How a DRT Recovery Certificate Is Executed: Section 25 and the Recovery Officer

When a Debts Recovery Tribunal (DRT) decides an Original Application in favour of a bank or financial institution, the Presiding Officer issues a Recovery Certificate under Section 19(22) of the Recovery of Debts and Bankruptcy Act 1993 and transmits it to the Recovery Officer. Execution then leaves the judicial side of the Tribunal altogether: the Recovery Officer recovers the certified amount using the modes in Section 25 — attachment and sale, taking possession and appointing a receiver to sell, arrest and detention, or appointing a receiver for management — following, by force of Section 29, the tax-recovery procedure of the income-tax law — the Second and Third Schedules to the Income-tax Act 1961, a reference that since that Act's repeal on 1 April 2026 points to the recovery provisions of the Income-tax Act 2025 and Rule 225 of the Income-tax Rules 2026, as explained below. The defendant cannot reopen the amount before the Recovery Officer; Section 26(1) forbids it.

That division of labour is the most important thing to understand about this stage, and the thing most often missed. A defendant who spends the execution stage arguing that the debt was miscalculated is arguing in the wrong forum, against the wrong officer, under the wrong statute. This note sets out how the certificate is issued, what the Recovery Officer may do with it, which parts of the Income-tax machinery apply, and what remedies survive once execution has begun.

What is a Recovery Certificate, and when is it issued?

Section 19(20) requires the Tribunal, after hearing the applicant and the defendant on all claims, set-off, counter-claim and interest, to pass an interim or final order within thirty days from the conclusion of the hearings, which may include interest from the date the amount is found due until realisation. Section 19(22) then supplies the enforcement mechanism: the Presiding Officer shall issue a certificate of recovery along with the final order under sub-section (20), for payment of debt with interest, under his signature to the Recovery Officer for recovery of the amount of debt specified in the certificate. Section 19(21) requires the final order and the certificate to be sent to both parties.

Three features of that provision deserve attention.

It is signed by the Presiding Officer, not the Recovery Officer. The certificate is a judicial act issued with the Tribunal's final order; the Recovery Officer is its executant, not its author. Questions of what is owed therefore belong to the Presiding Officer, and questions of how it is realised to the Recovery Officer.

It speaks only to the amount specified in it. Interest, costs and recoverable charges are what the Tribunal's order and the certificate say they are. A certificate that omits post-order interest cannot be enlarged by the Recovery Officer.

It binds every defendant against whom the order runs. Where guarantors and third-party mortgagors were arrayed in the Original Application, the certificate reaches them too, ordinarily on a joint and several basis. That is a material difference from enforcement under the SARFAESI Act 2002, which operates only against the secured asset and the security interest, and is one reason institutions run both routes — a comparison drawn out in the complete guide to debt recovery in India. What sets the Recovery Officer in motion is receipt of a copy of the certificate: Section 25 directs him to proceed on that receipt, not on the date of the Tribunal's order. Where property lies within the limits of two or more Tribunals, Section 19(23) lets the issuing Tribunal send copies of the certificate for execution to the Tribunals where the property is situated.

Who is the Recovery Officer, and which procedural code applies?

Section 7 of the Act provides for the Central Government to furnish each Tribunal with one or more Recovery Officers and such other officers and employees as it may think fit. The Recovery Officer sits within the Tribunal's establishment, discharging a distinct statutory function under the general superintendence of the Presiding Officer.

The procedural code he applies is borrowed wholesale. Section 29 provides that the provisions of the Second and Third Schedules to the Income-tax Act 1961 and the Income-tax (Certificate Proceedings) Rules 1962, as in force from time to time, shall as far as possible apply with necessary modifications, as if those provisions and rules referred to the amount of debt due under this Act instead of to income-tax. A proviso directs that any reference in them to the "assessee" is to be construed as a reference to the defendant under this Act.

The consequence is that Recovery Certificate execution is not run under the Code of Civil Procedure 1908. It is run under tax-recovery machinery adapted to a banking debt — though the Second Schedule imports selected CPC standards, most visibly Rule 10, under which all property exempted by the CPC from attachment and sale in execution of a decree of a civil court is likewise exempt here. The Second Schedule supplied the full apparatus of notice, attachment, proclamation, sale, confirmation and, until 2026, arrest; the Third Schedule dealt with distraint, the source of the summary power the Recovery Officer exercises over movables under Section 28.

