Debt recovery lawyers for lenders, businesses and borrowers

What our debt recovery lawyers handle

For banks, NBFCs and asset reconstruction companies

• SARFAESI enforcement: demand notices under Section 13(2), replies to borrowers' objections, possession under Section 13(4), applications to the magistrate under Section 14, and sale notices
• Original applications before the Debts Recovery Tribunal, recovery certificates and execution through the Recovery Officer
• Defending borrowers' applications under Section 17, appeals before the Debts Recovery Appellate Tribunal (DRAT), and insolvency petitions before the NCLT

For businesses and individuals owed money

Legal recovery services for unpaid invoices, loans between parties, deposits and other fixed sums: demand notices, summary suits, commercial suits, MSME Facilitation Council claims and execution of decrees. A dishonoured cheque also supports a criminal complaint, which runs separately; see cheque bounce cases.

For borrowers and guarantors

Objections to a Section 13(2) notice, Section 17 applications against possession or sale, defences in DRT and civil cases, and negotiation of a one-time settlement with the bank. Most deadlines on the borrower's side are counted in days, not months, so the earlier we see the notice, the more options remain.

Which forum fits the debt?

Six routes cover almost every debt. Not all of them are open to every creditor, and some can run side by side.

Where none of these fits, an ordinary civil suit under the Code of Civil Procedure, 1908 remains open. A secured lender often uses two routes together: SARFAESI against the security and a DRT application for the balance.

How debt recovery litigation works, step by step

1. Papers and limitation. We read the loan or supply documents, the statement of account and the correspondence, and fix the limitation date. Most money claims have three years under the Limitation Act, 1963, and a signed acknowledgment or a part payment starts a fresh period (Sections 18 and 19).
2. Asset check. Before spending on litigation, we look at what the debtor owns. A decree against someone with nothing in his name is only paper, which is where asset verification comes in.
3. Demand notice. Under the SARFAESI Act and the IBC the notice is a statutory step. Before a suit it is good practice, and it sets up the claim for interest and costs.
4. Mediation or settlement. Compulsory before a commercial suit unless urgent interim relief is needed, and worth a serious try in any case.
5. Filing with interim protection. We file in the chosen forum and, where assets may disappear, ask for attachment before judgment under Order XXXVIII Rule 5 CPC or interim orders from the tribunal.
6. Decree, award or certificate. The forum decides the claim after pleadings and evidence, or on a summary basis where the law allows.
7. Execution. Attachment and sale of property and attachment of bank accounts and dues under Order XXI CPC, or recovery through the DRT's Recovery Officer.

SARFAESI enforcement for secured lenders

The SARFAESI Act lets a secured lender take possession of the security and sell it without first going to court. It applies once the account is a non-performing asset, the amount due is at least Rs 1 lakh and at least 20% of principal and interest (Section 31(j)), and the security is not agricultural land. NBFCs with assets of Rs 100 crore or more can use it for secured debts of Rs 20 lakh and above.

• Section 13(2) notice. The borrower has 60 days to pay the amount demanded.
• Section 13(3A) objection. The borrower may object within that period; a lender that rejects the objection must give its reasons within 15 days.
• Section 13(4) possession. Symbolic possession first, by a notice served and published under Rule 8 of the Security Interest (Enforcement) Rules, 2002.
• Section 14 order. Where possession is resisted, the Chief Metropolitan Magistrate or the District Magistrate orders it, within 30 days, extendable to 60.
• Sale. A valuation, then at least 30 days' notice to the borrower before a public auction.
• Redemption. Under Section 13(8), as amended in 2016, the borrower can stop the sale by paying the full dues with costs, but only until the auction notice is published.

Section 34 bars the civil courts from any matter the DRT can decide under the Act. A borrower who wants to stop a SARFAESI sale goes to the Debts Recovery Tribunal, not to the civil court.

What is the Debt Recovery Tribunal, and how does a DRT case run?

The Debts Recovery Tribunal is a specialist tribunal set up under the Recovery of Debts and Bankruptcy Act, 1993 (the RDB Act) to decide claims by banks and financial institutions. It hears debts of Rs 20 lakh or more; smaller bank claims go to the civil court. It also hears borrowers' challenges to SARFAESI action under Section 17.

How a bank files a case in the DRT

The bank files an original application under Section 19 of the RDB Act before the tribunal where the borrower lives or works, where the cause of action arose, or where the account is held. The borrower files a written statement and may raise a counter-claim. The Act asks the tribunal to try to finish within 180 days; contested cases usually take longer. The result is a recovery certificate, which the Recovery Officer executes by attaching and selling property, attaching accounts, appointing a receiver or, in rare cases, ordering arrest.

DRT appeal to the DRAT

An appeal against a DRT order goes to the Debts Recovery Appellate Tribunal: within 45 days under Section 20 of the RDB Act, or within 30 days under Section 18 of the SARFAESI Act. A borrower who appeals must first deposit 50% of the debt, which the appellate tribunal may reduce to 25% of the debt. Beyond that lies only a writ petition to the High Court, which is used sparingly.

