fee payment details: The application form requires specific details of the demand draft or postal order – including the number, issuing bank, and date – to be filled in as part of the application.
Consider refund eligibility: If a settlement is anticipated, explore early resolution to preserve refund eligibility under Section 19(3B).
What do you think? Given that DRT filing fees are capped at ₹1,50,000 regardless of the debt size, do you think this creates an unintended advantage for large lenders pursuing mega NPA recoveries over smaller cooperative banks filing for modest amounts? And with digital filing now available through the e-DRT portal, should the fee payment modes be further streamlined to allow UPI and NEFT for all DRT applications uniformly across India?
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