THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL
INSTITUTIONS ACT, 1993
Introduction
1.
Short title, extent, commencement and
application
2.
Definitions
|
CHAPTER II
ESTABLISHMENT
OF TRIBUNAL AND APPELLATE
TRIBUNAL
|
CHAPTER
III
17.
Jurisdiction, powers and authority of
Tribunals. 17A. Power of Chairperson of Appellate Tribunal
18.
Bar of Jurisdiction
19.
Application to the
Tribunal
20.
Appeal to the Appellate
Tribunal
21.
Deposit of amount of debt
due, on filing appeal
22.
Procedure and Powers of
the Tribunal and the Appellate Tribunal
23.
Right to legal
representation and Presenting Officer
24.
Limitation
CHAPTER V
26.
Modes of recovery of debts
27.
Validity of certificate
and amendment thereof
28.
Stay of proceedings under
certificate and amendment or withdrawal thereof
29.
Other modes of recovery
30.
Application of certain
provisions of Income-tax Act
31.
Appeal against the order
of Recovery Officer
32.
CHAPTER VI
34.
Transfer of pending cases
35.
31A. Power of Tribunal to issue certificate
of recovery in case
36.
of decree or order.
37.
Chairperson, Presiding
Officer and staff of Appellate Tribunal and Tribunal to be public servants
38.
Protection of action taken
in good faith
39.
Act to have over-riding
effect
40.
Power to remove
difficulties
41.
Power to make rules
42.
Repeal and saving
1.
Short title and commencement
2.
Definitions
3.
Powers of the Presiding Officer of the
Appellate Tribunal
1.
Short title and commencement
2.
Definitions
3.
Method of appointment under section 9 of
the Act .
4.
Medical Fitness
5.
Interpretation
6.
Saving
7.
Oaths of office and secrecy
Banks
and financial institutions have been experiencing considerable difficulties in
recovering loans and enforcement of securities charge with them. The procedure
for recovery of debts due to the banks and financial institutions, which is
being followed, has resulted in a significant portion of the funds being
blocked.
The
Committee on the Financial System has considered the setting up of the Special
Tribunals with special powers for adjudication of such matters and speedy
recovery as critical to the successful implementation of the financial sector
reforms. An urgent need was, therefore, felt to work out a suitable mechanism
through which the dues, to the banks and financial institutions could be
realised. In 1981 a committee had examined the legal and other difficulties,
faced by banks and financial institutions and suggested remedial measures
including changes in law. This committee also suggested setting up of Special
Tribunals for recovery of dues of the banks and financial institutions by
following a summary procedure. Keeping in view the recommendations of the above
Committees, the Recovery of Debts due to Bank and Financial Institutions Bill,
1993 was introduced in the Parliament.
Banks
and financial institutions at present experience considerable difficulties in
recovering loans and enforcement of securities charged with them. The existing
procedure for recovery of debts due to the banks and financial institutions has
blocked a significant portion of their funds in unproductive assets, the value
of which deteriorates with the passage of time.
The Committee on the Financial System headed by Shri M. Narasimham has considered
the setting up of the Special Tribunals with special powers for adjudication of
such matters and speedy recovery as critical to the successful implementation
of the financial sector reforms. An urgent need was, therefore, felt to work
out a suitable mechanism through which the dues to the banks and financial
institutions could be realized without delay. In 1981, a Committee under the
Chairmanship of Shri T.Tiwari had examined the legal and other difficulties
faced by banks and financial institutions and suggested remedial measures
including changes in law. The Tiwari Committee had also suggested setting up of
Special Tribunals for recovery of dues of the banks and financial institutions
by following a summary procedure. The setting up of Special Tribunals will not
only fulfill a long-felt need, but also will be an important step in the
implementation of the Report of Narasimham Committee. Whereas on 30th September,
1990 more than fifteen lakhs of cases filed by the public sector banks and
about 304 cases filed by the financial institutions were pending in various
courts, recovery of debts involved more than Rs.5622 crores in dues of Public
Sector Banks and about Rs.391 crores of dues of the financial institutions. The
locking up of such huge amount of public money in litigation prevents proper
utilisation and recycling of the funds for the development of the country.
The
Bill seeks to provide for the establishment of Tribunal and Appellate Tribunals
for expeditious adjudication and recovery of debts due to banks and financial
institutions. Notes on clauses explain in detail the provisions of the Bill.
The
Recovery of Debts Due to Banks and Financial Institutions Bill having been
passed by both the Houses of Parliament received the assent of the President on
27th August 1993. It came on the Statute Book as THE RECOVERY OF DEBTS DUE TO
BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 (51 of 1993).
1.
The Recovery of Debts Due to Banks and
Financial Institutions (Amendment) Act, 1995 (28 of 1995).
2.
The Recovery of Debts Due to Banks and
Financial Institutions (Amendment) Act, 2000 (1 of 2000
(51
of 1993)
[27th
August, 1993]
An
Act to provide for the establishment of Tribunals for expeditious adjudication
and recovery of debts due to banks and financial institutions and for matters
connected therewith or incidental thereto.
BE it
enacted by Parliament in Forty-fourth Year of the Republic of India as
follows:-
CHAPTER I PRELIMINARY
1.
Short title, extent,
commencement and application.—(1) This Act may be
called the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
(2)
It extends to the whole of India except the
State of Jammu and Kashmir.
(3)
It shall be deemed to come into force on
the 24th day of June,
1993.
(4)
The provisions of this Act shall not apply
where the amount of debt due to any bank or financial institution or to a
consortium of banks or financial institutions is less then ten lakh rupees or
such other amount, being not less than one lakh rupees, as the Central
Government may, by notification, specify.
2.
