Banking
Querist :
Anonymous
(Querist) 04 January 2012
This query is : Resolved
can DRT entertain unsecured personal loans?
prabhakar singh
(Expert) 05 January 2012
2. Definitions.—In this Act, unless the context otherwise requires,--
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[(g) “debt” means any liability (inclusive of interest) which is claimed as
due from any person by a bank of a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application;]
CHAPTER III
JURISDICTION, POWERS AND AUTHORITY OF TRIBUNALS
17. Jurisdiction, powers and authority of Tribunals.—(1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions.
(2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act.
CHAPTER IV
PROCEDURE OF TRIBUNALS
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[19. Application to the Tribunal.—(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction—
(a) the defendant, or each of thedefendants where there are more than one, at the time of making the application, actually and
voluntarily resides or carries on business or personally works or gain; or
(b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business orpersonally works for gain; or
(c) the cause of action, wholly or in party, arises.
(2) Where a bank or a financial institution, which has to recover its
debt from any person, has filed an application to the Tribunal under subsection (1) and against the same person another bank or financial institution
also has claim to recover its debt, then, the later bank or financial institution
may join the applicant bank or financial institution at any stage of the
proceedings, before the final order is passed, by making an application to that Tribunal.
(3) Every application under sub-section (1) or sub-section (2) shall be
in such form and accompanied by such documents or other evidence and by
such fee as may be prescribed:
Provided that the fee may be prescribed having regard to the amount
of debt to be recovered:
Provided further that nothing contained in this sub-section relating to
fee shall apply to cases transferred to the Tribunal under sub-section (1) of
section 31.
(4) On receipt of the application under sub-section (1) or sub-section
(2), the Tribunal shall issue summons requiring the defendant to show cause
within thirty days of the service of summons as to why the relief prayed for
should not be granted.
(5) The defendant shall, at or before the first hearing or within such
time as the Tribunal may permit, present a written statement of his defence.
(6) Where the defendant claims to set-off against the applicant’s
demand any ascertained sum of money legally recoverable by him from such
applicant, the defendant may, at the first hearing of the application, but not afterwards unless permitted by the Tribunal, present a written statement
containing the particulars of the debt sought to be set-off.
(7) The written statement shall have the same effect as a plaint in a
cross-suit so as to enable the Tribunal to pass a final order in respect both of
the original claim and of the set-off.
(8) A defendant in an application may, in addition to his right of
pleading a set-off under sub-section (6), set up, by way of counter-claim
against the claim of the applicant, any right or claim in respect of a cause of
action accruing to the defendant against the applicant either before or after
the filing of the application but before the defendant has delivered his
defence or before the time limited for delivering his defence has expired,
whether such counter-claim is in the nature of a claim for damages or not.
(9) A counter-claim under sub-section (8) shall have the same effect
as a cross-suit so as to enable the Tribunal to pass a final order on the same
application, both on the original claim and on the counter-claim.
(10) The applicant shall be at liberty to file a written statement in
answer to the counter-claim of the defendant within such period as may be
fixed by the Tribunal.
(11) Where a defendant sets up a counter-claim and the applicant
contends that the claim thereby raised ought not be disposed of by way of
counter-claim but in an independent action, the applicant may, at any time
before issues are settled in relation to the counter-claim, apply to the
Tribunal for an order that such counter-claim may be excluded, and the
Tribunal may, on the hearing of such application, make such order as it
thinks fit.
(12) The Tribunal may make an interim order (whether by way of
injunction or stay or attachment) against the defendant to debar him from
transferring, alienating or otherwise dealing with, or disposing of, any
property and assets belonging to him without the prior permission of the
Tribunal.