Section 29 after the Income-tax Act 2025

Section 29 has not been amended and still names the Income-tax Act 1961, which Section 536 of the Income-tax Act 2025 repealed with effect from 1 April 2026. The 2025 Act puts the recovery procedure in rules rather than in Schedules. Section 413(1) provides for recovery on a Tax Recovery Officer's certificate by the listed modes "as per the rules prescribed in this regard", Section 416(7) provides for distraint and sale of movable property "in the manner as may be prescribed", and the procedure itself is Rule 225 of the Income-tax Rules 2026, notified on 20 March 2026. Section 8(1) of the General Clauses Act 1897 supplies the rule of construction: where a Central Act repeals and re-enacts, with or without modification, a provision of a former enactment, references in any other enactment to the provision so repealed are, unless a different intention appears, to be read as references to the provision so re-enacted. On that rule Section 29 points to Sections 413 and 416(7) and to Rule 225.

Two cautions apply. The procedure now sits in a rule rather than in a Schedule to the Act, so how far Section 8 carries Section 29 across is itself open to argument, and the 1993 Act has not been amended to settle it. And Section 536 deals with proceedings under the repealed Income-tax Act; it does not in terms address a recovery proceeding under the 1993 Act that was pending on 1 April 2026.

The procedure runs in the same sequence under either code: a notice to pay within fifteen days, attachment, proclamation and sale, claims by third parties, and confirmation. Rule 225 carries most of these steps across under the same numbers, as sub-rules, so this note cites each step by that number — Rule 2 (notice to pay), Rule 10 (exempt property), Rule 11 (claims and objections), Rule 16 (bar on dealing with property), Rule 48 (attachment of immovable property), Rule 55 (interval before sale) and Rules 60 and 61 (setting aside a sale).

One step has been removed from both codes. The Finance Act 2026 (4 of 2026) omitted clause (c) of Section 222(1) of the 1961 Act and Part V of its Second Schedule — the arrest and detention rules, Rule 73 among them — with effect from 30 March 2026, and recast Section 413(1) of the 2025 Act without the mode of arrest. Section 25(b) of the 1993 Act, which lists arrest and detention as a mode of recovery, has not been amended. The consequence is taken up below.

What are the modes of recovery under Section 25?

Section 25 directs the Recovery Officer, on receipt of a copy of the certificate, to proceed to recover the amount of debt specified in it by one or more of the statutory modes. They may be used singly, cumulatively or in sequence; nothing requires the Recovery Officer to exhaust one before turning to another. The four in the table are supplemented by Section 25(d), which adds any other mode of recovery the Central Government may prescribe.

The second mode — possession and sale through a receiver — was introduced by amendment in 2016 and is the one that most closely resembles SARFAESI enforcement, because it lets the Recovery Officer take the secured asset directly rather than proceeding by attachment first. The fourth is the least used and the most underrated: a receiver appointed for management, rather than for sale, keeps a business operating and applies its income to the certificate. Where the defendant's undertaking is worth more running than broken up, it is a rational request for either side to make.

What additional powers does Section 28 give?

Section 28 is headed "Other modes of recovery" and operates without prejudice to Section 25. Its practical significance is that it reaches assets that are not in the defendant's hands at all.

Garnishee recovery. The Recovery Officer may, by written notice, require any person from whom money is due or may become due to the defendant, or who holds or may subsequently hold money for or on account of the defendant, to pay that money to the Recovery Officer to the extent of the debt. A person who pays over in compliance is discharged to that extent as against the defendant; one who fails to comply may be treated as a defendant for the amount. In practice this is aimed at bank accounts, trade receivables, rent, retention money and contractual dues.

Money in the custody of a court. The Recovery Officer may apply to a court holding money belonging to the defendant for payment of it towards the certificate amount.

