Original Application (OA) before DRT – A Banker’s Playbook
- OA = Bank’s primary recovery case under the RDB Act
- 180-day disposal norm—adjournments won’t stall OA
- Restructuring talks ≠ automatic pause of proceedings
Audience: Credit, Legal, and Recovery teams at banks/NBFCs.
Context: In the recent Delhi DRAT matter (YFC Pvt. Ltd. & Ors. vs Bank of Baroda & Ors.), the Appellate Tribunal declined to interfere with the DRT’s refusal to grant more time for restructuring and directed expeditious disposal of the OA. The takeaway for bankers: keep your OA moving and treat restructuring as a parallel track—not a brake.
What is an OA (Original Application)?
- Purpose: Main recovery action filed by a bank/FI before the Debt Recovery Tribunal (DRT) under Section 19 of the RDB Act, 1993.
- Reliefs: Recovery of dues with interest/costs; enforcement of security; ancillary directions (e.g., injunctions, disclosure).
- Outcome: On success, DRT issues a Recovery Certificate (RC) executable by the Recovery Officer.
- Timeline: Statutory norm—180 days for disposal (often exceeded, but used by tribunals as a guiding yardstick).
Key Lesson from the DRAT Case
- Repeated requests for time due to “restructuring in progress” will not indefinitely delay an OA.
- DRAT upheld DRT’s approach: fix final-argument dates, avoid endless adjournments, and decide OA expeditiously.
- Borrowers may seek time for settlement/consent decree; tribunals may give a short window, but proceedings must advance.
OA Flow: From Filing to Recovery Certificate
| Step | Action & Banker’s Tip |
|---|---|
| 1. Filing | File OA with statement of claim, calculations, and document bundle. Tip: Include date-wise chart of events and sanction-cum-security matrix. |
| 2. Admission & Notices | DRT issues notice; ensure correct addresses/service. Tip: Use alternate service (email/WhatsApp/publication) if needed. |
| 3. Evidence | Affidavits, exhibits (sanctions, AODs, SOAs, NPA intimation, security docs). Tip: Keep interest workings error-free. |
| 4. Interim Reliefs | Seek injunctions on asset transfers, disclosure of assets, receiver in extreme cases. Tip: Show urgency & prima facie case. |
| 5. Final Hearing | Stick to dates; oppose adjournments without cause. Tip: Cite 180-day norm if delays are tactical. |
| 6. Order & RC | On decree, get Recovery Certificate. Tip: File execution promptly; track RO’s steps (attachment, auction). |
Banker’s Playbook: Do This
- Parallel tracks: Continue OA even if restructuring/OTS is being explored.
- Time discipline: Request short, final dates for arguments; resist rolling adjournments.
- Paper perfection: Keep authority/POA, board resolution, and consortium authorization in order.
- Computation clarity: Lock interest rates, penal clauses, and SOA reconciliation up to last date.
- Security trail: Title reports, registration proofs (CERSAI), valuation—attach summaries.
Avoid This
- Letting “proposal under consideration” become a reason for months of adjournment.
- Vague settlement talks without term sheets, upfront payments, or timelines.
- Gaps in documentation (unsigned sanctions, missing AODs, absent KYC or facility-wise breakups).
If Restructuring is Live: How to Layer it on OA
- Seek short indulgence only with clear milestones: e.g., “15 days to file consent terms/withdrawal” (as seen in the case).
- Insist on part-payment, security enhancement, or third-party guarantee before granting time.
- Put settlement on record as a consent decree wherever feasible to avoid fresh litigation.
OA Filing: Quick Checklist
- Sanction letters, renewals, review notes, board/committee approvals.
- Executed documents: loan agreements, DP notes, hypothecation/mortgage, guarantees.
- Security & perfection: mortgages, CERSAI, ROC charges, insurance, valuation.
- SOA with date-wise debit/credit, interest grid, NPA classification proof, recall/SARFAESI notices (if any).
- Authority to file: POA/Authorization, consortium lead bank mandate, resolution.
Common Borrower Objections & Banker Responses
- “We’re negotiating restructuring—give 3 months.”
Response: Seek brief time only for consent terms; otherwise press for final hearing citing the 180-day norm. - “Calculation disputes.”
Response: File reconciled SOA, working sheets, and offer to file a short rejoinder computation within days. - “Documents not served.”
Response: Show acknowledgments/alternate service and request proceeding ex parte if wilful avoidance.
Mini-FAQ for Bankers
- Does OA halt if restructuring talks start? No. OA continues; settlement can convert into consent decree.
- Can we get interim protection? Yes, seek injunctions, disclosure of assets, and in fit cases appointment of a receiver.
- How to deal with adjournment culture? Ask for short, final dates; record borrower delays; press the 180-day benchmark.
Note: This article is a banker-focused explainer based on a recent DRAT direction emphasizing timely disposal of OAs and limiting adjournments sought for loan restructuring. For case-specific strategy, consult your legal counsel.
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