Every country in its economic system has the ever going hard challenge of recovery of money resultant to which various debt recovery mechanisms has been setup, like wise in India, in the 1990’s, since the banks were incurring huge losses due to bad debts and ever increasing Non Performing Assets(NPA’s), government felt the need of fast recovery process for recovery of money towards banks,  thereforehad passed new law:- Recovery of Debts Due to Banks and Financial Institutions Act(RDDBFIA), 1993, under which Debt recovery Tribunal was setup.

Going with progressive story of making the recovery processes in India more stronger,in the year 2016 the government come up with new law of Insolvency and Bankruptcy Code.

Because both the laws setup rules for recovery of money, queries have been raised in minds of lots of business owners/professionals to know the difference between the two.

Basis of Difference



NCLT is formed under company law which is regulated by Ministry of corporate affairs.

DRT is constituted under sec3 of (RDDBFIA)which is regulated by Ministry of finance.

Governing Law

Recovery of debts proceedings by NCLT is made under Insolvency and bankruptcy Code(IBC).

Recovery of debts proceedings by DRT is made as per the provisions of RDDBFIA.

Who can apply

Anyone can approach to NCLT for recovery of money under IBC.

Only banks and financial institutions can approach DRT.

Against whom the recovery complaint can be filled.

Under IBC, as if now, only complaints against the corporate debtors can be filled, NOT against individuals or unlimited liability partnership firms.

Banks and financial institutions can file complaint against any person who has defaulted the repayment of debts towards them.

Minimum threshold limit of default for admission of cases

Minimum threshold for applying for complaint under IBC is Rs.1lakh of amount of default by corporate recovery of money.

Minimum threshold limit of default for complaint- Rs.10 lakhs, now this limit is doubled to Rs.20Lakhs

Timit limit of finishing cases

Total time  for completion of Insolvency resolution process is 180 days, extension of 90 days is possible if granted by Adjudicating Authority of NCLT. But practically time taken is quite more.

Total time for disposing application of recovery of debts is 180days from the date of application but practical time taken is quite more.

Court Fees

Flat fees of filling application of corporate insolvency resolution process against corporate debtor is Rs.25000/-

Rs.12,000 for first Rs.10Lakh of debt plus Rs.1000 for every one lakh of debt due or part thereof in excess of Rs.10.00 lakhssubject to a maximum of Rs.1,50,000/-

Disclaimer –This article is for the general information and awareness of its readers, in-case of any legal matter in relation with readers, they are expected to have legal opinion before placing reliance on it. Further it contains completely author’s views on the subject and completely unbiased based on authors own experience, study and understanding.

About Author:-Rajul Jain (CA, MCOM, LLB, MBA, CNPO, CPFA, NCFM) is Chartered Accountant and Legal Consultant, academically he is highly qualified and have gone through various certifications. He extensively speaks and writes on finance, taxation and legal matters. The author can be reached at [email protected]