Frame rules to prioritize disposal of DRT cases having claim amounts of Rs. 100 crores or more: Delhi High Court to Centre

The Delhi High Court has directed the Central government to frame appropriate rules within six weeks to prioritize disposal of pending cases having claim amounts of Rs. 100 crores or more before the Debt Recovery Tribunal (Edelweiss Asset Reconstruction vs Dept of Financial Services). .A Division Bench of Justices Vipin Sanghi and Rekha Palli opined that when the whole purpose and object behind the creation of Debt Recovery Tribunals was to expedite recovery of public monies, any delay in disposal of large claims of banks and financial institutions would have a "deleterious effect on the economy"."We direct respondent (Central government) to proceed to frame the appropriate Rules to prioritize disposal of cases pending before DRT with the claim amounts of Rs. 100 crores or more. All necessary Rules/Directions in this regard shall be issued by Central government positively within next six weeks," the Court ordered. .The Court opined that banks and financial institutions would be disabled from advancing monies to borrowers if their monies are stuck in long drawn legal proceedings. "The banks and financial institutions advance loans to enable small, medium and large businesses to grow. Chocking of the monies of the banks and financial institutions would arrest the growth of the economy itself. The DRT ought to have been sensitive to these aspects," the Court further stated. .The Court also observed that when the sums involved are so significant, there could be no debate with the idea of prioritizing such cases for expeditious and urgent disposal..This line of thought, the Court added, was also the mandate of Section 19(24) of the Recovery of Debts and Bankruptcy Act, 1993. .The order was passed in a petition by Edelweiss Asset Reconstruction Company inter alia seeking a direction that its Original Application pending before the Tribunal be disposed of in accordance with the manner and time frame set out in Section 19(24) of the Act..The claim amount in the present case was in excess of Rs. 466 crores. .The petitioner further argued that in spite of Section 19(3) which only requires that an original applicant produces true copies of all documents relied upon by it in support of its claim, the Registrar concerned directed filing of original documents instead of issuing summons and considering the prayer for interim relief. .In its order, the Court held that filing of original documents at the time of filing an Original Application before the Debt Recovery Tribunals was not mandatory.."There is absolutely no statutory or legal basis for insisting on the filing of original documents when filing an Original Application before the Debt Recovery Tribunals. Thus, the filing of original documents along with the Original Application cannot, and should not, be insisted upon in light of the provision already taken note of hereinabove, namely Section 19(3) of the Act and Form-I contained in the Debts Recovery Tribunal (Procedure) Rules, 1993 framed under the aforesaid Act," the Court ruled. .The Court further said that Section 19(10A) or Section 19(10B) also did not make it incumbent for the Applicant to file original documents at the time of presenting the Original Application..The Court also rejected the respondent authority's stand that the petitioner had itself sought an adjournment to file original documents. ."If we were to accept the submission of Mr. Thakur (Registrar) that the petitioner had itself sought an adjournment to file original documents, that would mean that the petitioner, despite filing true copies of the documents, did not want notice/summons to be issued in its own Original Application and wanted to compel itself to repeatedly appear before the Tribunal only to be directed to file the original documents. This submission is absurd and is only to be noted to be rejected. We would have appreciated if the respondent/DRT had come forward to accept the lapse on its part and to assure this Court of making amends in the future. Unfortunately, the approach adopted by the learned DRT before us is to justify the blunder which has been noted hereinabove," it said. .The petition was ultimately disposed in the above terms..Advocates RP Agrawal, Manisha Agrawal, Pragati Agrawal appeared for the petitioner. .ASG Chetan Sharma Chetan Sharma with Standing Counsel Ravi Prakash appeared for the respondent authority. .[Read Order]