The aim with which the debt recovery tribunal was established is that they help non-banking financial companies and banks to curb their non- performing assets and bad debt- loans which have not been recovered.
Establishment of DRT
Section 3 of the act deals with the establishment of debt recovery tribunal in India. According to this section central government shall establish such debt tribunals in the country by issuing a notification and its exercise of powers and functions, authority and jurisdiction will be given in act. The act – insolvency and bankruptcy code, 2016. The central government will also decide by notification that which tribunal will have jurisdiction for the cases of which particular areas.
Places where DRT’s and DART’s are established
The debt recovery appellate tribunals have been established in 5 place in India namely- Mumbai, Allahabad, Delhi, Chennai and Kolkata.
The debt recovery tribunals have established in 23 places in India. The total number of tribunals are- 32.
The composition of debt recovery tribunal
Section 4 of the act deals with composition of the debt recovery tribunal. According to this section,
- The tribunal shall comprise of only one person, who is referred to as presiding officer (P.O), who is appointed by the central government by a notification.
- It is also stated that central government might also,
- Authorize anyone as presiding officer from any tribunal established under any other law for the time being in force to discharge the function of presiding officer of any debt tribunal.
- Authorize any judicial member holding such position as in any other tribunal established under any other law for the time being in force to discharge functions as presiding officer (P.O) in debts recovery tribunal in addition to that of being a judicial member of another tribunal.
Qualifications for appointment of a presiding officer (P.O)
- Section 5 of the act provides that, a person can be appointed as a presiding officer only if he has been or he is qualified to become a district judge.
- Section 6 states that the presiding officer selected shall hold office for a term of 5 years from the date when he enters the office and he shall be also eligible for reappointment.
- No person shall be eligible to hold office as a presiding officer after the age of 65 years.
- Section 7 of the act deals with the staff of the tribunal and it says-
- The central government may appoint debt recovery officer or officers and other employees for the same as the government may deem fit.
- It also states that the recovery officers and other officers and other employees of the tribunal will discharge their functions under the superintendence of the presiding officer.
- The salaries and other allowance to the presiding officer, debt recovery officers, other officers and other employees shall be as prescribed.
Establishment of appellate tribunal
- It is given under section 8(1) of the act, central government with notification may establish appellate tribunal, which can be 1 or more in any place, and the authority, powers, functions and jurisdiction will be as per mentioned in the act.
- Central government may Authorize any person as a chairperson holding such position as in any other appellate tribunal established under any other law for the time being in force to discharge functions as chairperson in debts appellate recovery tribunal in addition to that of being a chairperson of another tribunal.
- According to section 12 of the act, the central government through notification, establish number of debt recovery appellate tribunals to exercise jurisdiction, powers and functions and also entertain any appeal against order made by adjudicating authority under part III of insolvency and bankruptcy code of 2016.
Composition of appellate tribunal and qualification
- Section 9 states that- The tribunal shall comprise of only one person, who is referred as chairperson and is appointed by the central government by a notification.
- Section 10 deals with the qualifications regarding to the chairperson appointed for the debt recovery appellate tribunal.It is given that a person can become chairperson if he has the following qualifications-
- He is or has been and is qualified to become a judge of a High Court.
- He has been a member of Indian legal service and during the service he held the post of Grade 1 officer for at least 3 years.
- He has held the officer as presiding officer for a tribunal for at least 3 years.
- Section 11 of the act says that, the chairperson appointed shall hold office for a term of 5 years from the date when he enters the office and he shall be also eligible for reappointment.
- No person shall be eligible to hold office as a chairperson after the age of 70 years.
Debt recovery tribunals are set up in order to curb the losses faces by the banks and NBFC. The tribunals are set up by central government. They have presiding officers for DRT. And for appellate tribunals which are also set by the government have chairperson who presides in the tribunal. Jurisdiction, powers and functions are mentioned in the act, which is to be complied with.
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