Debt Recovery Tribunal Vis a Vis Civil Court

Abstract

Historically, in the early 1980s banks and financial institutions found it suffocating to operate as funds and secured assets remained blocked in protracted litigation, whether they were recovery proceedings filed in regular courts by them or genuine or frivolous actions instituted by the constituents. Banking business was then almost completely state controlled and the worry was in public funds remaining entangled in time-consuming and ruinous court proceedings. There was a Tiwari Committee set up, which recommended setting up independent tribunals for recovering debts of banks and financial institutions. The fundamental purpose of the 1993 Act was to remove claims of banks and financial institutions from the ordinary fora to specialized tribunals. The avowed purpose of the statute was to ensure the speedy disposal of claims of banks and financial institutions intended to be governed by it. The 1993 RDB Act confers a benefit on banks and financial institutions in respect of the matters covered and enshrines establishment of Debt Recovery Tribunals, a specialized tribunal for quick recovery and timely disposal of debt related disputes. However, there is conflict over judiciary between Debt Recovery Tribunal and Civil Courts in many proceedings as many believe that DRT is a tribunal for speedy trial and recovery and not a court empowered with all civil powers as per provisions of CPC.