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Tuesday, January 10, 2017

(i) 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; (ii) 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; (iii) Whether, and if so, 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; (iv) 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 (v) 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. 6 The affidavit shall be filed within a period of four weeks from today. We clarify that this direction for the filing of a further affidavit shall not in any manner affect the functioning of the Committee which has already been constituted by the Union government and whose report is awaited.

                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                         CIVIL ORIGINAL JURISDICTION

                    WRIT PETITION (CIVIL) NO. 573 OF 2003




CENTRE FOR PUBLIC INTEREST                   .....PETITIONER
LITIGATION

                                   VERSUS



HOUSING & URBAN DEVELOPMENT               .....RESPONDENTS
CORPORATION LTD & ORS




                               J U D G M E N T





Dr D Y CHANDRACHUD, J

            Prior to the establishment of Debt Recovery Tribunals, as on  30
September 1990, more than fifteen lakh cases filed by  public  sector  banks
and about three hundred and four cases filed by financial institutions  were
pending before various courts.  The amounts involved were to the  extent  of
Rs. 5,622 crores in dues of public  sector  banks  and  Rs.  391  crores  of
financial institutions.  Following the Reports of the  Narasimhan  Committee
and the Tiwari Committee, Parliament enacted the Recovery of  Debts  Due  to
Banks  and  Financial  Institutions  Act,  1993  for   providing   for   the
establishment  of  tribunals  and  appellate   tribunals   for   expeditious
adjudication and recovery of dues due to banks and financial institutions.

2     At present, thirty four Debt Recovery  Tribunals  and  five  Appellate
Tribunals are functioning in the country.  In financial year  2015-16  these
Tribunals disposed of about 16,000 original applications involving  a  total
amount of Rs. 34,000 crores.  Since their inception until 31  October  2015,
the Tribunals had disposed of 1,34,433 original applications leading to  the
recovery of an amount of Rs. 70,725 crores.   The Tribunals are also  vested
with the jurisdiction to entertain  securitization  applications  under  the
Securitisation and Reconstruction of Financial  Assets  and  Enforcement  of
Security Interest Act, 2002.

3     This Court has been apprised, in the submissions filed  by  the  Union
government, that more than 70,000 cases involving an  amount  of  Rs.5  lakh
crores approximately are pending before  the  Debt  Recovery  Tribunals,  of
which many are pending for more than ten years.   Though  the  Act  of  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 May 2016.  The Bill was  referred
to a Joint Committee of both Houses of Parliament.  The Committee  presented
its Report to the Lok Sabha on 22 July 2016.  Eventually,  a  law  has  been
enacted by both the Houses of Parliament and published in the  E-gazette  on
16 August 2016.

4      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.  Recently, the Chairperson of the Debts Recovery  Appellate
Tribunal at Allahabad addressed a letter on 9 December  2016  to  the  Chief
Justice  of  India  recording  that  he  was  constrained  to   tender   his
resignation  from  the  post  of  Chairperson  since,  in  the  absence   of
infrastructure and facilities, the  functioning  of  the  adjudicating  body
over which he presided had become impossible.   This  is  symptomatic  of  a
trend whereby the Debt Recovery Tribunals  and  Appellate  Tribunals  suffer
from a lack of adequate infrastructure, manpower and resources.  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.

5     We accordingly direct the Union Government to file an affidavit
specifically dealing with the following issues :

(i)   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;

(ii)  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;

(iii) Whether, and if so, 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;

(iv)  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

(v)   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.

6     The affidavit shall be filed  within  a  period  of  four  weeks  from
today.  We  clarify  that  this  direction  for  the  filing  of  a  further
affidavit shall not in any manner affect the functioning  of  the  Committee
which has already been constituted by the Union government and whose  report
is awaited.


                      ………......................... CJI
                                                               [T.S.
THAKUR]


                                 ..........................................J

      [A.M. KHANWILKAR]


                                 ..........................................J
                                                         [Dr DY CHANDRACHUD]

New Delhi;
January 03, 2017.

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