Distraint of movables. The amount may be recovered by distraint and sale of the defendant's movable property in the manner laid down in the Third Schedule to the Income-tax Act 1961 — on the Section 8 reading described above, Section 416(7) of the Income-tax Act 2025 and the manner prescribed under it — a summary route that avoids the full attachment-and-proclamation sequence.

Declaration of assets. Section 28(4A) lets the Recovery Officer, at any stage of execution, require the person against whom the certificate is issued — and, for a company, any of its officers — to declare the particulars of his or its assets on affidavit.

Garnishee notices are where most execution-stage disputes with third parties begin: the recipient is a stranger to the litigation with defences of its own — that nothing is due, that the sum is disputed, that it is held on trust or subject to a prior charge. Section 28 contemplates the recipient objecting by a statement on oath that the sum demanded, or part of it, is not due to the defendant or is not held for him — and provides that a false statement in a material particular carries personal liability. A recipient who neither pays nor objects is deemed a defendant in default for the amount specified in the notice, and one who pays the defendant after receiving the notice is personally liable to the extent of the liability so discharged or of the defendant's liability, whichever is less — so the objection must be made promptly and in the form the section contemplates.

A walkthrough: from certificate to sale certificate

The sequence below is the ordinary course for realisation of immovable property. It is a map, not a guarantee; timelines slip and steps are contested.

1. Certificate issued. The Presiding Officer signs the certificate under Section 19(22) specifying the amount; it goes to the Recovery Officer, who numbers it as a recovery proceeding.

2. Demand notice. Under Rule 2, the Recovery Officer serves notice on the defendant requiring payment of the specified amount within fifteen days, failing which recovery will be made in the manner the procedure lays down.

3. Alienation freezes. Once the Rule 2 notice is served, Rule 16 makes it incompetent for the defendant to mortgage, charge, lease or otherwise deal with the property except with the Recovery Officer's permission, and bars a civil court from issuing process against it in execution of a money decree. After attachment, private transfer or delivery of the attached property is void against claims enforceable under the attachment.

4. Identification of assets. The certificate holder ordinarily files a memo identifying property with title documents, encumbrance certificates and valuation.

5. Attachment. Immovable property is attached under Rule 48 by an order prohibiting the defendant from transferring or charging it and prohibiting all persons from taking any benefit under such transfer or charge. Movables are attached by seizure or prohibitory order according to their nature.

6. Objections. Third parties claiming an interest in the attached property object under Rule 11, and the Recovery Officer investigates the claim.

7. Proclamation of sale. A proclamation is drawn up, published and affixed. It must specify, as fairly and accurately as possible, the property to be sold, the amount for the recovery of which the sale is ordered, any reserve price, and anything else material to a purchaser judging the nature and value of the property. Rule 55 fixes a minimum interval before a sale of immovable property: unless the defendant consents in writing, thirty days from the date a copy of the proclamation is affixed on the property or in the Recovery Officer's office, whichever is later.

8. Auction. Sale is by public auction to the highest bidder, subject to any reserve. The purchaser deposits a proportion of the price immediately and the balance within the period prescribed; default forfeits the deposit and the property may be resold.

9. Applications to set aside. Within thirty days of the sale the defendant, or any person whose interests are affected by it, may apply under Rule 60 to set it aside on depositing the amount specified in the proclamation as that for which the sale was ordered, with interest at fifteen per cent a year from the date of the proclamation, together with five per cent of the purchase money for the purchaser. Within the same thirty days, any person whose interests are affected may apply under Rule 61 to set the sale aside for material irregularity in publishing or conducting it, or for non-service of the notice to pay — but must establish substantial injury caused by it.

10. Confirmation and appropriation. Where no such application is made in time, or those made are disallowed, the sale is confirmed and becomes absolute; a certificate of sale issues and possession follows. Proceeds are applied to the certificate amount and the costs of the proceeding, and any surplus returned to the defendant.