Definitions.—In
this Act, unless the context otherwise requires,--
(a)
"Appellate Tribunal" means an Appellate Tribunal established under
sub-section (1) of Section 8;
(b)
"application" means an
application made to a Tribunal under
Section.19;
(c)
"appointed day", in relation to a
Tribunal or an Appellate Tribunal,
means
the date on which such Tribunal is established under subsection (1) of Section
3 or, as the case may be, sub-section (1) of Section 8;
(d)
"bank" means—
(i)
banking company;
(ii)
a corresponding new bank;
(iii)
State Bank of India;
(iv)
a subsidiary bank; or
(v)
a Regional Rural Bank;
(e)
"banking company" shall have the
meaning assigned to it in clause
(c)
of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
1[(ea)
"Chairperson" means a Chairperson of an Appellate Tribunal appointed
under section 9;]
(f)
"corresponding new bank" shall
have the meaning assigned to it in
clause
(da) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
[(g)
"debt" means any liability (inclusive of interest) which is claimed
as due from any person by a bank of a financial institution or by a consortium
of banks or financial institutions during the course of any business activity undertaken
by the bank or the financial institution or the consortium under any law for
the time being in force, in cash or otherwise, whether secured or unsecured, or
assigned, or whether payable under a decree or order of any civil court or any
arbitration award or otherwise or under a mortgage and subsisting on, and
legally recoverable on, the date of the application;]
(h)
"financial institution" means—
1
Ins. by Act 1 of 2000,
sec. 3 (w.r.e.f. 17.1.2000)
2
Subs. by Act 1 of 2000,
sec. 3, for clause (g) (w.r.e.f. 17.1.2000).
(i)
a public financial institution within the
meaning of Section 4A of the Companies Act, 1956 (1 of 1956);
(ii)
such other institution as the Central
Government may, having regard to its business activity and the area of its
operation in India by notification, specify;
(i)
"notification" means a notification published in the Official
Gazette;
(j)
"prescribed" means prescribed by rules made under this Act;
1
[(ja) "Presiding Officer" means the Presiding Officer of the Debts
Recovery Tribunal appointed under sub-section (1) of section 4;]
(k)
"Recovery Officer" means a Recovery Officer appointed by the Central
Government for each Tribunal under sub-section (1) of section 7;
(l)
"Regional Rural Bank" means a Regional Rural Bank established under
section 3 of the Regional Rural Bank Act, 1976 (21 of 1976);
(m)
"State Bank of India" means the State Bank of India constituted under
section 3 of the State Bank of India Act, 1955 (23 of 1955);
(n)
"subsidiary bank" shall have the meaning assigned to it in clause (k)
of section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of
1959);
(o)
"Tribunal" means the Tribunal established under sub-section (1) of
section 3.
COMMENTS
(i) Clause
(c) of section 5 of the Banking Regulation Act, 1949, defines the expression
"Banking Company" as follows:--
"banking company" means any company
which transacts the business of banking in India.
(ii) Clause
(da) of section 5 of the Banking Regulation Act, 1949 defines the expression
"corresponding new bank" as follows:--
1 Ins.
by Act 1 of 2000, sec. 3 (w.r.e.f. 17.1.2000)
"corresponding new bank" means a
corresponding new bank constituted under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1980 (4of 1980).
(iii) Section 4A of the Companies Act, 1956 (1 of
1956) states that each of the following financial institutions shall be
regarded as a public financial institution, namely:--
(i)
the Industrial Credit and Investment
Corporation of India Limited, a company formed and registered under the Indian
Companies Act, 1913;
(ii) the
Industrial Finance Corporation of India, established under section 3 of the
Industrial Financial Corporation Act, 1948;
(iii) the
Industrial Development Bank of India, established under section 3 of the
Industrial Development Bank of India Act, 1964;
(iv) the
Life Insurance Corporation of India, established under section 3 of the Life
Insurance Corporation Act, 1956;
(v) the
Unit Trust of India, established under section 3 of the Unit Trust of India
Act, 1963.
The
Central Government may by notification in the Official Gazette specify such
other institution as it may think fit to be a Public financial institution:
Provided that no institution shall be so specified
unless—
(1) it
has been established or constituted by or under any Central Act; or
(ii)
not less than fifty-one per cent of the paid-up share capital of such
institution is held or controlled by the Central Government.
3.
Establishment of Tribunal.—(1) The Central
Government shall, by notification, establish one or more Tribunals, to be known
as the Debts Recovery Tribunal, to exercise the jurisdiction, powers and
authority conferred on such Tribunal by or under this Act.
(2)
The Central Government shall also specify,
in the notification referred to in sub-section (1), the areas within which the
Tribunal may exercise jurisdiction for entertaining and deciding the
applications filed before it.
COMMENTS
In
exercise of its legislative power, relating to banking, the Parliament can
provide the mechanism by which monies due to the Bank and Financial
Institutions can be recovered. The Debt Recovery Tribunals have been set up in
regard to the debts due to the bank; Union of India V. Delhi
High Court Bar Association, 2002 (2) Supreme 435.
4.
Composition of Tribunal.—(1)
A Tribunal shall consist of one person only (hereinafter referred to as the
Presiding Officer) to be appointed by notification, by the Central Government.
(2)
Notwithstanding anything contained in sub-section (1), the Central Government
may authorise the Presiding Officer of one Tribunal to discharge also the
functions of the Presiding Officer of another Tribunal.
5.
Qualifications for
appointment as Presiding Officer.—A person shall not be
qualified for appointment as the Presiding Officer of a Tribunal unless he is,
or has been, or is qualified to be, a District Judge.
6.
Term of Office.—The
Presiding Officer of a Tribunal shall hold office for a term of five years from
the date on which he enters upon his office or until he attains the age of [1][sixty-two
years], whichever is earlier.
(2)
Staff of Tribunal.—(1)
The Central Government shall provide the Tribunal [with one or more Recovery Officers]
and such other officers and employees as that Government may think fit.[2][The
Recovery Officers] and other officers and employees of a Tribunal shall
discharge their functions under the general superintendence of the Presiding
Officer.
(3)
The salaries and allowances and other
conditions of service of the 4[Recovery Officers] and other officers
and employees of a Tribunal shall be such as may be prescribed
8.
Establishment of Appellate Tribunal.—(1) The Central
Government shall, by notification, establish one or more Appellate Tribunals,
to be known as the Debts Recovery Appellate Tribunal, to exercise the
jurisdiction, powers and authority conferred on such Tribunal by or under this
Act.
