advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Thursday, January 24, 2013

DRTs and DRATs suffer from severe infrastructural constraints. = the UOI, has agreed to: i. Provide adequate infrastructure to DRTs/DRATs on the following basis: a. If sufficient space as per requirement is available in the Government building, then space from the concerned department will be allotted on a permanent basis. b. If space is not available in the Government building but sufficient space is available in public sector undertakings’ buildings, then the DRTs/DRATs may move to the same on a permanent lease/rental basis. c. If (a) and (b) are not possible, then suitable land may be purchased for construction of a building, or a suitably constructed building may be purchased from public authorities. This may be completed in a phased manner. In the mean time, DRTs and DRATs may continue at their present locations or hire alternative suitable space as per norms. d. Further, on the basis of a spot study conducted by the Department of Financial Services on 11th December 2011, the existing space authorization of 5000 sq. ft. for DRTs and 3600 sq. ft. for DRATs was examined. In light of the study and requirements of additional facilities, the same has been increased to 7200 sq. ft. and 4500 sq. ft. respectively. In case more than one DRT is accommodated in one building, space would be saved for common facilities such as bar room, consultation chamber, reception, canteen, washrooms, etc. In such a case, the space requirements for the second and third DRT (if located in the same building) may be around 6000 sq. ft. and 5500 sq. ft. respectively. e. Preference is to be given to buildings where parking facility is provided either within the building premises or in the vicinity. ii. Consider the feasibility of establishing more DRTs/DRATs and redefining the jurisdiction of some DRTs on the basis of data showing pendency of cases and existing workload of all the DRTs and DRATs. iii. Fill all anticipated vacancies for the posts of senior officers, as and when they arise, with candidates who have already been selected according to the stipulated rules. iv. Extend the facility of General Pool of Accommodation of the type entitled to Group A officers upto April 2013 to the Presiding Officers. In the meantime, the Ministry of Finance and Ministry of Urban Development will examine all issues to finalise modalities for either buying or construction of flats/houses for use of the members of the Tribunals. Further, in case this proposal does not materialize, then the possibility of hiring accommodation shall be considered at the appropriate stage. v. Implement the “e-DRT Project” to automate and improve DRT services by building IT systems as expeditiously as possible. vi. Carry out the recruitment of Recovery Officers by promotion, failing which, by deputation, in accordance with the eligibility criteria as defined in the recruitment rules of each DRT. Keeping in mind the profile of the post of a Recovery Officer, it may not be possible to appoint judicial officers of a rank below that of an Additional District and Sessions Judge, as suggested by the learned amicus curiae. However, the UOI shall give preference to only those candidates who either have legal experience or hold a degree in law. Further, with respect to improving the selection procedure of Recovery Officers, the Departmental Promotion Committee (DPC), provided for in the recruitment rules, shall be expanded to include the Presiding Officer of any DRT as a member of the DPC to take part in the selection of the Recovery Officers. At the same time, the level of representation of the Reserve Bank of India in the DPC will also be raised from the rank of Deputy Legal Advisor to Joint Legal Advisor, RBI. vii. Hold regular training programmes for Recovery Officers/Assistant Registrars/Registrars to give them minimum working knowledge of the procedures followed in DRTs, the provisions of the RDDBFI Act, the SARFAESI Act, the Rules made thereunder, and the provisions of Schedules II and III of the Income Tax Act, 1961.- the High Courts are empowered to exercise their jurisdiction of superintendence under Article 227 of the Constitution of India in order to oversee the functioning of the DRTs and DRATs. Section 18 of the RDDBFI Act leaves no scope for doubt in this behalf. It reads thus: 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. Article 227 of the Constitution stipulates that every High Court shall have superintendence over all courts and tribunals throughout the territories interrelation to which it exercises jurisdiction. This power of superintendence also extends to the administrative functioning of these courts and tribunals [Shalini Shyam Shetty & Anr. Vs. Rajendra Shankar Patil[1]]. Hence, in light of the above, we expect that all the High Courts shall keep a close watch on the functioning of DRTs and DRAT, which fall within their respective jurisdictions. The High Courts shall ensure a smooth, efficient and transparent working of the said Tribunals. We are confident that through the timely and appropriate superintendence of the High Courts, the Tribunals shall adhere to the rigour of appropriate standards indispensable to the fair and efficient administration of justice.


