A three judge bench of the Supreme Court, headed by the Chief Justice of India, S.A. Bobde, decided to hear the Kotak Mahindra Bank’s plea which essentially seeks different ways from the Centre to set up a structure and determine the manner and procedure to hear appeals urgently in all the debt recovery tribunals (DRTs) and the debt recovery appellate tribunals (DRATs). They proposed the method of video conferencing due to the Covid-19 lockdown, as well as after the lockdown is lifted.
Since the efficient functioning of DRTs and DRATs is imperative to the banking sector as well as for financial and economic stability, the Bank took directions to make sure all types of cases can be listed and disposed of at the earliest. The Bank in its petition talked about the urgency of these matters, especially in the time of Covid-19, because this move will help in the stability of the banking and financial sector leading to the amelioration of the economy.
The credit and lending facilities of the bank is one of the most essential ones that enable economic growth and development. It moreover argued that the DRTs and DRATs are significant in protecting the fiscal strength of these institutions and their capabilities to perform other important functions. Thus, if these institutions do not function smoothly, it could affect the borrowing and lending of the economy which would lead to damage in the whole economic structure of the country.
Kotak also stated that any kind of delay in recovery is an addition to the liquidity issues, further, reducing the lending capacity of the bank. The next hearing in the case at hand is yet to be scheduled by the Apex Court, after it agreed to hear Kotak’s plea on Friday.