Introduction
The Debt Recovery Tribunal (DRT) was established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (commonly called the DRT Act) to provide a specialized forum for the expeditious recovery of debts owed to banks and financial institutions. The creation of DRTs was aimed at reducing the burden on regular civil courts by providing an expert and efficient mechanism for debt recovery.
Jurisdiction of Debt Recovery Tribunal
The jurisdiction of the DRT is defined by the DRT Act and related rules. It covers:
- Debt Recovery Cases: The DRT has jurisdiction over cases where the amount of debt due is more than ₹20 lakh (as per amendments). It handles suits filed by banks and financial institutions for recovery of debts.
- Exclusive Jurisdiction: The DRT has exclusive jurisdiction to entertain applications and suits concerning the recovery of debts due to banks and financial institutions. Civil courts are barred from entertaining such cases.
- Geographical Jurisdiction: The DRT has territorial jurisdiction based on the location of the debtor’s property or the branch of the bank/financial institution.
- Types of Debts Covered:
- Loans and advances
- Credit facilities
- Bills of exchange
- Promissory notes
- Any other dues from the borrower to the bank or financial institution
- Suits for Debt Recovery: The DRT entertains applications related to recovery of debts and proceedings for attachment, sale, or possession of secured assets.
Powers of Debt Recovery Tribunal
The DRT is vested with various powers to ensure speedy and effective recovery of debts:
- Civil Court Powers: The DRT has powers similar to those of a civil court under the Code of Civil Procedure, 1908 for the purposes of recovery proceedings. This includes summoning witnesses, enforcing attendance, examining evidence on oath, and issuing commissions.
- Summary Procedure: The DRT follows a summary procedure which is less formal and faster than regular civil court procedures, aimed at quick disposal.
- Recovery of Debts: The DRT can order the recovery of debts through the attachment and sale of the debtor’s property, including movable and immovable assets.
- Execution Powers: The Tribunal has powers of execution of its orders and decrees, including ordering attachment, sale, or possession of the secured assets to recover the outstanding amount.
- Review and Appeal: The DRT can review its own orders and decisions. Aggrieved parties can appeal against the orders of the DRT to the Debt Recovery Appellate Tribunal (DRAT).
- Transfer of Cases: The DRT can transfer cases pending before it to other DRTs if deemed necessary for convenience or in the interest of justice.
- Stay of Proceedings: The Tribunal has the power to grant stay on recovery proceedings in appropriate cases.
- Interim Orders: The DRT can pass interim orders for protection of the parties’ interests pending final disposal.