                                                  REPORTABLE
|IN THE SUPREME COURT OF INDIA                                  |
|CIVIL APPELLATE JURISDICTION                                   |
|CIVIL APPEAL  NOS.617-618 OF 2013                              |
|(Arising Out of SLP (C) Nos. 22808-22809 of 2010)              |
|                                                               |
|UNION OF INDIA & ORS.           |—         |      APPELLANTS  |
|                                                               |
|VERSUS                                                         |
|DEBTS RECOVERY TRIBUNAL BAR     |—         |RESPONDENTS       |
|ASSOCIATION & ANR.              |          |                  |



                                  O R D E R

1. Leave granted.

2. These appeals arise out of judgment dated 18th September 2008 in CWP  No.
   11742 of 2007, and order dated 21st August 2009 in Review Application 161
   of 2009, rendered by the High Court of Punjab & Haryana, whereby  certain
   directions relating to  provision  for  adequate  space  for  the  smooth
   functioning of the Debts Recovery Tribunals (for  short  “the  DRTs”)  at
   Chandigarh, have been issued. The circumstances  that  have  led  to  the
   filing of these appeals are succinctly stated below.


3. A Bench of the DRT was established at Chandigarh by the  Union  of  India
   (for short “the UOI”), vide notification dated  24th  March  2000,  in  a
   rented building.
Subsequently, a second Bench of the DRT was established,
   which was supposed to function from another premises.
However,  both  the
   Benches continued to function from the same premises  where  the  earlier
   Bench was functioning.
By a communication dated 20th July, 2007, the UOI
   directed that the second Bench would function from the premises  acquired
   for it.
Thereupon, the respondent Bar Association made  a  representation
   to the Presiding Officers of both the Benches, requesting them  to  inter
   alia, continue to function from the premises from where the first DRT was
   functioning.
However, in light of the aforesaid communication  issued  by
   the UOI, the request of the Bar Association was not acceded to.

4. Aggrieved, the Bar Association filed a Civil Writ Petition  in  the  High
   Court of Punjab & Haryana, seeking directions to the UOI, to  inter  alia
   provide adequate accommodation for the functioning of both the DRTs;  and
   to frame Rules for recruitment/appointment of the Presiding Officer & the
   Recovery Officers. In light of the assurance on behalf of  the  UOI  that
   adequate space would be taken on lease for the smooth functioning of both
   the Benches at the same place, and that  further,  land  was  also  being
   acquired for housing the DRTs, the writ petition was disposed of  with  a
   direction that the construction of the building shall be completed within
   three years from the date of its order.
However, the High Court  did  not
   examine the other issues referred to above on the ground that  they  were
   unrelated to the inadequacy of office space needed by the DRTs.

5. Having failed to get the said order reviewed, the UOI  is  before  us  in
   these appeals.  In order to appreciate the issue involved in  the  matter
   before us, it  would  be  useful  to  have  a  bird’s  eye  view  of  the
   constitution of DRTs and their functioning.

6. Prior to the promulgation of the Recovery of Debts  Due  to  Banking  and
   Financial Institutions Act, 1993 (for short “the RDDBFI Act”), all  banks
   and financial institutions were required to file their recovery cases  in
   the form of suits  before  the  civil  courts,  on  the  basis  of  their
   territorial and pecuniary jurisdictions.
Due to delays in the disposal of
   such suits by civil courts on account of heavy dockets, the  recovery  of
   loans and enforcement of securities suffered. Thus, an  urgent  need  was
   felt to work out a suitable mechanism through  which,  the  dues  of  the
   banks and financial institutions could be  realized  expeditiously.  This
   led to the  establishment  of  DRTs  and  the  Debts  Recovery  Appellate
   Tribunals (for short  “DRATs”)  under  the  RDDBFI  Act  for  expeditious
   adjudication  and  recovery  of  debts  due  to   banks   and   financial
   institutions.