(2)
The Central Government shall also specify in the notification, referred to in
sub-section (1) the Tribunals in relation to which the Appellate Tribunal may
exercise jurisdiction.
1[(3).
Notwithstanding anything contained in sub-sections (1) and (2), the Central
Government may authorise the Chairperson of one Appellate Tribunal to discharge
also the functions of the Chairperson of other Appellate Tribunal.]
9.
Composition of Appellate
Tribunal.—An Appellate Tribunal shall consist of one person
only (hereinafter referred to as [the Chairperson of the Appellate Tribunal] to
be appointed, by notification, by the Central Government.
10.
Qualifications for
appointment as [3][Chairperson
of the Appellate Tribunal].—A person shall not be
qualified for appointment as 4[the Chairperson of an Appellate
Tribunal] unless he—
(a)
is, or has been, or is qualified to be, a
Judge of a High Court; or
(b) has
been a member of the Indian Legal Service and has held a post in Grade I of
that service for at least three years; or
(c) has
held office as the Presiding Officer of a Tribunal for at least three years.
11.
Term of Office.—[4][The
Chairperson of an Appellate Tribunal] shall hold office for a term of five
years from the date on which he enters upon his office or until he attains the
age of [5][sixty-five
years], whichever is earlier.
12.
Staff of the Appellate
Tribunal.—The provisions of section 7 (except those
relating to Recovery Officer) shall, so far as may be, apply to an Appellate
Tribunal as they apply to a Tribunal and accordingly references in that section
to "Tribunal" shall be construed as references to "Appellate
Tribunal" and references to "Recovery Officer" shall be deemed
to have been omitted.
service
of Presiding Officers.—The salary and allowances payable to and
the other terms and conditions of service (including pension, gratuity and
other retirement benefits) of, [6][the
Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal]
shall be such as may be prescribed:
Provided
that neither the salary and allowances nor the other terms and conditions of
service of [the Presiding Officer of a Tribunal or the Chairperson of an
Appellate Tribunal shall be varied to his] disadvantage after appointment.
14.
Filling up of vacancies.—If,
for any reason other than temporary absence, any vacancy occurs in the officer
of 1[the Presiding Officer of a Tribunal or the Chairperson of an Appellate
Tribunal], then the Central Government shall appoint another person in
accordance with the provisions of this Act to fill the vacancy and the
proceedings may be continued before the Tribunal or the Appellate Tribunal from
the stage at which the vacancy is filled.
15.
Resignation and removal.—(1)
1[The Presiding Officer of a Tribunal or the Chairperson of an Appellate
Tribunal] may, by notice in writing under his hand addressed to the Central
Government, resign his office:
Provided
that [the Presiding Officer of a Tribunal or the Chairperson of an Appellate
Tribunal] shall, unless he is permitted by the Central Government to relinquish
his office sooner, continue to hold office until the expiry of three months
from the date of receipt of such notice or until a person duly appointed as his
successor enters upon his office or until the expiry of his term of officer,
whichever is the earliest.
(2)
[7][The
Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal]
shall not be removed from his office except by an order made by the Central
Government on the ground of proved misbehaviour or incapacity after inquiry,--
(a)
in the case of the Presiding Officer of a
Tribunal, made by a Judge of a High Court;
(b)
in the case of [the Chairperson of an
Appellate Tribunal], made by a Judge of the Supreme Court, in which [the
Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal]
has been informed of the charges against him and given a reasonable opportunity
of being heard in respect of these charges.
(3)
The Central Government may, by rules,
regulate the procedure for the investigation of misbehaviour or incapacity of
[the Presiding Officer of a Tribunal or the Chairperson of an Appellate
Tribunal].
16.
Orders constituting Tribunal or an Appellate Tribunal to be final and not to
invalidate its proceedings.—No order of the Central
Government appointing any person as [8][the
Presiding Officer of a Tribunal or Chairperson of an Appellate Tribunal] shall
be called in question in any manner, and no act or proceeding before a Tribunal
or an Appellate Tribunal shall be called in question in any manner on the
ground merely of any defect in the constitution of a Tribunal or an Appellate
Tribunal. CHAPTER III
Tribunal
shall exercise, on and from the appointed day, the jurisdiction, powers and
authority to entertain and decide applications from the banks and financial
institutions for recovery of debts due to such banks and financial
institutions.
(2)
An Appellate Tribunal shall exercise, on and from the appointed day, the
jurisdiction, powers and authority to entertain appeals against any order made,
or deemed to have been made, by a Tribunal under this Act.
Chairperson
of an Appellate Tribunal shall exercise general power of superintendence and
control over the Tribunals under his jurisdiction including the power of
appraising the work and recording the annual confidential reports of Presiding
Officers.
(2)
The Chairperson of an Appellate Tribunal having jurisdiction over the Tribunals
may, on the application of any of the parties or on his own motion after notice
to the parties and after hearing them, transfer any case from one Tribunal for
disposal to any other Tribunal.]
18.
Bar of Jurisdiction.—On
and from the appointed day, no court or other authority shall have, or be entitled
to exercise, any jurisdiction, powers or authority (except the Supreme Court,
and a High Court exercising jurisdiction under articles 226 and 227 of the
Constitution) in relation to the matters specified in section 17.
PROCEDURE
OF TRIBUNALS [19. Application to the Tribunal.—(1)
Where a bank or a financial institution has to recover any debt from any
person, it may make an application to the Tribunal within the local limits of
whose jurisdiction—
(a)
the defendant, or each of the defendants where
there are more than one, at the time of making the application, actually and
voluntarily resides or carries on business or personally works for gain; or
(b)
any of the defendants, where there are more
than one, at the time of making the application, actually and voluntarily
resides or carries on business or personally works for gain; or
(c)
the cause of action, wholly or in party,
arises.
(2)
Where a bank or a financial institution,
which has to recover its debt from any person, has filed an application to the
Tribunal under subsection (1) and against the same person another bank or
financial institution also has claim to recover its debt, then, the later bank
or financial institution may join the applicant bank or financial institution
at any stage of the proceedings, before the final order is passed, by making an
application to that Tribunal.
