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An Act to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions 1 [,insolvency resolution and bankruptcy of
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The web page provides the full text of the Indian law that regulates the recovery of debts and bankruptcy proceedings. It also includes the rules, regulations, notifications, orders, circulars, ordinances, statutes, sections, schedules, annexures, appendices and forms related to the act.
- What Is DRT?
- DRT’s Legitimacy
- Composition of Drts
- Extent and Scope of Drts
- The Process of Dr
- Change in Drts Post IBC
- Distinction Between The Two Forums
- Conclusion
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Indian banks and financial institutions had since long been suffering to recover debts and enforce securities from the defaulters. As the procedure regarding such recovery was erratic and extremely cumbersome, the Narasimham Committee of 1991 recommended the setting up of Special Tribunals like DRTs (Debt Recovery Tribunals) and DRATs (Debt Recover...
In 1995, the Delhi HC struck down RDDBFI, due to its unconstitutional nature which compromised the independence of judiciary. However, the SC allowed DRTs to function, if amendments are made to the existing Act of RDDBFI. Therefore, the government made subsequent amendments to RDDBFI in 200 and 2002, to which the SC gave its nod of being constituti...
Under 4 of the RDDBFI Act, the Tribunal shall be comprised of only one member (“Presiding Officer”), who shall be appointed by the Central Government upon notification. Upon authorisation of the Central government, the Presiding Officer (“PO”) of one Tribunal may also discharge functions of Presiding Officers of another Tribunal. The PO shall be ap...
Pecuniary limit under DRTs and the procedure
The DRTs can be approached for recovery of debts which are more than Rs. 10 lakhs in value. For lower amounts than the above-mentioned value, the banks and financial institutions (“creditors”), need to approach a civil court under CPC (Civil Procedure Code). However, the Act warrants that for other amounts more than Rs. 1 lakh, the Central government can direct certain cases to be adjudged by DRTs. Furthermore, SARFAESI Act, also specifies certain amounts pertaining to different cases, which...
Jurisdiction of DRTs
Under 17 of the RDDBFI Act, DRT has the authority to entertain any application from banks and financial institutions, in order to recover loans for such banks and financial institutions. DRAT being the Appellate Tribunal shall have the jurisdiction to entertain appeals against any order made by a DRT under the Act. However, Supreme Court has adjudged that DRT and DRAT cannot decide upon cases like succession rights of property, issuance of receipts, etc. Its jurisdiction is strictly confined...
The Application Route
Under 19 of the RDDBFI Act, the conditions are laid down as to under which DRT one has to file an application. Such an application can be filed by a bank or a financial institution to a DRT, that has the jurisdiction, and where the defendant either resides or carries out his business. Moreover, an application can also be filed with a DRT, if the cause of action arises wholly or partly within the limits of the jurisdiction. Along with the application, the prescribed needs to be paid.
SARFAESI Route
An application to the DRT can also be made under the Securitisation and Reconstruction for Enforcement of Security Interest Act (SARFAESI), 2002. Under SARFAESI, the secured creditor takes possession of the securities of the debtors, when he fails to discharge all his liabilities. However, there occurs a case, wherein the securities are not able to discharge of the entire debt. Under these circumstances, the creditors have an option of filing an application to the DRT for recovery of the rema...
Procedures to be followed post-filing an application
DRTs and DRATs are adjudicated by summary proceedings, in order to expediate the court proceedings. Under 19(12) of the Act, the DRT has the powers to proclaim an interim order against the borrower in order to restrict him from disposing or transferring any property belonging to him without the prior permission from the Tribunal. Moreover, the DRT can go to the extent of detaining the borrower for a period of maximum 3 months for any disobedience of an order or breach of any order issued unde...
The Insolvency and Bankruptcy Code, 2016 (“IBC”) was brought about by the government in order to unify the legal framework on bankruptcy and insolvency issues. IBC consolidated various laws relating to insolvency by amending close to 11 laws, including Companies Act, 2013, RDDBFI 1993, SARFAESI, 2002. It also did away with various old laws like Pre...
The first basic point of difference between the two tribunals is that DRT is regulated by SARFAESI Act and its Parent Act i.e. the DRT Act, on the other hand NCLT is regulated by the Companies Act...
The present law involving the code still faces confusion as the presence of more than one available forum is tested by implementation of law. The disposal rate of DRTs is alarming as they are unable to reduce the pending cases. The existence of many company related legislations with respect to recovery of debt mandates and asks for interpretation. ...
Learn about the legal framework, composition, jurisdiction and procedure of DRTs and DRATs in India, which are special tribunals for debt recovery matters. Find out the difference between DRT and RDB Act, and the changes after IBC.
Learn about the DRTs and DRATs established under the Recovery of Debts and Bankruptcy Act (RDB Act), 1993 for adjudication and recovery of debts due to Banks and Financial Institutions. See the cases disposed of in the last four years and the laws related to debt recovery.
The Recovery of Debts and Bankruptcy Act, 1993. Introduction. Debt Recovery Tribunals have been established to facilitate the debt recovery process involving banks and financial institutions with their customers.
Feb 27, 2017 · Learn about the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act), which provides a quasi-judicial setup for speedy recovery of debts from borrowers. Find out the authorities, jurisdiction, powers, and procedure under the RDDBFI Act.
The Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) provides speedy redressal to lenders and borrowers through filing of Original Applications (OAs) in Debts Recovery Tribunals (DRTs) and appeals in Debts Recovery Appellate Tribunals (DRATs).