7.  As per  the  information  available,  there  are  all  in  all  33  DRTs
   established in the entire country out of which  Delhi,  Mumbai,  Chennai,
   Kolkata, Chandigarh and  Ahmedabad have two or more DRTs  each.
However,
   there are only five DRATs,  established  in  Allahabad,  Chennai,  Delhi,
   Kolkata  and  Mumbai,  each  covering  multiple  DRTs  of  a   particular
   geographical zone.
As a result,  DRATs  are  overburdened  and  are  also
   facing an acute shortage of infrastructure and staff.

8.   Given the poor state of affairs as highlighted by the Bar  Association,
   we were constrained to take cognizance and hence, vide order  dated  15th
   November 2010, directed the learned Addl. Solicitor General  to  file  an
   affidavit suggesting measures for  improving  the  working  of  the  said
   Tribunals.
Subsequently, on 7th April  2011,  this  Court  appointed  Mr.
   Rajeeve Mehra, Senior Advocate, as amicus curiae  to  assist  the  Court.
   Consequently, having considered the views of all DRTs, DRATs as  well  as
   the Bar Associations, the learned Addl. Solicitor General and the learned
   amicus curiae have filed their responses, highlighting  the  core  issues
   and respective suggestions to address the same.
In light  of  the  above,
   the UOI was directed to place on record their  response on the issues  so
   raised, in particular, on the criteria being adopted for  appointment  of
   the members, Recovery Officers etc.
In pursuance  thereof,  the  UOI  has
   filed  status  reports,  indicating  the  measures  agreed  upon  by  the
   Government to address the aforementioned issues.  Before  we  proceed  to
   list the same, it would be helpful to discuss the core issues in  respect
   of which the suggestions have been made.

9.  At  present,  DRTs  and  DRATs  suffer   from   severe   infrastructural
   constraints. Most of the DRTs are being run from rented premises and face
   acute  shortage  of  space,  exorbitant  rents,   limitations   on   non-
   renewal/extension of leases etc. It has been brought to our  notice  that
   where the DRTs have been allotted space of about 5000 sq. ft., the actual
   requirement is not less than 7,500 sq. ft. Similarly, the learned  amicus
   curiae brought to the fore  several  other  issues  plaguing  the  smooth
   functioning of the Tribunals, the most significant being: that there is a
   need to increase the number  of  DRATs  in  the  country  to  reduce  the
   workload of the existing DRATs; that many serving Recovery Officers  lack
   a judicial background or are appointed  on  deputation  from  those  very
   banks or financial institutions which are filing recovery cases in  DRTs,
   thereby raising serious questions about their independence,  impartiality
   and fairness; that the time taken in filling up vacancies for  the  posts
   of senior officials of DRTs and DRATs is extremely  long;  and  that  the
   presence of modern and technological systems of administration  continues
   to be elusive in the administration of justice in as much  as  many  DRTs
   and DRATs do not even have websites or computerized systems.
Suggestions made by the learned Addl. Solicitor General and  learned  amicus
curiae