(3)
Every application under sub-section (1) or
sub-section (2) shall be in such form and accompanied by such documents or
other evidence and by such fee as may be prescribed:
Provided
that the fee may be prescribed having regard to the amount of debt to be
recovered:
Provided
further that nothing contained in this sub-section relating to fee shall apply
to cases transferred to the Tribunal under sub-section (1) of section 31.
(4)
On receipt of the application under
sub-section (1) or sub-section (2), the Tribunal shall issue summons requiring
the defendant to show cause within thirty days of the service of summons as to
why the relief prayed for should not be granted. The defendant shall, at or
before the first hearing or within such time as the Tribunal may permit,
present a written statement of his defence.
afterwards
unless permitted by the Tribunal, present a written statement containing the
particulars of the debt sought to be set-off.
(7)
The written statement shall have the same
effect as a plaint in a cross-suit so as to enable the Tribunal to pass a final
order in respect both of the original claim and of the set-off.
(8)
A defendant in an application may, in
addition to his right of pleading a set-off under sub-section (6), set up, by
way of counter-claim against the claim of the applicant, any right or claim in
respect of a cause of action accruing to the defendant against the applicant
either before or after the filing of the application but before the defendant
has delivered his defence or before the time limited for delivering his defence
has expired, whether such counter-claim is in the nature of a claim for damages
or not.
(9)
A counter-claim under sub-section (8) shall
have the same effect as a cross-suit so as to enable the Tribunal to pass a
final order on the same application, both on the original claim and on the
counter-claim.
(10)
The applicant shall be at liberty to file a
written statement in answer to the counter-claim of the defendant within such
period as may be fixed by the Tribunal.
(11)
Where a defendant sets up a counter-claim
and the applicant contends that the claim thereby raised ought not be disposed
of by way of counter-claim but in an independent action, the applicant may, at
any time before issues are settled in relation to the counter-claim, apply to
the Tribunal for an order that such counter-claim may be excluded, and the
Tribunal may, on the hearing of such application, make such order as it thinks
fit.
(12)
The Tribunal may make an interim order
(whether by way of injunction or stay or attachment) against the defendant to
debar him from transferring, alienating or otherwise dealing with, or disposing
of, any property and assets belonging to him without the prior permission of
the Tribunal.
(13)
(A) Where, at any stage of the proceedings,
the Tribunal is satisfied, by affidavit or otherwise, that the defendant, with
intent to obstruct or delay or frustrate the execution of any order for the
recovery of debt that may be passed against him,--
(i)
is about to dispose of the whole or any
part of his property; or
(ii)
is about to remove the whole or any part of
his property from the
local limits of the
jurisdiction of the Tribunal; or
(iii)
is likely to cause any damage or mischief
to the property or affect
its value by misuse or
creating third party interest,
the
Tribunal may direct the defendant, within a time to be fixed by it, either to
furnish security, in such sum as may be specified in the order, to produce and
place at the disposal of the Tribunal, when required, the said property or the
value of the same, or such portion thereof as may be sufficient to satisfy the
certificate for the recovery of the debt, or to appear and show cause why he
should not furnish security.
(B)
Where the defendant fails to show cause why he should not furnish security, or
fails to furnish the security required, within the time fixed by the Tribunal,
the Tribunal may order the attachment of the whole or such portion of the
properties claimed by the applicant as the properties secured in his favour or
otherwise owned by the defendant as appears sufficient to satisfy any
certificate for the recovery of debt.
(14)
The applicant shall, unless the Tribunal
otherwise directs, specify the property required to be attached and the estimated
value thereof.
(15)
The Tribunal may also in the order direct
the conditional attachment of the whole or any portion of the property
specified under subsection (14).
(16)
If an order of attachment is made without
complying with the provisions of sub-section (13), such attachment shall be
void.
(17)
In the case of disobedience of an order
made by the Tribunal under sub-sections (12), (13) and (18) or breach of any of
the terms on which the order was made, the Tribunal may order the properties of
the person guilty of such disobedience or breach to be attached an may also
order such person to be detained in the civil prison for a term not exceeding
three months, unless in the meantime the Tribunal directs his release.
(18)
Where it appears to the Tribunal to be just
and convenient, the Tribunal may, by order—
(a)
appoint a receiver of any property, whether
before or after grant of certificate for recovery of debt;
(b)
remove any person from the possession or
custody of the property;
(c)
commit the same to he possession, custody
or management of the receiver;
(d)
confer upon the receiver all such powers,
as to bringing and defending suits in the courts or filing and defending
application before the Tribunal and for the realization, management,
protection, preservation and improvement of the property, the collection of the
rents and profits thereof, the application and disposal of such rents and
profits, and the execution of documents as the owner himself has, or such of
those powers as the Tribunal thinks fit; and
(e)
appoint a Commissioner for preparation of
an inventory of the properties of the defendant or for the sale thereof.
(19)
Where a certificate of recovery is issued
against a company registered under the Companies Act, 1956 (1 of 1956) the
Tribunal may order the sale proceeds of such company to be distributed among
its secured creditors in accordance with the provisions of section 529A of the
Companies Act, 1956 and to pay the surplus, if any, to the company.
(20)
The Tribunal may, after giving the
applicant and the defendant an opportunity of being heard, pass such interim or
final order, including the order for payment of interest from the date on or
before which payment of the amount is found due up to the date of realization
or actual payment, on the application as it thinks fit to meet the ends of
justice.
(21)
The Tribunal shall send a copy of every
order passed by it to the applicant and the defendant.
(22)
The Presiding Officer shall issue a
certificate under his signature on the basis of the order of the Tribunal to
the Recovery Officer for recovery of the amount of debt specified in the
certificate.
(23)
Where the Tribunal, which has issued a
certificate of recovery, is satisfied that the property is situated within the
local limits of the jurisdiction of two or more Tribunals, it may send the
copies of the certificate of recovery for execution to such other Tribunals
where the property is situated:
Provided
that in a case where the Tribunal to which the certificate of recovery is sent
for execution finds that it has no jurisdiction to comply with the certificate
of recovery, it shall return the same to the Tribunal which has issued it.
