An Information On Debt Recovery Tribunal (DRT)

Introduction :Debt Recovery Tribunals (DRTs) :

Debt Recovery Tribunals (DRT) was established to smooth the progress of the debt recovery involving banks and other financial institutions with their customers. Debt Recovery Tribunals (DRTs) were set up after the passing of Recovery of Debts due to Banks and Financial Institutions Act (RDBBFI), 1993. Appeals in opposition to orders passed by DRTs lie before Debts Recovery Appellate Tribunal (DRAT). DRTs can take cases from banks for disputed loans which are above Rs 10 Lakhs. At present, there are a total of 33 DRTs and 5 DRATs functioning in various parts of India. In the year 2014, the government had created six new DRTs to speed up the loan related dispute settlement.

Compared to the ordinary court procedures, DRTs were able to handle a larger number of cases with less delay during the initial phases. Though the DRTs has made an impact on the recovery front, several issues related to their performance in the background of rising amount of NPAs have appeared in later on period. insufficient infrastructure coupled with an insufficient number of DRTs has made them lacking the ability to handle the rising quantity of disputes.

Powers of the Tribunal and the Appellate Tribunal :

Section 22 of the act deals with the procedure & powers of a Tribunal & the Appellate Tribunal. Sub-section (1) of the section provides that the Tribunal and the Appellate Tribunal will not be bound by the procedures laid down by the Code of Civil Procedure, 1908, but will follow the principles of natural justice.

The procedures before the Debt Recovery Appellate Tribunal (DRAT) are governed by Debt Recovery Appellate Tribunal (Procedures) Rules, 1993. In addition t it, Section 22 also permits the Tribunal and the Appellate Tribunal to adjust their own procedure including the places at which they shall have their settings. Sub-section (2)of the section provides that the Tribunal and the Appellate Tribunal will have, for the purposes of discharging their functions under this Act, the similar powers as are vested in a civil court under a Code of the Civil Procedure(CPC), 1908, while trying the suit, in respect of the following matters, namely:

1. Summoning& enforcing an attendance of any of the person & investigative him on the Path;
2. require the discovery & production of the documents;
3. Receiving the data on affidavits;
4. Issuing commissions for an assessment of witnesses or the documents;
5. review of its decisions;
6. Dismissing a submission for default or deciding it ex parte;
7. Keeping aside any order of dismissal of an application for the default or any order which is accepted by it ex parte;
8. Any other matters which might be prescribed. Sub-section (3) of the section provides that any proceeding before the Tribunal or the Appellate Tribunal will be deemed to be a judicial proceeding within the meaning of Sections 193 and section 228, and for the purposes of Section 196, of the Indian Penal Code(IPC), 1860 and the Tribunal or the Appellate Tribunal will be deemed to be a civil court for all the purposes of Section 195 & Chapter XXVI of Code of Criminal Procedure (CPC), 1973. Sub-section (4) of the section provides that [for the purpose of proof of any entry in the ‘bankers books’, the necessities of the Bankers’ Books Evidence Act, 1891 (18 of 1891) will apply to all the proceedings before a Tribunal (DRT) or Appellate Tribunal (DRAT). Section 22A of the Act provides that the Central Government may, for the purpose of this Act, by rules, lay down uniform procedure dependable with the provisions of this Act for conducting proceedings before the (DRT) Tribunals & (DRAT) Appellate Tribunals.

Right to Legal Representation and Presenting Officers

Section 23(1) of the act provides that a Bank or a Financial Institution making an application to a Tribunal (DTR) or an appeal to an Appellate Tribunal may sanction one or more legal practitioners or any of its officers to act as the (P.O) Presenting Officers & every person so approved by it may present its event before the Tribunal or the Appellate Tribunal. Sub-section (2)of the section states that the defendant may either appear in person or permit one or more legal practitioners or any of his or its officers to present his or its case before the Tribunal (DRT)or the Appellate Tribunal.

Limitations:

Section 24 of the act states that the provision of the Limitation Act, 1963, will, as far as may be, apply to a claim made to a Tribunal.

The revival of Debt Determined by Tribunal:

Modes of recovery of debts under Section 25 of the act states that the Recovery Officer will, on receipt of a copy of the certificate may proceed to recover the amount of the debt mentioned in the certificate by 1 or more of the following modes, namely:—

• add-on and sale of the movable or immovable property of the defendant; [(a) gaining possession of property over which security interest is generated or any other property of the defendant and appointing a receiver for such property and to sell the same property; ]
• take into custody of the defendant & his detention in the prison;
• appoint the receiver for the management of the movable property or immovable properties of a defendant;
• Any other mode of recovery as may be approved by the Central Government. (C.G)

Appeal to the Appellate Tribunal of DRT

Section 20 of the act deals with an Appeal to an Appellate Tribunal at DRT

• Any person who is distressed by an order made, or deemed to have been made, by the Tribunal under the Act, may have a preference an appeal to an Appellate Tribunal having jurisdiction in the matter.
• Not a single appeal will lie to an Appellate Tribunal from the order made by the Tribunal with permission of the parties.
• Each and Every appeal made will be filed in the period of 30 days from date on which a copy of an order made, or supposed to have been made by the Tribunal is received by him & it will be in the form & be accompanied by such a fee as may be agreed: Provided that an Appellate Tribunal may consider such an appeal after a termination of the said period of 30 days in case it is contented that there was adequate cause for not filing it within the predetermined period.
• On receiving of the appeal made under section 181 of the Insolvency and Bankruptcy Code, 2016, the Appellate Tribunal (DRAT) may, after giving a chance of being heard to the parties to the appeal, pass such an order thereon as it thinks fit, confirm, modify or keeping aside the order appealed against.
• The Appellate Tribunal (DRAT) will send a copy of each order made by it to the parties to an appeal & to the concerned Tribunal.
• The appeal that is filed before the Appellate Tribunal (DRAT) will be dealt with by it as expeditiously as possible &endeavor will be made by it to set out of an appeal finally within 6 months from the date of the receiving of an appeal.

Section 21 of the act provides that where the appeal is favored by any person from whom the quantity of the debt is due to the bank or a financial institution or a group of banks or the financial institutions, such an appeal will not be entertained by an Appellate Tribunal apart from such a person has deposited with an Appellate Tribunal [50%] of the quantity of the debt so due from him as determined by the Tribunal Provided that an Appellate Tribunal may, for any of  the reasons to be recorded in writing, lessen an amount to be deposited by such an amount which will not be less than 25% of the total of such a debt so due to being deposited under such section.

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