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RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993
51 of 1993
An Act to provide for the establishment of Tribunals for expeditious, adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Forty-fourth Year of the Republic of India as follows:-
CHAPTER 01: PRELIMINARY
SECTION 01: SHORT TITLE, EXTENT, COMMENCEMENT AND APPLICATION
(1) This Act may be called the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall be deemed to have come into force on the 24th day of June, 1993.
(4) The provisions of this Act shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify.
SECTION 02: DEFINITIONS
In this Act, unless the context otherwise requires,-
(a) "Appellate Tribunal" means an Appellate Tribunal established under sub- section (1) of section 8-;
(b) "application" means an application made to a Tribunal under section 19- ;
(c) "appointed day", in relation to a Tribunal or an Appellate Tribunal, means the date on which such Tribunal is established under sub-section (1) of section 3- or, as the case may be, sub-section (1) of section 8- ;
(d) "bank" means-
(i) a banking company;
(ii) a corresponding new bank;
(iii) State Bank of India;
(iv) a subsidiary bank; or
(v) a Regional Rural Bank;
(e) "banking company" shall have the meaning assigned to it in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)- ;
2[ "(ea) "Chairperson" means a Chairperson of an Appellate Tribunal appointed under Sec. 9;"
(f) "corresponding new bank" shall have the meaning assigned to it in clause (da) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)- ;
3[ "(g) "debt" means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the banks 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;"
(h) "financial institution" means- ( i) a public financial institution within the meaning of section 4A of the Companies Act, 1956 (1 of 1956)- ; (ii) such other institution as the Central Government may, having regard to its business activity and the area of its operation in India, by notification, specify;
(i) "notification" means a notification published in the Official Gazette;
(j) "prescribed" means prescribed by rules made under this Act;
2 "(ja) "Presiding Officer" means the Presiding Officer of the Debts Recovery Tribunal appointed under sub-sec. (1) of Sec. 4;"
(k) "Recovery Officer" means a Recovery Officer appointed by the Central Government for each Tribunal under sub-section (7) of section 7- ;
(l) "Regional Rural Bank" means a Regional Rural Bank established under section 3 of the Regional Rural Banks Act, 1976 (21 of 1976)- ;
(m) "State Bank of India" means the State Bank of India constituted under section 3 of the State Bank of India Act, 1955 (23 of 1955)- ;
(n) "subsidiary bank" shall have the meaning assigned to it in clause (k) of section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959)- ;
(o) "Tribunal" means the Tribunal established under sub-section (1) of section 3- .
CHAPTER 02: ESTABLISHMENT OF TRIBUNAL AND APPELLATE TRIBUNAL
SECTION 03: ESTABLISHMENT OF TRIBUNAL
(1) The Central Government shall, by notification, establish one or more Tribunals, to be known as the Debts Recovery Tribunal, to exercise the jurisdiction, powers and authority conferred on such Tribunal by or under this Act.
(2) The Central Government shall also specify, in the notification referred to in sub-section (1), the areas within which the Tribunal may exercise jurisdiction for entertaining and deciding the applications filed before it.
SECTION 04: COMPOSITION OF TRIBUNAL
(1) A Tribunal shall consist of one person only (hereinafter referred to as the Presiding Officer) to be appointed, by notification, by the Central Government.
(2) Notwithstanding anything contained in sub-section (1), the Central Government may authorise the Presiding Officer of one Tribunal to discharge also the functions of the residing Officer of another Tribunal.
SECTION 05: QUALIFICATIONS FOR APPOINTMENT AS PRESIDING OFFICER
A person shall not be qualified for appointment as the Presiding Officer of a Tribunal unless he is, or has been, or is qualified to be, a District Judge.
SECTION 06: TERM OF OFFICE
The Presiding Officer of a Tribunal shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of 1 [sixty-two years], whichever is earlier.
SECTION 07: STAFF OF TRIBUNAL
(1) The Central Government shall provide the Tribunal 4 "with one or more Recovery Officers" and such other officers and employees as that Government may think fit.
(2) 5 "The Recovery Officers" and other officers and employees of a Tribunal shall discharge their functions under the general superintendence of the Presiding Officer.
(3) The salaries and allowances and other conditions of service of 5 "The Recovery Officers" and other officers and employees of a Tribunal shall be such as may be prescribed.
SECTION 08: ESTABLISHMENT OF APPELLATE TRIBUNAL
(1) The Central Government shall, by notification, establish one or more Appellate Tribunals, to be known as the Debts Recovery Appellate Tribunal, to exercise the jurisdiction, powers and authority conferred on such Tribunal by or under this Act.
(2) The Central Government shall also specify in the notification referred to in sub-section (1) the Tribunals in relation to which the Appellate Tribunal may exercise jurisdiction.
2 "(3) Notwithstanding anything contained in sub-sees. (1) and (2), the Central Government may authorise the Chairperson of one Appellate Tribunal to discharge also the functions of the Chairperson of other Appellate Tribunal."
