Answer:  In year 2016, major changes in the powers of Debts Recovery Tribunals about passing interim orders, were introduced by an Amendment Act. A very important change was the omission of Section 19(12) of RDB Act, 1993. Before its omission, Section 19(12) read as follows : 

19(12)  “The Tribunal may make an interim order (whether by way of injunction or stay or attachment) against the defendant to debar him from transferring, alienating or otherwise dealing with, or disposing or any property and assets belonging to him without the prior permission of the Tribunal” 

After the omission of Section 19(12) of RDB Act, 1993, Debts Recovery Tribunals do not have general power of passing interim orders. However, by the amendment of Sub-Sections 4, 4A and 5 of Section 19 of RDB Act, 1993, provisions have been introduced for issue of summons with automatic injunction orders. Sub-Section 13 of Section 19 of RDB Act, 1993 contains provision regarding attachment of property. Sub-Section 18 of Section 19 contains provisions regarding receiver and commissioner.  

Answer:  The Debts Recovery Tribunals have to issue summons to the defendants with the following directions to the defendants –

to show cause within thirty days of the service of summons as to why relief prayed for should not be granted;

direct the defendant to disclose particulars of properties or assets other than secured assets and unsecured assets, the details of which have been mentioned in the recovery application filed by banks and financial institution. 

to restrain the defendants from dealing with or disposing of secured assets and unsecured assets, the details of which have been mentioned in the recovery application filed by banks and financial institution.  

(See Section 19(4) of RDB Act, 1993)

Answer: The defendant, on service of summons, shall not transfer by way of sale, lease or otherwise except in the ordinary course of his business any of the assets over which security interest is created and other unsecured assets, the details of which have been mentioned in the recovery application filed by banks and financial institution, without the prior approval of the Tribunal 

(See Section 19(4A) of RDB Act, 1993)

Answer: Section 19(4A) of RDB Act, 1993 deals with injunction order only as regards the assets over which security interest is created and other unsecured assets, the details of which have been mentioned in the recovery application filed by banks and financial institution. However, Section 19(5) (ii) of RDB Act, 1993 provides that where the defendant makes a disclosure of any property or asset pursuant to orders passed by the Tribunal, the provisions of Section 19(4A) of RDB Act, 1993 shall apply to such property or asset. 

(See Section 19(5)(ii) of RDB Act, 1993)

Answer: If the defendants do not comply with the order passed by the  Debts Recovery Tribunal directing the defendants to disclose particulars of their properties and assets, the Presiding Officer of Debts Recovery Tribunal may, by an order, direct that the person or officer who is in default, be detained in civil prison for a term not exceeding three months unless in the meantime, the Presiding Officer directs his release. 

(See Section 19(5)(iii) of RDB Act, 1993)

Answer: Debts Recovery Tribunals have the power to pass an order for attachment of the properties of the defendants, but subject to various pre-conditions, as detailed below:  

If on an application or otherwise, Debts Recovery Tribunal is satisfied that the defendant, with intent to obstruct or delay or frustrate the execution of any order for the recovery of debt that may be passed against him,-

is about to dispose of the whole or any part of his property; or

is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Tribunal; or

is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest,

the Debts Recovery Tribunal may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Tribunal, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the certificate for the recovery of the debt, or to appear and show cause why he should not furnish security.

Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Tribunal, the Tribunal may order the attachment of the whole or such portion of the properties claimed by the applicant as the properties secured in his favour or otherwise owned by the defendant as appears sufficient to satisfy any certificate for the recovery of debt.

(See Section 19(13A) of RDB Act, 1993)

Answer: If an order of attachment is made without complying with the pre-conditions mentioned in Section 19(13) of RDB Act, 1993, such attachment shall be void. 

(See Section 19(16) of RDB Act, 1993)

Answer: Debts Recovery Tribunals have the power to appoint a receiver of any property. Where it appears to the Tribunal to be just and convenient, the Tribunal may, by order-

appoint a receiver of any property, whether before or after grant of certificate for recovery of debt;

remove any person from the possession or custody of the property;

commit the same to the possession, custody or management of the receiver;

confer upon the receiver all such powers, as to bringing and defending suits in the courts or filing and defending applications before the Tribunal and for the realisation, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Tribunal thinks fit.

(See Section 19(18) of RDB Act, 1993)

Answer: Debts Recovery Tribunals have the power to appoint a commissioner for preparation of an inventory of the properties of the defendants or for the sale thereof, if it appears to the Tribunal to be just and convenient.

(See Section 19(18)(e) of RDB Act, 1993)