DRT Mumbai

Mumbai has three Debts Recovery Tribunals, numbered DRT-I to DRT-III, and the DRAT for the region also sits in Mumbai. Case status and daily cause lists for every tribunal are on the official DRT portal, drt.gov.in, and filings are made electronically. We appear before the Mumbai tribunals and the DRAT ourselves.

Summary suits, commercial courts and MSME claims

Summary suit under Order XXXVII CPC

A summary suit fits a debt fixed in writing: a promissory note, a bill of exchange, a written contract for a liquidated sum, or a surety's written undertaking. The defendant must enter appearance within 10 days of being served. When the plaintiff then serves the summons for judgment, the defendant has 10 more days to apply for leave to defend. Without leave, the plaintiff gets a decree.

Leave is refused where the defence is frivolous, and where part of the claim is admitted, leave comes only after that part is deposited. Order XXXVII applies in the High Courts, city civil courts, small causes courts and other courts the High Court notifies.

Commercial courts

A trade debt of Rs 3 lakh or more is a commercial dispute under the Commercial Courts Act, 2015. Before filing, the claimant must attempt pre-institution mediation under Section 12A, conducted through the legal services authority, unless urgent interim relief is sought; the Supreme Court held this mandatory in Patil Automation (2022). The defendant gets at most 120 days for a written statement, and the court can give summary judgment under Order XIIIA where the defence has no real prospect of success.

In Mumbai, commercial suits go to the commercial courts at the City Civil Court or, above its pecuniary limit, the Commercial Division of the Bombay High Court.

MSME Facilitation Council

A supplier registered as a micro or small enterprise can refer unpaid dues to the Micro and Small Enterprise Facilitation Council under Section 18 of the MSMED Act, 2006, through the MSME Samadhaan portal. The buyer must pay within the agreed period, which cannot exceed 45 days, and owes compound interest at three times the RBI bank rate on late payment (Sections 15 and 16). The Council conciliates first and then arbitrates. A buyer who challenges the award must first deposit 75% of it.

When is an IBC Section 9 petition the right step?

When the debtor is a company or LLP, the default is at least Rs 1 crore and there is no genuine dispute about the debt. An operational creditor, such as a supplier or service provider, first serves a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016. The company then has 10 days to pay or to point to a dispute that existed before the notice: a pending suit or arbitration, or earlier letters disputing quality or quantity. If it does neither, the creditor can apply under Section 9 to the National Company Law Tribunal. Companies with a registered office in Mumbai or Navi Mumbai come before its Mumbai bench.

Use it with care. In Mobilox Innovations (2017) the Supreme Court held that a plausible pre-existing dispute is enough to defeat the petition. Once a petition is admitted, a moratorium under Section 14 stops all other recovery, a resolution professional takes charge, and an operational creditor ranks below secured lenders in any distribution. The notice often produces payment; an admitted insolvency often does not.

Banks and other financial creditors file under Section 7 instead. Personal guarantors of corporate borrowers can be pursued before the NCLT under Part III of the Code.

Documents, time limits and what decides the cost

Documents we need

• Loan agreement or sanction letter, and the security papers: mortgage, hypothecation, pledge or surety deed
• For banks, the statement of account certified under the Bankers' Books Evidence Act, 1891
• For trade debts, invoices, purchase orders, delivery challans and ledger confirmations
• Emails, letters and messages, especially any acknowledgment of the debt
• Notices sent and replies received, with proof of delivery
• Udyam registration, for an MSME claim
• For borrowers, every SARFAESI notice received and the dates on which they arrived

What decides the cost

The forum and its fee scale, since tribunal fees and court fees rise with the amount claimed; whether the other side contests; the number of hearings; valuation and auction costs under SARFAESI; and how much work it takes to trace assets. We quote litigation in writing after reading the papers. A demand notice is fixed-fee drafting: our legal notice drafting is from Rs 5,000.

Mistakes that cost creditors and borrowers money

• Letting limitation run during friendly talks without getting a written acknowledgment of the debt.
• Suing before checking whether the debtor has anything to attach.
• Filing an IBC petition against a company that has already disputed the invoices in writing.
• Lenders skipping a SARFAESI step, such as publishing the possession notice or giving the full 30 days before sale. Each gap is a ground under Section 17.
• Borrowers ignoring the Section 13(2) notice and later going to a civil court, which cannot hear the challenge because of Section 34.
• Borrowers waiting for the auction to object. Once the sale notice is published, the right to redeem by paying is gone.
• Agreeing a settlement with a bank by phone. A one-time settlement must be in a sanction letter that states the amount, the payment schedule, the release of security and the withdrawal of cases.

How we work, and who handles your matter

We work from Sanpada, Navi Mumbai, and appear before the DRTs, the DRAT, the NCLT and the civil and commercial courts in Mumbai and Navi Mumbai. Lenders and businesses elsewhere in India send their papers by email; notices, drafting and much of the filing can be done from here. If hearings are needed before a tribunal in another city, we explain at the first consultation how they will be handled and what that costs.

Matters are handled by Adv. Swanand Pandit, Advocate, High Court of Bombay, whose qualifications include the JAIIB banking examination, and Adv. Ashok Ingle. For finding a judgment debtor's property after you win, read our note on asset verification in debt recovery.