(Also see Frequently Asked Questions(FAQ) about RDB Act and Rules)
Preamble — Object of RDB Act 1993
An Act to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions, insolvency resolution and bankruptcy of individuals and partnership firms and for matters connected therewith or incidental thereto.
Original name of the Act
Recovery of Debts Due to Banks and Financial Institution Act 1993
New name of the Act after amendment in 2016
Recovery of Debts and Bankruptcy Act 1993
Bank — Section 2(d) of RDB Act 1993
Section 2(d) Bank means-
(i) a banking company;
(ii) a corresponding new bank;
(iii) State Bank of India;
(iv) a subsidiary bank; or
(v) a Regional Rural Bank;
(vi) a multi-State co-operative bank;
Debt — Section 2(g) of RDB Act 1993
Section 2(g) Debt means any liability (inclusive of interest) which is claimed as due from any person for a pooled investment vehicle as defined in clause (da) of section 2 of the Securities Contracts (Regulation) Act, 1956, by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application and includes any liability towards debt securities which remains unpaid in full or part after notice of ninety days served upon the borrower by the debenture trustee or any other authority in whose favour security interest is created for the benefit of holders of debt securities.
Financial Institution — Section 2(h) of RDB Act 1993
Section 2(h) Financial Institution means-
(i) a public financial institution within the meaning of section 4A of the Companies Act, 1956 (1 of 1956);
7(ia) the securitisation company or reconstruction company which has obtained a certificate of registration under sub-section (4) of section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
(ib) a debenture trustee registered with the Board and appointed for secured debt securities;
(ii) such other institution as the Central Government may, having regard to its business activity and the area of its operation in India, by notification, specify;
Property — Section 2(jb) of RDB Act 1993
Section 2(jb) Property means
(a) immovable property;
(b) movable property:
(c) any debt or any right to receive payment of money, whether secured or unsecured;
(d) receivables, whether existing or future;
(e) intangible assets, being know-how, patent, copyright, trade mark, licence, franchise or any other business or commercial right of similar nature, as may be prescribed by the Central Government in consultation with Reserve Bank;
Secured Creditor — Section 2(la) of RDB Act 1993
Section 2(la) secured creditor shall have the meaning as assigned to it in clause (zd) of sub-section (1) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);
Security Interest— Section 2(lb) of RDB Act 1993
Section 2(lb) Security Interest means mortgage, charge, hypothecation, assignment or any other right, title or interest of any kind whatsoever upon property, created in favour of any bank or financial institution and includes-
(a) such right, title or interest upon tangible asset, retained by the bank or financial institution as owner of the property, given on hire or financial lease or conditional sale which secures the obligation to pay any unpaid portion of the purchase price of the asset or an obligation incurred or any credit provided to enable the borrower to acquire the tangible asset; or
(b) such right, title or interest in any intangible asset or licence of any intangible asset, which secures the obligation to pay any unpaid portion of the purchase price of the intangible asset or the obligation incurred or any credit extended to enable the borrower to acquire the intangible asset or licence of intangible asset;
Jurisdiction , powers and authority of Debts Recovery Tribunals —- Sections 17(1) and 17(1A) of RDB Act 1993
Section 17(1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions.
Section 17(1A) Without prejudice to sub-section (1),-
(a) the Tribunal shall exercise, on and from the date to be appointed by the Central Government, the jurisdiction, powers and authority to entertain and decide applications under Part III of Insolvency and Bankruptcy Code, 2016.
(b) the Tribunal shall have circuit sittings in all district headquarters.
Jurisdiction , powers and authority of Debts Recovery Appellate Tribunals
—- Sections 17(2) and 17(2A) of RDB Act 1993
Section 17(2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act.
Section 17(2A) Without prejudice to sub-section (2), the Appellate Tribunal shall exercise, on and from the date to be appointed by the Central Government, the jurisdiction, powers and authority to entertain appeals against the order made by the Adjudicating Authority under Part III of the Insolvency and Bankruptcy Code, 2016.
