Debt Recovery Tribunals
Government of India has constituted 33 Debt Recovery Tribunals and 5 Debt Recovery Appellate Tribunal across the country. The idea was to keep in line with the international trends on helping financial institutions recover their bad Debt quickly and efficiently. These debt recovery tribunals are located across the country.
- The Debt Recovery Tribunal are located across the country. In Big Cities, there are more than one DRTs. However, there are some states which don’t have DRTs.
- The Banks & Financial Institutions and other parties in these States have to go to Debt Recovery Tribunal located in other states having jurisdiction over there area.
- Thus the territorial jurisdiction of some Debt Recovery Tribunal is very vast. For example, the Debt Recovery Tribunal located in Guwahati has jurisdiction over all the seven North Eastern States.
- Similarly, the territorial jurisdiction of the Debt Recovery Tribunal located at Chandhigarh too has a very wide jurisdiction over the States of Punjab, Harayana, Chandhigarh.
Here are some important points for your exams:
- Setting up of Debt Recovery Tribunal is dependant upon the volume of cases. Higher the number of cases within a territorial area, more Debt Recovery Tribunal would be set up.
- Each Debt Recovery Tribunal is presided over by a Presiding Officer. The Presiding Officer is generally a judge of the rank of Dist. & Sessions Judge.
- Each Debt Recovery Tribunal has two Recovery Officers.
- The Debt Recovery Tribunals are governed by provisions of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993, also popularly called as the RDB Act. Thus DRTs are statutory bodies. Rules have been framed and notified under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
- The Debt Recovery Tribunal is fully empowered to pass comprehensive orders like in Civil Courts. The Tribunal can hear cross suits, counter claims and allow set offs. However, they cannot hear claims of damages or deficiency of services or breach of contract or criminal negligence on the part of the lenders
- Banks approach DRTs for disputed loans above Rs 10 lakh
- DRTs are expected to resolve the cases within 6 months
Bankers say that Rs 2 lakh crore of loans are stuck in DRTs. Of the Rs 2 lakh crore of suits filed, Rs 1.29 lakh-crore loan recovery certificates are yet to be issued. Currently, seven DRTs, including one of the three in Mumbai, are functioning without a presiding officer. There are vacancies for recovery officers and assistant staff as well.