Debt recovery is an important issue for both individuals and businesses in India. One of the ways in which debt can be recovered is through the Debt Recovery Tribunals (DRTs), which were established in 1993 to expedite the recovery of bad debts.

What are Debt Recovery Tribunals?

Debt Recovery Tribunals are special courts that have been set up under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act). The primary function of the DRTs is to adjudicate on matters relating to the recovery of debts due to banks and financial institutions.

Who can approach a Debt Recovery Tribunal?

Banks and financial institutions can approach the DRTs to recover their outstanding debts from defaulting borrowers. A defaulting borrower can also approach the DRT if they feel that they have been wrongly declared as a defaulter by a bank or financial institution.

What is the procedure for filing a case in a Debt Recovery Tribunal?

To file a case in a Debt Recovery Tribunal, the creditor (bank or financial institution) must first issue a demand notice to the borrower, asking them to repay the outstanding debt. If the borrower fails to repay the debt within 60 days of receiving the demand notice, the creditor can file an application with the DRT.

The application must include details of the outstanding debt, the borrower's assets and liabilities, and any security held by the creditor. The DRT will then issue a notice to the borrower, asking them to appear before the tribunal and present their case. The borrower can file a written statement in response to the application, and the matter will be heard by the DRT. The DRT will then pass an order, either directing the borrower to repay the outstanding debt, or releasing them from liability, based on the evidence presented before it.

What are the powers of the Debt Recovery Tribunal?

The Debt Recovery Tribunal has a wide range of powers to ensure that the outstanding debt is recovered. These include:

1. Issuing recovery certificates: If the borrower fails to comply with the DRT's order, the tribunal can issue a recovery certificate to the creditor. This certificate can be executed by the district magistrate, who can seize and sell the borrower's assets to recover the outstanding debt.
2. Summoning witnesses: The DRT has the power to summon witnesses and compel them to give evidence in a case.
3. Reviewing its own orders: The DRT can review its own orders if there is a mistake or error apparent on the face of the record.
4. Imposing penalties: The DRT can impose penalties on the borrower for delaying or obstructing the recovery process.

What is the appellate process for Debt Recovery Tribunal cases?

If a party is aggrieved by the order of the DRT, they can appeal to the Debt Recovery Appellate Tribunal (DRAT). The DRAT is a higher appellate authority, which hears appeals against the orders passed by the DRTs.

The DRAT has the power to confirm, modify, or set aside the order of the DRT. If a party is still not satisfied with the order of the DRAT, they can appeal to the High Court.

Conclusion
Debt Recovery Tribunals have played a crucial role in expediting the recovery of bad debts in India. The process of filing a case in a DRT is relatively simple, and the tribunal has a wide range of powers to ensure that the outstanding debt is recovered. While the DRTs have been successful in recovering a significant amount of bad debts, there have been some concerns regarding the delays in the disposal of cases.

End Notes:

1. Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act): https://www.indiacode.nic.in/handle/123456789/1987
2. Debt Recovery Appellate Tribunal: https://drt.gov.in/
3. High Court: https://www.indiancourts.nic.in/
4. "Debt Recovery Tribunals: An Analysis of their Functioning" by Raghvendra K. Singh and Shweta Singh, published in the Journal of Commerce and Accounting Research:
   https://www.researchgate.net/publication/330030686_Debt_Recovery_Tribunals_An_Analysis_of_their_Functioning
5. "Recovery of Debts Due to Banks and Financial Institutions: An Overview" by Mamta Suri, published in the International Journal of Research and Analytical Reviews:
   https://www.ijrar.org/papers/IJRAR21F1853.pdf
6. "Debt Recovery Tribunals: An Efficient Mechanism for Recovery of Bad Debts" by Pooja Yadav and Priyanka Yadav, published in the International Journal of Research and Analytical Reviews:
   https://www.ijrar.org/papers/IJRAR21F1801.pdf

References

1. Singh, R. K., & Singh, S. (2019). Debt Recovery Tribunals: An Analysis of their Functioning. Journal of Commerce and Accounting Research.
2. Suri, M. (2019). Recovery of Debts Due to Banks and Financial Institutions: An Overview. International Journal of Research and Analytical Reviews.
3. Yadav, P., & Yadav, P. (2021). Debt Recovery Tribunals: An Efficient Mechanism for Recovery of Bad Debts. International Journal of Research and Analytical Reviews.