Power of Chairperson of DRAT to exercise general power of superintendence and control of DRTs — Section 17A(1) of RDB Act 1993
Section 17A(1) The Chairperson of an Appellate Tribunal shall exercise general power of superintendence and control over the Tribunals under his jurisdiction including the power of appraising the work and recording the annual confidential reports of Presiding Officers.
No Court or other authority can exercise the powers of DRTs – Section 18 of RDB Act 1993
Section 18. Bar of jurisdiction
On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified in section 17:
PROVIDED that any proceedings in relation to the recovery of debts due to any multi-State co-operative bank pending before the date of commencement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 under the Multi-State Co-operative Societies Act, 2002 (39 of 2002) shall be continued and nothing contained in this section shall, after such commencement, apply to such proceedings.
The Recovery Application under Section 19 of the RDB Act 1993(Original Application) to be filed in which Debt Recovery Tribunals — Section 19(1) of RDB Act 1993
Section 19.(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction-
(a) 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:
Contents of Original Application — Section 19(3A) of RDB Act 1993
Section 19(3A) Every applicant in the application filed under sub-section (1) or sub-section (2) for recovery of debt, shall-
(a) state particulars of the debt secured by security interest over properties or assets belonging to any of the defendants and the estimated value of such securities;
(b) if the estimated value of securities is not sufficient to satisfy the debt claimed, state particulars of any other properties or assets owned by any of the defendants, if any; and
(c) if the estimated value of such other assets is not sufficient to recover the debt, seek an order directing the defendant to disclose to the Tribunal particulars of other properties or assets owned by the defendants.
Debts Recovery Tribunals shall issue Summons on filing of the original Application—- Section 19(4) of RDB Act 1993
Section 19(4) On receipt of application under sub-section (1) or sub-section (2), the Tribunal shall issue summons with following directions to the defendant-
(i) to show cause within thirty days of the service of summons as to why relief prayed for should not be granted;
(ii) direct the defendant to disclose particulars of properties or assets other than properties and assets specified by the applicant under clauses (a) and (b) of sub-section (3A); and
(iii) to restrain the defendant from dealing with or disposing of such assets and properties disclosed under clause (c) of sub-section (3A) pending the hearing and disposal of the application for attachment of properties.
Automatic injunction on service of Summons — Section 19(4A) of RDB Act 1993
Section 19(4A) Notwithstanding anything contained in section 65A of the Transfer of Property Act, 1882 (4 of 1882), 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 properties and assets specified or disclosed under sub-section (3A), without the prior approval of the Tribunal:
PROVIDED that the Tribunal shall not grant such approval without giving notice to the applicant bank or financial institution to show cause as to why approval prayed for should not be granted:
PROVIDED FURTHER that defendant shall be liable to account for the sale proceeds realised by sale of secured assets in the ordinary course of business and deposit such sale proceeds in the account maintained with the bank or financial institution holding security interest over such assets.
Written Statement to be filed by defendants in Original Application — Section 19(5)(i) of RDB Act 1993
Section 19(5)(i) The defendant shall within a period of thirty days from the date of service of summons, present a written statement of his defence including claim for set-off under sub-section (6) or a counter-claim under sub-section (8), if any, and such written statement shall be accompanied with original documents or true copies thereof with the leave of the Tribunal, relied on by the defendant in his defence:
PROVIDED that where the defendant fails to file the written statement within the said period of thirty days, the Presiding Officer may, in exceptional cases and in special circumstances to be recorded in writing, extend the said period by such further period not exceeding fifteen days to file the written statement of his defence;
Automatic injunction on the properties disclosed by defendants — Section 19(5)(ii) of RDB Act 1993
Section 19(5)(ii) Where the defendant makes a disclosure of any property or asset pursuant to orders passed by the Tribunal, the provisions of sub-section (4A) of this section shall apply to such property or asset;
Punishment for non –disclosure of personal properties — Section 19(5)(iii) of RDB Act 1993
Section 19(5)(iii) in case of non-compliance of any order made under clause (ii) of sub-section (4), the Presiding Officer 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:
PROVIDED that the Presiding Officer shall not pass an order under this clause without giving an opportunity of being heard to such person or officer.
