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...

No Bar On Pursuing Criminal Proceedings After Arbitration Has Commenced: Delhi High Court

Observing that commencement of arbitration does not bar a party from pursuing criminal proceedings, the Delhi High Court directed the Police to investigate the complaint lodged by a Non-Banking Finance Company against one of its defaulting borrowers.Justice Subramonium Prasad observed,"there is no bar of pursuing criminal proceedings once arbitration has commenced."In the instant case, the Bench noted that the facts on the face of it prima facie discloses commission of a cognizable offence. It...

Bank Can't Be Directed By Writ Of Mandamus To Grant 'One-Time Settlement' Benefit To Borrower : Supreme Court

No writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of One Time Settlement Scheme to a borrower, the Supreme Court has held in a judgment delivered on Wednesday (15 December 2021).The bench comprising Justices MR Shah and BV Nagarathna observed that no borrower can, as a matter of right, pray for grant of benefit of One Time Settlement Scheme. It was held...

Centre May Consider To Create All India Tribunal Services For Allocation Of Persons To Different Tribunals: Supreme Court

The Supreme Court on Wednesday orally put to the Union of India that, so far as administrative work in tribunals are concerned, it may consider creating an All-India Tribunals Service on the lines of UK's Her Majesty's Tribunals Service, by way of an umbrella service for allocation of persons to different tribunals like the NCDRC, the NCLT, the DRT and those under other central legislations.The bench of Justices D. Y. Chandrachud, Surya Kant and Vikram Nath was hearing the Imtiyaz Ahmad v. State...

Delhi High Court Seeks Expeditious Appointment Of Recovery Officers In DRTs, Framing Of Rules For High Value Recovery Matters Within 3 Weeks

The Delhi High Court has directed the Centre to ensure appointment of Recovery Officers in Debt Recovery Tribunals across India without any delay.A Bench of Justices Vipin Sanghi and Jasmeet Singh sought a status report to be filed in this regard on November 17, the next date of hearing, highlighting the progress made so far.The Bench was hearing a plea raising the issue of delay in disposal of high-value recovery cases pending before the Debt Recovery Tribunals. In one of the earlier hearings...