DEBTS RECOVERY TRIBUNAL (DRT) LAWYERS / ADVOCATES IN CHANDIGARH

WHAT IS DEBTS RECOVERY TRIBUNAL (DRT) ?

Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh : 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. Appeals against orders passed by DRTs lie before Debts Recovery Appellate Tribunal (DRAT). Earlier DRTs could take cases from banks for disputed loans above Rs 10 Lacs but in September 2019 The government doubled the monetary limit to ₹ 20 lakh for filing loan recovery applications in the Debt Recovery Tribunals (DRT) by banks and financial institutions.

The move is aimed at helping reduce pendency of cases in the DRTs in the country (India). The central government has raised “the pecuniary limit from ₹ 10 lakh to ₹ 20 lakh for filing application for recovery of debts in the Debts Recovery Tribunals by such banks and financial institutions,” said a Finance Ministry notification.

At present, there are 33 DRTs and 5 DRATs functioning at various parts of the country. In 2014, the government has created six new DRTs to speed up loan related dispute settlement. 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).

The Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (SARFAESI Act) provides access to banks and financial institutions covered under the Act for recovery of secured debts from the borrowers without the intervention of the Courts at the first stage. Securitisation Appeals (SAs) can be filed with the DRTs by those aggrieved against action taken by secured creditors under the SARFAESI Act. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

The Central Government could establish more than one Debts Recovery Tribunals through Debt Debts Recovery Tribunals to carry out the jurisdiction, powers and rights conferred under this Act.The Central Government can also stipulate the areas where such tribunal might carry out their jurisdiction for deciding the applications filed before it.

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The Need For Debts Recovery Tribunals (DRT)

Debt recovery tribunals were created in 1993 through an act to speed up cases for financial recovery by Banks. The Banks and financial institutions were experiencing lot of delays and difficulties in recovering the moneys lent and enforcement of securities pledged to them for the loans availed. That is why DRT was founded. Compared to the ordinary court procedures, DRTs were able to handle large number of cases with low delay during the initial phases. Though the DRTs have made impact on recovery front, several issues related to their performance in the background of rising volume of NPAs have appeared in later period. Inadequate infrastructure coupled with insufficient number of DRTs has made them incompetent to handle the rising volume of disputes. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

IMPORTANCE- AIM AND SCOPE Of DRT

The primary goal and function of DRT is the recovery of loaned money from borrowers which is owed to banks and financial institutions from customers. The power of the tribunal is restricted to settling down the cases concerning the recovery of the due amount from non-performing assets as affirmed by the banks as per the RBI guidelines.

The Tribunal has the powers bestowed with the District Court. The Tribunal shall have a Recovery officer who would be guiding towards executing the recovery Certificates as passed through the Presiding Officers. DRT is required to follow the legal process by stressing on prompt disposal of the matters and fast execution of the final order.

WHO CAN APPROACH TO DEBTS RECOVERY TRIBUNAL?

Where a bank or financial institution has to recover any debt from any person, it makes an application called Original Application (OA) to the Tribunal against such person. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

HOW TO APPROACH DEBTS RECOVERY TRIBUNALS?

Where the debt due from the borrower is more than Rs.10.00 lakhs, the case could be filed in DRT. The working of the tribunal is similar to a court. The borrower who is aggrieved by the order to the DRT can approach the Appellate Tribunal. Such appeal should be made within 45 days of receiving the orders of the DRT. He has to deposit 75 % of the amount which is due from him to the Bank or financial institution while filing his appeal. The Appellate Tribunal has got the powers to reduce or waive this amount.

Every application to be furnished by a paper book containing such as

A statement is showing details of the debt due from a Respondent and the circumstances under which such debt has become due.
Any documents relied upon by the applicant and those mentioned in the application.
Details including crossed Bank Draft or Indian Postal Order representing the application fee.
Index of the documents to be produced.

Note: Where the parties to the lawsuit or proceedings are to be produced by an agent with the documents authorising him to represent as such agent or Vakalatnama in case of an Advocate also be appended to the application.

