CENTRE FOR PUBLIC INTEREST LITIGATION Vs. HOUSING & URBAN DEVELOPMENT CORP.LTD&ORS
Supreme Court of India (Full Bench (FB)- Three Judge)
Writ Petition (Civil), 573 of 2003, Judgment Date: Jan 03, 2017
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO. 573 OF 2003
CENTRE FOR PUBLIC INTEREST .....PETITIONER
LITIGATION
VERSUS
HOUSING & URBAN DEVELOPMENT .....RESPONDENTS
CORPORATION LTD & ORS
J U D G M E N T
Dr D Y CHANDRACHUD, J
Prior to the establishment of Debt Recovery Tribunals, as on 30
September 1990, more than fifteen lakh cases filed by public sector banks
and about three hundred and four cases filed by financial institutions were
pending before various courts. The amounts involved were to the extent of
Rs. 5,622 crores in dues of public sector banks and Rs. 391 crores of
financial institutions. Following the Reports of the Narasimhan Committee
and the Tiwari Committee, Parliament enacted the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993 for providing for the
establishment of tribunals and appellate tribunals for expeditious
adjudication and recovery of dues due to banks and financial institutions.
2 At present, thirty four Debt Recovery Tribunals and five Appellate
Tribunals are functioning in the country. In financial year 2015-16 these
Tribunals disposed of about 16,000 original applications involving a total
amount of Rs. 34,000 crores. Since their inception until 31 October 2015,
the Tribunals had disposed of 1,34,433 original applications leading to the
recovery of an amount of Rs. 70,725 crores. The Tribunals are also vested
with the jurisdiction to entertain securitization applications under the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002.
3 This Court has been apprised, in the submissions filed by the Union
government, that more than 70,000 cases involving an amount of Rs.5 lakh
crores approximately are pending before the Debt Recovery Tribunals, of
which many are pending for more than ten years. Though the Act of 1993
provides for the disposal of recovery applications within one hundred and
eighty days, cases have remained pending for years together. In order to
deal with the large pendency of cases, the Enforcement of Security Interest
and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill,
2016 was introduced in the Lok Sabha on 11 May 2016. The Bill was referred
to a Joint Committee of both Houses of Parliament. The Committee presented
its Report to the Lok Sabha on 22 July 2016. Eventually, a law has been
enacted by both the Houses of Parliament and published in the E-gazette on
16 August 2016.
4 Legislative changes to provide for expeditious disposal of
proceedings before the Debt Recovery Tribunals may not by themselves
achieve the intended object so long as the infrastructure provided to the
Tribunals is not commensurate with the burden of the work and nature of
judicial duties. Recently, the Chairperson of the Debts Recovery Appellate
Tribunal at Allahabad addressed a letter on 9 December 2016 to the Chief
Justice of India recording that he was constrained to tender his
resignation from the post of Chairperson since, in the absence of
infrastructure and facilities, the functioning of the adjudicating body
over which he presided had become impossible. This is symptomatic of a
trend whereby the Debt Recovery Tribunals and Appellate Tribunals suffer
from a lack of adequate infrastructure, manpower and resources. Having due
regard to the important adjudicatory function which is entrusted to these
Tribunals, the efficacy of parliamentary legislation will depend in a large
measure on the efficiency with which the Tribunals discharge their duties.
5 We accordingly direct the Union Government to file an affidavit
specifically dealing with the following issues :
(i) Whether the timelines set down in the amended legislation are capable
of being achieved with the existing infrastructure including judicial
personnel and staffing pattern of the Debt Recovery Tribunals and Debt
Recovery Appellate Tribunals;
(ii) The underlying basis, if any, upon which the revised timelines have
been stipulated and whether any scientific study has been conducted on the
availability of infrastructure;
(iii) Whether, and if so, what steps the Union government intends to adopt
to enhance the infrastructure of Debt Recovery Tribunals and the Appellate
Tribunals in terms of physical infrastructure, judicial manpower and non-
judicial personnel required for the efficacious functioning of the
Tribunals;
(iv) The specific plan of action including time-schedules within which the
existing infrastructure would be upgraded so as to achieve the time frame
for disposal indicated in the amended legislation; and
(v) Empirical data on the pendency of cases for more than ten years and
the list of corporate entities where the amount outstanding is in excess of
Rs.500 crore.
6 The affidavit shall be filed within a period of four weeks from
today. We clarify that this direction for the filing of a further
affidavit shall not in any manner affect the functioning of the Committee
which has already been constituted by the Union government and whose report
is awaited.
………......................... CJI
[T.S.THAKUR]
..........................................J
[A.M. KHANWILKAR]
..........................................J
[Dr DY CHANDRACHUD]
New Delhi;
January 03, 2017.