Better To Scrap Law, Abolish Tribunals If Govt Can't Appoint POs In DRTs, DRATs: Allahabad HC Seeks Centre's Reply

In a strongly worded order, the Allahabad High Court today lashed out at Central Government for its failure to make appointments to the vacant posts of Presiding Officer/Chairman of Debt Recovery Tribunals and Debt Recovery Appellate Tribunals.

The Bench of Justice Dinesh Kumar Singh even remarked that if the Government is unable to appoint competent persons as Presiding Officers/Chairmen in D.R.Ts./D.R.A.Ts., then it is better that enactment is scrapped and the tribunals are abolished.

Essentially, the Court was hearing two pleas filed by Canara Bank/Assets Recovery Mgmt against the orders two orders passed by Debt Recovery Tribunal, Lucknow.

The Petitioner had approached the Court directly in writ jurisdiction as the post of Presiding Officer/Chairman of Debt Recovery Appellate Tribunal is vacant for more than three months.

In view of this, the Court, at the outset, noted that the Recovery of Debts and Bankruptcy Act, 1993 provides for the establishment of Debt Recovery Tribunal/Debt Recovery Appellate Tribunal for the purpose of adjudicating the disputes for recovery etc., of the loan advanced by the financial institutions.

Further, the Court also added that for the said purposes, the tribunals and appellate tribunals have been set up and adjudicatory mechanisms have been provided under the Act and rules framed thereunder.

Against this backdrop, stating that vacant posts in tribunals increase the burden on the High Court unnecessarily, the Court observed thus:

"It is unfortunate that after creating mechanism and adjudicatory forums, for several months and in some cases years, the posts of Presiding Officer/Chairman are kept vacant and the litigants have to come to this Court. If the Government is unable to appoint competent persons as Presiding Officers/Chairmen in D.R.Ts./D.R.A.Ts., then it is better that this enactment is scrapped and the tribunals are abolished."

Observing thus, the Court sought a response from the Secretary, Ministry of Finance, Government of India that what is preventing the Government to appoint Presiding Officers/Chairmen in D.R.Ts./D.R.A.Ts., which are vacant for several months in the country.

The Court has called for an appropriate response within a period of 2 weeks by the Secretary, Ministry of Finance, Government of India. Till the next date of listing of the petitions, respondents have been directed to maintain the status quo in respect of the properties in question. 

In related news, the Supreme Court in September 2021 expressed its disapproval of the Centre's practice of extending the jurisdiction of Debts Recovery Tribunal of one state to another state due to the unfilled vacancy of Presiding Officer.

A special bench comprising the Chief Justice of India NV Ramana, Justice DY Chandhrachud and Justice L Nageswara Rao was hearing a petition filed by the State Bar Council of MP challenging a notification issued by the Central Government attaching the jurisdiction of DRT Jabalpur (Madhya Pradesh) to DRT Lucknow(Uttar Pradesh) instead of filling the vacancy of Presiding Officer at DRT Jabalpur.

Further, in December 2021, taking note of the lack of operation of the Debts Recovery Tribunals (DRTs) and the Debt Recovery Appellate Tribunals(DRATs) in many states due to non-filling of vacancies, the Supreme Court passed an order requesting the High Courts to entertain applications under the SARFAESI under the writ jurisdiction as an interim measure.

"To resolve the problem for the time being, pending further orders, we request the High Courts to entertain the applications which are to be filed before DRT/DRAT", a bench comprising the Chief Justice of India NV Ramana, Justice DY Chandrachud and Justice L Nageswara Rao ordered.

Case title - Canara Bank/Assets Recovery Mgmt.Branch,Lko.Thru.Chief Manager Ajeet Kumar Srivastava v. Debts Recovery Tribunal Lucknow And 2 Others and connected petition

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