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A Complete Guide To Debt Recovery Tribunals

By Lawfarm Team January 07, 2022


By Pragati Sengar

 

Debt Recovery Tribunals were created to help banks and other financial organisations recover debts owing to them more promptly. DRTs were founded when the Recovery of Debts Due to Banks and Financial Institutions Act (RDBBFI) was approved in 1993. The Debt Recovery Appellate Tribunal can hear an appeal from a person or company that has been damaged by DRT orders (DRAT). The DRAT will not consider the appeal unless the person pays 75% of the debt, as calculated by the DRT.


DRT Composition

The Presiding Officer, who is competent to be a District Judge and is appointed by a Central Government announcement, oversees DRT. In addition to performing the functions of a presiding officer of a DRT, the central government may allow another presiding officer of a DRT to be appointed.

 
Documents Required

  1. A statement contains information about the debt owed to a Respondent and the circumstances in which it became due,
     
  2. Any documents that the applicant relies on, as well as those that are listed in the application,
     
  3. The application fee is represented by a crossed Bank Draft or an Indian Postal Order,
     
  4. A list of the papers to be created.

 
Application Fees

  1. The fee can be paid in the form of a crossed demand draught issued in the Registrar's name or in person at the Registrar's office.
     
  2. The fee is payable in the Central Post Office of the station where the Tribunal is located or by a crossed Indian Postal Order issued in favour of the Registrar.

 
DRT Process

Filing an application with the Debt Recovery Tribunal entails the following steps: 

1. The Application Filing Procedure

  • The applicant should file an application with the Registrar in the jurisdiction where the bank or financial institution is currently functioning.
  • A completed application must be submitted in the format specified.
  • The applicant, his representative, or an authorised legal practitioner may present the application.
  • The application must be delivered to the registrar of the tribunal that has jurisdiction over his case, or it can be sent to the Registrar by registered mail.


2. Submission Of An Application 

  • If the application is provided by mail, it is considered to have been sent to the Registrar on the day the request is received.
  • There should be two parts to the application. An empty file-size envelope with the complete address of the respondent. The petitioner should disclose the complete address of each respondent.


3. Presentation and Verification of the Application

  • On the day it is presented or considered to have been filed under that regulation, the registrar or any other involved official authorised by him must sign the endorsement, and the registrar or any other concerned officer must sign the endorsement.
  • Once the application has been verified, it should be correctly registered and given a serial number.


4. Issuance of Original Application Number

  • The Registrar of the DRT oversees the tribunal's overall administration.
  • Following the confirmation of the application, the Registrar will issue an Original Application (OA) number and summons. Each respondent receives a printed book as well as a copy of the application. The respondent may file four complete sets showing the application's response as well as supporting documents within one month (or an additional time granted by the tribunal) of receiving the application.


5. Execution of Recovery Certificate

  • Finally, the Presiding Officer signs and transmits the Recovery Certificate to the Recovery Officer (R.O.) for execution. The recovery officer can send a notification to Certificate Debtors after receiving the Recovery Certificate, giving them 15 days to pay the sum specified in the Recovery Certificate.
     
  • If the defendant fails to pay the amount owed, the Recovery Officer will pursue the money by one or more of the following methods:
    a. Attachment and sale of the defendant's movable and immovable property.
    b. The defaulter is arrested and detained.
    c. The Receiver is appointed.
    d. After the bank dues have been entirely recovered, the application is closed by the Recovery Officer.


6. Appeal Against Recovery Officer

An appeal to DRT against a Recovery Officer's decision can be made within 30 days of the date of the order. The Tribunals must resolve the claim within six months. Within 45 days, only DRAT can consider an appeal against a DRT judgement (Debt Recovery Appellate Tribunal). According to Section 21 of the Tribunal, the appellant must deposit 50% of the funds for the filing of the action, with the Chairperson having the ability to reduce the deposit amount to 25% of the deposit amount.

 

 

Tags: banking law , drt , banking regulations , debt recovery appellate tribunal , recovery certificate , drt process


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