Debt Recovery Tribunals (DRTs)

Why in news?

• Government has formed three exclusive benches at DRTs in Chennai, Mumbai and Delhi to get more focus on high-value cases.

About Debt Recovery Tribunals (DRTs):

• The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs) were established under the Recovery of Debts and Bankruptcy Act (RDB Act), 1993 with the specific objective of providing expeditious adjudication and recovery of debts due to Banks and Financial Institutions.
• DRTs are fully empowered to pass comprehensive orders and can travel beyond the Civil procedure Code to render complete justice.
• DRTs were empowered to adjudicate claims equal to or greater than 20 lakh rupees.
• Insolvency and Bankruptcy Code give powers to DRTs to consider cases of bankruptcy from individuals and unlimited liability partnerships.
  • Cases of bankruptcy of Companies and limited liability partnership are dealt by National Company Law Tribunal.
• DRTs also hear cases under SARFAESI Act 2002.

Composition of Tribunal

• A Tribunal shall consist of one person only, referred as the Presiding Officer, to be appointed by the Central Government.

Add ons:

• At present, there are 39 DRTs and 5 appellate tribunals that work under the Recovery of Debts and Bankruptcy Act 1993.

PRACTICE QUESTION:

With reference to ‘Debt Recovery Tribunals (DRTs)’, consider the following statements:

1. They are established by the Central Government

2. They can entertain applications from banks and financial institutions for recovery of debts which are due to them

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer