RECOVERY OF DEBTS DUE TO BANKS AND by sqzs1ez

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									 THE RECOVERY OF     1.        Short title, extent, commencement and

DEBTS DUE TO BANKS             application. –

         AND         2.        Definitions. -

     FINANCIAL                                CHAPTER II

 INSTITUTIONS ACT,   Establishment of Tribunal and Appellate Tribunal

          1993       3.        Establishment of Tribunal. –
                     4.        Composition of Tribunal-
      (51 of 1993)
                     5.        Qualifications for appointment as Presiding
                                    [
                               Officer. -
                     6.           2
                               Term of office. -
                     7.        Staff7of Tribunal. –
                     8.            t
                               Establishment of Appellate Tribunal. -
                     9.        Composition of Appellate Tribunal. -
                                  h

                     10.       Qualifications for appointment as Presiding
                               Officer of the Appellate Tribunal. -
                                    A
                     11.       Term of office. -
                     12.       Staffu the Appellate Tribunal. -
                                     of
                     13.           g
                               Salary and allowances and other terms and
                                   u
                               conditions of service of Presiding Officers, -
                     14.       Filling up of vacancies. -
                                    s
                     15.       Resignation and removal. –
                                    t
                     16.       Orders constituting Tribunal or an
                               Appellate Tribunal to be final and not to
                                    1
                               invalidate its proceedings. -
                                    9       CHAPTER III
                                    9
                          Jurisdiction, Powers and Authority of Tribunals
                     17        Jurisdiction, powers and authority of
                                   3
                               Tribunals. -
                                    ]
                     1
                         [17-A Power of Chairperson of Appellate Tribunal
    CONTENTS
     CHAPTER I                 .-
      Preliminary    18.       Bar of jurisdiction. -
                                            CHAPTER IV
                                        Procedure of Tribunals
1
    [19.   Application to the Tribunal .–             and Tribunal to be public servants.—
20.        Appeal to the Appellate              33.   Protection of action taken in good faith.
           Tribunal. –                          34.   Act to have overriding effect. –
21.        Deposit of amount of debt due,       35.   Power to remove difficulties. –
           on filing appeal. -                  36.   Power to make rules. –
22.        Procedures and powers of the         37.   Repeal and saving. –
           Tribunal and the Appellate
           Tribunal. -
23.        Right to legal representation          THE RECOVERY OF DEBTS
           and Presenting Officers. –                DUE TO BANKS AND
24.        Limitation. -                          FINANCIAL INSTITUTIONS
                CHAPTER V                                ACT, 1993
      Recovery of Debt Determined by                    (51 of 1993) 1
                         Tribunal                                                                 [
25.        Modes of recovery of debts. -                                                          2
26.        Validity of certificate and
                                                                                                  7
           amendment thereof. –
                                                                                                  t
27.        Stay of proceedings under
           certificate and amendment or                                                           h
           withdrawal thereof. -
28.        Other modes of recovery. –                                                             A
29.        Application of certain                                                                 u
           provisions of Income-tax Act. -
1
                                                                                                  g
    [30    Appeal against the order of
                                                                                                  u
           Recovery Officer.—
                CHAPTER VI                                                                        s
                Miscellaneous                                                                     t
31.        Transfer of pending cases. –
1
    [31A Power of Tribunal to issue                                                               1
           certificate of recovery in case of
                                                                                                  9
           decree or order.—
1
                                                                                                  9
    [32.   Chairperson, Presiding Officer
           and staff of Appellate Tribunal
                                                  (4)       The provisions of this Act shall not
                                                         3 apply where the amount of debt due to
                                                         ] any bank or financial institution or to a
                                                            consortium of banks or financial
                                                            institutions is less than ten lakh rupees
     An Act to provide for the
                                                            or such other amount, being not less
     establishment of Tribunals for
                                                            than one lakh rupees, as the Central
     expeditious adjudication and
                                                            Government may, by notification,
     recovery of debts due to banks
                                                            specify.
     and financial institutions and for
     matters connected therewith or
                                           2.     Definitions. -
     incidental thereto.
                                                  In this Act, unless the context otherwise
     Be it enacted by Parliament in
                                           requires, -
             Forty-fourth Year of the
             Republic of India as
                                                  (a)       “Appellate Tribunal” means an
             follows:
                                                            Appellate Tribunal established under
                                                            sub-section (1) of Sec. S;
     1.      Assented to by the
                                                  (b)       “Application” means an application
             President on 27th
                                                            made to a Tribunal under Sec.19;
             August, 1993, published
             in the Gazette of India,
                                                  (c)       “Appointed day”, in relation to a
             Extraordinary, Pt. II,
                                                            Tribunal or an Appellate Tribunal,
             Sec. I dated 27th
                                                            means the a -ate on which such Tribunal
             August, 1993.
                                                            is established under sub-section (1) of
                                                            Sec. 3 or, as the case may be, sub-
           CHAPTER I                                        section (1) of Sec. 8;
           Preliminary                            (d)       “Bank” means-
1.   Short         title,       extent,                     (i)     A banking company;
     commencement                  and
     application. –                                         (ii)    A corresponding new bank;
     (1)     This Act may be called
                                                            (iii)   State Bank of India;
             the Recovery of Debts
             Due to Banks and
                                                            (iv)    A subsidiary bank; or
             Financial Institutions Act,
             1993.
                                                            (v)     A Regional Rural Bank;
     (2)     It extends to the whole of
                                                  (e)       “Banking company” shall have the
             India except the State of
                                                            meaning assigned to it in Cl. (c) of Sec.
             Jammu and Kashmir.
                                                            5 of the Banking Regulation Act, 1949
                                                            (10 of 1949);
     (3)     It shall be deemed to have
             come into force on the               1
                                                      [(ea) “Chairperson” means a Chairperson of
             24th day of June, 1993.
                                                            an Appellate Tribunal appointed under
                                                            section 9;]
                                                      having regard to its business
(f)   “Corresponding       new                        activity and the area of its
      bank” shall have the                            operation      in     India, by
      meaning assigned to it in                       notification, specify;
      Cl. (da) of Sec. 57of the
      Banking Regulation Act,        (i)       “Notification” means a notification
      1949 (10 of 1949);                       published in the Official Gazette;
      2
(g)    [“Debt”      means      any   (j)       “Prescribed” means prescribed by rules
      liability (inclusive of                  made under this Act;
      interest) which is claimed
                                     1
      as due from any person             [(ja) “Presiding Officer” means the Presiding
      by a bank or a financial                 Officer of the Debts Recovery Tribunal
      institution or by a                      appointed under sub-section (1) of
      consortium of banks or                   section 4;]
      financial       institutions
      during the course of any       (k)       “Recovery Officer” means a Recovery
      business            activity             Officer appointed by them Central
      undertaken by the bank or                Government for each Tribunal under
      the financial institution or             sub- section (1) of Sec. 7;
      the consortium under any
      law for the time being in      (1)       “Regional Rural Bank” means a
      force,     in    cash     or             Regional Rural Bank established under
      otherwise,          whether              Sec. 3 of the Regional Rural Banks Act,
      secured or unsecured, or                 1976 (21 of 1976);
      assigned, or whether
      payable under a decree or      (m)       “State Bank of India” means the State
      order of any Civil Court                 Bank of India constituted under Sec. 3
      or any arbitration award                 of the State Bank of India Act, 1955,
      or otherwise or under a                  (23 of 1955);
      mortgage and subsisting
      on,        and       legally   (n)       “Subsidiary bank” shall have the
      recoverable on, the date                 meaning assigned to it in Cl. (k) of Sec.
      of the application;]                     2 of the State Bank of India (Subsidiary
                                               Banks) Act, 1959, (38 of 1959);
(h)   “Financial institution”
      means-                         (o)       “Tribunal” means the Tribunal
                                               established under sub-section (1) of Sec.
      (i)    A public financial                3.
             institution within
             the meaning of          1.        Inserted by Act 1 of The Recovery of
             Sec. 4-A of the                   Debts due to Banks and Financial
             Companies Act,                    Institutions (Amendment) Act, 2000,
             1956 (1 of 1956);                 dt. 25-03-2000
                                     2.        Substituted by Act 1 of The Recovery
      (ii)   Such          other               of Debts due to Banks and Financial
             institution as the                Institutions (Amendment) Act, 2000,
             Central                           dt. 25-03-2000
             Government may,
         CHAPTER II                      5.   Qualifications for appointment as Presiding
 Establishment of Tribunal and                Officer. -
      Appellate Tribunal
                                              A person shall not be qualified for appointment
                                              as the Presiding Officer of a Tribunal unless he
3.   Establishment of Tribunal. –
                                              is, or has been, or is qualified to be, a District
                                              Judge.
     (1)   The Central Government
           shall, by notification,
                                     6.       Term of office. -
           establish one or more
           Tribunals, to be known as
                                              The Presiding Officer of a Tribunal shall hold
           the     Debts    Recovery
                                              office for a term of five years from the date on
           Tribunal, to exercise the
                                              which he enters upon his office or until he
           jurisdiction, powers and
                                              attains the age of 1[sixty-two years], whichever
           authority conferred on
                                              is earlier.
           such Tribunal by or under
           this Act.
                                              1.     Subs. for ‘sixty years” by Act No. 28
                                                     of 1995, Sec. 2.
     (2)   The Central Government
           shall also specify, in the
                                       7.     Staff of Tribunal. –
           notification referred to in
           sub-section (1), the areas
                                              (1)    The Central Government shall provide
           within which the Tribunal
                                                     the Tribunal 1[with one or more
           may exercise jurisdiction
                                                     Recovery Officers] and such other
           for    entertaining    and
                                                     officers and employees as that
           deciding the applications
                                                     Government may think fit.
           filed before it.
                                                     1
                                              (2)     [The Recovery Officers] and other
4.   Composition of Tribunal-
                                                     officers and employees of a Tribunal
                                                     shall discharge their functions under the
     (1)   A Tribunal shall consist
                                                     general    superintendence      of    the
           of one person only
                                                     Presiding Officer.
           (hereinafter referred to as
           the Presiding Officer) to
                                              (3)    The salaries and allowances and other
           be      appointed,       by
                                                     conditions of service of the 1[Recovery
           notification,    by     the
                                                     Officers] and other officers and
           Central Government.
                                                     employees of a Tribunal shall be such
                                                     as may be prescribed.
     (2)   Notwithstanding anything
           contained in sub-section
                                              1.     Substituted by Act 1 of The Recovery
           (1),      the       Central
                                                     of Debts due to Banks and Financial
           Government             may
                                                     Institutions (Amendment) Act, 2000,
           authorise the Presiding
                                                     dt. 25-03-2000.
           Officer of one Tribunal to
           discharge      also     the
                                       8.     Establishment of Appellate Tribunal. -
           functions of the Presiding
           Officer     of      another
                                              (1)    The Central Government shall, by
           Tribunal.
                                                     notification, establish one or more
                                                     Appellate Tribunals, to be known as the
                 Debts           Recovery
                 Appellate Tribunal, to              A person shall not be qualified for appointment
                 exercise the jurisdiction,          as the Presiding Officer of an Appellate
                 powers and authority                Tribunal unless he-
                 conferred    on      such
                 Tribunal by or under this           (a)    Is, or has been, or is qualified to be, a
                 Act.                                       judge of a High Court; or

      (2)        The Central Government              (b)    Has been a member of the Indian Legal
                 shall also specify in the                  Service and has held a post in Grade I
                 notification referred to in                of that Service for at least three years;
                 sub-section      (1)    the                or
                 Tribunals in relation to
                 which the Appellate                 (c)    Has held office as the Presiding Officer
                 Tribunal may exercise                      of a Tribunal for at least three years.
                 jurisdiction.
                                               11.   Term of office. -
      1
          [(3)   Notwithstanding anything
                 contained in sub-sections           The Presiding Officer of an Appellate Tribunal
                 (1) and (2), the Central            shall hold office for a term of five years from
                 Government           may            the date on which he enters upon his office or
                 authorise the Chairperson           until he attains the age of 1[Sixty five years],
                 of one Appellate tribunal           whichever is earlier.
                 to discharge also the
                 functions      of     the           1.     Subs. for ‘sixty-two years’ by ibid.
                 Chairperson of other
                 Appellate Tribunal.]      12.       Staff of the Appellate Tribunal. -

      1.         Inserted by Act 1 of The            The provisions of Sec. 7 (except those relating
                 Recovery of Debts due               to Recovery Officer) shall, so far as may be,
                 to Banks and Financial              apply to an Appellate Tribunal` as they to a
                 Institutions                        Tribunal and accordingly references in that
                 (Amendment) Act, 2000,              section to “ Tribunal” shall be construed as
                 dt. 25-03-2000                      references to “ Appellate Tribunal” and
                                                     references to “Recovery Officer” shall be
9.    Composition          of    Appellate           deemed to have been omitted.
      Tribunal. -
                                               13.   Salary and allowances and other terms and
      An Appellate Tribunal shall                    conditions of service of Presiding Officers, -
      consist of one person only
      (hereinafter referred to as the                The salary and allowances payable to and the
      Presiding    Officer     of    the             other terms and conditions of service (including
      Appellate Tribunal) to be                      pension, gratuity and other retirement benefits)
      appointed, by notification, by the             of the presiding Officer of a Tribunal or and
      Central Government.                            Appellate Tribunal shall be such as m may be
                                                     prescribed:
10.   Qualifications for appointment
      as Presiding Officer of the                    Provided that neither the salary and allowances
      Appellate Tribunal. -                          nor the other terms and conditions of service of
      1
       [the Presiding Officer of a                   Office until the expiry of three months
      Tribunal or the Chairperson of an              from the date of receipt of such notice
      Appellate Tribunal shall be                    or until a person duly appointed as his
      varied to his] disadvantage after              successor enters upon his office or until
      appointment.                                   the expiry of his term 6f office,
                                                     whichever is the earliest.
      1.     Substituted by Act 1 of
             The Recovery of Debts            (2)    The Presiding Officer of a Tribunal or
             due to Banks and                        an Appellate Tribunal shall not be
             Financial    Institutions               removed from his office except by an
             (Amendment) Act, 2000,                  order made by the Central Government
             dt. 25-03-2000                          on the ground of proved misbehaviour
                                                     or incapacity after inquiry, -
14.   Filling up of vacancies. -
                                                     (a)    In the case of the Presiding
      If, for any reason other than                         Officer of a Tribunal, made by a
      temporary absence, any vacancy                        Judge of a High Court;
      occurs in the office of the
      Presiding Officer of a Tribunal or             (b)    In the case of the Presiding
      an appellate Tribunal, then the                       Officer    of   an    Appellate
      Central     Government       shall                    Tribunal, made by a judge of the
      appoint another person in                             Supreme Court,
      accordance with the provisions of
      this Act to fill the vacancy and               In which 1[the Presiding Officer of a
      the     proceedings    may      be             Tribunal or the Chairperson of an
      continued before the Tribunal or               Appellate Tribunal] concerned has been
      the Appellate Tribunal from the                informed of the charges against him and
      stage at which the vacancy is                  given a reasonable opportunity of being
      filled.                                        heard in respect of these charges.