|S.  |Issue            |Suggestions of the  |Suggestions of the |
|No  |                 |learned Addl.       |learned amicus     |
|    |                 |Solicitor General   |curiae             |
|1.  |Premises &       |All DRTs and DRATs  | Concurring        |
|    |Physical         |should be housed in |                   |
|    |Infrastructure   |suitable buildings. |                   |
|    |                 |Pending construction|                   |
|    |                 |of these buildings, |                   |
|    |                 |the Tribunals should|                   |
|    |                 |be housed in rented |                   |
|    |                 |premises having an  |                   |
|    |                 |area of at least    |                   |
|    |                 |8000 sq.ft. where   |                   |
|    |                 |suitable space for  |                   |
|    |                 |records, etc. and   |                   |
|    |                 |amenities for the   |                   |
|    |                 |officers of the     |                   |
|    |                 |court, staff,       |                   |
|    |                 |litigants and       |                   |
|    |                 |lawyers should be   |                   |
|    |                 |provided.           |                   |
|    |                 |                    |                   |
|2.  |Increase in      |                    |A DRAT must be     |
|    |Number of        |                    |established in each|
|    |DRTs/DRATs       |                    |state where there  |
|    |                 |---                 |is a DRT or        |
|    |                 |                    |multiple DRTs.     |
|    |                 |                    |DRATs may be       |
|    |                 |                    |established in the |
|    |                 |                    |city where the     |
|    |                 |                    |concerned High     |
|    |                 |                    |Court of a State is|
|    |                 |                    |located.           |
|3.  |Appointment of   |Qualifications for  |Appointment of     |
|    |Recovery Officers|Recovery Officers   |Recovery Officers  |
|    |                 |should include at   |by way of          |
|    |                 |the very least, a   |deputation from    |
|    |                 |basic degree in law.|Government         |
|    |                 |If possible,        |Departments/Ministr|
|    |                 |judicial officers or|ies, Banks and     |
|    |                 |advocates with five |Financial          |
|    |                 |years standing at   |Institutions should|
|    |                 |the Bar may be      |be discontinued.   |
|    |                 |appointed as        |Instead, the person|
|    |                 |Recovery Officers.  |appointed must be a|
|    |                 |                    |person of a        |
|    |                 |                    |judicial           |
|    |                 |                    |background,        |
|    |                 |                    |preferably a       |
|    |                 |                    |judicial officer of|
|    |                 |                    |the rank below the |
|    |                 |                    |designation of     |
|    |                 |                    |Addl. District and |
|    |                 |                    |Sessions Judge on  |
|    |                 |                    |deputation, and    |
|    |                 |                    |should be given the|
|    |                 |                    |same facilities and|
|    |                 |                    |perks he/she enjoys|
|    |                 |                    |in the parent      |
|    |                 |                    |cadre.             |
|4.  |Vacancies and    |A select list of    |a. For posts other |
|    |Status of Senior |candidates should be|than Presiding     |
|    |Officers of      |maintained to fill  |Officers and       |
|    |DRTs/DRATs       |the vacancies. The  |Recovery Officers, |
|    |                 |selections should be|on-going process of|
|    |                 |made within a fixed |sourcing           |
|    |                 |time frame.         |staff/officers on  |
|    |                 |                    |deputation should  |
|    |                 |                    |be discontinued,   |
|    |                 |                    |and permanent      |
|    |                 |                    |cadres should be   |
|    |                 |                    |established.       |
|    |                 |                    |b. The post of     |
|    |                 |                    |Presiding Officers,|
|    |                 |                    |Registrars and     |
|    |                 |                    |Recovery Officers  |
|    |                 |                    |should be filled up|
|    |                 |                    |from the state     |
|    |                 |                    |cadre of Judicial  |
|    |                 |                    |Officers through   |
|    |                 |                    |deputations and    |
|    |                 |                    |rotations so that  |
|    |                 |                    |these posts do not |
|    |                 |                    |remain vacant.     |
|    |                 |                    |c. Judicial        |
|    |                 |                    |officers must be   |
|    |                 |                    |provided the same  |
|    |                 |                    |facilities and     |
|    |                 |                    |perks as they enjoy|
|    |                 |                    |in their parent    |
|    |                 |                    |cadres. Further,   |
|    |                 |                    |residential        |
|    |                 |                    |accommodation must |
|    |                 |                    |be necessarily     |
|    |                 |                    |earmarked for      |
|    |                 |                    |Presiding Officers.|
|5.  |Information      |DRTs and DRATs must |Concurring         |
|    |Technology and   |have a website.     |                   |
|    |Computerisation  |Possibility of      |                   |
|    |                 |publication of      |                   |
|    |                 |notices and auctions|                   |
|    |                 |on the website      |                   |
|    |                 |should be explored, |                   |
|    |                 |keeping necessary   |                   |
|    |                 |safeguards in mind. |                   |
|    |                 |The National        |                   |
|    |                 |Informatics Centre  |                   |
|    |                 |should be called    |                   |
|    |                 |upon to prepare     |                   |
|    |                 |appropriate software|                   |
|    |                 |for computerization |                   |
|    |                 |of processes in the |                   |
|    |                 |DRTs, from filing to|                   |
|    |                 |disposal, so that   |                   |
|    |                 |the time taken for  |                   |
|    |                 |disposal is reduced.|                   |



