Complete Analysis DEBT Recovery Tribunal in India

Narendra Kumar

02 Dec, 2020

DRT helps Banks and NBFC in the fastest recovery of their NPA or due to overdue loan book. DRT only handles secured loan.

Establishment of Tribunal

Section 3 of the Act deals with the establishment of the tribunal.

• The Central Government shall, by notification, establish one or more Tribunals, to be known as the DEBT Recovery Tribunal, to exercise the jurisdiction, powers, and authority conferred on such Tribunal by or under this Act.

[(1A) The Central Government shall by the notification establish such a number of Debts Recovery Tribunals & its benches as it may consider essential, to exercise jurisdiction, powers & authority of the Adjudicating Authority conferred on such Tribunal by or under an Insolvency and Bankruptcy Code, 2016.]

• The Central Government (C.G) shall specify, in a notification referred to in sub-section (1), the areas within which the Tribunal may exercise jurisdiction for entertaining & deciding the applications filed before it.

Places where DRTs and DART are Working at Present

The details of the Tribunals constituted as of now—

Debt Recovery Appellate Tribunals (DRATs)

DRAT Allahabad, DRAT Chennai, DRAT Delhi, DRAT Kolkata, DRAT Mumbai.

Debt Recovery Tribunals (DRT)

They are in DRT-I Ahmedabad, DRT-II Ahmedabad, DRT Allahabad, DRT Aurangabad, DRT Bangalore, DRT-I Chandigarh, DRT-II Chandigarh, DRT-1 Chennai, DRT-2 Chennai, DRT Coimbatore, DRT Cuttak, DRT Ernakulam, DRT Guwahati, DRT- Hyderabad, DRT- Jabalpur, DRT- Jaipur, DRT-1 Kolkata, DRT-2 Kolkata, DRT-3 Kolkata, DRT – Lucknow, DRT-1 Mumbai, DRT-2 Mumbai, DRT-3 Mumbai, DRT Nagpur, DRT-1 New Delhi, DRT-2 New Delhi, DRT-3 New Delhi, DRT Patna, DRT Pune, DRT Visakhapatnam, DRT Ranchi, DRT Madurai.

The composition of Debt Recovery Tribunal

Section 4 of Act deals with A Composition Tribunal.

• The Tribunal shall comprise of 1 person only (hereinafter referred to as the Presiding Officer or (P.O)) to be appointed, by notification, by the Central Government.
• Nevertheless, anything contained in sub-section (1), the Central Government might—

1. Authorize the (P.O) Presiding Officer of any other Tribunal established under any other law for time being in force to discharge function of the (P.O) Presiding Officer of a Debt Recovery. Tribunal under this Act in addition to his being the (P.O) Presiding Officer of that Tribunal; or
2. Authorize the judicial Member holding post as such in any other Tribunal, established under any other law for time being in force, to discharge functions of the Presiding Officer of Debts Recovery Tribunal under this Act, in addition to his being a Judicial Member of that Tribunal.

Qualifications for Appointment of Presiding Officer & ITs Term

Section 5 provides that a person shall not be qualified for an appointment as (P.O) Presiding Officer of a Tribunal unless he is, or he has been, or he is qualified to be a District Judge.

Section 6 provides that the [Presiding Officer of the Tribunal shall hold office for a term of 5 years from a date on which he enters upon his office & shall be also eligible for reappointment.

Provided that no person shall hold office as a Presiding Officer (P.O) of a Tribunal after he has attained the age of 65 years.

Section 7 deals with a Staff of the Tribunal. It also provides that the (C.G) Central Government shall provide a Tribunal with 1 or more Recovery Officers & such other officers as well as employees as that government may think fit. It further states that the Recovery Officers & other officers & employees of the Tribunal shall discharge their functions under the general superintendence of (P.O) Presiding Officer. It also provides that salaries & allowances & other conditions of the service of Recovery Officers & other officers & employees of the Tribunal shall be such as it may be prescribed.

Establishment of Appellate Tribunal

Section 8 (1) says that the Central Government (C.G) shall, by the notification, establish 1 or more Appellate Tribunals, to be known as the Debts Recovery Appellate Tribunal, to exercise the jurisdiction, powers & authority conferred on such Tribunal by or under this Act: [Provided that the Central Government (C.G) may authorize the Chairperson of any another Appellate Tribunal, established under any other law for time being in force, to discharge a functions of the Chairperson of the Debts Recovery Appellate Tribunal under this Act in the addition to his being a Chairperson of that Appellate Tribunal. ]

12 [ (1A) The Central Government shall, by notification, establish the number of Debt Recovery Appellate Tribunals to exercise jurisdiction, powers, and authority to entertain an appeal against the order made by an Adjudicating Authority under Part III of an Insolvency and Bankruptcy Code, 2016. ]

13 (2) The Central Government shall also specify in the notification referred to in sub-section (1) the Tribunals in relation to which the Appellate Tribunal may exercise jurisdiction. [(3) Nevertheless anything contained in it, the (C.G) Central Government may authorize Chairperson of 1 Appellate Tribunal to discharge also the functions of the Chairperson of other Appellate Tribunal.]

The composition of Appellate Tribunal, Qualifications, and ITs Term

Section 9 of Act provides that an Appellate Tribunal shall consist of 1 person only (hereinafter referred to as the Chairperson of the Appellate Tribunal) to be appointed, by notification, by the Central Government (C.G).

Section 10 of the Act deals with the qualifications for THE appointment of Chairperson of the Appellate Tribunal. It also provides that the person shall not be qualified for the appointment as a Chairperson of an Appellate Tribunal unless he:

1. Is, or has been, or is qualified to be a Judge of a High Court; or
2. Has been the member of an Indian Legal Service & has held the post in Grade I of that service for at least 3 years; or
3. Has held office as the Presiding Officer of a Tribunal for at least three years.

Section 11 provides that a Chairperson of an Appellate Tribunal shall hold office for a period of 5 years from the date on which he enters upon his office & shall be eligible for reappointment

Provided that no person shall hold office as a Chairperson of the Appellate Tribunal after he has attained the age of 70 years.