15.   Resignation and removal. –              (3)    The Central Government may, by rules,
                                                     regulate the procedure for the
      (l)    The Presiding Officer of a              investigation of misbehaviour or
             Tribunal or an Appellate                incapacity of 1[the Presiding Officer of
             Tribunal may, by notice                 a Tribunal or the Chairperson of an
             in writing under his hand               Appellate Tribunal.]
             addressed to the Central
             Government, resign his           1.     Substituted by Act 1 of The Recovery
             office:                                 of Debts due to Banks and Financial
                                                     Institutions (Amendment) Act, 2000,
                                  1
             Provided     that     [the              dt. 25-03-2000
             Presiding Officer of a
             Tribunal       or      the 16.   Orders constituting Tribunal or an
             Chairperson       of    an       Appellate Tribunal to be final and not to
             Appellate Tribunal] shall,       invalidate its proceedings. -
             unless he is permitted by
             the Central Government           No order of the Central Government appointing
             to relinquish his office         any ‘ person as the Presiding Officer of a
             sooner, continue to hold         Tribunal or an Appellate Tribunal shall be
         called in question in any manner,                     appraising the work and recording the
         and no act or proceeding before a                     annual confidential reports of Presiding
         Tribunal or an e Appellate                            Officer.
         Tribunal shall be called in
         question in any manner on the                  (2)    The Chairperson of an Appellate
         ground merely of any defect in                        tribunal having jurisdiction over the
         the constitution of a Tribunal or                     Tribunals may, on the application of
         an Appellate Tribunal.                                any of the parties or on his own motion
                                                               after notice to the parties, and after
            CHAPTER III                                        hearing them, transfer any case from
       Jurisdiction, Powers and                                one Tribunal for disposal to any other
                                                               Tribunal.]
        Authority of Tribunals
                                                        1.     Inserted by Act 1 of The Recovery of
17       Jurisdiction,    powers      and                      Debts due to Banks and Financial
         authority of Tribunals. -                             Institutions (Amendment) Act, 2000,
                                                               dt. 25-03-2000
         (l)    A Tribunal shall exercise,
                on and from the              18.        Bar of jurisdiction. -
                appointed clay, the
                jurisdiction, powers and                On and from the appointed day, no Court or
                authority to entertain and              other authority shall have, or been titled to
                decide applications from                exercise, any jurisdiction, power or authority
                the banks and financial                 (except the Supreme Court, and a High Court
                institutions for recovery               exercising jurisdiction under Arts. 226 and 227
                of debts due to such                    of the Constitution) in relation to the matters
                banks and financial                     specified in Sec. 17.
                institutions. .

         (2)    An Appellate Tribunal                             CHAPTER IV
                shall exercise, on and                        Procedure of Tribunals
                from the appointed day,
                                             1
                the jurisdiction, powers         [19.   Application to the Tribunal .–
                and authority to entertain
                appeals against any order               (1)    Where a bank or a financial institution
                made, or deemed to have                        has to recover any debt from any
                been made, by a Tribunal                       person, it may make an application to
                under this Act.                                the Tribunal within the local limits of
                                                               whose jurisdiction, -
1
    [17-A Power of Chairperson          of
          Appellate Tribunal .-                                (a)     The defendant, or each of the
                                                                       defendants where there are more
         (1)    The Chairperson of an                                  than one, at the time of making
                Appellate Tribunal shall                               the application, actually and
                exercise general power of                              voluntarily resides, or carries on
                superintendence       and                              business, or personally works
                control over the Tribunal                              for gain; or
                under his jurisdiction
                including the power of                         (b)     Any of the defendants, where
                                                                       there are more than one, at the
              time of making                Provided further that nothing contained
              the    application,           in this sub-section relating to fee shall
              actually       and            apply to cases transferred to the
              voluntarily                   Tribunal under sub-section (1) of Sec.
              resides, or carries           31.
              on business, or
              personally works        (4)   On receipt of the application under sub-
              for gain; or                  section (1) or sub-section (2), the
                                            Tribunal shall issue summons requiring
      (c)     The cause of                  the defendant to show cause within
              action, wholly or             thirty days of the service of summons as
              in part, arises.              to why the relief prayed for should not
                                            be granted.
(2)   Where a bank or financial
      institution, which has to       (5)   The defendant shall, at or before the
      recover its debt from any             first fearing or within such time as the
      person has filed an                   Tribunal may permit, present a written
      application       to      the         statement of his defence.
      Tribunal      under     sub-
      section (1) and against the     (6)   Where the defendant claims to set-off
      same person another bank              against the applicant’s demand any
      or financial institution              ascertained sum of money legally
      also has claim to recover             recoverable by him for such applicant,
      its debt then, the later              the defendant may, at the first hearing
      bank       or      Financial          of the application, but not afterwards
      institution may join the              unless permitted by the Tribunal,
      applicant-bank             or         present a written statement containing
      financial institution at any          the particulars of the debt sought to be
      stage of the proceedings              set-off.
      before the final order is
      passed by making an             (7)   The written statement shall have the
      application      to      that         same effect as a plaint in a cross-suit so
      Tribunal.                             as to enable the Tribunal to pass a final
                                            order in respect of both of the original
(3)   Every application under               claim and of the set-off.
      sub-section (1) or sub-
      section (2) shall be in         (8)   A defendant in an application may, in
      such form and be                      addition to his right of pleading a set-off
      accompanied by such                   under sub-section (6), set up, by way of
      documents      or    other            counter-claim against the claim of the
      evidence and by such fee              applicant, any right or claim in respect
      for filing the application            of a cause of action accruing to the
      as may be prescribed:                 defendant against the applicant either
                                            before or after the filing of the
      Provided that the fee may             application but before the defendant has
      be prescribed having                  delivered his defence or before the time
      regard to the amount of               limited for delivering his defence has
      debt to be recovered:                 expired, whether such counter-claim is
       in the nature of a claim             disposing of, any property and assets
       for damages or not.                  belonging to him without the prior
                                            permission of the Tribunal.
(9)    A counter-claim under
       sub-section (8) shall have    (13)   (A)     Where, at any stage of the
       the same effect as a cross-          proceedings, the Tribunal is satisfied,
       suit so as to enable the             by affidavit or otherwise, that the
       Tribunal to pass a final             defendant, with in-tent to obstruct or
       order on the same                    delay or frustrate the execution of any
       application, both on the             order for the recovery of debt that may
       original claim and on the            be passed against him,—
       counter-claim.
                                                   (i)    is about to dispose of the
(10)   The applicant shall be at            whole or any part of his property; or
       liberty to file a written
       statement in answer to the                  (ii)    is about to remove the
       counter-claim of the                                whole or any part of his
       defendant within such pe-                           property from the local
       riod as may be fixed by                             limits of the jurisdiction
       the Tribunal.                                       of the Tribunal; or