Explanation: For the purpose of this section, the expression ‘officer who is in default’ shall mean such officer as defined in clause (60) of section 2 of the Companies Act, 2013 (18 of 2013).
Admission of the claim of the Secured Creditor either in full or in part by the defendants — Section 19(5B) of RDB Act 1993
Section 19(5B) Where a defendant makes an admission of the full or part of the amount of debt due to a bank or financial institution, the Tribunal shall order such defendant to pay the amount, to the extent of the admission within a period of thirty days from the date of such order failing which the Tribunal may issue a certificate in accordance with the provisions of sub-section (22) to the extent of the amount of debt due admitted by the defendant.
Set Off claimed by the defendants — Section 19(6) of RDB Act 1993
Section 19(6) Where the defendant claims to set-off against the applicant’s demand any ascertained sum of money legally recoverable by him from such applicant, the defendant may, at the first hearing of the application, but not afterwards unless permitted by the Tribunal, present a written statement containing the particulars of the debt sought to be set-off along with original documents and other evidence relied on in support of claim of set-off in relation to any ascertained sum of money, against the applicant.
Written Statement to have the same effect as plaint — Section 19(7) of RDB Act 1993
19(7) The written statement shall have the same effect as a plaint in a cross-suit so as to enable the Tribunal to pass a final order in respect both of the original claim and of the set-off.
Counter Claim by the defendants — Section 19(8) of RDB Act 1993
Section 19(8) A defendant in an application may, in addition to his right of pleading a set-off under sub-section (6), set up, by way of counter-claim against the claim of the applicant, any right or claim in respect of a cause of action accruing to the defendant against the applicant either before or after the filing of the application but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not.
Counter Claim to have the same effect as a cross-claim — Section 19(9) of RDB Act 1993
19(9) A counter-claim under sub-section (8) shall have the same effect as a cross-suit so as to enable the Tribunal to pass a final order on the same application, both on the original claim and on the counter- claim.
Pleadings to be supported by affidavits — Section 19(10A) of RDB
19(10-A) Every application under sub-section (3) or written statement of defendant under sub-section (5) or claim of set-off under sub-section (6) or a counter-claim under sub-section (8) by the defendant, or written statement by the applicant in reply to the counter-claim, under sub-section (10) or any other pleading whatsoever, shall be supported by an affidavit sworn in by the applicant or defendant verifying all the facts and pleadings, the statements pleading documents and other documentary evidence annexed to the application or written statement or reply to set-off or counter-claim, as the case may be:
Provided that if there is any evidence of witnesses to be led by any party, the affidavits of such witnesses shall be filed simultaneously by the party with the application or written statement or replies filed under sub-section (10-A).
Pleadings, which are not properly verified, cannot be relied on— Sections 19(10B) of RDB Act 1993
1910-B) If any of the facts or pleadings in the application or written statement are not verified in the manner provided under sub-section (10-A), a party to the proceedings shall not be allowed to rely on such facts or pleadings as evidence or any of the matters set out therein.
Attachment of the properties of the defendants — Sections 19(13) of RDB Act 1993
Section 19(13)(A) Where, at any stage of the proceedings, the Tribunal on an application made by the applicant along with particulars of property to be attached and estimated value thereof, or otherwise 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,
(i) is about to dispose of the whole or any part of his property; or
(ii)is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Tribunal; or
(iii) is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest,
the Tribunal may direct the defendant, within a time to be fixed, either to furnish security, in such sum as may be specified in the order, to produce and place at the by it 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 debt, or to appear and show cause why he should not furnish security.
Section 19(13)(B) 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.