FEE STRUCTURE OF DEBTS RECOVERY TRIBUNALS

Every application should be accompanied with fee provided in sub-rule (2). The fee payable as per Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 is Rs.12,000/- where an amount of debt due is Rs.10.00 lakhs, Rs.12,000 plus Rs.1000 for every one lakh of debt due or part thereof in excess of Rs.10.00 lakhs subject to a maximum of Rs.1,50,000/- where an amount of debt due is above Rs.10.00 lakhs. The fee for Review Application is fifty per cent of the fee paid for the OA. The fee for filing Interlocutory Application (IA) is Rs.250/-. The fee for filing Vakalatnama is Rs.5/-.

The fee for an appeal against the order of the Recovery Officer :

Rs.12,000/- if the amount appealed against is less than Rs.10 lakhs.

20,000/- if the amount appealed against is Rs.10 to 30 lakhs.
30,000/- if the amount appealed against is more than 30 lakhs.

The fee for perusal of documents is Rs.100/- per case.

The fee payable for certified copies of documents Rs.5 per page.

The fee can be payable either in the form of crossed demand draft drawn in respect of the Registrar or at the Registrars office is situated.
The fee can be paid through a crossed Indian Postal Order drawn in favour of the Registrar and also payable in Central Post Office of the station where a Tribunal is situated.

PROCESS OF FILING CASE BEFORE DEBTS RECOVERY TRIBUNAL

There are following procedure involved in making application to Debt Recovery Tribunal are as follows:

Procedure for filing of application

The applicant should apply with the Registrar within whose jurisdiction the applicant is functioning as a bank or financial institution in the present. An application should be presented in the prescribed format. The application can be presented by the applicant or by his agent or by an authorized legal practitioner. The application to be presented to the registrar of the tribunal within whose jurisdiction his case falls or can be sent through registered post addressed to the Registrar. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

Submission of application

If the application sent by post to be deemed to have been presented to the Registrar on the same day of receiving the request by the registrar. The application should be presented in two sets. An empty file size envelops bearing full address of the respondent. The applicant should furnish full bearing address of each of the respondents.

Presentation and verification of application

The registrar or any other concerned officer authorised by him will approve every application on the date in which it is presented or deemed to have been filed under that rule and should sign the endorsement. If on verification the application is found to be in order, it should be duly registered and give a serial number. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

Issuance of original application number

The Registrar of DRT is responsible for the Overall Administration of the tribunal. The Registrar will issue the Original Application (OA) number and summon after verifying the application. Also serves a copy of the application and paper book on each of the respondents. The respondent may file four complete sets indicating the reply to the application along with documents within one month (or extended time allowed by the tribunal) of its receipt.

Procedure Before Filing a Case in DRT

The following procedures are to be followed before filing the case in debt recovery tribunal.

Sell pledged goods after addressing particular notice to the lender.
In the case of hypothecated goods, get possession of the assets, and sell them after addressing the due in the form of notice.
In the case of LIC policies, handover such policies and designate the surrender value towards the loan account.
Set off the credit balance in any current or savings, account and TDRs in the names of the Borrowers or Guarantors, before filing a suit.
Proof of ownership or debt such as shares, debentures, NSC, Mutual Fund Securities should be realised and be adjusted against the outstanding.
Secure the documents or securities are enforceable against borrowers/guarantors while handling files to advocates for requesting Recovery Application before the tribunal.
Brief the advocate accurately by providing a detailed narrative or write-up and by examining in detail the conduct of the account, documents received up to the date, securities created and other relevant information relating to the account.
Analysis of the draft application to verify the correctness of every fact and relevant details stated in the draft application
After verifying the accuracy of the draft application, the branch has to forward the draft application to the concerned authority for approval along with the copy of the memorandum for legal action in the account and the copy of the narrative or write-up provided earlier to the advocate along with the list of documents.
After obtaining permission from the Authority, the Branch should discuss with the advocate about the changes or observations made by the appropriate authority while according approval and finalise the Application for recovery of updated dues of the Bank.