(l1)   Where a defendant sets                      (iii)   is likely to cause any
       up a counter-claim and                              damage or mischief to
       the applicant contends                              the property or affect its
       that the claim thereby                              value by misuse or
       raised ought not to be                              creating third party
       disposed of by way of                               interest,
       counter-claim but in an
       independent action, the              the Tribunal may direct the defendant,
       applicant may, at any                within a time to be fixed by it, either to
       time before issues are               furnish security, in such sum as may be
       settled in relation to the           specified in the order, to produce and
       counter-claim, apply to              place at the disposal of the Tribunal,
       the Tribunal for an order            when required, the said property or the
       that such counter-claim              value of the same, or such portion
       may be excluded, and the             thereof as may be sufficient to satisfy
       Tribunal may, on the                 the certificate for the recovery of debt,
       hearing of such                      or to appear and show cause why he
       application make such                should not furnish security.
       order as it thinks fit.
                                            (B)    Where the defendant fails to
(12)   The Tribunal may make                       show cause why he should not
       an interim order (whether                   furnish security, or fails to
       by way of injunction or                     furnish the security required,
       stay or attachment)                         within the time fixed by the
       against the defendant to                    Tribunal, the Tribunal may order
       debar him from                              the attachment of the whole or
       transferring, alienating or                 such portion of the properties
       otherwise dealing with, or                  claimed by the applicant as the
               properties secured                   the Tribunal directs his release.
               in his favour or
               otherwise owned              (18) Where it appears to the Tribunal to be
               by the defendant     just and convenient, the Tribunal may, by order,—
               as appears
               sufficient to sat-                   (a)      appoint a receiver of any
               isfy any certificate         property, whether before or after grant of
               for the recovery of          certificate for recovery of debt;
               debt.
                                                    (b)      remove any person from the
(14)   The applicant shall,                 possession or custody of the property;
       unless the Tribunal
       otherwise directs, specify
       the property required to
       be attached and the
       estimated value thereof.

(15)   The Tribunal may also in
       the order direct the
       conditional attachment of
       the whole or any portion
       of the property specified
       under sub-section (14).

(16)   If an order of attachment
       is made without
       complying with the
       provisions of sub-section
       (13) such attachment shall
       be void.

(17)   In the case of
       disobedience of an order
       made by the Tribunal
       under sub-sections (12),
       (13) and (18) or breach of
       any of the terms on which
       the order was made, the
       Tribunal may order the
       properties of the person
       guilty of such
       disobedience or breach to
       be attached and may also
       order such person to be
       detained in the civil
       prison for a term ot
       exceeding three months,
       unless in the meantime
                                                    registered under the Companies Act,
        (c)    commit the same                      1956. The Tribunal may order the sale
to the possession, custody or                       proceeds of such company to be
management of the receiver;                         distributed among its secured creditors
                                                    in accordance with the provisions of
       (d)     confer upon the                      section 529-A of the Companies Act,
               receiver all such                    1956 and to pay the surplus, if any, to
               powers, as to                        the company.
               bringing and
               defending suits in          (20) The Tribunal may, after giving the
               the courts or filing               applicant and the defendant an
               and defending                      opportunity of being heard, pass such
               applications                       interim or final order, including the
               before the                         order for payment of interest from the
               Tribunal and for                   date on or before which payment of the
               the realization,                   amount is found due upto the date of
               management,                        realisation or actual payment, on the
               protection,                        application as it thinks fit to meet the
               preservation and                   ends of justice.
               improvement of
               the property, the           (21) The Tribunal shall send a copy of every
               collection of the    order passed by it to the applicant and the defendant.
               rents and profits
               thereof, the                (22) The Presiding Officer shall issue a
               application and                    certificate under his signature on the
               disposal of such                   basis of the order of the Tribunal to the
               rents and profits,                 Recovery Officer for recovery of the
               and the execution                  amount of debt specified in the
               of documents as                    certificate.
               the owner himself
               has, or such of             (23) Where the Tribunal which has issued a
               those powers as                    certificate of recovery, is satisfied that
               the Tribunal                       the property is situated with in the local
               thinks fit; and                    limits of the jurisdiction of two or more
                                                  Tribunals, it may send the copies of the
       (e)     appoint a                          certificate of recovery for execution to
               Commissioner for                   such other Tribunals where the property
               preparation of an                  is situated:
               inventory of the
               properties of the                  Provided that in a case where the Tribu-
               defendant or for                   nal to which the certificate of recovery
               the sale thereof.                  is sent for execution finds that it has no
                                                  jurisdiction to comply with the
(19)   Where a certificate of                     certificate of recovery, it shall return the
       recovery is is-sued                        same to the Tribunal which has Issued
       against a company                          it.
      (24)   The application made to        (2)    No appeal shall lie to the Appellate
             the Tribunal under sub-               Tribunal from an order made by a
             section (1) or sub-section            Tribunal with the consent of the parties.
             (2) shall be dealt with by
             it as expeditiously as         (3)    Every appeal under sub-section (1) shall
             possible and endeavour                be filed within a period of forty-five
             shall be made by it to dis-           days from the date on which a copy of
             pose of the application               the order made, or deemed to have been
             finally within one                    made, by the Tribunal is received by
             hundred and eighty days               him and it shall be in such form and be
             from the date of receipt of           accompanied by such fee as may be
             the application.                      prescribed:

