The bank will provide loans to those who need, they have to provide some security like deeds of immovable property afterward they provide the loans according to the statutory laws which prevail on time.
In some cases, the customer who had failed to pay the loan amount tries to fraud the bank. then the bank can initiate the suit in the civil court which will take more time to recover the debt incurred by the customer.
HISTORY OF DEBT RECOVERY TRIBUNAL
Initially, there is no specific tribunal to deal with the issues of banks and financial institutions if any arises they have to deal with the civil court.
In the year 1981, the Committee was formed under the chairmanship of Late Shri T. Tiwari to examine the legal and other difficulties faced by the banks and other financial institutions. The Tiwari Committee submitted its report in 1984 and suggested among others, the setting up of Special Tribunals to deal with the recovery of the dues of banks and financial institutions. The broad outlines for the constitution and functioning of the Special Tribunals were given by the Tiwari Committee.
In the year 1986, the Vesuvalla committee submitted the draft Bill called Recovery of Dues (Public Sector Banks and Financial Institutions) Bill, 1986 which the Bill contains provisions for setting up Tribunals to take care of the recovery problems of banks and financial institutions in respect of claims above Rs. 50 lakhs.
NARASIMHAN COMMITTEE I AND II
The Narasimhan Committee I and II headed under the chairmanship of Mr.Maidavolu Narasimham [who is the 13th Governor of the RBI] and Narasimham Committee- I was set up in the year 1991 for the financial system. Narasimham Committee-I also considered setting up special tribunals with special powers for speedy adjudication of debt recovery matters.
Narasimham Committee II was set up in the year 1998 and was formed for the cause of making reforms in the banking sector. The Narasimham Committee II approach could be extended to other financial institutions and, if possible, to banks. The other approach is to set up special tribunals for the recovery of dues to banks and financial institutions.
These Tribunals need to have powers of attachment before judgment, for appointment of receivers, and for ordering preservation of property. For this purpose, an amendment to the concerned legislation may be necessary.
The Committee would like to emphasize the importance of having in place dedicated and effective machinery for debt recovery for banks and financial institutions and the above mentioned are the Recommendations on which a view has to be taken by Government.
ENACTMENT OF RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993
The Recovery of Debts due to Banks and Financial Institutions Act, 1993 and it is provided for establishment of tribunals and Appellate Tribunal. In the year 2016, it is renamed the Recovery of Debts and Bankruptcy Act, 1993.
Chapter II states about the Establishment of Tribunal and Appellate particularly the section 3(1) stated about the Establishment of Tribunal i.e The Central Government shall, by notification, establish one or more Tribunals, to be known as the Debts Recovery Tribunal, to exercise the jurisdiction, powers, and authority conferred on such Tribunal by or under this Act.
JURISDICTION OF DEBT RECOVERY TRIBUNAL
The pecuniary jurisdiction of DRT is more than 20 lakhs below that amount they can approach the civil court.
The jurisdiction of DRT is stated in chapter III of the RDDBFI Act i.e jurisdiction, powers, and authority of tribunals. The RDDBFI Act, 1993 is applied to cases where the amount of debt due to any bank or financial institution defined under the Act or a consortium of banks or financial institutions is Rs.20 lakh or more.
Section 24 of RDDBFI Act,1993 states about the limitation period i.e provisions of the Limitation Act, 1963 (36 of 1963), shall, as far as may be, apply to an application made to a Tribunal.
DRT deals with the Recovery of Debts due to Banks and Financial Institutions Act, 1993 and SARFAESI Act, 2002. These applications can be filed in DRT: Original Application [OA], Interlocutory Application [IA], Securitization Application [SA], and Miscellaneous Application [MA]. Sec.19 of the RDDBFI Act, 1993 states the application of the Tribunal.
The bank and other financial institutions can apply in the tribunal to recover the debt from the person who incurred it. If the other bank or financial institution wants to apply on the same person then the later applicant bank or financial institution and the new applicant bank can join the proceedings before the final order is issued to claim the debt.
If you want to file the case in DRT online you have to register yourself at the portal of DRT. On e-filing the case you have to make payment online via net banking, UPI, Credit, or debit cards. If you are e-filing the cases then you have to deposit the hard copies of documents related to the case online with the confirmation slip within 7 days of which the DRT jurisdiction limits. e-DRT provides access to e-filing, e-payment of fees, cause list generation, and a case information system that enables viewing of case status, orders, and judgments.
DRT online is only an additional facility so the user has to read the manual which is provided for e-filing after you completely know about the procedure and then initiate the application process. If the user is facing any difficulty in filing the case they can approach the portal and there you can find the helpline for it.
EFFECTIVENESS OF DEBT RECOVERY TRIBUNAL
- Provide relief to the bank and other financial institutions who wants to recover the debt which is incurred by the customers.
- Saving the time of the bank as in the civil court will incur a lot of time whereas here the DRT will follow the simple and summary procedures with the principles of natural justice.
- It is very specific for the debt if in case the customers or bank doubts in the process of DRT they can refer to this statute of Recovery of Debts and Bankruptcy Act, 1993.
- It resolves the issues and provides the award as soon as possible if they are not satisfied they can approach the Debt Recovery Appellate Tribunal.
APPELLATE AUTHORITY OF DRT
If the either of parties is not satisfied with the final order given by the Proceeding officer in DRT then the parties can appeal to the Debt Recovery Appellate Tribunal still now there are 5 DRAT in India. The appeal should be filed within 45 days from the final order. The languages used in DRAT are English and Hindi. The Debt Recovery Tribunal Procedure rules, 1994 are followed in the Appellate tribunal.
In India, still, now there are 39 Debt Recovery Tribunal. The new era of the online e-DRT projects has been implemented in all DRTs and DRATs. This project aims to bring improved access, efficiency, and transparency. The Debt Recovery Tribunal has the same power as the civil court.