(24)
The application made to the Tribunal under
sub-section (1) or sub-section (2) shall be dealt with by it as expeditiously
as possible and endeavour shall be made by it to dispose of the application
finally within one hundred and eighty days from the date of receipt of the
application.
(25)
The Tribunal may made such orders and give
such directions as may be necessary or expedient to give effect to its orders
or to prevent abuse of its process or to secure the ends of justice.]
20.
Appeal to the Appellate Tribunal.—(1) Save as provided in
subsection (2), any person aggrieved by an order made, or deemed to have been
made, by a Tribunal under this Act, may prefer an appeal to an Appellate
Tribunal having jurisdiction in the matter.
(2)
No appeal shall lie to the Appellate
Tribunal from an order made by a Tribunal with the consent of the parties.
(3)
Every appeal under sub-section (1) shall be
filed within a period of forty-five days from the date on which a copy of the
order made, or deemed to have been made, by the Tribunal is received by him and
it shall be in such form and be accompanied by such fee as may be prescribed:
Provided
that the Appellate Tribunal may entertain an appeal after the expiry of the
said period of forty-five days if it is satisfied that there was sufficient
cause for not filing it within that period.
heard,
pass such orders thereon as it thinks fit, confirming, modifying or setting
aside the order appealed against.
(5)
The Appellate Tribunal shall send a copy of
every order made by it to the parties to the appeal and to the concerned
Tribunal.
(6)
The appeal filed before the Appellate
Tribunal under sub-section (1) shall be dealt with by it as expeditiously as
possible and endeavour shall be made by it to dispose of the appeal finally
within six months from the date of receipt of the appeal.
COMMENTS
An
order which is made by the Tribunal with the consent of the parties, shall not
be appealable. The period for filing an appeal is 45 days from the date on
which a copy of the order is received by the appellant. However, the Tribunal
may condone the delay in preferring an appeal beyond 45 days. The Appellate
Tribunal may confirm, modify or set aside the order appealed against.
21.
Deposit of amount of debt
due, on filing appeal.—Where an appeal is
preferred by any person from whom the amount of debt is due to a bank or a
financial institution or a consortium of banks or financial institutions, such
appeal shall not be entertained by the Appellate Tribunal unless such person
has deposited with the Appellate Tribunal seventy-five per cent of the amount
of debt so due from him as determined by the Tribunal under section 19:
Provided
that the Appellate Tribunal may, for reasons to be recorded in writing, waive
or reduce the amount to be deposited under this section.
COMMENTS
For
preferring an appeal it is necessary to deposit with the Appellate Tribunal 75%
of the amount of debt due from him as determined by the Tribunal under section
19.
22.
Procedure and Powers of
the Tribunal and the Appellate Tribunal.— (1) The Tribunal and the
Appellate Tribunal shall not be bound the procedure laid down by the Code of
Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of
natural justice and, subject to the other provisions of this Act and of any
rules, the Tribunal and the Appellate Tribunal shall have powers to regulate
their own procedure including the places at which they shall have their
sittings.
(2)
The Tribunal and the Appellate Tribunal
shall have, for the purposes of discharging their functions under this Act, the
same powers as are vested in a civil court under the Code of Civil Procedure,
1908 (5 of 1908), while trying a suit, in respect of the following matters,
namely:--
(a) summoning
and enforcing the attendance of any person and examining him on oath;
(b)
requiring the discovery and production of
documents;
(c)
receiving evidence on affidavits;
(d) issuing
commissions for the examination of witnesses or documents;
(e)
reviewing its decisions;
(f)
dismissing an application for default or
deciding it ex parte;
(g) setting
aside any order of dismissal of any application for default or any order passed
by it ex parte;
(h)
any other matter which may be prescribed.
(3)
Any proceeding before the Tribunal or the
Appellate Tribunal shall be deemed to be a judicial proceeding within the
meaning of sections 193 and 228, and for the purposes of section 196, of the
Indian Penal Code (45 of 1860) and the Tribunal or the Appellate Tribunal shall
be deemed to be a civil court for all the purposes of section 195 and Chapter
XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
bank
or a financial institution making an application to a Tribunal or an appeal to
an Appellate Tribunal may authorize one or more legal practitioners or any of
its officers to act as Presenting Officers and every person so authorized by it
may present its case before the Tribunal or the Appellate Tribunal.
(2)
The defendant may either appear in person or authorize one or more legal
practitioners or any of his or its officers to present his or its case before
the Tribunal or the Appellate Tribunal.
COMMENTS
A
bank or a financial institution may authorize (i) one or more legal
practitioners, or (ii) any of its officers to act as Presenting Officer for
presenting its case before the Tribunal or the Appellate Tribunal. On the other
hand, the defendant may (i) appear in person, or (ii) authorize one or more
legal practitioners, or (iii) authorize any of his or its officers, to present
his or its case before the Tribunal or the Appellate Tribunal.
24.
Limitation.—The
provisions of the Limitation Act, 1963 (36 of 1963), shall, as far as may be,
apply to an application made to a Tribunal.
CHAPTER
V
25.
Modes of recovery of
debts.—The Recovery Officer shall, on receipt of the
copy of the certificate under sub-section (7) of section 19, proceed to recover
the amount of debt specified in the certificate by one or more of the following
modes, namely:--
(a) attachment
and sale of the movable or immovable property of the defendant;
(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.
26.
Validity of certificate
and amendment thereof.—(1) It shall not be open
to the defendant to dispute before the Recovery Officer the correctness of the
amount specified in the certificate, and no objection to the certificate on any
other ground shall also be entertained by the Recovery Officer.
(2)
Notwithstanding the issue of a certificate
to a Recovery Officer, the Presiding Officer shall have power to withdraw the
certificate or correct any clerical or arithmetical mistake in the certificate
by sending intimation to the Recovery Officer.
