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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

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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

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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

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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;

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(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.