The Hindu : Tamil Nadu News : Tribunals mop up crores

Online edition of India's National Newspaper
Monday, Sep 13, 2004

Tamil Nadu

Tamil Nadu

Tribunals mop up crores

By A. Subramani

CHENNAI, SEPT. 12. What can be achieved by `humanising law' and simplifying the cumbersome court procedures? Rs. 1,500 crores.

That is what three Debts Recovery Tribunals in Tamil Nadu got in return for adopting the natural justice-centric approach while dealing with banks and defaulters.

DRT-I, the first for the unified territory of Tamil Nadu, Kerala and Pondicherry, came up in Chennai in October 1996, three years after the Recovery of Debts Due to Banks and Financial Institutions Act was legislated. After several rounds of litigation and initial functional hiccups, the Act was validated by the Supreme Court in 2002.

But by then the DRTs grew in numbers. While one tribunal came up in Ernakulam, DRT-II in Chennai and one in Coimbatore were established in Tamil Nadu. DRT-I alone is responsible for the recovery of over Rs. 1,025 crores. The achievement is significant as over 4,000 cases disposed of for recovering the amount involved a suit claim of Rs. 2,850 crores. While Rs. 130 crores was recovered through public auction of about 500 pieces of mortgaged property, the rest came through compromise settlements. That is the reason why very few appeals are being filed in the Debts Recovery Appellate Tribunal in this part of the country, says Harihar P. Chaturvedi, Presiding Officer of the DRT-I. The secret lies in giving all possible importance and assistance to the "bonafide defaulter", for he is honest and keen on a reasonable settlement, he says. His words command attention because he is a man responsible for the recovery of over Rs. 850 crores.

"Procedure is out, and only the principle of natural justice is the guiding principle," says A. Vijayakumar, Presiding Officer of DRT-II. As a man in-charge of Coimbatore DRT as well, he has recovered about Rs. 380 crores. While DRT-II has realised Rs. 251.48 crores, the Coimbatore unit has mopped up Rs. 127.56 crores till February.

Small borrowers

A significant feature of the DRT performance is that not many mega borrowers paid crores in one settlement. Ninety per cent of the recovered amount came from small borrowers hailing from the "god-fearing middle class," says Mr. Vijayakumar.

Big companies go to the BIFR for settlement, says Mr. Chaturvedi. They unanimously decry a popular impression that DRTs are vested with powers to downscale claim amounts according to their personal whims and fancies. Not blaming the civil courts, from where a large number of pending cases was transferred to DRTs after the arrival of the Act, Mr. Vijayakumar said expeditious settlement was not possible in courts because of time constraint. "While we have our task is cut out, of resolving bank cases and recovering dues, the civil courts grapple with a variety of cases. Also, even after a suit was decreed in civil courts, the banks concerned have to file execution petitions in the jurisdictional courts to get the decree enforced." Decrees from DRT could be implemented directly by recovery officers anywhere in India, and no separate proceedings involving the execution petition were required, says R. Pandian, Recovery Officer, DRT-I.

Mr. Chaturvedi points out that the DRTs in the four southern States account for the recovery of more than Rs. 3,000 crores, with the one in Bangalore recovering Rs. 1,200 crores and the Hyderabad one crossing the Rs. 900-crore mark recently.

How economical are the DRTs in their recovery drives compared to the other modes? Sample this: The annual budgetary allocation for DRT-I, which has mopped up over Rs. 1,000 crores, is only Rs. 50 lakhs!

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