Unconstitutional functioning of drt & drat- article in journalist magazine
Querist :
Anonymous
(Querist) 10 January 2012
This query is : Resolved
UNCONSTITUTIONAL FUNCTIONING OF DRT & DRAT
To tackle the problems faced by banks for speedy recovery of debts from defaulters, a Law was enacted called the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI Act) and under the said RDDBFI Act Debt Recovery Tribunals (DRT) and Debt Recovery Appellate Tribunals (DRAT) were established. The said DRT and DRAT function under the Judicial officers appointed as per the said RDDBFI Act.
In past all Tribunals and Appellate Tribunals where under the administrative control and supervision of their respective departments and concerned Ministries.
The question of Judicial Independence, appointments, safety of tenure, termination, funding for salaries, benefits and facilities of all Tribunals was clarified by the Constitutional Bench of the Hon Supreme Court of India while dealing with various petitions filed before the Hon Court. The said questions were answered by the Constitutional Bench of Hon Supreme Court of India in Union of India, Madras Bar Association vs R.Gandhi, President Madras Br Association and Union of India ( 2010 INDLAW SC 405).
In this landmark judgment, given by a Constitutional Bench of Hon Supreme Court made the following orders : Para 56(ix) ……..the selection Committee should broadly be on the following lines: (a) Chief Justice of India or his nominee- Chairperson(with a casting vote); (b) A senior Judge of the Supreme Court or Chief Justice of High Court-Member; (c) Secretary in the Ministry of Finance and company Affairs-Member; and (d) Secretary in the ministry of law and justice- Member. Para 56 (xiii)…The Administrative support for all Tribunals should be from the Ministry of Law & Justice. Neither the Tribunals nor its members shall seek or be provided with facilities from the respective sponsoring or parent Ministries or concerned Department.(emphasized)
Thus to prevent the appearance of partiality and to separate Judiciary from Executive branch in the conduct of Judicial Proceedings the Hon Supreme Court decided to give Judicial Freedom by ordering that all Tribunals and Appellate Tribunals should be under administrative control of Ministry of Law & Justice.
Ministry of Finance own the Banks and its officials are appointed as Board Directors of Banks and as Board Members they authorize claims of debt to be filed by the Banks in DRT under RDDBFI Act. The same Board members of Banks also delegate certain officials of Banks to be Authorised Officers for taking possession of mortgaged properties of borrowers under SRFAESI Act.
At the same time Ministry of Finance officials have administrative control of Judicial Officers, Registrar and staff of DRT & DRAT. Ministry of Finance officials directly recruit the Presiding Officers of DRT along with the Registrars and other officials of DRT & DRAT. Ministry of Finance also receives complaints from Banks and Bank Associations against the Presiding Officers of DRT. If any Presiding Officer of DRT does not toe the line of the banks, complaints are directly written to the Ministry of Finance by the Banks and Banks Association against the Presiding Officers. No action has been taken against the Bank officials for writing complaints against Presiding Officers and Chairpersons who are deemed to be Judicial Officers. On the contrary in some instances the Ministry of Finance officials have placed Presiding Officers on suspension based on complaints from Banks. Clearly, fear of suspension by Ministry of Finance prevents the Presiding Officers who are Judicial Officers from conducting fair and free trial in claims filed by the Banks.
Conflict of interest is obvious as Ministry of Finance officials are in control of both litigants (i.e. Banks) and adjudicator i.e. the Judicial Officers and officials of DRT and DRAT. The DRT and DRAT Judicial officers are hence not given Judicial Freedom to fulfill their constitutional obligations of conducting an unbiased fair trial without fear or favor.