Procedure at Filing the Case in DRT

The following procedures are to be followed at the time filing the case in debt recovery tribunal.

The Recovery Application, in the prescribed format, should be submitted with the DRT within the specified time from the day of the appropriate authority mentioned for approval against the legal action.
Recovery Application should contain the description of all relevant documents and securities charged to the Bank.
While filing Recovery Application, Xerox copies of records are to be produced to the Advocates.
Original Documents should be maintained with the Branch till DRT requires the same.
Interim reliefs such as the injunction against properties, attachment before judgement, the appointment of Receiver, Recovery Certificate for admitted dues should be appealed as a rule.
Account Extracts to be provided and certified as per the provisions of Bankers Books Evidence Act and be annexed to the Recovery Application.
Penal Interest should not be compounded.
Costs for preserving the securities before filing suit and during the pendency of the lawsuit claimed.

Procedure After Filing the Case in DRT

The following procedures are to be followed after filing the case in debt recovery tribunal.

If the Recovery Application filed is satisfied in all respects, DRT will issue a serial number and summons to borrowers or guarantors called defendants.
Serving of warrant for quick disposal of the case and the Branch/Advocate should get to see that summons are served within one month.
If the summons is served on the defendants, proceedings commence with evidence by way of affidavits filed by the bank followed by cross-examination of Bank’s witnesses and vice versa followed by arguments ending up in Recovery Certificates in respect of the Bank.
Evidence by way of affidavits as preceding, clarifications or reports excepted by the DRT should be filed in time, and no adjournment to be asked on this score. Reply to counter-claims made by the borrowers should be submitted without any delay.
Defendants attempt to get an adjournment on various grounds including that their compromise proposal is pending consideration before the Bank’s Advocate should oppose the Bank.
The DRT has the controls to order arrest and detention in civil prison of those defendants who do not follow the specified orders of the DRT. Wherever the defendant disobeys the laws of the DRT, the Branch should notify the Bank’s Advocate to appeal for arrest and detention of such defendant.

Execution of Recovery Certificate

The Presiding Officer finally grants Recovery Certificate and sends it to Recovery Officer (R.O.) for execution. On receipt of the Recovery certificate, the recovery officer can issue the notice to Certificate Debtors, giving 15 days for payment of the amount stated in the Recovery Certificate. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

If the defendant neglects to pay the amount, Recovery Officer will proceed to recover the amount by any one or more of the methods, which are listed below:

Attachment and sale of Movable or Immovable Property of the defendant.
Arrest and Detention of the defaulter.
Appointment of Receiver.
The closing of DRT Application after full recovery of bank dues, the application is closed by Recovery officer.

Appeal Against Recovery Officer

The appeal against an order of Recovery Officer to DRT can be requested within 30 days from the date of order. The Tribunals have to resolve the claim within six months. The appeal against the judgment of DRT can be made within 45 days only to DRAT(Debt Recovery Appellate Tribunal). For filling lawsuit, as per Section 21 of the tribunal the 50% of the fund to be deposited by the appellant and the Chair Person may reduce it up to 25% of the deposit amount. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

JURISDICTION OF DRT

TERRITORIAL

The Debt Recovery Tribunal Act is allocable to all over India except for State of Jammu and Kashmir.

PECUNIARY

It is also applicable where the due amount is not below Rs. 20, 00,000

PARTIES INVOLVED

It is also applicable when the original application for recovery of Debts has been filed only by Banks and the Financial Institutions.

Debts Recovery Tribunal (Drt) Lawyers / Advocates In Chandigarh

WHAT RELIEF CAN BE GRANTED?

SECTION 25- MODES OF RECOVERY OF DEBT

The Recovery Officer shall, on receipt of the copy of the certificate under sub-section (7) of section 19, proceed to recover the amount of debt specified in the certificate by one or more of the following modes, namely:–

(a) attachment and sale of the movable or immovable property of the defendant;

¹[(aa) taking possession of property over which security interest is created or any other property of the defendant and appointing receiver for such property and to sell the same;]

(b) arrest of the defendant and his detention in prison;

¹[(d) any other mode of recovery as may be prescribed by the Central Government.]

