DRT and DRAT - Notes - YG LAW - 3936589 - 2023 - 09 - 18 - 09 - 16
DRT and DRAT - Notes - YG LAW - 3936589 - 2023 - 09 - 18 - 09 - 16
DRT and DRAT - Notes - YG LAW - 3936589 - 2023 - 09 - 18 - 09 - 16
Can DRT also entertain the Inter se disputes between the defendants?
No, DRT cant entertain application for adjudicating inter-se
disputes of the defendants because it will defeat the
purpose of the act i.e. quick disposal of disputes for debt
recovery by banks and financial institutions
Can a order from civil court stop the enforcement of order of DRT?
No, Civil Court has no power to pass an order restraining the enforcement of
any Order of DRT.
YG LAW 1
Banking Laws and Regulations 2021 DRT
DRT
Section 3 – Establishment of DRT
Section 4 – Composition – One member called Presiding Officer (This Presiding
officer is the head of DRT; he is basically the judge of the DRT)
Section 5 – Qualification – QUALIFIED/IS/HAS BEEN a district Judge
Section 6 – Term – 5 years/65 years of age – can be reappointed
Section 7 – Staff – Recovery officer (1 or more)
DRAT
Section 8 – Establishment of DRAT
Section 9 – Composition – one member – Chairperson
Section 10 – Qualification –
Qualified/is/has been Judge of a High Court, or
Grade I for 3 years in Indian Legal Service, or
Presiding officer of a Tribunal for 3 years
Section 11 – Term – 5/70 years of age – eligible for reappointment
Section 12 – Staff – No Recovery officer but other staff same as provided in
Section 7
YG LAW 2
Banking Laws and Regulations 2021 DRT
RESIGNATION
Section 15 –Resignation - Presiding officer and Chairperson will both give
resignation to Central Govt. They will work until successor is appointed or 3
months whichever is earlier.
Inquiry - In case of misbehaviour, incapacity before removal there would
be an inquiry, the inquiry will be done by Judge of High court in case of
Presiding officer, Judge of Supreme Court in case of Chairperson.
BAR ON JURISDICTION
Section 18 – Bar on other courts and authorities to exercise jurisdiction (except
HC and SC)
PROCEDURE
Section 19 – Application to DRT
Bank Applies to DRT
• Application to tribunal must be within the local limits of whose
jurisdiction –
o the branch or any other office of the bank or financial
institution is maintaining an account in which debt claimed is
outstanding, or
o Defendant/defendants actually and voluntarily resides, or
carries on business, or personally works for gain; or
o the cause of action, wholly or in part, arises:
• Bank or Financial Institution can transfer the case from the DRT to
other processes which came after it , for example SARFAESI, 2002
• Another Bank/Financial Institution which has a claim to recover its
debt can join the Bank or Financial Institution which has already filed
an application to the DRT at any stage of the proceeding before final
order is passed.
• Refund of Fee: If case is settled Before start of hearing (50%), after
start of hearing (25%) (given in DRT Rules)
• Summon to defendant to show cause in 30 days and disclose other
properties
• If there is no disclosure of property (up to 3 months in civil prison)
YG LAW 3
Banking Laws and Regulations 2021 DRT
APPEAL
Section 20 – Appeal – within 30 days of receiving the order – appeal to be
disposed within 6 months. No appeal shall lie if the order is reached with
consent of parties.
Section 21 – Fee for appeal – 50% of amount (can be reduced to 25%)
YG LAW 4
Banking Laws and Regulations 2021 DRT
RECOVERY
Section 25. Modes of recovery of debts. —
Recovery officer can recover the amount of debt by:
Cannot attach
(a) attachment and sale of the movable or immovable properties listed
property of the defendant; under proviso of
Section 60 of CPC in
(aa) taking possession of property over which security execution of
interest is created or any other property of the recovery certificate
defendant and appointing receiver for such property
and to sell the same;
(b) arrest of the defendant and his detention in prison;
(c) appointing a receiver for the management of the movable or
immovable properties of the defendant;
(d) any other mode of recovery as may be prescribed by the Central
Government.
Section 27 – Extra Time - Even after Recovery Certificate is issued; the
presiding officer may grant time to the defendant to make down payment of
25% of the amount in recovery certificate and give unconditional undertaking
to pay remaining balance in reasonable time (No appeal lies in this case)
Section 28 – Other modes of recovery - The money the third party owes to the
defendant, the recovery officer can ask for that.
The Recovery Officer is empowered to direct the Certificate Debtor, i.e.,
borrower and/or guarantor to disclose his/her/their assets during the
pendency of the execution proceeding of the Recovery Certificate.
Section 30 – Appeal against order of Recovery officer –to DRT within 30 days
within the date of the order issued
Section 30A – Fee for appeal under Sec. 30 (50% of amount)
YG LAW 5
Banking Laws and Regulations 2021 DRT
MISC.
Section 31 – Transfer of pending cases – when this act becomes operational all
applications shall be transferred to DRT except appeals.
Section 31A – If decree is passed in other court before this act is operational
DRT can issue Recovery Certificate on basis of that decree
Section 31B -Secured creditor will get priority over all 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.
Section 32 – Chairperson, presiding officer and staff will be public servant
under Section 21 IPC
Section 34 – Act to have over riding effect
Section 37. Repeal and saving. — The Recovery of Debts Due to Banks and
Financial Institutions Ordinance, 1993 (Ord. 25 of 1993) is hereby repealed. (2)
Notwithstanding such repeal, anything done or any action taken under the said
Ordinance, shall be deemed to have been done or taken under the
corresponding provisions of this Act.
YG LAW 6
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