At least Rs1.57 lakh crore that is locked in dispute between borrower private institutions and lender government financial institutions could be open for public investments if the government expeditiously sets up debt recovery tribunals, arms them with efficient officers and strengthens them with modern technology tools.
There are 33 debt recovery tribunals (DRT) in India, with three each in Chennai, Delhi, Kolkata and Mumbai. Delhi, Kolkata and Mumbai have the maximum number of pending cases.
Taking note of the government’s neglect in setting up the tribunals, which is the sole forum for debt recovery, the Supreme Court has passed a slew of directions with a view to decrease the mounting recovery dispute suits and to ensure efficiency of administration.
It is reported that by March last year, a whopping 67,524 cases were pending for resolution in 33 DRTs and five debt recovery appellate tribunals (DRAT). This figure demonstrates a steep 80% jump in a span of 15 months from 37,616 cases pending at the end of 2010.
In a recent study, the industry body Assocham said, the net non-performing assets (NPAs) of Indian banks may surge by 27% to Rs2,00,000 crore by March 2013.
While disposing of a lawsuit filed by the Union government challenging a judgment by the Punjab and Haryana High Court that asked it to complete the building for DRTs and DRATs within three years, the top court has, for the time being, allowed the government to house them in leased premises.
In due course, however, the court said every debt recover authority must function from functional premises, equipped with computers and efficient and legally qualified personnel to speedily dispose of the pending disputes.
Realising the importance of such semi-judicial tribunals, the judges also asked all the high courts to ensure that the tribunals don’t suffer from any more government apathy.
Before the Recovery of Debts Due to Banking and Financial Institutions Act, 1993 came into being, all banks and financial institutions were required to move the already pendency-bogged down civil courts. That delayed disposal of such suits on account of heavy dockets resulting in undue delay in recovery of loans and enforcement of securities.