Debt Tribunals Expediting Recovery

The debt recovery tribunals in the country are fast becoming an effective adjudication machinery for expeditious recovery of debts due to banks and financial institutions.

Dorai Kaliaratnam, presiding officer of the Chennai tribunal says one of the nine such tribunals functioning in the country, at least Rs 5,622 crore was blocked as bad debts incurred by banks and other financial institutions in the country and there were nearly 18 lakh cases relating to these pending before various civil courts in 1990.With the setting up of the tribunal by an Act of Parliament most of these cases were being transferred to them from civil courts leading to expeditious recovery of these debts.

 

He said the Chennai tribunal, which had additional jurisdiction over Kerala and Pondicherry, had received 2,500 cases from Tamil Nadu alone by way of original applications and transfer of cases from civil courts and 300 cases from Kerala.

The Chennai tribunal has so far disposed of 120 cases from Tamil Nadu, effecting a recovery of Rs 6 crore. During the 10-day ongoing maiden sitting of the tribunal in Kochi from June 16, a total of 168 cases were being heard and so far a sum of Rs 113 lakh has been recovered in respect of at least four cases disposed of on Monday.

Kaliaratnam said the tribunal intended to have regular sittings in Kochi once in two months as there were a number of cases involving Rs 10 lakh and above being filed or transferred to the tribunal by banks and financial institutions.

He said in Kerala there were cases of bad debts to the tune of Rs 300 crore were pending before the tribunal. He said a separate recovery officer had been appointed at the tribunal for recovery of debts on the basis of recovery certificates issued by the presiding officer. After giving 15 days notice if the borrower failed to pay the decreed dues, the recovery officer could attach and sell the property mortgaged or charged, he said.

He said under the Tribunal Act there was only one appellate tribunal in the country, in Mumbai. The presiding officer of the debt recovery appellate tribunal is of the rank of a high court judge. If an affected party has to prefer an appeal against the order of tribunal, the party has to pay 75 per cent of the decreed amount before filing the appeal.