Supreme Court: Taking note of the fact that at present, thirty four Debt Recovery Tribunals and five Appellate Tribunals are functioning in the country which suffer from a lack of adequate infrastructure, manpower and resources, the Court said that the legislative changes to provide for expeditious disposal of proceedings before the Debt Recovery Tribunals may not by themselves achieve the intended object so long as the infrastructure provided to the Tribunals is not commensurate with the burden of the work and nature of judicial duties.

The Court noticed that though the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 provides for the disposal of recovery applications within one hundred and eighty days, cases have remained pending for years together. In order to deal with the large pendency of cases, the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill, 2016 was introduced in the Lok Sabha on 11.05. 2016. The Bill has eventually been passed by both the houses of Parliament on 16.08.2016. The Court, however, that having due regard to the important adjudicatory function which is entrusted to these Tribunals, the efficacy of parliamentary legislation will depend in a large measure on the efficiency with which the Tribunals discharge their duties. Hence, the Court directed the Union of India to file affidavit dealing with the following issues:

  • Whether the timelines set down in the amended legislation are capable of being achieved with the existing infrastructure including judicial personnel and staffing pattern of the Debt Recovery Tribunals and Debt Recovery Appellate Tribunals;
  • The underlying basis, if any, upon which the revised timelines have been stipulated and whether any scientific study has been conducted on the availability of infrastructure;
  • What steps the Union government intends to adopt to enhance the infrastructure of Debt Recovery Tribunals and the Appellate Tribunals in terms of physical infrastructure, judicial manpower and non-judicial personnel required for the efficacious functioning of the Tribunals;
  • The specific plan of action including time-schedules within which the existing infrastructure would be upgraded so as to achieve the time frame for disposal indicated in the amended legislation; and
  • Empirical data on the pendency of cases for more than ten years and the list of corporate entities where the amount outstanding is in excess of Rs.500 crore.

The 3-judge bench of T.S. Thakur, CJ and Dr. D.Y. Chandrachud and A.M. Khanwilkar, JJ has directed the Union Government to file affidavit within 4 weeks from the date of this order. [Centre for Public Interest Litigation v. Housing & Urban Development Corporation Ltd., 2017 SCC OnLine SC 13, decided on 03.01.2017]

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