News: Recently, the Department of Financial Services (DFS), under the Ministry of Finance, convened a colloquium of Chairpersons of Debt Recovery Appellate Tribunals (DRATs) and Presiding Officers of Debt Recovery Tribunals (DRTs) at New Delhi. Debt Recovery Tribunals (DRTs)
About Debt Recovery Tribunals (DRTs)
- Debt Recovery Tribunals (DRTs) are special courts established by the Government of India to facilitate the recovery of debts owed to banks and financial institutions.
- They were set up under the Recovery of Debts and Bankruptcy Act, 1993, previously known as the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act.
- Purpose: To provide a fast and efficient legal mechanism for banks to recover non-performing assets (NPAs).
- Aim: These tribunals aim to reduce the workload on regular civil courts in financial matters and ensure that loan defaults are addressed promptly.
- DRTs handle loan default cases above ₹20 lakh, focusing on secured debts.
Structure of DRTs
- Each DRT is headed by a Presiding Officer, who is usually a qualified and experienced judge appointed by the central government.
- If a party is not satisfied with the decision of the DRT, they can appeal to a higher body called the Debt Recovery Appellate Tribunal (DRAT).
- DRATs are headed by Chairpersons who oversee appeals and ensure proper legal review of DRT decisions.
Key Features of DRT Proceedings
- DRTs follow a simplified legal process designed specifically for debt recovery and do not strictly follow the Civil Procedure Code.
- They have powers similar to civil courts, including summoning individuals, examining witnesses, and attaching properties to recover dues.
- Proceedings in DRTs are time-bound to ensure quicker resolution of cases compared to regular courts.
