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NOTES ON DRT & DRAT | COMPOSITION | JURISDICTION | POWERS & AUTHORITY | FREE JAIIB NOTES 2022

JAIIB LRAB FREE NOTES ON DRT & DRAT | COMPOSITION | JURISDICTION | POWERS & AUTHORITY | JAIIB BEST STUDY MATERIAL 2022

These are free notes on the JAIIB LRAB Syllabus 2022 topic: DRT & DRAT which will help in the preparation of JAIIB EXAM 2022.

Don’t stress. Do your Best. The rest of the things? Leave it with Learning Sessions.

In this article, we are providing you with all the details about how Debt recovery Tribunal (DRT) and Debt recovery appellate Tribunal (DRAT) has been established, the addiction, powers and authority of DRT & DRAT which are the concepts from the syllabus of JAIIB Exam 2022. 

The article has been written with a view to provide the JAIIB candidates an easy text from which they can easily understand the mentioned topics easily & clear LRAB paper in JAIIB Exam 2022.

DEBT RECOVERY TRIBUNAL:

Recovery of Debts and Bankruptcy Act (RDB Act), 1993 has been introduced with the description that tribunals will be established so that speedy adjudication & recovery of debts could be ensured all over India, well except Jammu & Kashmir.

DRAT has been established to prefer appeals against the Tribunal orders.

ESTABLISHMENT OF TRIBUNAL AND APPELLATE TRIBUNAL

The power to establish any number of tribunals (DRTs) lies with the central government. So, it is the Central government which can establish one or more tribunals.

Composition of DRTs

If we talk about the composition of these tribunals, then it consists of 1 presiding officer – who is appointed by the central government through notification.

Debt Recovery Tribunal – DRT Appellate Tribunal – DRAT
The person who can be appointed as the presiding officer in DRT has to be district judge. Chairperson of DRAT shall be a High Court Judge who has worked as Presiding officer of a DRT for at least 3 years.
Term of Presiding officer: He or she can work as a presiding officer of DRT up to 5 years or until he or she at the age of 62 years, whichever comes earlier. Term of Chairperson: He or she can hold his/her position up to 5 years or until he or she at the age of 65 years, whichever comes earlier.
Whoever will be appointed as a staff in DRT, will be working under the superintendence of presiding officer.

 

WHAT IS THE JURISDICTION, POWERS & AUTHORITY OF TRIBUNALS?

Start of functions of a DRT: Whenever Central Government appoints either of DRT or DRAT, both the tribunals could exercise the jurisdiction, powers and authorities assigned to them from the date of appointment. This date of appointment is the date from when they can function as it has been declared in the notification.

Chairperson of Appellate Tribunal (DRAT): Chairperson of DRAT has the general power to supervise and control the tribunals that come under its jurisdiction. He or she also has the power to transfer any application that has been received by your presiding officer of one DRT to the other presiding officer which falls under his or her jurisdiction. This transfer can be done on the receipt of application for this purpose or the chairperson can do it on his or her own motion.

But before the chairperson can transfer the application, he or she has to give notice to the parties involved and give them the opportunity of being heard. The chairperson also holds the power to appraise the work of presiding officers which was under his or her control.

SYLLABUS STUDY MATERIAL NOTES MOCK TESTS
Legal & Regulatory aspects of Banking Syllabus 2022 JAIIB LRAB Study Material PDF 2022 JAIIB LRAB Notes PDF 2022 JAIIB LRAB Mock Test PDF 2022

BAR OF JURISDICTION OF CIVIL COURTS

The day a tribunal is established, from that day onwards, no Court or any other activity will have any jurisdiction, powers or authority through which they can deal in the cases of recovery involving > Rs.10,00,000.00

So, in other words, when tribunal comes into existence, the jurisdiction has bi be Civil Court so any other authorities are lost.

Note: But it should be noted that this bar of Jurisdiction is not applicable on the high courts and supreme courts which have the authority to exercise the jurisdiction as per articles: 226 and 227 of the constitution.

Time of the applicability of this bar: The date by which this bar on the court or authority will be applicable – the date when the Tubular will come into existence in that particular area & not the date when this act came into existence.

Case Law: Bhanu Construction Company Ltd. vs Andhra Bank [2002]

PROCEDURE OF TRIBUNALS

The procedure to file application with the tribunals as mentioned below:

Appeal by BANK: If a Bank wants to file an application to recover the loan amount, it has to take into account the jurisdiction and because of the action.