Attachment without complying with the provisions of Section 13(13) shall be void— 19(16) of RDB Act 1993
19(16) If an order of attachment is made without complying with the provisions of sub-section (13), such attachment shall be void.
Debts Recovery Tribunals have the power to punish for contempt — Section 19(17) of RDB Act 1993
19(17) In the case of disobedience of an order made by the Tribunal under sub-sections (12), (13) and (18) or breach of any of the terms on which the order was made, the Tribunal may order the properties of the person guilty of such disobedience or breach to be attached and may also order such person to be detained in the civil prison for a term not exceeding three months, unless in the meantime the Tribunal directs his release.
Appointment of receiver / commissioner — Section 19(18) of RDB Act 1993
Section 19(18) Where it appears to the Tribunal to be just and convenient, the Tribunal may, by order,-
(a) appoint a receiver of any property, whether before or after grant of certificate for recovery of debt;
(b) remove any person from the possession or custody of the property;
(c) commit the same to the possession, custody or management of the receiver ;
(d) 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 realization, 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; and
(e) appoint a Commissioner for preparation of an inventory of the properties of the defendant or for the sale thereof.
Orders which may be passed by Debts Recovery Tribunal after hearing — Section 19(20) of RDB Act 1993
19(20) The Tribunal may, after giving the applicant and the defendant, an opportunity of being heard, in respect of all claims, set-off or counter-claim, if any, and interest on such claims, within thirty days from the date of conclusion of the hearings, pass interim or final order as it deems fit which may include order for payment of interest from the date on which payment of the amount is found due up to the date of realisation or actual payment.
Distribution of sale proceeds — Section 19(20AB) of RDB Act 1993
Section 19(20AB) Notwithstanding anything to the contrary contained in any law for the time being in force, the proceeds from sale of secured assets shall be distributed in the following orders of priority, namely:-
(i) the costs incurred for preservation and protection of secured assets, the costs of valuation, public notice for possession and auction and other expenses for sale of assets shall be paid in full;
(ii) debts owed to the bank or financial institution.
Explanation: For the purposes of this sub-section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), in cases where insolvency and bankruptcy proceedings are pending in respect of secured assets of the borrower, the distribution of proceeds from sale of secured assets shall be subject to the order of priority as provided in that Code.
Presiding Officer will issue Certificate of Recovery to the Recovery Officer— Section 19(22) of RDB Act 1993
Section 19(22) The Presiding Officer shall issue a certificate of recovery along with the final order, under sub-section (20), for payment of debt with interest under his signature to the Recovery Officer for recovery of the amount of debt specified in the certificate.
Recovery Certificate to be deemed as decree — Section 19(22A) of RDB Act 1993
19(22-A) Any recovery certificate issued by the Presiding Officer under sub-section (22) shall be deemed to be decree or order of the Court for the purposes of initiation of winding up proceedings against a company registered under the Companies Act, 2013 (18 of 2013) or Limited Liability Partnership registered under the Limited Liability Partnership Act, 2008 (6 of 2009) or insolvency proceedings against any individual or partnership firm under any law for the time being in force, as the case may be.
Inherent powers of Debts Recovery Tribunals — Section 19(25) of RDB Act 1993
Section 19(25) The Tribunal may make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.
Filing of Appeal to DRAT against an order of DRT — Sections 20(1) and 20(2) of RDB Act 1993
Section 20. Appeal to the Appellate Tribunal
20(1) Save as provided in sub-section (2), any person aggrieved by an order made, or deemed to have been made, by a Tribunal under this Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter.
20(2) No appeal shall lie to the Appellate Tribunal from an order made by a Tribunal with the consent of the parties.
Limitation for filing an appeal to DRAT — Section 20(3) of RDB Act 1993
Section 20(3) Every appeal under sub-section (1) shall be filed within a period of thirty days from the date on which a copy of the order made, or deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed:
PROVIDED that the Appellate Tribunal may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.
