Topics Covered: Statutory organisations.
Debts Recovery Tribunals
What to study?
For Prelims and Mains: All about DRTs.
Context: The Direct Tax Vivaad se Vishwas Bill, 2020 will now cover pending litigation in debt recovery tribunals (DRTs) as well besides those in various courts and tribunals, the Union cabinet said while approving the change to the bill.
What are DRTs?
Debt Recovery Tribunals were established to facilitate the debt recovery involving banks and other financial institutions with their customers. DRTs were set up after the passing of Recovery of Debts due to Banks and Financial Institutions Act (RDBBFI), 1993. Section 3 of the RDDBFI Act empowers the Central government to establish DRTs. Appeals against orders passed by DRTs lie before Debts Recovery Appellate Tribunal (DRAT).
Powers and functions:
- The Debts Recovery Tribunal (DRT) enforces provisions of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993 and also Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.
- The Debts Recovery Tribunal (DRT) are fully empowered to pass comprehensive orders and can travel beyond the Civil procedure Code to render complete justice. A Debts Recovery Tribunal (DRT) can hear cross suits, counter claims and allow set offs.
- However, a Debts Recovery Tribunal (DRT) cannot hear claims of damages or deficiency of services or breach of contract or criminal negligence on the part of the lenders. In addition, a Debts Recovery Tribunal (DRT) cannot express an opinion beyond its domain, or the list pending before it.
- The Debts Recovery Tribunal can appoint Receivers, Commissioners, pass ex-parte orders, ad-interim orders, interim orders apart from powers to Review its own decisions and hear appeals against orders passed by the Recovery Officers of the Tribunal.
Other key facts:
- A DRT is presided over by a presiding officer who is appointed by the central govt. and who shall be qualified to be a District Judge; with tenure of 5 years or the age of 62, whichever is earlier.
- No court in the country other than the SC and the HCs and that too, only under articles 226 and 227 of the Constitution have jurisdiction over this matter.
- The central government, in 2018, raised the pecuniary limit from Rs 10 lakh to Rs 20 lakh for filing application for recovery of debts in the Debts Recovery Tribunals by such banks and financial institutions.
Sources: the hindu.