(3)
The Presiding Officer shall intimate to the
Recovery Officer any order withdrawing or canceling a certificate or any
correction made by him under sub- section (2).
27.
Stay of proceedings under
certificate and amendment or withdrawal thereof.—(1)
Notwithstanding that a certificate has been issued to the Recovery Officer for
the recovery of any amount, the Presiding Officer may grant time for the
payment of the amount, and thereupon the Recovery Officer shall stay the
proceedings until the expiry of the time so granted.
(2)
Where a certificate for the recovery of
amount has been issued, the Presiding Officer shall keep the Recovery Officer
informed of any amount paid or time granted for payment, subsequent to the
issue of such certificate to the Recovery Officer.
(3)
Where the order giving rise to a demand of
amount for recovery of debt has been modified in appeal, and, as a consequence
thereof the demand is reduced, the Presiding Officer shall stay the recovery of
such part of the amount of the certificate as pertains to the said reduction
for the period for which the appeal remains pending.
(4)
Where a certificate for the recovery of
debt has been received by the Recovery Officer and subsequently the amount of
the outstanding demands is reduced [9][or
enhanced] as a result of an appeal, the Presiding Officer shall, when the order
which was the subject-matter of such appeal has become final and conclusive,
amend the certificate or withdraw it, as the case may be.
28.
Other modes of recovery.—(1) Where a certificate
has been issued to the Recovery Officer under sub-section (7) of section 19,
the Recovery Officer may, without prejudice to the modes of recovery specified
in section 25, recover the amount of debt by any one or more of the modes
provided under this section.
(2)
If any amount is due from any person to the defendant, the Recovery Officer may
require such person to deduct from the said amount, the amount of debt due from
the defendant under this Act and such person shall comply with any such requisition
and shall pay the sum so deducted to the credit of the Recovery Officer:
Provided
that nothing in this sub-section shall apply to any part of the amount exempt
from attachment in execution of a decree of a civil court under section 60 of
the Code of Civil Procedure, 1908 (5 of 1908).
(3)
(i) The Recovery Officer may, at any time or from time to time, by notice in
writing, require any person from whom money is due or may become due to the
defendant or to any person who holds or may subsequently hold money for or on
account of the defendant, to pay to the Recovery Officer either forthwith upon
the money becoming due or being held or within the time specified in the notice
(not being before the money becomes due or is held) so much of the money as is sufficient
to pay the amount of debt due from the defendant or the whole of the money when
it is equal to or less than that amount.
(ii)
A notice under this sub-section may be
issued to any person who holds or may subsequently hold any money for or on
account of the defendant jointly with any other person and for the purposes of
this subsection, the shares of the joint holders in such amount shall be
presumed, until the contrary is proved, to be equal.
(iii)
A copy of the notice shall be forwarded to
the defendant at his last address known to the Recovery Officer and in the case
of a joint account to all the joint holders at their last addresses known to
the Recovery Officer.
(iv)
Save as otherwise provided in this
sub-section, every person to whom a notice is issued under the sub-section
shall be bound to comply with such notice, and, in particular, where any such
notice is issued to a post office, bank, financial institution, or an insurer,
it shall not be necessary for any pass book, deposit receipt, policy or any
other document to be produced for the purpose of any entry, endorsement or the
like to be made before the payment is made notwithstanding any rule, practice
or requirement to the contrary.
(v)
Any claim respecting any property in
relation to which a notice under this sub-section has been issued arising after
the date of the notice shall be void as against any demand contained in the
notice.
(vi)
Where a person to whom a notice under this
sub-section is sent objects to it by a statement on oath that the sum demanded
or the part thereof is not due to the defendant or that he does not hold any
money for or on account of the defendant, then, nothing contained in this
sub-section shall be deemed to require such person to pay any such sum or part
thereof, as the case may be, but if it is discovered that such statement was
false in any material particular, such person shall be personally liable to the
Recovery Officer to the extent of his own liability to the defendant on the
date of the notice, or to the extent of the defendant's liability for any sum
due under this Act, whichever is less.
(vii)
The Recovery Officer may, at any time or
from time to time, amend or revoke any notice under this sub-section or extend
the time for making any payment in pursuance of such notice.
(viii)
The Recovery Officer shall grant a receipt
for any amount paid in compliance with a notice issued under this sub-section,
and the person so paying shall be fully discharged from his liability to the
defendant to the extent of the amount so paid.
(ix)
Any person
discharging any liability to the defendant after the receipt of a notice under
this sub-section shall be personally liable to the Recovery Officer to the
extent of his own liability to the defendant so discharged or to the extent of
the defendant's liability for any debt due under this Act, whichever is less.
(x)
If the person to whom a notice under this
sub-section is sent fails to make payment in pursuance thereof to the Recovery
Officer, he shall be deemed to be a defendant in default in respect of the
amount specified in the notice and further proceedings may be taken against him
for the realization of the amount as if it were a debt due from him, in the
manner provided in sections 25, 26 and 27 and the notice shall have the same
effect as an attachment of a debt by the Recovery Officer in exercise of his
powers under section 25.
(4)
The Recovery Officer may apply to the court in whose custody there is money
belonging to the defendant for payment to him of the entire amount of such
money, or if it is more than the amount of debt due an amount sufficient to
discharge the amount of debt so due.
1[(4A)
The Recovery Officer may, by order, at any stage of the execution of the
certificate of recovery, require any person, and in case of a company, any of
its officers against whom or which the certificate of recovery is issued, to
declare on affidavit the particulars of his or its assets.]
(5)
The Recovery Officer may recover any amount of debt due from the defendant by
distraint and sale of his movable property in the manner laid down in the Third
Schedule to the Income-Tax Act, 1961 (43 of 1961).
provisions
of the Second and Third Schedules to the Income-tax Act, 1961 and the
Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time
shall, as far as possible, apply with necessary modifications as if the said
provisions and the rules referred to the amount of debt due under this Act
instead of to the Income-tax:
Provided
that any reference under the said provisions and the rules to the
"assessee" shall be construed as a reference to the defendant under
this Act.