      (25)   The Tribunal may make                 Provided that the Appellate Tribunal
             such orders and give such             may entertain an appeal after the expiry
             directions as may be                  of the said period of forty-five days if it
             necessary or expedient to             is satisfied that there was sufficient
             give effect to its orders or          cause for not filing it within that period.
             to prevent abuse of its
             process or to se-cure the      (4)    On receipt of an appeal under sub-
             ends of justice.]                     section (1), the Appellate Tribunal may,
                                                   after giving the parties to the appeal, an
             1.      Substituted     by            opportunity of being heard, pass such
                     Act 1 of The                  orders thereon as it thinks fit,
                     Recovery        of            confirming, modifying or setting aside
                     Debts due to                  the order appealed against.
                     Banks         and
                     Financial              (5)    The Appellate Tribunal shall send a
                     Institutions                  copy of every order made by it to the
                     (Amendment)                   parties to the appeal and to the
                     Act, 2000, dt. 25-            concerned Tribunal.
                     03-2000
                                            (6)    The appeal filed before the Appellate
                                                   Tribunal under sub-section (1) shall be
20.   Appeal to        the    Appellate            dealt with by it as expeditiously as
      Tribunal. –                                  possible and endeavour shall be made
                                                   by it to dispose of the appeal finally
      (l)    Save as provided in sub-              within six months from the date of
             section (2), any person               receipt of the appeal.
             aggrieved by an order
             made, or deemed to have 21.    Deposit of amount of debt due, on filing
             been made, by a Tribunal       appeal. -
             under this Act, may prefer
             an appeal to an Appellate      Where an appeal is preferred by any person
             Tribunal             having    from whom the amount of debt is due to a bank
             jurisdiction in the matter.
      or a financial institution or a              vested in a Civil Court under the Code
      consortium of banks or financial             of Civil Procedure, 1908, (5 of 1908)
      institutions, such appeal shall not          while trying a suit, in respect of the
      be entertained by the Appellate              following matters, namely: -
      Tribunal unless such person has
      deposited with the Appellate                 (a)    Summoning and enforcing the
      Tribunal seventy-five per cent. of                  attendance of any person and
      the amount of debt so due from                      examining him on oath;
      him as determined by the
      Tribunal under Sec. 19:                      (b)    Requiring the discovery and
                                                          production of documents;
      Provided that the Appellate
      Tribunal may, for reasons to be              (c)    Receiving evidence on
      recorded in writing, waive or                       affidavits;
      reduce the amount to be
      deposited under this section.                (d)    Issuing commissions for the
                                                          examination of witnesses or
22.   Procedures and powers of the                        documents;
      Tribunal and the Appellate
      Tribunal. -                                  (e)    Reviewing its decisions;

