Supreme Court Affirms Mandatory E-Filing In DRTs & DRATs, Says Other Courts Should Replicate It

In a plea filed by the Madhya Pradesh High Court Bar Association, the Supreme Court affirmed mandatory e-filing in Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs). The court, while remarking that other Courts and Tribunals should also replicate the model of mandatory e-filing, also passed certain directions to make e-filing more accessible for everyone. The bench comprising CJI DY Chandrachud, Justice PS Narasimha, and Justice JB Pardiwala, through its...

Though Borrower Can File Civil Suit Despite The Remedy Of Counter Claim In DRT, In Light Of Section 8 Of The A&C Act, Bombay High Court Refers The Parties To Arbitration

The Bombay High Court has reiterated that the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) bars the jurisdiction of the Civil Court only in respect of the applications filed by banks/ financial institutions for recovery of debt, however, it does not bar the jurisdiction of the Civil Court to try a suit filed by the borrower. The bench of Justice Bharati Dangre remarked that even though a remedy is available to the borrower to file a counterclaim in the application filed by the...

Determination Of Debt/ Adjudication Of Liability, Under SARFAESI, No Need To Refer To Arbitration: Delhi High Court

The Delhi High Court has ruled that the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act) or the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) do not lay down an omnibus bar to arbitration. In each case, the Court would have to consider the nature of the dispute and determine whether the said statutes require the dispute to be tried exclusively by the Debt Recovery Tribunals...

Borrower Has To Pre-deposit 50% Of Which Amount In Appeal Before DRAT U/S 18 SARFAESI Act? Supreme Court Explains

While calculating the amount to be deposited as predeposit under Section 18 of the SARFAESI Act, 50% of which amount the borrower is required to deposit as pre-deposit? The Supreme Court has explained in a judgment delivered on Thursday (5 Jan 2023).The bench of Justices M R Shah and B V Nagarathna held as follows:Whatever amount is mentioned in the notice under Section 13(2) of the SARFAESI Act, in case steps taken under Section 13(2)/13(4) against the secured assets are under challenge before...

DRT Can Impose Cost But Not Other Stringent Conditions While Restoring Application U/S 22(2)(g) RDB Act: Madhya Pradesh HC

The Madhya Pradesh High Court recently set aside an order of the Debt Recovery Tribunal, whereby an application for restoration under Section 22(2)(g) of the Recovery of Debts and Bankruptcy Act was allowed subject to fulfilling certain conditions.The division bench comprising Justice Sujoy Paul and Justice P.C. Gupta observed that there was no enabling provision under the Act which vested the Tribunal with the power to impose conditions that it did while restoring the application under Section...

[Debt Recovery] Service Of Summons Mandatory, Not Dispensed With Party Entering Appearance By Filing Vakalatnama: Bombay High Court

Observing that serving of summons is a mandatory procedural requirement in a debt recovery application, the Bombay High Court held that the appearance of an Advocate and filing of a Vakalatnama does not do away with the requirement to serve summons. "Service of summons is a mandatory procedural requirement and is not dispensed with merely on account of the party entering appearance by filing a Vakalatnama", the court held. Justices K. R. Shriram and A. S. Doctor were dealing with a...

OTS Proposal Is An 'Acknowledgement Of Debt' Under Section 18 Of Limitation Act: NCLAT Delhi

The National Company Law Appellate Tribunal ("NCLAT"), New Delhi Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member), while adjudicating an appeal filed in Tejas Khandhar v Bank of Baroda, has held that a One Time Settlement (OTS) proposal falls within the definition of 'acknowledgement of debt' under Section 18 of the Limitation Act, 1963. Background Facts Bank of Baroda ("Financial Creditor/Respondent") had extended financial...

Pendency Of Proceedings Before DRT, SARFAESI Or Other Fora-Not A Bar For Initiating CIRP: NCLAT Chennai

The National Company Law Appellate Tribunal ("NCLAT"), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Kanthi Narahari (Technical Member), while adjudicating an appeal in Mr. Amar Vora v City Union Bank Ltd, has held that a petition can be moved under Section 7, 9, or 10 of Insolvency and Bankruptcy Code, 2016 ("IBC"), even when proceedings with respect to the same debt are pending before the Debt Recovery Tribunal; or SARFAESI Act 2002; or Prohibition of Benami...

Centre Clears Appointments Of Chairpersons In All Five 'Debt Recovery Appellate Tribunals' (DRATs)

The Appointments Committee of the Cabinet has approved the proposal of the Department of Financial Services for the appointment of Chairpersons in all the Fiver DRATs [Debts Recovery Appellate Tribunals].The following persons have been appointed as chairpersons in the salary of Rs.2,50,000/- (fixed) p.m., for a period of 04 years, or till attaining the age of 70 years, or until further orders, whichever is the earliest:1. DRAT, AllahabadJustice Rajesh Dayal Khare, Former Judge, High Court of...

Bihar DRT Not Functional : Supreme Court Stays E-Auction Of A Property

The Supreme Court on Friday stayed an e-Auction of a person's dwelling house in Bihar after taking into consideration that the Debt Recovery Tribunal was not functional in the State of Bihar.The bench of Justices DY Chandrachud and Surya Kant granted the relief while considering a special leave petition assailing Patna High Court's order dated November 30, 2021 ("impugned order").In the impugned order, the High Court while granting time to the petitioner to settle the account with State Bank of...

Better To Scrap Law, Abolish Tribunals If Govt Can't Appoint POs In DRTs, DRATs: Allahabad HC Seeks Centre's Reply

In a strongly worded order, the Allahabad High Court today lashed out at Central Government for its failure to make appointments to the vacant posts of Presiding Officer/Chairman of Debt Recovery Tribunals and Debt Recovery Appellate Tribunals.The Bench of Justice Dinesh Kumar Singh even remarked that if the Government is unable to appoint competent persons as Presiding Officers/Chairmen in D.R.Ts./D.R.A.Ts., then it is better that enactment is scrapped and the tribunals are...

'We Are Tired Of Adjectives, What Due Diligence?' : Bombay High Court To Centre On Delay In Appointment Of DRAT Chairman

The Bombay High Court on Friday pulled up the Union Government delaying the appointment of Chairperson to the Debt Recovery Appellate Tribunal (Mumbai), and sought a road map on the appointment by next Thursday. The bench led by Chief Justice Dipankar Datta had earlier issued several directions suo-motu, for debt recovery litigants since the High Court is flooded with matters that the DRAT must decide. The court held that orders of any DRT in Maharashtra would remain stayed if an appeal...