SECTION 28- OTHER MODES OF RECOVERY

(1) Where a certificate has been issued to the Recovery Officer under sub-section (7) of section 19, the Recovery Officer may, without prejudice to the modes of recovery specified in section 25, recover the amount of debt by any one or more of the modes provided under this section. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

(2) If any amount is due from any person to the defendant, the Recovery Officer may require such person to deduct from the said amount, the amount of debt due from the defendant under this Act and such person shall comply with any such requisition and shall pay the sum so deducted to the credit of the Recovery Officer:

Provided that nothing in this sub-section shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908 (5 of 1908).

(3) (i) The Recovery Officer may, at any time or from time to time, by notice in writing, require any person from whom money is due or may become due to the defendant or to any person who holds or may subsequently hold money for or on account of the defendant, to pay to the Recovery Officer either forthwith upon the money becoming due or being held or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount of debt due from the defendant or the whole of the money when it is equal to or less than that amount.

(ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the defendant jointly with any other person and for the purposes of this sub-section, the shares of the joint holders in such amount shall be presumed, until the contrary is proved, to be equal.

(iii) A copy of the notice shall be forwarded to the defendant at his last address known to the Recovery Officer and in the case of a joint account to all the joint holders at their last addresses known to the Recovery Officer.

(iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, bank, financial institution, or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like to be made before the payment is made notwithstanding any rule, practice or requirement to the contrary.

(v) Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.

(vi) Where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or the part thereof is not due to the defendant or that he does not hold any money for or on account of the defendant, then, nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Recovery Officer to the extent of his own liability to the defendant on the date of the notice, or to the extent of the defendant’s liability for any sum due under this Act, whichever is less.

(vii) The Recovery Officer may, at any time or from time to time, amend or revoke any notice under this sub-section or extend the time for making any payment in pursuance of such notice.

(viii) The Recovery Officer shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section, and the person so paying shall be fully discharged from his liability to the defendant to the extent of the amount so paid. Debts Recovery Tribunal (Drt) Lawyers / Advocates In Chandigarh

(ix) Any person discharging any liability to the defendant after the receipt of a notice under this sub-section shall be personally liable to the Recovery Officer to the extent of his own liability to the defendant so discharged or to the extent of the defendants liability for any debt due under this Act, whichever is less.

(x) If the person to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Recovery Officer, he shall be deemed to be a defendant in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were a debt due from him, in the manner provided in sections 25, 26 and 27 and the notice shall have the same effect as an attachment of a debt by the Recovery Officer in exercise of his powers under section 25.

(4) The Recovery Officer may apply to the court in whose custody there is money belonging to the defendant for payment to him of the entire amount of such money, or if it is more than the amount of debt due, an amount sufficient to discharge the amount of debt so due.

¹[(4A) The Recovery Officer may, by order, at any stage of the execution of the certificate of recovery, require any person, and in case of a company, any of its officers against whom or which the certificate of recovery is issued, to declare on affidavit the particulars of his or its assets.]

(5) The Recovery Officer may recover any amount of debt due from the defendant by distraint and sale of his movable property in the manner laid down in the Third Schedule to the Income-tax Act, 1961 (43 of 1961).

MAJOR PROVISIONS/ SECTIONS UNDER IT

FOLLOWING ARE SECTIONS OF RECOVERY OF DEBTS AND BANKRUPTCY ACT (RDB ACT), 1993

SECTION 4 – COMPOSITION

The tribunal must be comprised of only one individual, who is the presiding officer (P.O), and appointed by the central government through a notification.
It is also mentioned in the Act that central government may also,
Allow any individual as presiding officer from any tribunal set under any other law for the time being in force towards discharging the power of presiding officer of any debt tribunal.
Allow any judicial member holding such position as in any other tribunal set under any other law for the time being in force to towards discharging the power as presiding officer (P.O) in debts recovery tribunal furthermore to that of being a judicial member of another tribunal.

