2017 (1) TMI 1505 - SC - Indian Laws

Clearances of cases pending before Debt Recovery Tribunal - Held that - 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 - 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 - Union Government directed to file affidavit on relevant issues.

Summary

Issues:
1. Establishment of Debt Recovery Tribunals and Appellate Tribunals.
2. Pending cases and amounts involved prior to the enactment of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
3. Functioning and disposal of cases by Debt Recovery Tribunals and Appellate Tribunals.
4. Large pendency of cases and delays in disposal.
5. Introduction of legislative changes and the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill, 2016.
6. Lack of infrastructure, manpower, and resources in Debt Recovery Tribunals and Appellate Tribunals.
7. Resignation of the Chairperson of the Debts Recovery Appellate Tribunal at Allahabad due to inadequate infrastructure.
8. Directions to the Union Government to address issues related to infrastructure and efficiency of Debt Recovery Tribunals and Appellate Tribunals.

Analysis:

1. The judgment discusses the establishment of Debt Recovery Tribunals and Appellate Tribunals to expedite the adjudication and recovery of dues due to banks and financial institutions. Prior to the enactment of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, a significant number of cases were pending before various courts, highlighting the need for specialized tribunals to handle such matters efficiently.

2. The judgment outlines the staggering amounts involved in pending cases before the establishment of these tribunals, emphasizing the urgency and importance of creating a dedicated framework for resolving disputes related to dues owed to public sector banks and financial institutions.

3. It is noted that the Debt Recovery Tribunals and Appellate Tribunals have been disposing of cases, but a substantial number of cases remain pending, some for more than ten years. Despite legislative provisions for timely disposal, delays have persisted, prompting the introduction of the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill, 2016 to address the backlog.

4. The judgment highlights the crucial role of infrastructure, manpower, and resources in ensuring the effective functioning of the Debt Recovery Tribunals and Appellate Tribunals. The lack of adequate facilities and support has been a significant challenge, as evidenced by the resignation of the Chairperson of the Debts Recovery Appellate Tribunal due to infrastructure constraints.

5. In response to the issues raised, the Supreme Court directs the Union Government to provide detailed information on various aspects, including the achievability of revised timelines, the rationale behind the timelines, plans to enhance infrastructure, and empirical data on pending cases. This directive aims to address the systemic challenges faced by the tribunals and improve their efficiency in handling cases.

6. The Court's intervention underscores the importance of aligning legislative reforms with practical implementation by ensuring that the necessary infrastructure and support systems are in place to facilitate the expeditious disposal of cases and enhance the overall effectiveness of the Debt Recovery Tribunals and Appellate Tribunals.