Kotak Mahindra Bank Approaches Supreme Court Against Backlog In Debt Recovery Tribunals

The Supreme Court agreed to hear a petition filed by Kotak Mahindra Bank to ensure that debt recovery and appellate tribunals resume full operations across the country to clear the backlog.

There's a need to urgently fill vacancies in Debt Recovery Tribunals as 18 out of the total 39 DRTs in India don't have permanent presiding officers, the bank said in its public interest litigation. BloombergQuint has reviewed a copy.

Delays in disposal of cases before the DRTs increase non-performing assets on the books of banks, apart from lower recovery as the value of the mortgaged assets declines.

During the lockdown, the debt recovery tribunals should have continued to function through e-hearings across the country, it said. This facility was available only in five cities and was later extended to three more, the petition said.

The bank urged the top court to issue directions to ensure hearings resume via video-conferencing at these tribunals. The failure to make these forums available to the citizens where they can legally recover their debts amounts to a violation of their constitutional rights, the petition said.

The bank said the DRTs and their appellate tribunals have been suffering from delays even before the lockdown. The reason behind this seems to be the large number of vacancies, appointment of inadequately experienced personnel and lack of adequate training of those at the lower level, the petition said.

Despite the past rulings of the top court, “no action has been taken towards devising a concrete plan for filling up these vacancies, ensuring meritorious appointment and proper training for the officers, and thus, clearing the heavy backlog of cases pending before all DRTs and DRATs,” Kotak Mahindra Bank said.

A three-judge bench, headed by Chief Justice of India Justice SA Bobde, issued notice to the central government to respond. The next hearing is yet to be scheduled.