Pre- deposit by Borrowers to file an appeal before DRAT — Section 21 of RDB Act 1993
Section 21. Deposit of amount of debt due, on filing appeal
Where an appeal is preferred by any person from whom the amount of financial debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal fifty per cent of the amount of debt so due from him as determined by the Tribunal under section 19:
PROVIDED that the Appellate Tribunal may, for reasons to be recorded in writing, reduce the amount to be deposited by such amount which shall not be less than twenty-five per cent. of the amount of such debt so due to be deposited under this section.
DRTs and DRATs not bound by Code of Civil Procedure but to be guided by principles of natural justice — Section 22(1) of RDB Act 1993
Section 22(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure any laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.
DRTs and DRATs to have same power as are vested in Civil Court while trying a suit — Section 22(2) of RDB Act 1993
22(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely,-
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or documents;
(e) reviewing its decisions;
(f) dismissing an application for default or deciding it ex parte;
(g) setting aside any order of dismissal of any application for default or any order passed by it ex parte;
(h) any other matter which may be prescribed.
Limitation Act to apply to application to DRTs — Section 24 of RDB Act 1993
24.The provisions of the Limitation Act, 1963, (36 of 1963) shall, as far as may be, apply to an application made to a Tribunal.
Modes of Recovery of Debts, which can be adopted by Recovery Officer — Section 25 of RDB Act 1993
Section 25. The Recovery Officer shall, on receipt of the copy of the certificate under sub-section (7) of section 19, proceed to recover the amount of debt specified in the certificate by one or more of the following modes, namely,-
(a) attachment and sale of the movable or immovable property of the defendant;
(aa) taking possession of property over which security interest is created or any other property of the defendant and appointing receiver for such property and to sell the same;
(b) arrest of the defendant and his detention in prison;
(c) appointing a receiver for the management of the movable or immovable properties of the defendant.
(d) any other mode of recovery as may be prescribed by the Central Government.
Recovery Certificate cannot be challenged before Recovery Officer — Section 26 of RDB Act 1993
26(1) It shall not be open to the defendant to dispute before the Recovery Officer the correctness of the amount specified in the certificate, and no objection to the certificate on any other ground shall also be entertained by the Recovery Officer
Withdrawal or correction of Recovery Certificate by Presiding Officer — Section 26(2) of RDB Act 1993
Section 26(2) Notwithstanding the issue of a certificate to a Recovery Officer, the Presiding Officer shall have power to withdraw the certificate or correct any clerical or arithmetical mistake in the certificate by sending an intimation to the Recovery Officer.
Presiding Officer may grant time to pay the Certificate amount — Section 27(1) of RDB Act 1993
Section 27(1) Notwithstanding that a certificate has been issued to the Recovery Officer for the recovery of any amount, the Presiding Officer, may by an order, grant time for payment of the amount, provided the defendant makes a down payment of not less than twenty-five per cent. of the amount specified in the recovery certificate and gives an unconditional undertaking to pay the balance within a reasonable time, which is acceptable to the applicant bank or financial institution holding recovery certificate.
Other modes of Recovery which may be adopted by the Recovery Officer — Sections 28(2), 28(3)(i), 28(4), 28(4A) and 28(5) of RDB Act 1993
Section 28(2) If any amount is due from any person to the defendant, the Recovery Officer may require such person to deduct, from the said amount, the amount of debt due from the defendant under this Act and such person shall comply with any such requisition and shall pay the sum so deducted to the credit of the Recovery Officer:
PROVIDED that nothing in this sub-section shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908 (5 of 1908).
28(3)(i) The Recovery Officer may, at any time or from time to time, by notice in writing, require any person from whom money is due or may become due to the defendant or to any person who holds or may subsequently hold money for or on account of the defendant, to pay to the Recovery Officer either forthwith upon the money becoming due or being held or within the time specified in the notice (not being before the money becomes due or is held), so much of the money as is sufficient to pay the amount of debt due from the defendant or the whole of the money when it is equal to or less than that amount.