10. We are pleased to note the positive and forthcoming response of the  UOI
   to the suggestions of  the  learned  Addl.  Solicitor  General  and  the
   learned amicus curiae. Having taken note of the urgent need  to  address
   the abject conditions prevailing in the Tribunals, the UOI,  has  agreed
   to:
   i. Provide adequate infrastructure to DRTs/DRATs on the following basis:
   a. If sufficient space as per requirement is available in the  Government
      building, then space from the concerned department will be allotted on
      a permanent basis.
   b. If space is not available in the Government  building  but  sufficient
      space is available in public sector undertakings’ buildings, then  the
      DRTs/DRATs may move to the same on a permanent lease/rental basis.
   c. If (a) and (b) are not possible, then suitable land may  be  purchased
      for construction of a building, or a suitably constructed building may
      be purchased from public authorities.  This  may  be  completed  in  a
      phased manner. In the mean time, DRTs and DRATs may continue at  their
      present locations or hire alternative suitable space as per norms.
   d. Further, on the basis of a spot study conducted by the  Department  of
      Financial  Services  on  11th  December  2011,  the   existing   space
      authorization of 5000 sq. ft. for DRTs and 3600 sq. ft. for DRATs  was
      examined. In  light  of  the  study  and  requirements  of  additional
      facilities, the same has been increased to 7200 sq. ft. and  4500  sq.
      ft. respectively. In case more than one DRT  is  accommodated  in  one
      building, space would be saved for common facilities such as bar room,
      consultation chamber, reception, canteen, washrooms, etc.  In  such  a
      case, the space requirements for the second and third DRT (if  located
      in the same building) may be around 6000 sq.  ft.  and  5500  sq.  ft.
      respectively.
   e. Preference is to be given  to  buildings  where  parking  facility  is
      provided either within the building premises or in the vicinity.
  ii.  Consider  the  feasibility  of  establishing  more   DRTs/DRATs   and
      redefining the jurisdiction of some DRTs on the basis of data  showing
      pendency of cases and existing workload of all the DRTs and DRATs.
 iii.       Fill all anticipated vacancies for the posts of senior officers,
      as and when they arise, with candidates who have already been selected
      according to the stipulated rules.
  iv.  Extend the facility of General Pool  of  Accommodation  of  the  type
      entitled to  Group  A  officers  upto  April  2013  to  the  Presiding
      Officers. In the meantime, the Ministry of  Finance  and  Ministry  of
      Urban Development will examine all issues to finalise  modalities  for
      either buying or construction of flats/houses for use of  the  members
      of the Tribunals. Further, in case this proposal does not materialize,
      then the possibility of hiring accommodation shall  be  considered  at
      the appropriate stage.
   v. Implement the “e-DRT Project” to automate and improve DRT services  by
      building IT systems as expeditiously as possible.
  vi. Carry out the recruitment of Recovery Officers by  promotion,  failing
      which, by deputation, in accordance with the eligibility  criteria  as
      defined in the recruitment rules of each  DRT.  Keeping  in  mind  the
      profile of the post of a Recovery Officer, it may not be  possible  to
      appoint judicial officers of a  rank  below   that  of  an  Additional
      District and Sessions  Judge,  as  suggested  by  the  learned  amicus
      curiae.  However,  the  UOI  shall  give  preference  to  only   those
      candidates who either have legal experience or hold a degree  in  law.
      Further, with respect to improving the selection procedure of Recovery
      Officers, the Departmental Promotion Committee (DPC), provided for  in
      the recruitment rules, shall be  expanded  to  include  the  Presiding
      Officer of any DRT as a  member  of  the  DPC  to  take  part  in  the
      selection of the Recovery Officers. At the same  time,  the  level  of
      representation of the Reserve Bank of India in the DPC  will  also  be
      raised from the rank of Deputy Legal Advisor to Joint  Legal  Advisor,
      RBI.
 vii. Hold  regular  training  programmes  for  Recovery  Officers/Assistant
      Registrars/Registrars to give them minimum working  knowledge  of  the
      procedures followed in DRTs, the provisions of  the  RDDBFI  Act,  the
      SARFAESI Act,  the  Rules  made  thereunder,  and  the  provisions  of
      Schedules II and III of the Income Tax Act, 1961.