Distribution is governed by the 1993 Act itself. Section 19(20AA) requires the final order to specify the assets over which security interest is created and to direct the Recovery Officers to distribute their sale proceeds as Section 19(20AB) provides — first the costs of preserving, valuing, advertising and selling them, then the debts owed to the bank or financial institution. Where the certificate is against a company under liquidation, Section 19(19) lets the Tribunal direct that the sale proceeds of its secured assets be distributed as Section 326 of the Companies Act 2013, or any other law for the time being in force, provides. Section 31B, inserted in 2016, separately gives the rights of secured creditors to realise secured debts priority over all other debts and government dues including revenues, taxes, cesses and rates. Section 19(20AB) and Section 31B are each expressly made subject to the Insolvency and Bankruptcy Code 2016 where insolvency or bankruptcy proceedings are pending.

Can the certificate itself be corrected, stayed or withdrawn?

Yes — but only by the Presiding Officer, not the Recovery Officer. This is the architecture Section 26 and Section 27 create, and it is the answer to most defendant grievances at this stage.

Section 26(1) closes the door at the Recovery Officer. It is not open to the defendant to dispute before the Recovery Officer the correctness of the amount specified in the certificate, and no objection to the certificate on any other ground is to be entertained by him. The Recovery Officer executes; he does not audit.

Section 26(2) opens it at the Presiding Officer. Notwithstanding the issue of a certificate, the Presiding Officer retains power to withdraw it, or to correct any clerical or arithmetical mistake in it, by sending an intimation to the Recovery Officer. Note the limit: correction under this sub-section is of clerical or arithmetical error, not of a contested computation of interest. A genuine quantum dispute is a matter for appeal against the underlying order. Section 26(3) then requires the Presiding Officer to intimate to the Recovery Officer any order withdrawing or cancelling a certificate, and any correction made under sub-section (2).

Section 27 supplies the stay and adjustment machinery, and its first limb is conditional. Section 27(1), as substituted in 2016, allows the Presiding Officer, notwithstanding that a certificate has been issued, to grant time for payment only where the defendant makes a down payment of not less than twenty-five per cent of the amount specified in the certificate and gives an unconditional undertaking to pay the balance within a reasonable time acceptable to the bank or financial institution holding the certificate. Under Section 27(1A) the Recovery Officer must then stay the proceedings until the time granted expires. Two consequences follow: under Section 27(1B) a defendant who agrees to pay and obtains the stay forfeits the right to appeal against the Tribunal's orders, and under Section 27(1C) any default in payment withdraws the stay and recovery resumes. Section 27(2) requires the Presiding Officer to keep the Recovery Officer informed of amounts paid and time granted after issue. Section 27(3) provides that where the order giving rise to the demand is modified in appeal so that the demand is reduced, recovery of the part of the certificate attributable to that reduction is to be stayed while the appeal remains pending. Section 27(4) requires the certificate to be amended or withdrawn once the appellate outcome — a reduction or an enhancement — becomes final.

For a defendant negotiating a settlement, Section 27(1) is the provision to work with, on its terms: a down payment of at least twenty-five per cent and an undertaking the certificate holder accepts produce a statutory stay of the recovery proceeding — a materially stronger position than an informal understanding with the certificate holder — but at the price of the right of appeal, so the choice should be made with any pending or intended appeal in view. Structuring such an arrangement is covered in the note on the legal framework of one-time settlements.

How does the Section 30 appeal against the Recovery Officer work?

Section 30 is the principal remedy against the conduct of execution, and its opening words are the key to it: "Notwithstanding anything contained in section 29". Because Section 29 imports the Income-tax machinery, it would otherwise import the appellate route built into that machinery as well. Section 30 displaces that and substitutes an appeal to the Tribunal.

Section 30(1) provides that any person aggrieved by an order of the Recovery Officer made under the Act may, within thirty days from the date on which a copy of the order is issued to him, prefer an appeal to the Tribunal. Section 30(2) provides that the Tribunal may, after giving the appellant an opportunity of being heard and making such enquiry as it deems fit, confirm, modify or set aside the order made by the Recovery Officer in exercise of his powers under Sections 25 to 28, both inclusive.

Section 30A, inserted in 2016, adds a condition of entry: an appeal by a person from whom the amount of debt is due is not to be entertained unless that person has deposited with the Tribunal fifty per cent of the amount of debt due as determined by the Tribunal. Unlike Section 21, Section 30A contains no power to reduce the deposit.

Several practical points follow.

