(Expert) 24 October 2017
It seems to be an academic query. If you putforth the material facts it can be advised accordingly. The date and time will be mentioned in the summon issued by the DRT or any court of Law.
Dr J C Vashista
(Expert) 25 October 2017
An examination hall question paper to be given to your students.
(Expert) 25 October 2017
Debt Recovery Tribunal – The Debts Recovery Tribunals were established by the Government of India under an Act of Parliament (Act 51 of 1993) for expeditious adjudication and recovery of debts due to banks and financial institutions. Accordingly the DRTs were set up in different parts of the country as per the Recovery of Debts due to banks and Financial Institutions Act, 1993 and Debts Recovery Tribunal (Procedure) Rules, 1993.
As per the provisions ( Section 19) of the DRT Act , banks and financial Institutions could apply to the Tribunal for recovery of debts of Rs 10 Lakh or more by making an application called Original application to it. The Tribunal has powers to pass an interim order preventing the borrower from selling/ disposing off / tampering with the property and can pass orders for attaching the properties of the borrower in case it is satisfied that the latter may sell/ dispose off whole or part of the property. Further the Tribunal has powers to appoint a receiver for taking care of the property.
Issue of Decree under section 19(20) of the Act- The Tribunal, after giving opportunities to both the parties, issues an order directing the borrower to pay a specific amount to the bank. Based on the order, the Tribunal then issues a certificate of recovery to the Recovery Officer. The RO can then proceed to recover the amount by attachment & sale of property or by appointment of receiver for management of the property in terms of section 25 of the Act. As per Section 20 of the Act, the aggrieved party can file an appeal against the order of the DRT before the Appellate Tribunal within 45 days.
Recent Judgement of a three member bench of the Supreme Court:
The Supreme Court held that Cooperative banks can recover outstanding loans only through the mechanism provided in State cooperative laws and need not approach the Debts Recovery Tribunal. The Bench pointed out that the reason for excluding cooperative banks from the purview of the RDB Act seemed to be that they had comprehensive, self-contained and less expensive remedies available under the State Co-operative Societies Acts, while commercial banks and financial institutions had to file suits in civil courts. The RDB Act was, therefore, designed to deal with other banks and financial institutions, which had to have recourse to the time-consuming process of civil courts. The bench held that If cooperative disputes also went to the tribunals, they would be overburdened and the whole object of speedy recovery of debts due to banks and financial institutions would be defeated. In conclusion, unless this decision of the bench is revised, the co-operative banks can not recover their loans through the DRT.
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