Tanisha Rana
Published on: October 7, 2022 at 23:08 IST
The DRTs in Delhi, Mumbai, and Chennai now have jurisdiction over all cases involving debt amounts of Rs. 100 crore or more, according to the Central Government.
For the expedited adjudication and recovery of debts owed to banks and financial institutions, insolvency resolution, bankruptcy of individuals and partnership firms, and related matters, the RDB Act, 1993, establishes Debts Recovery Tribunals (DRTs) with original jurisdiction and Debts Recovery Appellate Tribunals (DRATs) with appellate jurisdiction.
While not discouraging borrowers, the Act seeks to protect the interests of banks and other financial institutions as lenders.
Because the corresponding provisions have not yet come into effect, the Tribunals have not yet started taking on bankruptcy and insolvency resolution cases.
The Act is applicable in situations where the total sum owed to any bank, financial institution, or group of banks or financial institutions as defined by the Act is Rs. 20 lakh or more.
The following three DRTs will have the authority to handle matters involving more than Rs. 100 crore, in accordance with a notification released on Tuesday by the Ministry of Finance:
- Debts Recovery Tribunal No 1, Chennai,
- Debts Recovery Tribunal No 3, Delhi,
- Debts Recovery Tribunal No 1. Mumbai.
The other tribunals, whose authority is set forth in the announcement, will handle cases involving less than Rs. 100 crore.