Answer: Banks and Financial Institutions can file Recovery Applications in Debts Recovery Tribunals under RDB Act, 1993.

Answer: Bank means – 

A Banking company which transacts the business of banking in India, as defined under Clause © of Section 5 of the Banking Regulation Act, 1949  

A corresponding new Bank constituted under Section 3 of the Banking Companies ( Acquisition and Transfer of Undertakings ) Act 1970 or under Section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980

State Bank of India 

A subsidiary Bank 

A regional rural Bank.

(See Section 2(d) of RDB Act, 1993)

Answer: Financial Institutions means :-

A Public Financial Institution within the meaning of Section 4A of the companies Act, 1956, that is, 

Industrial Credit And Investment Corporation   of India Limited 

Industrial Finance Corporation of India 

Industrial Development Bank of India

 Unit Trust of India 

Any other Institution specified by the Central Government by notification in the Official Gazette 

 

Securitisation Company or Reconstruction Company

A Debenture Trustee

Such other institution as the Central Government may specify by notification  

(See Section 2(h) of RDB Act, 1993)

Answer: Supreme Court of India in the case of Greater Bombay Co-operative Bank Limited Versus United Yarn Textile Pvt. Ltd AIR 2007 Supreme Court 1584 held that Co-operative Banks doing business of Banking are not Banking Companies.

Answer: Under Section 17(1) of RDB Act, 1993 , the Debts Recovery Tribunals have the jurisdiction, powers and authority to entertain and decide applications from bank and financial institution for recovery of debts due to such banks and financial institutions. According to Section 18 of RDB Act, 1993 no Court or other authority shall have or be entitled to exercise any jurisdiction power or authority in relation to recovery applications filed by banks and financial institutions. However, Section 18 of RDB Act, 1993 does not affect the jurisdiction, power and authority of Supreme Court of India and of the High Courts under Articles 226 and 227 of the Constitution of India.

Answer: A  bank or a financial institution has to file the recovery application under Section 19 of the RDB Act, 1993 in the Debts Recovery Tribunal within the local limits of whose jurisdiction – 

the branch or any other office of the bank or financial institution is maintaining an account in which debt claimed is outstanding, for the time being; or

(aa)  the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or

(c) the cause of action, wholly or in part, arises:

(See Section 19(1) of RDB Act, 1993)

Answer: A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant.

Answer: Banks and Financial Institutions in a recovery application filed in Debts Recovery Tribunals under Section 19 of the RDB Act, 1993 should mention – 

Particulars of the debts 

Whether the debt is secured or unsecured 

If the debt is secured debt, the estimated value of the securities 

If the estimated value of the securities is not sufficient to satisfy the debt claimed in the recovery application, particulars of any other properties or assets owned by any of the defendants should be stated along with their estimated value. 

If the estimated value of such other asset is not sufficient to recover the debts, and order should be sought directing the defendants to disclose to the Debts Recovery Tribunal particulars of other properties or assets owned by the defendants. 

(See Section 19(3A) of RDB Act, 1993)