Union Govt’s Duty To Ensure Fully Functional DRTs On Unhindered Basis, Non-Availability Renders Litigants Remediless: Delhi High Court

The Delhi High Court has observed that it is the duty of the Union Ministry of Finance to ensure that the Debt Recovery Tribunals (DRTs) in the national capital are fully functional on an unhindered basis as their non-availability renders litigants remediless.

A division bench of Justice Najmi Waziri and Justice Sudhir Kumar Jain observed that pro-active measures are expected in such matters especially when they involve the nation’s economy and assets of banks, financial institutions, private entities and citizens.

The court was hearing a plea moved by Pegasus Assets Reconstruction Private Limited seeking adjudication of its case pending before a DRT since last year in a time bound manner. However, two of the three DRTs in Delhi at present are non-functional. Accordingly, the company sought appointment of the Presiding Officer in the tribunal.

The bench took note of its order passed in another case titled Indu Kapoor v. AU Small Finace Bank & Anr. dealing with the similar issue of “frequent vacancy” arising in the DRTs.

It observed that the issue needs to be addressed by the Ministry of Finance on an urgent basis so as to stem the frequent vacancies by eliminating the cause of remuneration disparity.

“It is well-nigh impossible for three DRTs to dispose off cases within six months’ time which is envisaged under section 19(24) of Recovery of Debts and Bankruptcy Act, 1993 and three months’ time which is envisaged under section 17(5) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,” the court observed.

It further said that the two statutes were enacted to facilitate and expedite the resolution of disputes and recovery of dues towards the banks and financial institutions.

“Once statutory jurisdiction has been vested in the DRTs, there is an expectation that the DRTs would be fully and regularly functional so as to achieve the statutory objectives. The non-availability of functional DRTs renders litigants remediless,” the court added.

Accordingly, the court directed the Ministry of Finance to look into the matter and file an affidavit before April 19, the next date of hearing.

“The said affidavit shall be filed with prior approval of the Secretary of the Department of Financial Services,” the court ordered.

Title: PEGASUS ASSETS RECONSTRUCTION PVT LTD v. SULABH KAPUR AND ORS

Citation: 2023 LiveLaw (Del) 309

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