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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. —       APPELLANT S  

VERSUS

DEBTS RECOVERY TRIBUNAL  BAR ASSOCIATION & ANR.

— RESPONDENTS

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.

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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;  2

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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  3

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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  4

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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  

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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  

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Suggestions  made  by  the  learned  Addl.  Solicitor  General and learned a  micus curiae   

S. No

Issue Suggestions  of  the  learned  Addl.  Solicitor  General

Suggestions of  the  learned  amicus curiae

1. Premises  &  Physical  Infrastructur e

All  DRTs  and  DRATs should be  housed  in  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.

Concurring

2. Increase  in  Number  of  DRTs/DRATs

---

A DRAT must be  established  in  each  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 Qualifications  for Appointment  of  7

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of  Recovery  Officers

Recovery Officers  should include at  the very least,  a  basic  degree  in  law.  If  possible,  judicial  officers  or  advocates  with  five  years  standing  at  the  Bar  may  be  appointed  as  Recovery  Officers.

Recovery  Officers  by  way  of  deputation  from  Government  Departments/Mi nistries,  Banks  and  Financial  Institutions  should  be  discontinued.  Instead,  the  person  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 Status of  Senior  Officers  of  DRTs/DRATs

A  select  list  of  candidates  should  be  maintained to fill  the  vacancies.  The  selections  should  be  made  within  a  fixed  time frame.

a.  For  posts  other  than  Presiding  Officers  and  Recovery  Officers,  on- going process of  sourcing  staff/officers  on  deputation  should  be  discontinued,  and permanent  cadres  should  

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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  Technology  and  Computerisa tion

a. DRTs  and  DRATs  must  have  a  website.  Possibility of  publication  of  notices  and  auctions  on  the  website  should  be  explored,  keeping  necessary  

Concurring

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safeguards  in mind.

b. The National  Informatics  Centre  should  be  called  upon  to  prepare  appropriate  software  for  computeriza tion  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  

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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,  11

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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,  12

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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  13

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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  14

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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.  

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Rajendra Shankar Patil1]. 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.

1 (2010) 8 SCC 329 16

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

………………………………….         (D.K. JAIN, J.)  

..………………………………….         (H.L. DATTU, J.)

NEW DELHI, JANUARY 22, 2013.

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