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DRT, DRAT & SARFAESI

ACT(2002)
DEBT RECOVERY TRIBUNALS (DRT),

DEBT RECOVERY APPELLATE TRIBUNALS(DRAT)

THE SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT(SARFAESI ACT 2002)
WHAT ARE TRIBUNAL COURTS?

Tribunal Courts Have Been Established Under (The Tribunals,Courts and Enforcement
Act 2007) in UK.
Tribunalization in India is done in order to Implement Administrative Law in India.
Tribunal is:- (1) A Body of Administrative Character. (2) Power With Judicial Powers to
Adjudicate on Question of Law or Fact that Effects Rights of Citizens. (3) Has Judicial or
Quasi Judicial Functions. (4) Work in a Judicial Manner.
Since Tribunals Follow the Rule of Natural Justice, They do Not follow The Indian Evidence
Act, 1872 That is Commonly Followed in Courts.
NECESSITY

The Necessity of Establishing Tribunal was Recommended by THE SWARNA


COMMITTEE Appointed by The Parliament.
DRT & DRAT

The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunal (DRATs)
were established under the Recovery of Debts Due to Banks and Financial
Institutions Act (RDDBFI Act), 1993 with the specific objective of providing expeditious
adjudication and recovery of debts due to Banks and Financial Institution. Presently 38
DRT's and 5 DRAT's are functioning in India.
DRT & DRAT

The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunal (DRATs)
were established under the Recovery of Debts Due to Banks and Financial
Institutions Act (RDDBFI Act), 1993 with the specific objective of providing expeditious
adjudication and recovery of debts due to Banks and Financial Institution. Presently 38
DRT's and 5 DRAT's are functioning in India.
HISTORY OF DRAT

Mumbai DRAT :- 1994


Chennai DRAT :- 2000
Delhi DRAT :- 2000
Kolkata DRAT :- 2000
Allahabad DRAT :- 2005
TOTAL DRAT :- 5
HISTORY OF DRTS

Ahmedabad DRT- 1 1994


Banglore DRT 1994
Delhi DRT- 1 1994
Jaipur DRT 1994
Kolkata DRT 1 1994
Chennai DRT 1 1996
Guwahati DRT 1997
Patna DRT 1997
CONTD.

Ernakulum DRT 1999


Hyderabad DRT 1999
Mumbai DRT- 1 1999
Allahabad DRT 2000
Aurangabad DRT 2000
Chandigarh DRT 2000
Cuttak DRT 2000
Delhi DRT 2 2000
CONTD.

Mumbai DRT 2 2000


Mumbai DRT 3 2000
Nagpur DRT 2000
Chennai DRT 2001
Kolkata DRT 2001
Pune DRT 2001
Coimbatore DRT 2002
Delhi DRT 3 2002
CONTD.

Kolkata DRT 2002


Ranchi DRT 2002
Vishakapatnam DRT 2002
Chandigarh DRT 2 2006
Ahmedabad DRT 2 2007
Chennai DRT 3 2007
Madurai DRT 2007
Ernakulum DRT 2 2016
CONTD.

Bangalore DRT 2 2017


Chandigarh DRT 3 2017
Dehradun DRT 2017
Hyderabad DRT 2 2017
TOTAL DRTs 38
WHAT IS DRT?

DRTs Have Been Established by The Govt. of India Under an Act of Parliament (Act 51 of
1993) for Expeditious Adjudication and Recovery of Debts Due to Banks and Financial
Institution.
WHAT IS DRAT

Debt Recovery Appellate Tribunal is The Appellate Authority for Appeals Filed Against the
Proceedings Initiated by Secured Creditors Under Sub-Section (4) of Section 13 of the
Securitization and Reconstruction of Financial Assets and Enforcements of Security
Interest Act 2002
SARFAESI ACT 2002

Under this act secured creditors Have Many Right for Enforcement of Security Interest u/s 13 of
SARFAESI ACT, 2002
If Borrower of any Financial Assistance Makes any Default in Repayment of Loan or Any Installment and
his Account is Classified as NON PERFORMING ASSET by secured creditor, Then Security
Creditors may Require Before Expiry of Period of Limitation by Written Notice to the Borrower for
Repayment of due in Within 60 days by Clearly Stating Amount due and Intention of Enforcement.
Where He does not Discharge Dues in full within 60 days, THEN WITHOUT INTERVENTION
OF ANY COURT OR TRIBUNAL Secured Creditors may take Possession in Secured Assets, or
Takeover Management of Business of Borrower or Appoint Manager for Secured Asset or Without Taking
any of These Action may Also Proceed Against Guarantor or Sell the Pledged Asset if Any.
BRIEF OF SARFAESI ACT, 2002

The Law Does Not Apply to Unsecured Loans.


Loans Below Rs. 100,000 or Where Remaining Debt is Below 20% of The Original Principal.
This Law Allowed the Creation of Asset Reconstruction Companies ( ARC)
Allowed Bank to Sell There Non-Performing Asset to ARCs
Banks Are Allowed to Take Possession of the Collateral Property
Sell it Without the Permission of the Courts.
AMENDMENTS

This Act Was Amended by Enforcement of Security Interest an Recovery of


Debts Law and Miscellaneous Provision (Amendment) Bill, 2016.
Passed by Lok Sabha on 2 August 2016.
Act Passed by Rajya Sabha by Voice Vote on August 10, 2016
NOTABLE VERDICTS

Mardia Chemicals Ltd. Vs. ICICI BANK


The Supreme Court of India Declared SARFAESI ACT to be Constitutionally Valid.
The Court Said that a Borrower may Appeal Against the Lender in Debt Recovery Tribunal.
Without Having to Deposit 75% of the Amount of the Debt.
If the Tribunal Does Not Stay the Order, The Lender may Sell The Assets.
After This Law, 0n 27th November 2002, ICICI Bank took Possession of Mardia Chemical Plant in
Valva, Ahmedabad District, Gujarat.
ICICI Bank was Owned Rs. 300 Crore.
In all it Owned Rs. 1450 Crore. to 20 Lenders.