      (1)    The Tribunal and the                  (f)    Dismissing an application for
             Appellate Tribunal shall                     default or deciding it ex parte;
             not be bound by the
             procedure laid down by                (g)    Setting aside any order of
             the Code of Civil                            dismissal of any application for
             Procedure, 1908 (5 of                        default or any order passed by it
             1908), but shall be guided                   ex parte;
             by the principles of
             natural     justice     and,          (h)    Any other matter, which may be
             subject to the other                         prescribed.
             provisions of this Act and
             of any rules, the Tribunal      (3)   Any proceeding before the Tribunal or
             and      the      Appellate           the Appellate Tribunal shall be deemed
             Tribunal      shall     have          to be a judicial proceeding within the
             powers to regulate their              meaning of Secs. 193 and 228, and for
             own procedure including               the purposes of Sec. 196 of the Indian
             the places at which they              Penal Code (45 of 1860) and the
             shall have their sittings.            Tribunal or the Appellate Tribunal shall
                                                   be deemed to be a Civil Court for all the
      (2)    The Tribunal and the                  purposes of Sec. 195 and Chapter XXVI
             Appellate Tribunal shall              of the Code of Criminal Procedure,
             have, for the purposes of             1973 (2 of 1974.).
             discharging          their
             functions under this Act, 23.   Right to legal representation and Presenting
             the same powers as are          Officers. –
                                                 (a)   Attachment and sale of the movable or
      (l)    A bank or a financial                     immovable property of the defendant;
             institution making an
             application to a Tribunal           (b)   Arrest of the defendant and his
             or an appeal to an                        detention in prison;
             Appellate Tribunal may
             authorise one or more               (c)   Appointing a receiver for the
             legal practitioners or any                management of the movable or
             of its officers to act as                 immovable properties of the defendant.
             Presenting Officers and
             every       person       so 26.     Validity of   certificate and     amendment
             authorised by it may                thereof. –
             present its case before the
             Tribunal or the Appellate           (l)   It shall not be open to the defendant to
             Tribunal.                                 dispute before the Recovery Officer the
                                                       correctness of the amount specified in
      (2)    The defendant may either                  the certificate, and no objection to the
             appear in person or                       certificate on any other ground shall
             authorise one or more                     also be entertained by the Recovery
             legal practitioners or any                Officer.
             of his or its officers to
             present his or its case             (2)   Notwithstanding the issue of a
             before the Tribunal or the                certificate to a Recovery Officer, the
             Appellate Tribunal.                       Presiding Officer shall have power to
                                                       withdraw the certificate or correct any
24.   Limitation. -                                    clerical or arithmetical mistake in the
                                                       certificate by sending intimation to the
      The provisions of the Limitation                 Recovery Officer.
      Act, 1963 (36 of 1963), shall, as
      far as may be, apply to an                 (3)   The Presiding Officer shall intimate to
      application made to a Tribunal.                  the Recovery Officer any order
                                                       withdrawing or cancelling a certificate
        CHAPTER V                                      or any correction made by him under
Recovery of Debt Determined by                         sub-section (2).
           Tribunal
                                           27.   Stay of proceedings under certificate and
                                                 amendment or withdrawal thereof. -
25.   Modes of recovery of debts. -
                                                 (1)   Notwithstanding that a certificate has
      The Recovery Officer shall, on
                                                       been issued to the Recovery Officer for
      receipt of the copy of the
                                                       the recovery of any amount, the
      certificate under sub-section (7)
                                                       Presiding Officer may grant time for the
      of Sec. 19, proceed to recover the
                                                       payment of the amount, and thereupon
      amount of debt specified in the
                                                       the Recovery Officer shall stay the
      certificate by one or more of the
                                                       proceedings until the expiry of the time
      following modes, namely: -
                                                       so granted.
                                              to Banks and Financial Institutions
(2)   Where a certificate for the             (Amendment) Act, 2000, dt. 25-03-
      recovery of amount has                  2000
      been issued, the Presiding
      Officer shall keep the
      Recovery           Officer 28.   Other modes of recovery. –
      informed of any amount
      paid or time granted for         (1)    Where a certificate has been issued to
      payment, subsequent to                  the Recovery Officer under sub-section
      the     issue   of    such              (7) of Sec. 19, the Recovery Officer
      certificate     to      the             may, without prejudice to the modes of
      Recovery Officer.                       recovery specified in Sec. 25, recover
                                              the amount of debt by any one or more
(3)   Where the order giving                  of the modes provided under this
      rise to a demand of                     section.
      amount for recovery of
      debt has been modified in        (2)    If any amount is due from any person to
      a peal, and, as a                       the defendant, the Recovery Officer
      consequence thereof the                 may require such person to deduct from
      demand is reduced, the                  the said amount, the amount of debt due
      Presiding Officer shall                 from the defendant under this Act and
      stay the recovery of such               such person shall comply with any such
      part of the amount of the               requisition and shall pay the sum so
      certificate as pertains to              deducted to the credit of the Recovery
      the said reduction for the              Officer:
      period for which the
      appeal remains pending.                 Provided that nothing in this sub-section
                                              shall apply to any part of the amount
(4)   Where a certificate for the             exempt from attachment in execution of
      recovery of debt has been               a decree of a Civil Court under Sec. 60
      received by the Recovery                of the Code of Civil Procedure, 1908 (5
      Officer and subsequently                of 1908).
      the amount of the
      outstanding demands is           (3)   (i)     The Recovery Officer may, at
      reduced 1[or enhanced] as                      any time or from time to time,
      a result of an appeal, the                     by notice in writing, require any
      Presiding Officer shall,                       person from whom money is due
      when the order which was                       or may become due to the
      the subject-matter of such                     defendant or to any person who
      appeal has become final                        holds or may subsequently hold
      and conclusive, amend                          money for or on account of the
      the      certificate     or                    defendant, to pay to the
      withdraw it, as the case                       Recovery      Officer       either
      may be.                                        forthwith upon the money
                                                     becoming due or being held or
1.    Inserted by Act 1 of The                       within the time specified in the
      Recovery of Debts due
        notice (not being            last addresses known to the
        before the money             Recovery Officer.
        becomes due or is
        held) so much of      (iv)   Save as otherwise provided -in
        the money as is              this sub-section, every person to
        sufficient to pay            whom a notice is issued under
        the amount of debt           this sub-section shall be bound
        due from the                 to comply with such notice, and,
