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RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT

Ministry of Law and Justice

Act nº 51 of 1993


  • Chapter 1
  • Chapter 2
  • Chapter 3
  • Chapter 4
  • Chapter 5
  • Chapter 6
  • Amending Acts
  • Act nº 51 of 1993

Preamble

THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 [Act, No. 51 of 1993]

[27th August, 1993]

PREAMBLE

An Act to provide for the establishment of Tribunals for expeditions adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto.

Be it enacted by Parliament in Forty-fourth Year of the Republic of India as follows:--

Chapter 1

Section 1. Short title, extent, commencement and application

(1) This Act may be called the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall be deemed to come into force on the 24th day of June, 1993.

(4) The provisions of this Act shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify.

Section 2. Definitions

In this Act, unless the context otherwise requires,--

(a) "Appellate Tribunal" means an Appellate Tribunal established under sub­section (1) of section 8;

(b) "application" means an application made to a Tribunal under section 19;

(c) "appointed day", in relation to a Tribunal or an Appellate Tribunal, means the date on which such Tribunal is established under sub-section (1) of section 3 or, as the case may be, sub-section (1) of section 8;

(d) "bank" means--

(i) a banking company;

(ii) a corresponding new bank;

(iii) State Bank of India;

(iv) a subsidiary bank; or

(v) a Regional Rural Bank;

(c) "banking company" shall have the meaning assigned to it in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

1[(ea) "Chairperson" means a Chairperson of an Appellate Tribunal appointed under section 9,]

(f) "corresponding new bank" shall have the meaning assigned to it in clause (da) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

2[(g) "debt" means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application;]

(h) "financial institution" means--

(i) a public financial institution within the meaning of section 4A of the Companies Act, 1956 (1 of 1956);

3[(ia) the securitisation company or reconstruction company which has obtained a certificate of registration under sub-section (4) of section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;".]

(ii) such other institution as the Central Government may, having regard to its business activity and the area of its operation in India by notification, specify;

(i) "notification" means a notification published in the Official Gazette;

(j) "prescribed" means prescribed by rules made under this Act;

1[(ja) "Presiding Officer" means the Presiding Officer of the Debts Recovery Tribunal appointed under sub-section (I) of section 4;]

(k) "Recovery Officer" means a Recovery Officer appointed by the Central Government for each Tribunal under sub-section (1) of section 7;

(l) "Regional Rural Bank" means a Regional Rural Bank established under section 3 of the Regional Rural Bank Act, 1976 (21 of 1976);

(m) "State Bank of India" means the State Bank of India constituted under section 3 of the State Bank of India Act, 1955 (23 of 1955);

(n) "subsidiary bank" shall have the meaning assigned to it in clause (k) of section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(o) "Tribunal" means the Tribunal established under sub-section (I) of section 3.

1. Inserted by Act 1 of 2000, section 3 (w.r.e.f. 17-1-2000).

2. Substituted by Act 1 of 2000, section 3 for clause (g) w.r.e.f. 17-1-2000).

3. Inserted by Act The Enforcement of Security Interest and Recover of Debts Laws (Amendment) Act, 2004.


Chapter 2

Section 3. Establishment of Tribunal

(1) The Central Government shall, by notification, establish one or more Tribunals, to be known as the Debts Recovery Tribunal, to exercise the jurisdiction, powers and authority conferred on such Tribunal by or under this Act.

(2) The Central Government shall also specify, in the notification referred to in sub-section (1), the areas within which the Tribunal may exercise jurisdiction for entertaining and deciding the applications filed before it.

Section 4. Composition of Tribunal

(1) A Tribunal shall consist of one person only (hereinafter referred to as the Presiding Officer) to be appointed by notification, by the Central Government.

(2) Notwithstanding anything contained in sub-section (1), the Central Government may authorise the Presiding Officer of one Tribunal to discharge also the functions of the Presiding Officer of another Tribunal.