SECTION 31- TRANSFER OF PENDING CASES

(1) Every suit or other proceeding pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal: Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

Provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any court:

¹[Provided further that any recovery proceedings in relation to the recovery of debts due to any multi-State co-operative bank pending before the date of commencement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 (1 of 2013) under the Multi-State Co-operative Societies Act, 2002 (39 of 2002), shall be continued and nothing contained in this section shall apply to such proceedings.]

(2) Where any suit or other proceeding stands transferred from any court to a Tribunal under sub-section (1),–

(a) the court shall, as soon as may be after such transfer, forward the records of such suit or other proceeding to the Tribunal; and

(b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceeding, so far as may be, in the same manner as in the case of an application made under section 19 from the stage which was reached before such transfer or from any earlier stage ²*** as the Tribunal may deed fit.

SECTION 31 (B)- PRIORITY TO SECURED CREDITORS

¹[31B. Priority to secured creditors.— Notwithstanding anything contained in any other law for the time being in force, the rights of secured creditors to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or local authority.

Explanation.— For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

SECTION 35 – POWER TO REMOVE DIFFICULTIES

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette make such provisions, not inconsistent with the provisions of this Act, as appear to it to be necessary or expedient for removing the difficulty:

Provided that no such order shall be made after the expiry of the period of three years from the date of commencement of this Act Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

Section 33- PROTECTION OF ACT TAKEN IN FOOD FAITH

No suit, prosecution or other legal proceeding shall lie against the Central Government or against ¹[the Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal] or against the Recovery Officer for anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder.

SECTION 34- ACT TO HAVE OVER RIDDING EFFECT

(1) Save as provided under sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

(2) The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Industrial Finance Corporation Act, 1948 (15 of 1948), the State Financial Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984), ¹[the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and the Small Industries Development Bank of India Act, 1989 (39 of 1989).] Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

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FOLLOWING ARE THE SECTIONS OF SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTERESTS ACT (SARFAESI ACT), 2002

SECTION 27 – PENALITIES

If a default is made–

(a) in filing under section 23, the particulars of every transaction of any securitisation or asset reconstruction or security interest created by a ¹[asset reconstruction company]or secured creditors; or

(b) in sending under section 24, the particulars of the modification referred to in that section; or

(c) in giving intimation under section 25, every company and every officer of the company or the secured creditors and every officer of the secured creditor who is in default shall be punishable with fine which may extend to five thousand rupees for every day during which the default continues: Debts Recovery Tribunal (Drt) Lawyers / Advocates In Chandigarh

²[Provided that provisions of this section shall be deemed to have been omitted from the date of coming into force of the provisions of this Chapter and section 23 as amended by the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (44 of 2016).]

SECTION 29 – OFFENCES

If any person contravenes or attempts to contravene or abets the contravention of the provisions of this Act or of any rules made thereunder, he shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with both.

SECTION 20- COGNIZANCE OF OFFENCES

(1) No court shall take cognizance of any offence punishable under section 27 in relation to non-compliance with the provisions of section 23, section 24 or section 25 or under section 28 or section 29 or any other provisions of the Act, except upon a complaint in writing made by an officer of the Central Registry or an officer of the Reserve Bank, generally or specially authorised in writing in this behalf by the Central Registrar or, as the case may be, the Reserve Bank.

(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.]

SECTION 30 A- POWER OF ADJUDICATING AUTHORITY TO IMPOSE PENALTY

(1) Where any asset reconstruction company or any person fails to comply with any direction issued by the Reserve Bank under this Act the adjudicating authority may, by an order, impose on such company or person in default, a penalty not exceeding one crore rupees or twice the amount involved in such failure where such amount is quantifiable, whichever is more, and where such failure is a continuing one, a further penalty which may extend to one lakh rupees for every day, after the first, during which such failure continues. Debts Recovery Tribunal (Drt) Lawyers / Advocates In Chandigarh

(2) For the purpose of imposing penalty under sub-section (1), the adjudicating authority shall serve a notice on the asset reconstruction company or the person in default requiring such company or person to show cause why the amount specified in the notice should not be imposed as a penalty and a reasonable opportunity of being heard shall be given to such person.