        defendant or the             in particular, where any such
        whole      of  the           notice is issued to a post office,
        money when it is             bank, financial institution, or an
        equal to or less             insurer, it shall not be necessary
        than that amount.            for any pass book, deposit
                                     receipt, policy or any other
(ii)    A notice under               document to be produced for the
        this   sub-section           purpose       of     any     entry,
        may be issued to             endorsement or the like to be
        any person who               made before the payment is
        holds or may                 made notwithstanding any rule,
        subsequently hold            practice or requirement to the
        any money for or             contrary.
        on account of the
        defendant jointly     (v)    Any claim respecting any
        with any other               property in relation to which a
        person and for the           notice under this sub-section has
        purposes of this             been issued arising after the date
        sub-section,    the          of the notice shall be void as
        shares of the joint          against any demand contained in
        holders in such              the notice.
        amount shall be
        presumed,     until   (vi)   Where a person to whom a
        the contrary is              notice under this sub-section is
        proved, to be                sent objects to it by a statement
        equal.                       on oath that the sum demanded
                                     or the part thereof is not due to
(iii)   A copy of the                the defendant or that he does not
        notice shall be              hold any money for or on
        forwarded to the             account of the defendant, then,
        defendant at his             nothing contained in this sub-
        last       address           section shall be deemed to
        known to the                 require such person to pay any
        Recovery Officer             such sum or part thereof, as the
        and in the case of           case may be, but if it is
        a joint account to           discovered that such statement
        all    the    joint          was false in any material
        holders at their             particular, such person shall be
         personally liable                        defendant after the receipt of a
         to the Recovery                          notice under this sub-section
         Officer to the                           shall be personally liable to the
         extent of his own                        Recovery Officer to the extent
         liability to the                         of his own liability to the
         defendant on the                         defendant so discharged or to
         date of the notice,                      the extent of the defendant’s
         or to the extent of                      liability for any debt due under
         the      defendant’s                     this Act, whichever is less.
         liability for any
         sum due under                    (x)     If the person to whom a notice
         this            Act,                     under this sub- section is sent
         whichever is less.                       fails to make payment in
                                                  pursuance thereof to the
(vii)    The      Recovery                        Recovery Officer, he shall be
         Officer may, at                          deemed to be a defendant in
         any time or from                         default in respect of the amount
         time to time,                            specified in the notice and
         amend or revoke                          further proceedings may be
         any notice under                         taken against him for the
         this sub-section or                      realisation of the amount as if it
         extend the time                          were a debt due from him, in the
         for making any                           manner provided in Secs. 25, 26
         payment          in                      and 27 and the notice shall have
         pursuance of such                        the same effect as an attachment
         notice.                                  of a debt by the Recovery
                                                  Officer in exercise of his powers
(viii)   The       Recovery                       under Sec. 25.
         Officer shall grant
         a receipt for any      (4)       The Recovery Officer may apply to the
         amount paid in                   Court in whose custody there is money
         compliance with a                belonging to the defendant for payment
         notice        issued             to him of the entire amount of such
         under this sub-                  money, or if it is more than the amount
         section, and the                 of debt due, an amount sufficient to
         person so paying                 discharge the amount of debt so due.
         shall be fully
                                1
         discharged from            [(4A) The Recovery Officer may, by order, at
         his liability to the             any stage of the execution of the certifi-
         defendant to the                 cate of recovery, require any person,
         extent     of    the             and in case of a company, any of its
         amount so paid.                  officers against whom or which the
                                          certificate of recovery is issued, to
(ix)     Any         person               declare on affidavit the particulars of his
         discharging any                  or its assets.]
         liability to the
          (5)    The Recovery Officer              (l)    Notwithstanding anything contained in
                 may recover any amount                   section 29, any person aggrieved by an
                 of debt due from the                     order of the Recovery Officer made
                 defendant by distraint and               under this Act may, within thirty days
                 sale of his movable                      from the date on which a copy of the
                 property in the manner                   order is issued to him, prefer an appeal
                 laid down in the Third                   to the Tribunal.
                 Schedule to the Income-
                 tax Act, 1961 (43 of              (2)    On receipt of an appeal under sub-sec-
                 1961).                                   tion (l), the Tribunal may, after giving
                                                          an opportunity to the appellant to be
          1.     Inserted by Act 1 of The                 heard, and after making such enquiry as
                 Recovery of Debts due                    it deems fit, confirm, modify or set
                 to Banks and Financial                   aside the order made by the Recovery
                 Institutions                             Officer in exercise of his powers under
                 (Amendment) Act, 2000,                   sections 25 to 28 (both inclusive).]
                 dt. 25-03-2000
                                                   1.     Substituted by Act 1 of The Recovery
29.       Application       of    certain                 of Debts due to Banks and Financial
          provisions of Income-tax Act. -                 Institutions (Amendment) Act, 2000,
                                                          dt. 25-03-2000
          The provisions of the Second and
          Third Schedules to the Income-                     CHAPTER VI
          tax Act, 1961 (43 of 1961), and
                                                             Miscellaneous
          the    Income-tax     (Certificate
          Proceedings) Rules, 1962, as in
                                             31.   Transfer of pending cases. –
          force from time to time shall, as
          far as possible, apply with
                                                   (l)    Every suit or other proceeding pending
          necessary modifications as if the
                                                          before any Court immediately before
          said provisions and the rules
                                                          the date of establishment of a Tribunal
          referred to the amount of debt
                                                          under this Act, being a suit or
          due under this Act instead of to
                                                          proceeding the cause of action whereon
          the income-tax:
                                                          it is based is such that it would have
                                                          been, if it had arisen after such
                                                          establishment, within the jurisdiction of
                  Provided     that    any                such Tribunal, shall stand transferred on
          reference    under    the    said               that date to such Tribunal:
          provisions and the rules to the
          assessee” shall be construed as a               Provided that nothing in this sub-section
          reference to the defendant under                shall apply to any appeal pending as
          this Act.                                       aforesaid before any Court.