11. We are confident that the aforementioned measures proposed by  the  UOI,
   shall go a long way in improving the administration of justice  in  these
   Tribunals.  We are in agreement with these proposals and hope  that  they
   will be  implemented  efficiently  and  expeditiously  by  the  concerned
   authorities.  Having  said  that,  it  is  necessary  that  the  exercise
   undertaken by this Court must reach its logical end sans any  delays  and
   glitches  or  any  other  hindrances  in  the  implementation  of   these
   suggestions.
To this effect, we issue the following directions:

   i. All the aforementioned proposals and measures agreed upon by  the  UOI
      in response to the suggestions made by the learned amicus  curiae  and
      the Addl. Solicitor General shall be implemented expeditiously  within
      a suitable time frame. In the event that  the  UOI  or  the  concerned
      authority fails to comply with the aforesaid assurances,  it  will  be
      open to the learned amicus curiae to bring the same  to  this  Court’s
      notice for appropriate directions.

  ii. Further, we believe that the High Courts  are  empowered  to  exercise
      their  jurisdiction  of  superintendence  under  Article  227  of  the
      Constitution of India in order to oversee the functioning of the  DRTs
      and DRATs. Section 18 of the RDDBFI Act leaves no scope for  doubt  in
      this behalf. It reads thus:
      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.


Article 227 of the Constitution stipulates that every High Court shall  have
superintendence over all courts and  tribunals  throughout  the  territories
interrelation  to  which  it   exercises   jurisdiction.   This   power   of
superintendence also extends to  the  administrative  functioning  of  these
courts and tribunals [Shalini Shyam  Shetty  &  Anr.  Vs.  Rajendra  Shankar
Patil[1]]. 
Hence, in light of the above, we expect that all the High  Courts
shall keep a close watch on the functioning of DRTs  and  DRAT,  which  fall
within their respective  jurisdictions.  
The  High  Courts  shall  ensure  a
smooth, efficient and transparent working of  the  said  Tribunals.  
We  are
confident that through the timely and  appropriate  superintendence  of  the
High Courts, the  Tribunals  shall  adhere  to  the  rigour  of  appropriate
standards  indispensable  to  the  fair  and  efficient  administration   of
justice.

12. Before parting, we place on record our deep appreciation  for  the  able
   assistance rendered to us by  Mr.  Sidharth  Luthra,  the  learned  Addl.
   Solicitor General, Mr. Rajeeve Mehra, the learned amicus curiae  and  Mr.
   Arjun Kapoor, Law Clerk-cum-Research Assistant.


















13. These appeals stand disposed of in the above terms.


|                           |………………………………….                     |
|                           |        (D.K. JAIN, J.)            |
|                           |                                   |
|                           |                                   |
|                           |..………………………………….                   |
|                           |        (H.L. DATTU, J.)           |
|                           |                                   |
|NEW DELHI,                 |                                   |
|JANUARY 22, 2013.          |                                   |

-----------------------
[1]    (2010) 8 SCC 329

-----------------------
                                                                          15


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.