(3) Any penalty imposed under this section shall be payable within a period of thirty days from the date of issue of notice under sub-section (2).

(4) Where the asset reconstruction company fails to pay the penalty within the specified period under sub-section (3), the adjudicating authority shall, by an order, cancel its registration:

Provided that an opportunity of being heard shall be given to such asset reconstruction company before cancellation of registration.

(5) No complaint shall be filed against any person in default in any court pertaining to any failure under sub-section (1) in respect of which any penalty has been imposed and recovered by the Reserve Bank under this section.

(6) Where any complaint has been filed against a person in default in the court having jurisdiction no proceeding for imposition of penalty against that person shall be taken under this section.

Explanation.–For the purposes of this section and sections 30B, 30C and 30D,–

(i) “adjudicating authority” means such officer or a committee of officers of the Reserve Bank, designated as such from time to time, by notification, by the Central Board of Reserve Bank;

(ii) “person in default” means the asset reconstruction company or any person which has committed any failure, contravention or default under this Act and any person incharge of such company or such other person, as the case may be, shall be liable to be proceeded against and punished under section 33 for such failure or contravention or default committed by such company or person.]

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SECTION 30 B- APPEAL AGAINST PENALTIES

A person in default, aggrieved by an order passed under sub-section (4) of section 30A, may, within a period of thirty days from the date on which such order is passed, prefer an appeal to the Appellate Authority:

Provided that the Appellate Authority may entertain an appeal after the expiry of the said period of thirty days, if it is satisfied that there was sufficient cause for not filing it within such period.]

SECTION 30 C- APPELLATE AUTHORITY

(1) The Central Board of Reserve Bank may designate such officer or committee of officers as it deems fit to exercise the power of Appellate Authority.

(2) The Appellate Authority shall have power to pass such order as it deems fit after providing a reasonable opportunity of being heard to the person in default.

(3) The Appellate Authority may, by an order stay the enforcement of the order passed by the adjudicating authority under section 30A, subject to such terms and conditions, as it deems fit.

(4) Where the person in default fails to comply with the terms and conditions imposed by order under sub-section (3) without reasonable cause, the Appellate Authority may dismiss the appeal.]

SECTION 30 D- RECOVERY OF PENALTIES

(1) Any penalty imposed under section 30A shall be recovered as a “recoverable sum” and shall be payable within a period of thirty days from the date on which notice demanding payment of the recoverable sum is served upon the person in default and, in the case of failure of payment by such person within such period, the Reserve Bank may, for the purpose of recovery,–

(a) debit the current account, if any, of the person in default maintained with the Reserve Bank or by liquidating the securities, if any, held to the credit of such person in the books of the Reserve Bank;

(b) issue a notice to the person from whom any amount is due to the person in default, requiring such person to deduct from the amount payable by him to the person in default, such amount equivalent to the amount of the recoverable sum, and to make payment of such amount to the Reserve Bank.

(2) Save as otherwise provided in sub-section (4), a notice issued under clause (b) of sub-section (1) shall be binding on every person to whom it is issued, and, where such notice is issued to a post office, bank or an insurance company, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry or endorsement thereof before payment is made, notwithstanding any rule, practice or requirement to the contrary.

(3) Any claim in respect of any amount, arising after the date of issue of notice under sub-section (1) shall be void as against the demand contained in such notice.

(4) Any person, to whom the notice is sent under sub-section (1), objects to such notice by a statement on oath that the sum demanded or any part thereof is not due to the person in default or that he does not hold any money for or on account of the person in default, then nothing contained in this section shall be deemed to require, such person to pay such sum or part thereof, as the case may be.