Notwithstanding
anything contained in section 29, any person aggrieved by an order of the
Recovery Officer made under this Act may, within thirty days from the date on
which a copy of the order is issued to him, prefer an appeal to the Tribunal.
(2)
On receipt of an appeal under sub-section (1), the Tribunal may, after giving
an opportunity to the appellant to be heard, and after making such inquiry as
it deems fit, confirm, modify or set aside the order made by the Recovery
Officer in exercise of his powers under sections 25 to 28 (both inclusive).]
31.
Transfer of pending cases.—(1) Every suit or other
proceeding pending before any court immediately before the date of
establishment of a Tribunal under this Act, being a suit or proceeding the
cause of action whereon it is based is such that it would have been, if it had
arisen after such establishment, within the jurisdiction of such Tribunal,
shall stand transferred on that date to such Tribunal: Provided that nothing in
this sub-section shall apply to any appeal pending as aforesaid before any
court.
(2)
Where any suit or other proceeding stands transferred from any court to a
Tribunal under sub-section (1),--
(a)
the court shall, as soon as may be after
such transfer, forward the records of such suit or other proceeding to the
Tribunal; and
(b)
the Tribunal may, on receipt of such
records, proceed to deal with such suit or other proceeding, so far as may be,
in the same manner as in the case of an application made under section 19 from
the stage which was reached before such transfer or from any earlier stage [10][***]
as the Tribunal may deed fit.
2[31A.
Power of Tribunal to issue certificate of recovery in case of decree or order.—(1)
Where a decree or order was passed by any court before the commencement of the
Recovery of Debts Due to Banks and Financial Institutions (Amendment) Act, 2000
and has not yet been executed, then, the decree-holder may apply to the
Tribunal to pass an order for recovery of the amount.
(2)
On receipt of an application under
sub-section (1), the Tribunal may issue a certificate for recovery to a Recovery
Officer.
(3)
On receipt of a certificate under
sub-section (2), the Recovery Officer shall proceed to recover the amount as if
it was a certificate in respect of a debt recoverable under this Act.]
3
[32. Chairperson, Presiding Officer and staff of Appellate Tribunal and
Tribunal to be public servants.—The Chairperson of an
Appellate Tribunal, the Presiding Officer of a Tribunal, the Recovery Officer
and other officers and employees of an Appellate Tribunal and a Tribunal shall
be deemed to be public servants within the meaning of section 21 of the Indian
Penal Code (45 of 1860).]
33.
Protection of action taken in good faith.—No suit, prosecution or
other legal proceeding shall lie against the Central Government or against 1[the
Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal] or
against the Recovery Officer for anything which is in good faith done or
intended to be done in pursuance of this Act or any rule or order made
thereunder.
34.
Act to have over-riding
effect.—(1) Save as provided under subsection (2), the
provisions of this Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law for the time being in force or in any
instrument having effect by virtue of any law other than this Act.
(2) The
provisions of this Act or the rules made thereunder shall be in addition to,
and not in derogation of, the Industrial Finance Corporation Act, 1948 (15 of
1948), the State Financial Corporations Act, 1951 (63 of 1951), the Unit Trust
of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India
Act, 1984 (62 of 1984) [11][,
the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and
the Small Industries Development Bank of India Act, 1989 (39 of 1989)].
35.
Power to remove difficulties.—(1)
If any difficulty arises in giving effect to the provisions of this Act, the
Central Government may, by order published in the Official Gazette make such
provisions, not inconsistent with the provisions of this Act, as appear to it
to be necessary or expedient for removing the difficulty:
Provided
that no such order shall be made after the expiry of the period of three years
from the date of commencement of this Act.
(2)
Every order made under this section shall, as soon as may be after it is made,
be laid before each House of Parliament.
36.
Power to make rules.—(1)
The Central Government may, by notification, make rules to carry out the
provisions of this Act.
(2)
Without prejudice to the generality of the foregoing powers, such rules may,
provide for all or any of the following matters, namely:--
(a)
the salaries and allowances and other terms
and conditions of service of [12][the
Chairpersons, the Presiding Officers], Recovery Officers and other officers and
employees of the Tribunal and the Appellate Tribunal under sections 7, 12 and
13;
(b)
The procedure for the investigation of
misbehaviour or incapacity of [the Chairpersons of Appellate Tribunals and the
Presiding Officers of the Tribunals] under sub-section (3) of section 15;
(c
)The form in which an application may be made under section 19, the documents
and other evidence by which such application shall be accompanied and the fees
payable in respect of the filing of such application;
(d)
the form
in which an appeal may be filed before the Appellate Tribunal under section 20
and the fees payable in respect of such appeal;
(e)
any other matter which is required to be,
or may be, prescribed.
[(3)
Every notification issued under sub-section (4) of section 1, section 3 and
section 8 and every rule made by the Central Government under this Act, shall
be laid, as soon as may be after it is made, before each House of Parliament,
while it is in session, for a total period of thirty days which may be
comprised in one session or in two or more successive sessions, and if, before
the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the
notification or rule or both Houses agree that the notification or rule should
not be issued or made, the notification or rule shall thereafter have effect
only in such modified form or be of no effect, as the case may be; so, however,
that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that notification or rule.]
37. Repeal and saving.—(1)
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. THE DEBT RECOVERY
APPELLATE TRIBUNAL
G.S.R
337(E), dated 24th June, 19971
In
exercise of the powers conferred by section 36 of the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993(51 of 1993), the Central Government
hereby makes the following rules, namely:-
1.
Short title and
commencement.-(1)These rules may be called THE DEBTS RECOVERY
TRIBUNAL (FINANCIAL AND ADMINSTRATIVE POWER) RULES, 1997.
(2)
They shall come into force on the date of their publication in the Official
Gazatte.
2.
Definitions.- In
these rules, unless the context otherwise requires, -
(a) "Act"
means the Recovery of Debts Due to Banks and Financial Institutions Act, 1993
(51 of 1993).