Powerful and rich borrowers who are defaulters, with right connections and access to Bank Chairmans’ and politicians’ get hundreds of crores of rupees of benefits like CDR, OTS, and waiver of interest and principle without any judicial review. Whereas small borrowers and other borrowers who are defaulters but do not have access to the right connections are dragged to the DRT under RDDBFI act and SRFAESI Act for a trial to be conducted without Judicial freedom. Banks give huge write offs and other benefits to rich defaulters without judicial approval and drag other defaulters to DRT under RDDBFI Act. This is a clear case of discrimination against a set of people who do not have “connections”. Once a borrower is declared defaulter then RDDBFI Act and SRFAESI Act should be applicable to all defaulters and Banks should not have the power to pick and choose against who they would apply the Acts for recovery. The said RDDBFI Act and SRFAESI Act do not differentiate between defaulters where by any discretionary power has been given to the banks to enforce the said acts against only a section of defaulters.
The only hope for borrowers without ‘connections’ is a fair trial in the DRT and DRAT. However with this cozy relationship between Banks and DRT officials in many cases this fair trial guaranteed under Constitution is being denied.
Borrowers fear and complain that they are not getting fair hearing and adjudication from DRT & DRAT as these Judicial Officers do not have Judicial freedom to adjudicate cases in an impartial manner without fear or favour. All Judicial trials are guaranteed to be free and fair under our Constitution with separation of Executive from Judiciary.
The cozy relationship between Presiding Officers and Bank lawyers is evidenced in the corridors of Tribunals that frequent meetings are alleged to have been held between themselves in the chambers to discuss cases without presence of defendants’ lawyers. This cozy relationship also gives credibility to complaints of borrowers that auctions are being fixed at low prices by Banks and DRT officials.
Even after eighteen months of the Hon Supreme Court Constitutional Bench judgment the DRT and DRAT are still functioning unconstitutionally under control of Ministry of Finance. The officials of DRT and DRAT still continue to take their salaries and benefits from Ministry of Finance in contempt of the Hon Supreme Court judgment. These Presiding Officers and others officials of DRT & DRAT, who are bound to uphold the Constitution under oath are themselves guilty of not abiding by the directives of the Hon Supreme Court.
The Government had informed the Rajya Sabha that it is seized of the matter arising out of the judgment of the Supreme Court delivered on 11.05.2010 in the Civil Appeal No. 3067 of 2004 (Union of India Vs. R. Gandhi ) wherein the Court has affirmed its observations made in L. Chandra Kumar’s case (1977) 3 SCC 61 that uniformity in administration of tribunals may be brought in and there is a need of a nodal authority to oversee the functioning of tribunals and authorities set up by the Central Government. Giving this information in written reply to a question in the Rajya Sabha, Shri Salman Khurshid, Minister of Law & Justice said that consultations have been made with various Departments and Ministries presently administering the tribunals/authorities.
Will all judgments, auctions, acts, actions of DRT and DRAT, subsequent to the Hon Constitutional Bench Judgment deemed to be unconstitutional? In such cases what is the legal position of the auction purchasers? All Tribunals in the country should stop functioning unconstitutionally and should reconvene only after they are transferred to Ministry of Law & Justice.
Government should take action against Ministry of Finance, DRT and DRAT officials for ignoring the Hon Supreme Court directive and ensure that all tribunals are under administrative control of Ministry of Law & Justice to ensure free and fair trial as guaranteed under Constitution. Hon Courts should also prevent discrimination and ensure that RDDBFI Act and SRFAESI Act are equally applicable against everyone classified as defaulters and not just against those defaulters who do not have ‘connections’.
No doubt Banks need to collect debt owed to them and enforce RDDBFI Act & SRFEASI Act, but it should be done equitably and constitutionally. It is the constitutional and moral duty of the Government and Hon Courts to ensure that it is done so.
prabhakar singh
(Expert) 10 January 2012
Good theme....keep on....i agree with you...
DEFENSE ADVOCATE.-firmaction@g
(Expert) 10 January 2012
There are many such problems in our legal system but sufferers can not unite to take united action and so such problems go on compounding.
prabhakar singh
(Expert) 11 January 2012
Mr.Barman !
If we can not remove anomalies at least we can discuss to share pains arising out there of.
Raj Kumar Makkad
(Expert) 14 January 2012
We being experts are expected to share pains of the general needy persons.
Your problem is not confined only up to you rather this is being faced by various person in India. A public awakening is must for the eradication of all problems.
