Govt plans more powers to DRTs

Govt plans more powers to DRTs
ENS ECONOMIC BUREAU

NEW DELHI, JAN 12: The Union government has decided to give more teeth to the debt recovery tribunals (DRT) by amending the Recovery of Debt Due to Banks and Financial Institutions Act 1993 (DRT Act) through an ordinance.

Briefing newspersons about the meeting of the Union cabinet here on Wednesday, Pramod Mahajan, Minister for Information and Technology and Parliamentary Affairs, said that the amendments were being enacted to honour the wishes of the Supreme Court. He added that the President would soon be promulgating an ordinance.

The minister said that the government was proposing, "to amend Section 7 of the DRT Act to empower the tribunals to pass orders for attachment of property before judgement or for appointment of Commissioner or receiver for preparation of inventory or possession of property or the sale thereof." The amendments also sought to empower the tribunals to distribute the sale proceeds among the secured creditors on the basis of priorities inter se and in accordance with the provisions of the Section 529A and other provisions of the Companies Act. Surplus amounts, if any, would be paid to the company, he added.

Also, the minister added, tribunals were being empowered to transfer the recovery certificate from one tribunal to another to facilitate easy recovery as borrower might have their assets outside the jurisdiction of the tribunal.

Mahajan said that a new Section would be inserted in the DRT Act to empower presiding officer (PO) of the Debt Recovery Appellate Tribunal (DRAT) to exercise jurisdiction over tribunal in respect of transfer cases from one tribunal to another.

The PO of DART would also appraise the work of the presiding officer of tribunals, he said. He further said that a new sub-Section (C) in Section 31 (2) of the DRT Act would be incorporated, "to give power to tribunals to issue certificate straight away."