2. INTRODUCTION
The banks and financial institutions had been facing
problems in recovery of loans advanced by them to
individual people or business entities.
Due to this, the banks and financial institutions started
restraining themselves from advancing out loans.
There was a need to have an effective system to
recover the money from borrowers.
This lead to the formation of Debts Recovery
Tribunals (DRTs) after the passing of Recovery of
Debts due to Banks and Financial Institutions Act
(RDDBFI), 1993.
3. The original aim of DRT was to receive claim
applications from Banks and Financial Institution
against their defaulting borrowers.
For this the Debts Recovery Tribunal (Procedure)
Rules, 1993 was also drafted.
DRTs handle the cases in relation to disputed loans
above Rs. 10 lakhs. Debts Recovery Appellate
Tribunals (DRATs) deals with the appeals against
the order passed by the DRTs.
Presently, there are 33 DRTs and 5 DRATs
working all over India.
4. ESTABLISHMENT OF
TRIBUNAL
(1) The Central Government shall, by notification,
establish one or more Tribunals, to be known as
the Debts Recovery Tribunal , to exercise the
jurisdiction, powers and authority conferred on
such Tribunal by or under this Act.
(2) The Central Government shall also specify in the
notification referred in the sub-section (1), the
areas within the Tribunal may exercise
jurisdiction for entering and deciding the
applications filed before it.
5. COMPOSITION
A Tribunal shall consist of one person only
(hereinafter referred to as the Presiding Officer) to
be appointed, by notification, by the Central
Government.
Notwithstanding anything contained in sub-
section (1), the Central Government may authorize
the Presiding Officer of one Tribunal to discharge
also the functions of the Presiding Officer of
another Tribunal.
6. PRESIDING OFFICER
O QUALIFICATION – A person shall not be
qualified for appointment as the Presiding
Officer of a Tribunal unless he is, or has been,
or is qualified to be, a District Judge.
O TERM OF OFFICE – He shall hold the office for
a term of 5 years from the date on which he
enters upon his office or until he obtains 62
years of age, whichever is earlier.
O RESIGNATION/REMOVAL – By notice in writing
under his address to central government resign
his office. Provided he shall continue to hold
office until the expiry of 3 months from date of
notice or until a person is duly appointed,
whichever is the earliest.
7. POWERS OF DRT’S
The tribunal and the appellate tribunal shall have, for the purposes of
discharging their functions under this Act, the same powers as are
vested in a civil court under the code of criminal
procedure,1908,while trying a suit in respect of the following matters
namely:
a) Summoning and enforcing the attendance of any person and
examining him on oath;
b) Requiring the discovery and production of documents;
c) Issuing commissions for the examination of witnesses or
documents;
d) Direct the defendants to provide security sufficient to satisfy the
debt.
e) Reviewing its decisions.
f) Dismissing an application for default or deciding it ex-parte;
g) Setting aside any order of dismissal of any application for default
or any order passed by it ex-parte;
h) Any other matter which may be prescribed.
8. In addition to the power of the DRT under DRT Act,
a DRT has following additional powers:
a) To restore for ordering restoration of the
management of the secured assets to the borrower
or restoration of possession of the secured assets to
the borrower.
b) To order payment of cost/compensation to the
borrower if it holds that the possession of the
secured by the secured creditor is not in
accordance with the provision of the act.
9. FUNCTIONS
1)A Tribunal shall exercise ,on and from the appointed day,
the jurisdiction, powers and authority to entertain and decide
applications from the banks and financial institutions for
recovery of debts due to such banks and financial institutions.
(sec17)
2)No court or other authority shall have ,or be entitled to
exercise, any jurisdiction, powers or authority (except SC and
HC under article 226 and 227 of the constitution) in relations
to the matters specified in section 17. (sec 18)
3)The Tribunal may make an interim order against the
defendant to debar him from transferring, alienating or
otherwise dealing or disposing of any property belonging to
him without the prior permission of the Tribunal
10. 4)The applicant shall , unless the Tribunal otherwise directs,
specify the property required to be attached and the estimate
value thereof.
5) The primary objective and role of DRT is the recovery of
money from borrowers which is due to financial institutions and
banks.
6)The Tribunals power is restricted to try and settle cases
recuperation of advances from NPAs as stated by the banks
under the RBI guidelines.
7)The Tribunal has all the powers vested with the District
Court.
8) The Tribunal also has a Recovery officer who helps in
executing the recovery Certificates as passed by the Presiding
Officers.
