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DRT Notes

The document discusses the Debt Recovery Tribunal (DRT) established under the Recovery of Debts due to Banks and FIs Act 1993. The DRT has jurisdiction over cases where debts owed to banks and financial institutions are greater than 20 lakhs. It is headed by a Presiding Officer and has powers similar to civil courts. Appeals against DRT orders can be made to the Debt Recovery Appellate Tribunal. The DRT follows procedures to determine the amount owed, issue recovery certificates, and authorize recovery actions including property attachment and arrest.

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586 views

DRT Notes

The document discusses the Debt Recovery Tribunal (DRT) established under the Recovery of Debts due to Banks and FIs Act 1993. The DRT has jurisdiction over cases where debts owed to banks and financial institutions are greater than 20 lakhs. It is headed by a Presiding Officer and has powers similar to civil courts. Appeals against DRT orders can be made to the Debt Recovery Appellate Tribunal. The DRT follows procedures to determine the amount owed, issue recovery certificates, and authorize recovery actions including property attachment and arrest.

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Raja best deal Marketing
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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DEBT RECOVERY TRIBUNAL

1. Recovery of Debts due to Banks and FIs Act 1993 (DRT Act)

2. Applicability

 All Banks / FIs including Securitization Companies and Cooperative Banks


 Whole of India except J & K
 Debt Rs. 20 Lakhs and above

3. Tribunal

 Established by GOI. Each Tribunal has been given a jurisdiction


 Headed by Presiding Officer
 Qualified to be a District Judge
 Term of Presiding Officer 4 years or 65 years of age whichever is earlier
 Recovery Officers are appointed under each Presiding Officer to implement the orders of
the Presiding Officers

4. Appellate Authority – Debt Recovery Appellate Tribunal (DRAT)

 Headed by “Chairperson” – appointed by GOI


 Qualified to be a High Court Judge or 3 years legal service or 3 years as PO
 Term 4 years or 70 years of age whichever is earlier

5. DEBT

 Liability of the borrower – both Principal and Interest


 Liability should be legally recoverable or the case is already under the decree of court
 Debt includes payment made by mistake or amount overdrawn in a debt
 An amount recoverable on account of employee fraud – NOT A DEBT

6. Presiding Officer (PO) / Chairperson – Their appointment or the proceedings cannot be


questioned . They can be removed only for misbehavior or incapacity.

7. After introduction of DRT, no civil court jurisdiction for debts due Rs. 20 Lakhs and above

8. Procedure

 Applicant :: Bank / FIs (more than one bank can join)


 An application for execution of decree of foreign court can be entertained by DRT
 On Application by the bank to DRT,
o DRT issues summons to the borrower, to show cause within 30 days
o Borrower can give counter claim for which bank should reply within the time fixed
by the Tribunal
 Tribunal verifies the documents / evidences. The proceedings can be through hearing /
taking witnesses or it can be a summary in nature also.
 Cases can be transferred from the court, if the amount is Rs. 20 Lakhs and above

9. Orders passed

 Presiding Officer issues the Recovery Certificate for recovery, which will be implemented /
executed by the Recovery Officers.
 Can pass interim order or final order
 Copies of the order sent to both the bank and the borrower, specifying amount due
 DRT to dispose the application within 180 days. Long / liberal adjournments not to be
granted

10. Appeal

 Aggrieved party can appeal Debt Recovery Appellate Tribunal (DRAT) within 45 days from
the date of receipt of the order
 If the order is made with consent of both the parties, then no appeal shall lie.
 Any appeal shall be made after paying 50 % of the amount due as determined by the
Tribunal. Tribunal has powers to reduce or waive.
 An appeal received by the DRAT should be disposed within 6 months from the date of
receipt of appeal
 Any appeal from cases in which court orders are already passed, should be made only to
DRAT.
 There shall be no appeal against orders of Appellate Tribunal. However, this is not
applicable to writ jurisdictions of HC / SC / Special Leave Petitions (SLP)

11. Procedures in DRT not bound by Civil Court procedure. But it has powers of Civil Court,
guided by natural justice. Proceedings of DRT deemed to be judicial proceedings.

12. Limitation Act applicable. That is “Time Barred Accounts” are not enforceable in DRT

13. Mode of Recovery

 Can pass attachment order, interim order, can bring the assets for sale, can arrest
 Having powers of Tax recovery officers of Income Tax. Can deal as applicable to Income
Attachment Order
 Can appoint Official Receiver
 No arrest, if there is no means for the borrower or not a willful defaulter

14. DRT Act having effect on other laws.

15. Doctrine of Election

 Bank has choice for one of the remedies to proceed, provided THREE elements are there
o Existence of two or more remedies available
o There are inconsistencies between them
o Choice of one of them

16. The amount limit of Rs. 20 Lakhs not applicable to HC / SC exercising jurisdiction under
Article 226 and 227

17. An order passed by the Civil Court prior to establishment of Tribunal in a location, but
after establishment of DRT Act, is well within the jurisdiction of the Civil Court

18. Whenever an application is filed with the DRT, Banks to pay the applicable fees. However,
if the cases are transferred from the Civil Court, no fees is applicable

19. For any breach by the defendant, it is punishable with an imprisonment for a period not
exceeding 3 months

20. If the properties are located in more than one jurisdiction, Presiding Officer to send copies
of the Recovery Certificate to the other Tribunal also

21. Any transfer of property made by the defendant in violation of the injunction order passed
in the court, such transfer is void.

22. If there is an apparent error in the Recovery Certificate issued by the PO, defendant can
make review application within 60 days of the order or issuing the Recovery Certificate.

23. Provisions of Income Tax Act applicable to DRT Act, like recovery of arrears of Tax

24. Any appeal against the orders of the Recovery Officers, should be made to Tribunal (PO)
within 30 days from the receipt of the order

25. If Court decree is already issued, then the DRT can directly issue Recovery Certificate

26. Recovery Officers / Presiding Officers / Chairperson – are deemed Public Servants

27. In case of a Company, when the proceedings are under DRT, Winding procedures under
Companies Act not permitted. DRT Act overrides Companies Act

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