(13) (A) Where, at any stage of the proceedings, the Tribunal is
satisfied, by affidavit or otherwise, that the defendant, with intent to obstructor delay or frustrate the execution of any order for the recovery of debt that
may be passed against him,--
(i) is about to dispose of the whole or any part of his property; or
(ii) is about to remove the whole or any part of his property from the
local limits of the jurisdiction of the Tribunal; or
(iii) is likely to cause any damage or mischief to the property or affect
its value by misuse or creating third party interest,
the Tribunal may direct the defendant, within a time to be fixed by it, either
to furnish security, in such sum as may be specified in the order, to produce
and place at the disposal of the Tribunal, when required, the said property or
the value of the same, or such portion thereof as may be sufficient to satisfy
the certificate for the recovery of the debt, or to appear and show cause why
he should not furnish security.
(B) Where the defendant fails to show cause why he should not
furnish security, or fails to furnish the security required, within the time
fixed by the Tribunal, the Tribunal may order the attachment of the whole or
such portion of the properties claimed by the applicant as the properties
secured in his favour or otherwise owned by the defendant as appears
sufficient to satisfy any certificate for the recovery of debt.
(14) The applicant shall, unless the Tribunal otherwise directs, specify
the property required to be attached and the estimated value thereof.
(15) The Tribunal may also in the order direct the conditional
attachment of the whole or any portion of the property specified under subsection (14).
(16) If an order of attachment is made without complying with the
provisions of sub-section (13), such attachment shall be void.
(17) In the case of disobedience of an order made by the Tribunal
under sub-sections (12), (13) and (18) or breach of any of the terms on
which the order was made, the Tribunal may order the properties of the
person guilty of such disobedience or breach to be attached an may also
order such person to be detained in the civil prison for a term not exceeding
three months, unless in the meantime the Tribunal directs his release.
(18) Where it appears to the Tribunal to be just and convenient, the
Tribunal may, by order—
(a) appoint a receiver of any property, whether before or after grant
of certificate for recovery of debt;
(b) remove any person from the possession or custody of the
property;
(c) commit the same to he possession, custody or management of
the receiver;
(d) confer upon the receiver all such powers, as to bringing and
defending suits in the courts or filing and defending application
before the Tribunal and for the realization, management,
protection, preservation and improvement of the property, the
collection of the rents and profits thereof, the application and
disposal of such rents and profits, and the execution of
documents as the owner himself has, or such of those powers as
the Tribunal thinks fit; and
(e) appoint a Commissioner for preparation of an inventory of the
properties of the defendant or for the sale thereof.
(19) Where a certificate of recovery is issued against a company
registered under the Companies Act, 1956 (1 of 1956) the Tribunal may
order the sale proceeds of such company to be distributed among its secured
creditors in accordance with the provisions of section 529A of the
Companies Act, 1956 and to pay the surplus, if any, to the company.
(20) The Tribunal may, after giving the applicant and the defendant an
opportunity of being heard, pass such interim or final order, including the
order for payment of interest from the date on or before which payment of
the amount is found due up to the date of realization or actual payment, on
the application as it thinks fit to meet the ends of justice.
(21) The Tribunal shall send a copy of every order passed by it to the
applicant and the defendant.
(22) The Presiding Officer shall issue a certificate under his signature
on the basis of the order of the Tribunal to the Recovery Officer for recovery
of the amount of debt specified in the certificate.
(23) Where the Tribunal, which has issued a certificate of recovery, is
satisfied that the property is situated within the local limits of the jurisdiction
of two or more Tribunals, it may send the copies of the certificate of
recovery for execution to such other Tribunals where the property is
situated:
Provided that in a case where the Tribunal to which the certificate of
recovery is sent for execution finds that it has no jurisdiction to comply with
the certificate of recovery, it shall return the same to the Tribunal which has
issued it.
(24) The application made to the Tribunal under sub-section (1) or
sub-section (2) shall be dealt with by it as expeditiously as possible and
endeavour shall be made by it to dispose of the application finally within one
hundred and eighty days from the date of receipt of the application.
(25) The Tribunal may made such orders and give such directions as
may be necessary or expedient to give effect to its orders or to prevent abuse
of its process or to secure the ends of justice.]