Section 28(4) The Recovery Officer may apply to the court in whose custody there is belonging to the defendant for payment to him of the entire amount of such money, or if it is more than the amount of debt due, an amount sufficient to discharge the amount of debt so due.
Section 28(4A) The Recovery Officer may, by order, at any stage of the execution of the certificate of recovery, require any person, and in case of a company, any of its officers against whom or which the certificate of recovery is issued, to declare on affidavit the particulars of his or its assets.
Section 28(5) The Recovery Officer may recover any amount of debt due from the defendant by distraint and sale of his movable property in the manner laid down in the Third Schedule to the Income Tax Act, 1961 (43 of 1961).
Some provisions of Income Tax Act 1961 will apply to Recovery Proceedings before Recovery Officer — Section 29 of RDB Act 1993.
Section 29. The provisions of the Second and Third Schedules to the Income Tax Act, 1961 (43 of 1961), and the Income Tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred to the amount of debt due under this Act instead of to the Income Tax Act:
PROVIDED that any reference under the said provisions and the rules to the “assessee” shall be construed as a reference to the defendant under this Act.
Appeal to Presiding Officer against order of Recovery Officer — Section 30(1) of RDB Act 1993
Section 30(1) Notwithstanding anything contained in section 29, any person aggrieved by an order of the Recovery Officer made under this Act may, within thirty days from the date on which a copy of the order is issued to him, prefer an appeal to the Tribunal.
Pre-deposit for filing appeal to Presiding Officer against the order of Recovery Officer — Section 30A of RDB Act 1993
Section 30A. Where an appeal is preferred against any order of the Recovery Officer, under section 30, by any person from whom the amount of debt is due to a bank or financial institution or consortium of banks or financial institutions, such appeal shall not be entertained by the Tribunal unless such person has deposited with the Tribunal fifty per cent, of the amount of debt due as determined by the Tribunal.
Priority to Secured Creditor — Section 31B of RDB Act 1993
Section 31B. Notwithstanding anything contained in any other law for the time being in force, the rights of secured creditors to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or local authority.
Explanation: For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code.
RDB Act to have overriding effect — Sections 34(1) and 34(2) of RDB Act 1993
Section 34(1) Save as provided under sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.
Section 34(2) The provisions of this Act or the rules made thereunder shall be in addition to and not in derogation of, the Industrial Finance Corporation Act, 1948 (15 of 1948), the State Financial Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984), and [the Sick Industrial Companies (Special Provisions) Act, 1985 and the Small Industries Development Bank of India Act, 1989.
Important Provisions of The Debts Recovery Tribunal (Procedure) Rules 1993
(Also see Frequently Asked Questions(FAQ) about RDB Act and Rules)
————————
Review before Presiding officer of Debts Recovery Tribunals — Rule 5A of DRT Procedure Rules 1993
Rule 5A (1) Any party considering itself aggrieved by an order made by the Tribunal on account of some mistake or error apparent on the face of the record desires to obtain a review of the order made against him, may apply for a review of the order to the Tribunal which had made the order.
Rule 5A (2) No application for review shall be made after the expiry of a period of thirty days from the date of the order and no such application shall be entertained unless it is accompanied by an affidavit verifying the application.
Rule 5A (3) Where it appears to the Tribunal that there is no sufficient ground for a review, it shall reject the application but where the Tribunal is of opinion that the application for review should be granted, shall grant the same:
PROVIDED that no such application shall be granted without previous notice to the opposite party to enable him to appear and to be heard in support of the order, a review of which is applied for.
Note: Provisions for Review are also contained in Section 22(2) of Recovery of Debts and Bankruptcy Act 1993 .
Filing of Written Statement and other document by the defendant — Rule 12(1) to Rule 12(7) of DRT Procedure Rules 1993
Rule 12(1) The defendant may within a period of thirty days from the date of service of summons, file two complete sets of written statement including claim for set-off or counter claim, if any, along with documents in a paper book form.