(5) Where it is found that statement made by the person under sub-section (4) is false in material particulars, such person shall be personally liable to the Reserve Bank to the extent of his own liability to the person in default on the date of the notice, or to the extent of the recoverable sum payable by the person in default to the Reserve Bank, whichever is less.

(6) The Reserve Bank may, at any time, amend or revoke any notice issued under sub-section (1) or extend the time for making the payment in pursuance of such notice.

(7) The Reserve Bank shall grant a receipt for any amount paid to it in compliance with a notice issued under this section and the person so paying shall be fully discharged from his liability to the person in default to the extent of the amount so paid.

(8) Any person discharging any liability to the person in default after the receipt of a notice under this section shall be personally liable to the Reserve Bank–

(a) to the extent of his own liability to the person in default so discharged; or

(b) to the extent of the recoverable sum payable by the person in default to the Reserve Bank, whichever is less.

(9) Where the person to whom the notice is sent under this section, fails to make payment in pursuance thereof to the Reserve Bank, he shall be deemed to be the person in default in respect of the amount specified in the notice and action or proceedings may be taken or instituted against him for the realisation of the amount in the manner provided in this section.

(10) The Reserve Bank may enforce recovery of recoverable sum through the principal civil court having jurisdiction in the area where the registered office or the head office or the principal place of business of the person in default or the usual place of residence of such person is situated as if the notice issued by the Reserve Bank were a decree of the Court.

(11) No recovery under sub-section (10) shall be enforced, except on an application made to the principal civil court by an officer of the Reserve Bank authorised in this behalf certifying that the person in default has failed to pay the recoverable sum.] Debts Recovery Tribunal (Drt) Lawyers Advocates In Chandigarh

CONCLUSION

To correct the situation, government has made several efforts. Major one is the amendment to the RDBBFI Act 1993 in 2016. Similarly, the new Insolvency and Bankruptcy Code give powers to DRTs to consider cases of Bankruptcy from individuals and unlimited liability partnerships. Following are the main changes made to the RDBBFI Act in 2016 though the amendments are yet to be enforced. Debts Recovery Tribunal (Drt) Lawyers / Advocates In Chandigarh

The amendment gives timelines for various steps in the adjudication process before the debt recovery tribunals. Time limit for filing of written statements, passing of orders, appeals, etc. have been reduced. The Act Empowers the Central Government to provide for uniform procedural rules for the proceedings in the Debts Recovery Tribunals and Appellate Tribunals.

The amendment increases the retirement age of Presiding Officers of Debt Recovery Tribunals from 62 years to 65 years and that of the Chairpersons of Appellate Tribunals from 65 years to 67 years. It also makes Presiding Officers and Chairpersons eligible for reappointment to their positions.

The amendment allows banks to file cases in DRTs having jurisdiction over the area of bank branch where the debt is pending, instead in the DRT which have jurisdiction over the defendant’s area of residence or business.

Similarly, to reduce delays, the he cost on a borrower to delay recovery timelines through protracted appeals and proceedings has been increased. Borrowers will have to deposit at least 25% of the outstanding amounts with the debt recovery appellate tribunal (DRAT) under the DRT Act to avail an appeal. Previously, this provision was required only under the SARFAESI Act.Debts Recovery Tribunal (Drt) Lawyers / Advocates In Chandigarh

The leading issue related with debt recovery through DRTs is the slow process of resolution (settling debts and finding end to defaults). Like several other debt recovery mechanisms, the DRTs are slow to work out on pending disputes. Nearly 93000 cases are pending in front of all the DRTs in the country at the end of 2016. The World Bank estimated that it took 4.3 years on average in India to resolve insolvency under the old laws, more than twice as long as in China. Similarly, the average recoveries were just 25.7 cents on the dollar in India. This is one of the worst among the similar economies.

The number of DRTs are small given the increasing number of cases.
Delay in settling the cases is long.
The DRTs were not able to handle cases related to large borrowers.
Timely appointment of officials for DRT has not been made.