|debts recovery appellate tribunal|
Debts Recovery Appellate Tribunal
At the beginning of the last decade of the 20th century, more than 15 lakhs of cases filed by the Public Sector Banks and Financial Institutions (FIs) were pending in various courts of the country involving more than 6,013 crores of rupees in dues. Such a big amount of funds locked in litigation prevented its use for national development.
The Banks and FIs encountered grave roadblocks in recovering the loans advanced and in enforcing the securities charged with them due to the then existing procedure for recovery of debts.
Way back in 1981, the T. Tiwari Committee had suggested setting up of Special Tribunals for recovery of dues of the Banks and FIs by following a summary procedure.
In the wake of economic liberalization and financial sector reforms, the M. Narasimhan Committee on Financial System had considered setting up of the Special Tribunals with special powers for adjudication of such matters and speedy recovery as critical to their successful implementation.
It was felt desirable to set up Special Tribunals and Appellate Tribunals for expeditious adjudication and recovery of debts due to Banks and FIs. Accordingly, The Recovery Of Debts Due To Banks And Financial Institutions Act came in 1993, as amended in 1995, 2000 and 2004.
In accordance with the provisions of the Act, Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs) were set up.
During the course of time, it was seen that there were no legal ways and means to facilitate securitization of financial assets of the Banks and FIs. The recovery of defaulting loans was at a very slow pace resulting in steadily rising levels of non-performing assets of Banks and FIs.
The Narasimhan Committee I and II and Andhyarujina Committee constituted by the Government of India for examining Banking Sector reforms considered the need for changes in the legal system in respect of these areas. These committees, inter alia, suggested enactment of a new legislation for securitization and empowering Banks and FIs to take possession of the securities and to sell them with out the intervention of the courts of law.
Acting on these suggestions, The Securitisation and Reconstruction of Financial Assets And Enforcement of Security Interest Act came in 2002, as amended in 2004.
About the DRAT's
There are a total of five DRATs as under having jurisdiction over 32 DRTs located at various places covering all the States/UTs in the country (except J&K in respect of The RDBFI Act, 1993) :
1.Debts Recovery Appellate Tribunal, Allahabad
2. Debts Recovery Appellate Tribunal, Chennai
3. Debts Recovery Appellate Tribunal, Delhi
4. Debts Recovery Appellate Tribunal, Kolkata
5. Debts Recovery Appellate Tribunal, Mumbai