The appeal lies to the DRT, not the DRAT. Filing before the wrong forum is an easy error at this stage. The Debts Recovery Appellate Tribunal hears appeals under Section 20 against orders of the Tribunal; it does not sit in first appeal over a Recovery Officer. An order made by the Tribunal in a Section 30 appeal is itself an order of the Tribunal, from which the Section 20 route opens, subject, where the appellant is a person from whom the amount of debt is due, to the deposit condition Section 21 imposes — framed differently from the one governing a SARFAESI appeal under Section 18.

"Any person aggrieved" is wider than "the defendant". A third party whose property has been attached, a garnishee served under Section 28, an objector whose Rule 11 claim has been rejected, and an auction purchaser affected by an adverse direction may all qualify. The Section 30A deposit binds only a person from whom the debt is due, not a third-party objector. The thirty days runs from issue of a copy of the order, so record that date on the file. It cannot be extended: Section 24 applies the Limitation Act 1963 only to an application under Section 19, and it is settled that delay in filing a Section 30 appeal cannot be condoned under Section 5 of that Act.

What the appeal can and cannot achieve. It can attack the manner of execution: attachment of exempt property, attachment of property that does not belong to the defendant, a defective proclamation, a sale held without the prescribed interval, a garnishee notice served on a person who owes nothing, an arrest order made without notice, hearing and recorded reasons. It cannot reopen the certified amount — Section 26(1) blocks that, and the appeal is against the Recovery Officer's order, not the Tribunal's. Background on the Tribunal itself is in the Debts Recovery Tribunal guide.

When can arrest and detention actually be ordered?

Arrest is a mode of recovery under Section 25(b) of the Act itself, not a punishment for default. Until 2026 the tax-recovery procedure surrounded it with conditions precedent: Rule 73 of the Second Schedule required a notice calling on the defaulter to show cause why he should not be committed to civil prison, and a satisfaction recorded in writing either that he had, with the object or effect of obstructing execution of the certificate, dishonestly transferred, concealed or removed any part of his property after the certificate reached the officer, or that he had, since then, the means to pay the arrears or some substantial part of them and refused or neglected to pay.

That procedure is no longer in either income-tax code. The Finance Act 2026 omitted Part V of the Second Schedule, which held Rule 73 and the other arrest and detention rules, with effect from 30 March 2026, and Section 413(1) of the 2025 Act no longer includes arrest among the modes on which Rule 225 operates. Section 25(b) of the 1993 Act was not amended. Whether a Recovery Officer can still order detention, and on what procedure, is therefore unsettled, and an arrest application now invites that objection before any question of the defendant's conduct is reached.

What has not changed is the settled constitutional position on civil detention generally. The mere inability of a judgment-debtor to discharge a money liability does not justify imprisonment, and something more has to be established — means coupled with a refusal or neglect to pay, or a dishonest disposal of assets calculated to defeat execution. The distinction is between the debtor who cannot pay and the debtor who will not; inability alone falls outside it, and any detention would have to rest on identified material and recorded reasons.

For a defendant served with an arrest application the answer is therefore twofold: the procedural objection, and evidence rather than rhetoric — audited accounts, bank statements, returns, and an explanation of every disposal of property since the certificate. For a certificate holder, an arrest application unsupported by material on means or bad faith, and by an answer to the procedural point, is ordinarily a wasted listing.

What can a third party do about an attachment?

Rule 11 provides the mechanism. Where a claim is preferred to, or an objection made to the attachment or sale of, property attached in execution of a certificate, on the ground that the property is not liable to attachment, the officer is to investigate the claim. The claimant must adduce evidence to show that he had some interest in, or was in possession of, the property at the relevant date — for immovable property, the date of service of the Rule 2 notice to pay; for movable property, the date of the attachment. If satisfied, the officer releases the property from attachment, wholly or in part; if not, he disallows the claim.

Two consequences are worth stating plainly. First, a decision under Rule 11 is a summary determination, and the procedure preserves a right in the party against whom an order is made to institute a suit in a civil court to establish the right claimed — subject, in this statutory setting, to the jurisdictional bar in Section 18 of the Act in relation to matters falling within Section 17. Second, an order under Rule 11 is an order of the Recovery Officer, so the Section 30 appeal is available to a dissatisfied claimant and is usually the faster route.

