The Recovery of Debts Due to Banks and Financial Institutions Act, 1993

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The Recovery of Debts Due to Banks and Financial Institutions Act has been incorporated on 24th June, 1993. This Act as the name indicated has been instituted to recover the debts due to banks and financial institutions.

The Commercial Banking in India plays a vital role in our economic development. These banking not only provide liquidity and such other banking facilities but also provide lots of credits to all economic sets of people. Later, due to liberalization, several private banks and financial institution came into force and performs most of the banking functions including credit facilities. On the Course of such functions, both banks and financial institutions suffered lots of difficulties in recovering loans and enforcement of securities charge with them. Due to which several funds has been significantly blocked. Several Committees, Tribunals were formed but went with no use. In order to keep a check, this Act has been enacted under several recommendations.

The Central Government with a notification in the Official Gazette shall constitute one or more Debt Recovery Tribunals with all details regarding the purpose of this Act and the procedure in which it works. This Tribunal shall exercise its jurisdiction and authorities efficiently as that are specified under the provisions of this Act. The Central Government by notification in the Official Gazette shall appoint one such person as Presiding Officer for a Tribunal. Such Officer shall perform all the necessary and required functions that are specified under this Act. The Presiding Officer shall not be less than a District Judge for performing under this Act. This Presiding Officer shall be a Presiding Officer of another Debt Recovery Tribunal. This Presiding Officer shall hold Office for five years from the date of incorporation of this Act or till the age of sixty-two whichever is earlier.

The Central Government shall appoint one or more recovery Officers and employees in order to function efficiently without any lacuna. These Officers and employees shall perform their delegated functions under to vigilance of the Presiding Officer. The salaries and such other benefits and remunerations of the Recovery Officers and such other employees shall be paid as specified under the provisions of this Act.

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The Central Government shall constitute one or more Debt Recovery Appellate Tribunals in order to perform its jurisdictions, powers and authority provided on such Tribunals as specified under the provisions of this Act. The Debt Recovery Appellate Tribunal shall preside by the Chairperson to be appointed by a notification in the Official Gazette. The qualification of such Chairperson shall be not less than a High Court Judge or a member of the Indian Legal Services holding a Grade I service for not less than three years and should be the Presiding Officer in the Debt Recovery Tribunal for not less than three years. The term of Office of such Chairperson shall be for the term of Five years from the date of incorporation of this Act or till the age of his Sixty Five years whichever is earlier. The Central Government shall appoint such Recovery Officers and employees under the supervision of the Chairperson. They perform their assigned functions and duties in pursuance to this Act. Their Salaries and such other payment shall be paid as specified under the provisions of this Act. The Central Government shall make any number of rules and regulations in pursuance to these provisions under this Act.

These Tribunals and Appellate Tribunals shall perform their jurisdiction and powers as specified under the provisions of this Act. The Tribunal shall execute the issues related to the applications filed by the banks and such other financial Institutions for the recovery of Debts. The Appellate Tribunal shall look after the Appeal that arises from the award of the Tribunal by the aggrieved parties or even by the Tribunals for explanations of certain issues.

The Chairperson shall also act as an administrator of the Tribunal and its functions in pursuance to this Act. Except the High Court and Supreme Court, no other Court shall enjoy such jurisdiction and powers conferred by this Act to act in pursuance to this Act. The recovery shall be in the form of attachment for sale, arrest or either by appointing a receiver and any such manner as specified under the provisions of this Act. In case of auction sale, if there is excess amount beyond the debt amount shall be given back to the party with whom the property were vested with. From the initiation of the proceedings till the end of the recovery of debts, all functions were done in an efficient manner in pursuance to this Act. This Act went on with several Amendments for better functioning in order to fulfill the intention of the legislature.

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by C.Srivenkatesh Prabhu.