Appeal before DRAT: If a person wants to file an appeal before The Debt Recovery Appellate Tribunal, that person needs to pay up 75% of the amount of debt that has been ordered by DRT.

DRT Act Sections & Description

Points Section Description
Application of recovery Section  19(1) Request form for recovery by a tribunal within its jurisdiction
Join to recover  Section  19(2) For recovery of the debt from the same person other banks can also join to recover debt.
Fees in case of transfer  Section  19(3) Fee is not required to be paid when Case is transferred from Civil Court to Tribunal
Summons to defendant  Section  19(4) On receipt of application under sub-section(1) or sub-section(2) the Tribunal has to issue summons to the defendant requiring him or her to show cause within 30 days of the service of summons for why the relief prayed for should not be granted
Written statement by defendant  Section  19(5) Defendant is required to submit a written statement at or before first hearing or within such time as the Tribunal may permit.
Claims of amount by defendant  Section  19(6) Defendant has to claims any amount on first hearing from the applicant and to have set off against the applicant’s demand with ascertained sum of money
Plaint in a cross suit Section  19(7) When a written statement contains a claim and sets off, the written statement has the same effect as a plaint in a cross-suit.
Counterclaim  Section  19(8) Counterclaim
Counterclaim = Plaint in a cross suit Section  19(9) Counter-claim has the same effect as a plaint in cross-suit so as to enable the Tribunal to pass a final order in respect of both the original and CounterClaim.
Period to file written statement Section  19(10) The applicant is at liberty to submit a written statement to the counterclaim of the defendant within the period which may be prescribed by the Tribunal
Independent action Section  19(11) Counter Claim is required to be disposed as an Independent action.
Interim order by tribunal Section  19(12) The Tribunal may pass interim order against the defendant to debar him from alienating, transferring or otherwise dealing with or disposing or selling of any property/asset without prior permission of the Tribunal
Disposal of property Section  19(13 A & B) Tribunal can also Dispose of the property, provide for any Damage to the property, remove/whole any part of the property
Attachment of properties Section  19(14) The applicant can request that the properties of the defendant should be attached.
Conditional attachment order Section  19(15) The Tribunal also has the power to pass a conditional attachment order.
Void Attachment order  Section  19(16) If any attachment order is passed without complying with the requirements of Subsection (13), then such order is void.
Detention of persons  Section  19(17) The Tribunal has power to pass interim orders as well as attachment orders etc. If any order is breached, the Tribunal may order that the properties of the guilty person (of the order breach) be attached & person be detained in civil prison for a term < or = 3 months.
Appointment of receiver & Commissioner Section  19(18) appoint a receiver of any property

– remove any person from the custody/possession of property

– confer powers to the receiver.

– appoint a commissioner to prepare the inventory of the property of the defendant (for sale thereof)

Use of sale proceeds Section  19(19) If the recovery certificate is granted against a company, the Tribunal may order that the sale proceeds of such company be distributed among the Secured Creditors as provided in Section 529A of the Companies Act.
Final order Section  19(20) Pass interim or final order to receive payment of amount including interest thereon
Copy of orders Section  19(21) The tribunal is required to send a copy of every order to the applicant & the defendant.
Issue of Certificate of recovery Section  19(22) Issue a Certificate of Recovery to the recovery officer for recovery of the amount of debts.
Sending Recovery Certificate Section  19(23) Sending Certificate of Recovery to other tribunals if it is located within local limits of other jurisdiction
Disposal of Application Section  19(24) Application received by the tribunal to recovery debt is required to be disposed of finally within 180 days
Orders & Directions Section  19(25) The tribunal may make such orders & give such directions that may be necessary

 

APPEAL TO THE APPELLATE TRIBUNAL

Below are some of the details relating to the appeal that can be filed by the aggrieved person from the order passed by DRT to DRAT:

Who can file the appeal?

A person who is aggrieved by the DRT order can file an appeal to DRAT under section 21 of the Act.

RELATED LINKS OF: SYLLABUS
PPB Principles & Practices of Banking Syllabus 2022
AFB Accounting & Finance for Bankers Syllabus 2022
LRAB Legal & Regulatory aspects of Banking Syllabus 2022

What is the timing for filing an appeal with DRAT?

The aggrieved person is required to file the Appeal within 45 days from the receipt of the order copy. He or she is also required to deposit the 75% of the amount which has been ordered by DRT.

What is the time limit for disposal of appeals by DRTs?

The appeals which are filed with DRAT are to be disposed of within 6 months from the date of application.

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