Delay is the recurring failure. A claimant who waits until the proclamation issues faces a far harder task than one who objects on receiving notice of the attachment.

What stops execution entirely?

• An IBC moratorium against a corporate debtor. Section 14(1)(a) of the Insolvency and Bankruptcy Code 2016 bars the continuation of proceedings against the corporate debtor in any tribunal, including execution of any judgment, decree or order. Attachment, sale, garnishee action and arrest against the corporate debtor all stop on admission, and the certificate holder's role converts to proof of claim. The scope and the limits of that freeze — in particular that it does not protect guarantors — are set out in the note on the Section 14 moratorium.
• Time granted by the Presiding Officer under Section 27(1), on a down payment of at least twenty-five per cent and an accepted undertaking, which obliges the Recovery Officer under Section 27(1A) to stay proceedings for the period granted.
• A reduction of the demand in appeal, to the extent of the reduction, under Section 27(3).
• Full satisfaction of the certified amount, after which the Presiding Officer may withdraw the certificate under Section 26(2).
• An interim order of the Appellate Tribunal or the High Court in an appropriate case. Section 18 bars other courts and authorities from exercising jurisdiction over matters specified in Section 17, expressly saving the Supreme Court and the High Courts under Articles 226 and 227 — a jurisdiction exercised sparingly where the statute provides a complete remedy.

A checklist for a defendant facing certificate execution

1. Obtain a certified copy of the certificate and reconcile the certified amount against the Tribunal's operative order line by line, including the interest direction and costs.

2. Diarise the fifteen-day period from the Rule 2 notice and treat it as the last practical window before attachment.

3. Identify any clerical or arithmetical error and move the Presiding Officer under Section 26(2) at once; if the dispute is one of genuine quantum, pursue it in appeal against the Tribunal's order, not before the Recovery Officer.

4. Where payment capacity exists but time is needed, weigh an application under Section 27(1): it needs a down payment of at least twenty-five per cent and an undertaking the certificate holder accepts, and under Section 27(1B) it costs the right of appeal.

5. Check every attached item against the exemptions carried in by Rule 10, and object with proof rather than assertion.

6. Place any bona fide dispute over sums said to be due to the defendant before the Recovery Officer in writing, and notify the garnishee.

7. Diarise each Section 30 appeal from the date a copy of the Recovery Officer's order is issued and file within thirty days, which cannot be extended, with the Section 30A deposit where the appellant is a person from whom the debt is due.

8. Verify that the proclamation states encumbrances, the amount to be recovered and the terms of sale accurately — errors here are the raw material of a Rule 61 application — and arrange funds before the auction, because the Rule 60 route closes thirty days after the sale.

Why the certificate matters even when execution stalls

A Recovery Certificate is not only an execution instrument. It is settled that a liability in respect of a claim arising out of a recovery certificate is a financial debt within the meaning of the Insolvency and Bankruptcy Code 2016, and that the holder of such a certificate is therefore a financial creditor competent to initiate a corporate insolvency resolution process against a corporate debtor. Limitation for that purpose is reckoned from the date on which the certificate was issued, which means an old underlying default does not by itself put the claim out of time. That gives an unsatisfied certificate a second life in a different forum, and makes the date of issue a date to record carefully. The admission requirements on that side are covered in the note on Section 7 IBC and financial creditor admission.

Where the lender is also enforcing under the SARFAESI Act, sums realised from the secured asset reduce what remains due under the certificate, because a lender cannot recover the same money twice. Section 27(2) requires the Presiding Officer to keep the Recovery Officer informed of amounts paid after the certificate issues, and any application on the balance should annex the account reconciliation.

For the vocabulary used above — recovery certificate, garnishee, attachment, receiver — see the glossary of Indian legal terms, and for the forums in which these proceedings run, the note on courts and tribunals. Lender-side material is on the page for banks, NBFCs and ARCs, and the related practice areas are debt recovery and NPA resolution.

This article is general information on the law as it stands and is not legal advice; the course open in any particular recovery proceeding depends on the terms of the certificate, the orders on record and the facts of the account. Queries may be directed through the contact page.