The Supreme Court reprimanded the Finance Ministry for tasking Debt Recovery Tribunals (DRTs) with data collation instead of focusing on resolving cases. The Bench directed the Ministry to create a Standard Operating Procedure (SOP) to prevent disruptions in the DRTs’ core functions. It emphasized the importance of maintaining efficiency in adjudicating financial disputes while managing administrative tasks effectively.
New Delhi: The Supreme Court directed the Union Ministry of Finance to provide information regarding the staffing levels at Debts Recovery Tribunals (DRTs) nationwide.
Justices Abhay S Oka and Augustine George Masih voiced concerns about the Ministry’s requests for extensive data collection from DRTs, which they believe interferes with the tribunals’ primary function of adjudicating cases.
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The Bench emphasized the need for the Ministry to establish a Standard Operating Procedure (SOP) to ensure that the operations of the DRTs are not disrupted by data collection efforts.
The Court noted,
“We expected the Ministry to come out with proper SOPs for securing data from DRTs,”
The Ministry’s recent affidavit suggested that each DRT has sufficient staff, approximately 30 members, which the Court found unsatisfactory. They mandated that the Ministry provide comprehensive data on DRT staffing by January 2.
This ruling arose from an appeal concerning the postponement of a securitization application at the DRT in Visakhapatnam, attributed to a strike by local lawyers. During the proceedings, it was revealed that DRT staff were preoccupied with compiling extensive data for the Finance Ministry, leading to delays.
Previously, the Court expressed concern about the Ministry of Finance treating the DRTs as subordinate entities and sought an explanation from a Ministry official.
Upon reviewing the official’s affidavit, Justice Oka criticized the claims that DRTs had adequate staffing levels, stating,
“We cannot allow a Section Officer to hamper the working of DRT.”
He instructed the Ministry to provide a detailed affidavit regarding the actual staffing situation at DRTs.
The next hearing on this matter scheduled for January 3.
Debt Recovery Tribunals (DRTs)
Debt Recovery Tribunals (DRTs) are specialized judicial bodies in India established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act). Their primary function to expedite the recovery of debts owed to banks and financial institutions.
Key features of DRTs include:
- Exclusive Jurisdiction: They handle cases involving debt recovery above Rs. 20 lakh.
- Fast-Track Process: Designed to provide quicker resolutions compared to regular courts.
- Appellate Body: Appeals against DRT decisions can be made to the Debt Recovery Appellate Tribunal (DRAT).
DRTs play a critical role in maintaining financial discipline and reducing non-performing assets (NPAs) in the banking sector.