(b) "Appellate
Tribunal" means the Debts Recovery Appellate Tribunal established under
sub-Section (1) of section 8 of the Act;
(c) "Presiding
Officer" means a person appointed as Presiding Officer of an Appellate Tribunal
under section 9 of the Act;
(d) all
other words and expressions used and not defined in these rules but defined in
the Act shall have the meanings respectively assigned to them in the Act.
Provided
that the exercise of powers by the Presiding Officer under these rules shall be
subject to such instructions as may be issued from time to time by the Central
Government.
THE DEBT RECOVERY APPELLATE TRIBUNAL
G..S.R.
31(E), DATED 19th January, 1998[13]
In exercise of the powers
conferred by section 9 read with clause(e) of subsection (2) of section 36 of
the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of
1993), the Central Government hereby makes the following rules, namely:-
1.
Short title and
commencement.- 1.These rules may be called THE DEBT RECOVERY
APPELLATE TRIBUNAL (PROCEDURE FOR APPOINTMENT AS (CHAIRPERSON) OF THE APPELLATE
TRIBUNAL ) RULES, 1998.
2.
They shall come into force from the date of their publication in the Official
Gazette
2.
Definitions.- In
these rules, unless the context otherwise requires,-
(a)
"Act" means the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993 (51 of 1993)'
(b)
"Appellate Tribunal" means the
Debts Recovery Appellate Tribunal established under section 8 of the Act;
(c)
["Chairperson"] means a person
appointed as ["Chairperson"] of an Appellate Tribunal under section 9
of the Act
(d)
"Reserve Bank" means the Reserve
Bank of India constituted under section 3 of the Reserve Bank of India Act,
1934(2) of 1934)
(e)
all other words and expressions used and
not defined in these rules but defined in the Act shall have the meanings
respectively assigned to them in the Act.
3.
Method of appointment
under section 9 of the Act. -(1) For the purpose of
appointment to the post of a (Chairperson), there shall be a Selection
Committee consisting of-
(1)
The Chief Justice of India
or a Judge of the Supreme Court of India as nominated by the
Chief Justice of India;
(ii)
The Secretary to the Government of India in
the Ministry of Finance (Department of Economic Affairs)'
(iii)
The Secretary to the Government of India in
the Ministry of Law and Justice;
(iv)
The Governor of the Reserve Bank or the
Deputy Governor of the Reserve Bank nominated by the Governor of the Reserve Bank;
(v)
Special Additional Secretary to the
Government of India in the Ministry of Finance, Department of Economic Affairs
(Banking Division) or an officer not below the rank of Joint Secretary in the
Banking Division nominated by the Special Additional Secretary in the Banking
Division.
(2)
The Chief Justice of India or the Judge of
the Supreme Court shall be the Chairman of the Selection Committee.
(3)
Any three
members of the Committee including the Chairman shall form a quorum for meeting
of the Committee.
(4)
1The Selection Committee may devise its own
procedure including interview for selection and appointment of Chairperson
Provided
that the procedure of interview shall not apply in case of a judge of a High
Court nominated by the Chief Justice of such High Court.
(5)
The Selection
Committee shall recommend persons for appointment of Chairperson,_
(i)
from amongst the persons from the list of
candidates prepared by the Ministry of Finance after inviting necessary
applications; and
(ii)
from amongst the Judges of High Court nominated
by the Chief Justice of such High Courts.)
(6)
The Central
Government shall on the basis of the recommendations of the Selection Committee
make a list of persons selected for appointment as (Chairperson) and the said
list shall be valid for a period of two years. The appointment of a
(Chairperson) shall be made from the list so prepared.
4.
Medical fitness. - No
person shall be appointed as a (Chairperson) unless he is declared medically
fit by a Medical Board to be constituted by the Central Government for the
purpose unless he has already been declared fit by an equivalent authority.
5.
Interpretation. - If
any question arises relating to the interpretation of these rules the same
shall be referred to the Central Government for its decision.
6.
Saving.
-Nothing in these rules shall affect reservations, relaxation of age limit and
other concessions required to be provided for the Scheduled Castes, Scheduled
Tribes, other Backward Classes, ex-servicemen and other special categories of
persons, in accordance with the orders issued by the Central Government from
time to time in this regard.
7.
Oaths of office and
secrecy. -Every person appointed to be (Chairperson) under
section 9 of the Act shall before entering upon his office, make and subscribe
an oath of office and secrecy in the Forms annexed to these rules.
ANNEXURE Form
I (See rule7)
"I,
.............................. (Name
of the [Chairperson]), having been appointed
as
["Chairperson"] do solemnly affirm/do swear in the name of God that I
will faithfully and conscientiously discharge my duties as
["Chairperson"] to the best of my ability, knowledge and judgement,
without fear or favour, affection or ill will."
NAME
OF THE [CHAIRPERSON] DEBTS RECOVERY APPELLATE TRIBUNAL
"I,....................... (Name of the
Chairperson), having been appointed as
[Chairperson]
do solemnly affirm/do swear in the name of God that I will not directly or indirectly
communicate or reveal to any person or persons any matter which shall be
brought under my consideration or shall become known to me as Chairperson of
said Debts Recovery Appellate Tribunal except as may be required for the due
discharge of my duties as the [Chairperson]
NAME
OF THE [CHAIRPERSON] DEBT RECOVERY APPELLATE TRIBUNAL
[3] Subs. by Act 1 of 2000,
sec. 2, for "Presiding Officer of the Appellate Tribunal" 4w.r.e.f.
17-1-2000).
[4] Subs. by Act 1 of 2000,
sec. 2, for "the Presiding Officer of an Appellate Tribunal"
6w.r.e.f. 17-1-2000).
[6] Subs. by Act 1 of 2000,
sec. 2, for "the Presiding Officer of a Tribunal or an Appellate
Tribujnal" (w.r.e.f. 17-1-2000).
[7] Subs. by Act 1 of 2000,
sec. 2, for "the Presiding Officer of a Tribunal or an Appellate
Tribujnal" (w.r.e.f. 17-1-2000)
[8] Subs. by Act 1 of 2000,
sec. 2, for "the Presiding Officer of a Tribunal or an Appellate
Tribunal" (w.r.e.f. 17-1-2000).
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