SECTION 09: COMPOSITION OF APPELLATE TRIBUNAL
An Appellate Tribunal shall consist of one person only (hereinafter referred to as the Presiding Officer of the Appellate Tribunal) to be appointed, by notification, by the Central Government.
SECTION 10: QUALIFICATIONS FOR APPOINTMENT AS PRESIDING OFFICER OF THE APPELLATE TRIBUNAL
A person shall not be qualified for appointment as the Presiding Officer of the Appellate Tribunal unless he-
(a) is, or has been, or is qualified to be, a Judge of a High Court; or
(b) has been a member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years; or
(c) has held office as the Presiding Officer of a Tribunal for at least three years.
SECTION 11: TERMS OF OFFICE
The Presiding Officer of an Appellate Tribunal shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of 6 [sixty-five years] whichever is earlier.
SECTION 12: STAFF OF THE APPELLATE TRIBUNAL
The provisions of section 7 - (except those relating to Recovery Officer) shall, so far as may be, apply to an Appellate Tribunal as they apply to a Tribunal and accordingly references in that section to "Tribunal" shall be construed as references to "Appellate Tribunal" and references to "Recovery Officer" shall be deemed to have been omitted.
SECTION 13: SALARY AND ALLOWANCES AND OTHER TERMS AND CONDITIONS OF SERVICE OF PRESIDING OFFICERS
The salary and allowances payable to, and the other terms and conditions of service (including pension, gratuity and other retirement benefits) of, the Presiding Officer of a Tribunal or an Appellate Tribunal shall be such as may be prescribed: Provided that neither the salary and allowances nor the other terms and conditions of service of 7 "the Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal shall be varied to his" disadvantage after appointment.
SECTION 14: FILLING UP OF VACANCIES
If, for any reason other than temporary absence, any vacancy occurs in the office of the Presiding Officer of a Tribunal or an Appellate Tribunal, then the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Tribunal or the Appellate Tribunal from the stage at which the vacancy is filled.
SECTION 15: RESIGNATION AND REMOVAL
(1) The Presiding Officer of a Tribunal or an Appellate Tribunal may, by notice in writing under his hand addressed to the Central Government, resign his office: Provided that 8 "the Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal" shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.
(2) The Presiding Officer of a Tribunal or an Appellate Tribunal shall not be removed from his office except by an order made by the Central Government on the ground of proved misbehaviour or incapacity after inquiry,-
(a) in the case of the Presiding Officer of a Tribunal, made by a Judge of a High Court;
(b) in the case of the Presiding Officer of an Appellate Tribunal, made by a Judge of the Supreme Court, in which 9 "the Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal" has been informed of the charges against him and given a reasonable opportunity of being heard in respect of these charges.
(3) The Central Government may, by rules, regulate the procedure for the investigation of
misbehavior or incapacity of 10 "the Presiding Officer of a Tribunal or the Chairperson of an Appellate Tribunal".
SECTION 16: ORDERS CONSTITUTING TRIBUNAL OR AN APPELLATE TRIBUNAL TO BE FINAL AND NOT TO INVALIDATE ITS PROCEEDINGS
No order of the Central Government appointing any person as the Presiding Officer of a Tribunal or an Appellate Tribunal shall be called in question in any manner, and no act or proceeding before a Tribunal or an Appellate Tribunal shall be called in question in any manner on the ground merely of any defect in the constitution of a Tribunal or an Appellate Tribunal.
CHAPTER 03: JURISDICTION, POWERS AND AUTHORITY OF TRIBUNALS
SECTION 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.
SECTION 17A: POWER OF CHAIRPERSON OF APPELLATE TRIBUNAL
11[(1) The Chairperson of an Appellate Tribunal shall exercise general power of superintendence and control over the Tribunals under his jurisdiction including the power of appraising the work and recording the annual confidential reports of Presiding Officers.
(2) The Chairperson of an Appellate Tribunal having jurisdiction over the Tribunals may, on the application of any of the parties or on his own motion after notice to the parties, and after hearing them, transfer any case from one Tribunal for disposal to any other Tribunal."
SECTION 18: BAR OF JURISDICTION
On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under articles 226 and 227 of the Constitution) in relation to the matters specified in section 17 -
CHAPTER 04: PROCEDURE OF TRIBUNALS
SECTION 19: APPLICATION TO THE TRIBUNAL
12[(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 the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for 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, or personally works for gain; or (c) the cause of action, wholly or in part, 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 sub-sec. (1) and against the same person another bank or financial institution also has a 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-sec. (1) or sub-sec. (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-sec. (1) of Sec. 31.
(4) On receipt of the application under sub-sec. (1) or sub-sec. (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 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-sec.(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 defendants 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-sec, (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 counterclaim of the defendant within such period as may be fixed by the Tribunal.
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