Section 5. Qualifications for appointment as Presiding Officer

A person shall not be qualified for appointment as the Presiding Officer of a Tribunal unless he is, or has been, or is qualified to be, a District Judge.

Section 6. Term of Office

The Presiding Officer of a Tribunal shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of 1[sixty-two years], whichever is earlier.

1. Substituted by Act 28 of 1995, section 2, for "sixty years" (w.e.f. 9-8-1995).


Section 7. Staff of Tribunal

(1) The Central Government shall provide the Tribunal 1 [with one or more Recovery Officers] and such other officers and employees as that Government may think fit.

(2) 2 [The Recovery Officers] and other officers and employees of a Tribunal shall discharge their functions under the general superintendence of the Presiding Officer.

(3) The salaries and allowances and other conditions of service of the 3 [Recovery Officers] and other officers and employees of a Tribunal shall be such as may be prescribed.

1. Substituted by Act 1 of 2000, section 4, for "with a Recovery Officer" (w.r.e.f. 17-1-2000).

2. Substituted by Act 1 of 2000, section 4, for "The Recovery Officer" (w.r.e.f. 17-1-2000).

3. Substituted by Act 1 of 2000, section 4, for "Recovery Officer" (w.r.e.f. 17-1-2000).


Section 8. Establishment of Appellate Tribunal

(1) The Central Government shall, by notification, establish one or more Appellate Tribunals, to be known as the Debts Recovery Appellate Tribunal, to exercise the jurisdiction, powers and authority conferred on such Tribunal by or under this Act.

(2) The Central Government shall also specify in the notification, referred to in sub-section (1) the Tribunals in relation to which the Appellate Tribunal may exercise jurisdiction.

1[(3) Notwithstanding anything contained in sub-sections (1) and (2), the Central Government may authorise the Chairperson of an Appellate Tribunal to discharge also the functions of the Chairperson of other Appellate Tribunal.]

1. Inserted by Act 1 of 2000, section 5 (w.r.e.f. 17-1-2000).


Section 9. Composition of Appellate Tribunal

An Appellate Tribunal shall consist of one person only (hereinafter referred to as1[the Chairperson of the Appellate Tribunal]) to be appointed, by notification, by the Central Government.

1. Substituted by Act 1 of 2000, section 2, for "the Presiding Officer of the Appellate Tribunal" (w.r.e.f. 17-1-2000).


Section 10. Qualifications for appointment as Chairperson of the Appellate Tribunal

10. Qualifications for appointment as1[Chairperson of the Appellate Tribunal]

A person shall not be qualified for appointment as2[the Chairperson of an Appellate Tribunal] unless he--

(a) is, or has been, or is qualified to be, a Judge of a High Court; or

(b) has been a member of the Indian Legal Service and has held a post in Grade I of that service for at least three years; or

(c) has held office as the Presiding Officer of a Tribunal for at least three years.

1. Substituted by Act 1 of 2000, section 2, for "Presiding Officer of the Appellate Tribunal" (w.r.e.f. 17-1-2000).

2. Substituted by Act 1 of 2000, section 2, for "The Presiding Officer of an Appellate Tribunal" (w.r.e.f. 17-1-2000).


Section 11. Term of Office

1 [TheChairperson of an Appellate Tribunal] shall hold office for a term of five yearsfrom the date on which he enters upon his office or until he attains the age of 2 [sixty-five years], whichever is earlier.

1.Substituted by Act 1 of 2000, section 2, for "The PresidingOfficer of an Appellate Tribunal" (w.r.e.f.17-1-2000).

2.Substituted by Act 28 of 1995, section 3,for "sixty-two years" (w.e.f. 9-8-1995).


Section 12. Staff of the Appellate Tribunal

The provisions of section 7 (except those relating to Recovery Officer) shall, so far as may be, apply to an Appellate Tribunal as they apply to a Tribunal and accordingly references in that section to "Tribunal" shall be construed as references to "Appellate Tribunal" and references to "Recovery Officer" shall be deemed to have been omitted.