Rule 12(2) A copy of the written statement filed under sub-rule (1) shall be served to the applicant.
Rule 12(3) If the defendant fails to file the written statement of his defence including claim for set-off or counter claim under sub- rule (1), if any, within the period of thirty days, the Presiding Officer may in exceptional case and special circumstances to be recorded in writing, extend the period, by such further period not exceeding fifteen days.
Rule 12(4) If the defendant have filed their claim set-off or counter claim, the applicant shall file reply statement in answer to the claim for set-off or counter claim within a period of thirty days of filling of such claims.
Rule 12(5) If the defendant fails to file his reply within the period of thirty days, the Presiding Officer, may in exceptional cases and special circumstances, to be recorded in writing, extend the period, by such further period not exceeding fifteen days.
Rule 12(6) The written statement of the defendant including claim for set-off or counter claim or any other pleading whatsoever by the defendant or the applicant, as the case may be, shall be supported by an affidavit sworn in by the defendant or the applicant or the witnesses, verifying all the facts and pleadings and other documents annexed and the affidavits of witness, to be led by defendant or the applicant shall be filed simultaneously with the written statement of the defendant or the reply of the applicant.
Rule 12(7) If the defendant or the applicant as the case may be fails to file the reply as specified above, the Tribunal may proceed forthwith to pass an order on the application as it thinks fit.
Communication of orders by DRTs to parties — Rule 16 of DRT Procedure Rules 1993
Rule 16. Every final order passed and recovery certificate issued shall be communicated to the applicant and to the defendant either in person or by registered post free of cost and may also be uploaded in the website of the Tribunal.
Provided that the applicant and defendant may obtain copy of any other order passed by the Tribunal during the nearing form the Registrar on payment of fees of rupees fiver per page, subject to a minimum of rupees one hundred, for every order and the same may also be uploaded in the website of the Tribunal.
Important Provisions of The Debts Recovery Appellate Tribunal ( Procedure ) Rules 1994
(Also see Frequently Asked Questions(FAQ) about RDB Act and Rules)
———————–
Review of the order passed by the Chairperson of the DRAT — Rule 6A of DRAT(Procedure) Rules 1994
Rule 6A (1) Any party aggrieved by an order passed by the Appellate Tribunal, on account of some mistake or error apparent on the face of the record, desires to obtain a review of such order, may apply for a review to the Appellate Tribunal which passed the order.
(2)No application for review shall be made after the expiry of a period of thirty days from the date of the order and no such application shall be entertained unless it is accompanied by an affidavit verifying the application.
(3)Where it appears to the Appellate Tribunal that sufficient ground for a review does not exist, it shall reject the application, and if it is satisfied with the grounds raised in the application for such review, it shall allow the application for review of the order. Provided that no such application for review shall be allowed without previous notice and an opportunity of being heard is given to the opposite party.
Pre-deposit for filing the appeal — Rule 9 of DRAT (Procedure) Rules 1994
Rule 9. Where an appeal is preferred by a person referred to in section 21 of the Act, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal fifty per cent of the amount of debt so due from him as determined by the Tribunal under section 19 of the Act, provided that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited by such amount which shall not be less than twenty five per cent of the amount of such debt so due.
Contents of Memorandum of appeal — Rule 10 of DRAT (Procedure) Rules 1994
Rule 10(1) Every memorandum of appeal filed under rule 5 shall set forth concisely under distinct heads, the grounds of such appeal without any argument or narrative, and such grounds shall be numbered consecutively and shall be typed in double line space on one side of the paper.
Rule 10(2) It shall not be necessary to present separate memorandum of appeal to seek interim order or direction if in the memorandum of appeal, the same is prayed for.
Communication of orders passed in the appeal — Rule 20 of DRAT (Procedure) Rules 1994
Rule 20. Every order passed on an appeal shall be communicated to the appellant and to the respondent and to the Tribunal concerned either in person or by registered post free of cost.
