The Role of the Debt Recovery Tribunal

Section 17 of the Recovery of Debts Due to Banks and Economic Institutions Act, 1993 [“RDB Act”] provides that the DRT intend to have jurisdiction to “interest and decide requests from banks and financial institutions for recovery of debts owing to such banks and economic associations”. ‘Debt’ is defined in s. 2(g) as any liability which is claimed as due by a bank during the course of business activity. While at first the DRT (Debts Recovery Tribunal) performed well and helped the Banks and Financial Institutions recoup generously vast parts of their non performing resources, or their terrible obligations as they are usually known, however their advancement was hindered when it came to substantial and capable borrowers. So, the rule of the DRT extends not just to debts as usually understood, but to any claim of money that a bank makes during the course of business. Section 18 gives that no court aside from the Supreme Court and the High Court under Art. 226 should have any purview in connection to these matters. In 1995, the lawfulness of the DRT was tested effectively under the steady gaze of the Delhi High Court, which held that the Tribunal couldn't work truly since it didn't have any arrangement for documenting counterclaims. In this way, the RDB Act was revised and the dependability of the changed demonstration was maintained by the Supreme Court. As things stand, borrowers are qualified for record "counterclaims" under section 19 of the RDB Act. 

The inquiry is whether borrowers must pick this cure or whether they are additionally qualified for document an autonomous suit in the proper common court. There are two clashing Supreme Court choices on this point and two others which are questionable. In Indian Bank v. ABS Marine Products, (2006) 5 SCC 72, Indian Bank requested a suit documented by ABS Marine in the Calcutta High Court to be exchanged to the DRT. The Supreme Court held that such an autonomous suit recorded by a borrower couldn't be exchanged to the DRT without his assent, since his entitlement to approach a common court can't be taken away.