LEGAL AND REGULATORY ASPECTS OF BANKING (LRAB) 

Unit - 31: Procedure of Tribunals 

​Legal & Regulatory Aspects of Banking - 

Unit - 31 : Procedure of Tribunals 
# Bank has to file application for recovery of loan taking into consideration jurisdiction and cause of action.

# Application has to be with fees, documents and evidence. For transfer from civil Court to Tribunal no fresh fee is required ​as transfer is due to  effect of law. 

# Tribunal can pass interim orders to prevent defendant from transferring his property.

# The Debt Recovery Tribunal is Fully empowered to pass comprehensive orders like in Civil Courts . 

# However for preferring appeal, 75% of the amount determined by the tribunal is required to be deposited . 

# The limitation Act applies for the DRT cases which means bank has to file the recovery application within three years of the cause of the action.

A person who has to file appeal before the Appellate Tribunal has to pay 75% of the debt ordered by the DRT. Bank has to file application for recovery of loan taking into consideration jurisdiction and cause of action.

DRT Act and Description
19(1) Application for recovery to Tribunal within local limits of whose jurisdiction
19(2) Recovery of the debt is from same person, any other bank also has to recover debt,
they may join.
19(3) No need to pay the fee, if Case is transferred from Civil Court to Tribunal
19(4) On receipt of application under sub-section(1) or (2) the Tribunal has to issue summons to the defendant requiring him to show cause within 30 days of the service of summons as to why the relief prayed for should not be granted
19(5) The Defendant has to present written statement at or before first hearing or within such time as the Tribunal may permit.
19(6) defendant has to claims any amount on first hearing from the applicant and to have
setoff against the applicant’s demand with ascertained sum of money
19(7) When written statement contains claim and set off, the written statement has the same effect as a plaint in a cross-suit.
19(8) Counter claim
19(9) Counter claim has the same effect as a plaint in cross-suit so as to enable the Tribunal to pass a final order in respect of both the original and Counter Claim.
19(10) The applicant is at liberty to file a written statement to the counter claim of the
defendant within such period may be fixed by the Tribunal
19(11) Counter Claim to be disposed as an Independent action.
19(12) The Tribunal may pass interim order against the defendant to debar him from transferring, alienating, or otherwise dealing with or disposing of any property/asset
without the permission of the Tribunal
19(13 A and B) Tribunal Dispose of the property, Damage to the property, remove/whole any part of the property
19(14) When the applicant wants that the properties of the defendant should be attached.
19(15) The Tribunal can pass conditional attachment order.
19(16) If any attachment order is passed without complying the requirements of Subsection (13), then such order is void.
19(17) The Tribunal has power to pass interim orders, attachment orders etc. If there is any
breach of the orders, the Tribunal may order that the properties of the person guilty
of the breach of the order be attached and person be detained in civil prison for a term not exceeding 3 months.
19(18) appoint a receiver of any property
- remove any person from the custody/possession of property
- confer powers to receiver.
- appoint a commissioner for preparation of an inventory of the property of the defendant or for sale thereof
19(19) If the recovery certificate is granted against a company, the Tribunal may order that
the sale proceeds of such company be distributed among the Secured Creditors as provided in Section 529A of the Companies Act.
19(20) Pass interim or final order for payment of amount including interest thereon
19(21) The tribunal is required to send copy of every order by it to the applicant and the defendant.
19(22) Issue a Certificate of Recovery to the recovery officer for recovery of the amount of
debts.
19(23) Sending Certificate of Recovery to other tribunals if it is local limits of other jurisdiction
19(24) Application received by the tribunal for recovery of debt shall be disposed of finally
within 180 days
19(25) The tribunal may make such orders and give such directions as may be necessary
Appeal to the Appellate Tribunal
1. Any person aggrieved by the order passed by DRT, may appeal to an Appellate Tribunal.
2. The appeal is required to be filed within 45 days from the date on which copy of the order is received. At the time of filing appeal Section 21 of the DRT Act 75% of the amount shown as due in the order required to be deposited by the appellant.
3. Appellate Tribunal should disposed off the appeal within 6 months.

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