As the name suggests, the Debt Recovery Tribunals (DRTs) have been created for the specified objective of speedy recovery of bad loans or loans granted by the banks and financial institutions to the borrowers who have turned defaulters. A simplified explanation of the DRT's and Debt Recovery Appellate Tribunals (DRATs) to help the general readers understand this legal process with all intricacies involved in it is provided below.
The genesis of DRT and its legal prerogative in crux is inspired by international trends. The Government of India has constituted 39 DRTs and five DRATs across the country to help banks/financial institutions to recover their bad debts quickly and efficiently. To understand the role of DRTs it is crucial to understand the legal framework and objective of DRTs and DRATs. To elaborate further the DRT enforces provisions of Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993 and also Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002. The DRAT-being the appellate court-looks into the appeals filed by any person aggrieved by the order of DRT. One more important fact to be noted here is that though the name of RDDBFI Act, 1993 has been amended to a new name -Recovery of Debts and Bankruptcy Act, 1993, the same has not yet been enforced being not gazetted. Under the RDDBFI Act, 1993 the bank and financial institutions can file case for the recovery of the amount of Rs 10 lakh and above and the action of the bank against the borrowers, guarantors or any other person aggrieved by the action of the bank can be challenged under the SARFAESI Act, 2002. The DRT is being headed by one presiding officer safeguarding the provisions contemplated in both the Acts, who is selected from the field of law-a judge and/or a practising advocate.
Now as I approach the conclusion of this article, there is an important aspect where I feel the earnest and honest need to draw everybody's attention including the policymakers of our judicial system. As a professional legal practitioner and by the virtue of affluent practice in this legal periphery, one finds that there are few shortcomings which surface instantly while seeking the justice and judicial objective within the ambit of DRT. Though there are few shortcomings to mention, it will suffice to state my opinion for only one in this article elaborately. The first and foremost is appointment of only one presiding officer for each DRT. If we compare it with the cases and appeals filed on law and technical points, the composition of DRT being headed by one presiding officer only, does not suffice to impart judgment judiciously in my view. In the present scenario, in the first place practically it is difficult to expect that the basic legal aim of DRT of speedy jurisdiction can be achieved anyhow, with only one presiding officer in comparison to the pending sea of cases awaiting trial and decision. Here I firmly suggest that the composition of the tribunals should be of at least a three member bench, wherein one member can be from banking background, one from the judiciary and one may be a person of social repute. The simple and logical reasoning behind it is that one presiding officer of DRT if from banking background, may not have good legal acumen and vice-versa. If the presiding officer is purely from judicial background he may not be aware of banking terminology and intricacies of banking business but holds his proficiency in law and to achieve the goal of working on principles of natural justice, one member should be from social intelligentsia-an educationist or a social-reformist, a person from NGO who work towards the welfare of the society at large.
Thus, this bench with three members from different walks of life can help impart justice which is in full terms with socio-economic and judicial intricacies of our society and nation.
(The author is an advocate who practices exclusively against banks in legal matters encompassing DRT's, DRAT and loans. Views expressed are personal)