1                                                  (2)    Where any suit or other proceeding
    [30   Appeal against the order of
          Recovery Officer.—                              stands transferred from any Court to a
                                                          Tribunal under sub-section (1), --
                 (a)    The Court shall,                         Recovery of Debts Due to Banks and
                        as soon as may be                        Financial Institutions (Amendment)
                        after such transfer,                     Act, 2000 and has not yet been
                        forward         the                      executed, then, the decree-holder may
                        records of such                          apply to the Tribunal to pass an order
                        suit    or    other                      for recovery of the amount.
                        proceeding to the
                        Tribunal; and                     (2)    On receipt of an application under sub-
                                                                 section (1), the Tribunal may issue a
                 (b)    The Tribunal may,                        certificate for recovery to a Recovery
                        on receipt of such                       Officer.
                        records, proceed
                        to deal with such                 (3)    On receipt of a certificate under sub-
                        suit    or   other                       section (2), the Recovery Officer shall
                        proceeding, so far                       proceed to recover the amounts as if it
                        as may be, in the                        was a certificate in respect of a debt
                        same manner as in                        recoverable under this Act.]
                        the case of an
                        application made                  1.     Inserted by Act 1 of The Recovery of
                        under Sec. 19                            Debts due to Banks and Financial
                        from the stage                           Institutions (Amendment) Act, 2000,
                        which          was                       dt. 25-03-2000
                        reached     before
                        such transfer or
                                               1
                        from any earlier           [32.   Chairperson, Presiding Officer and staff of
                        stage 1[Omitted]                  Appellate Tribunal and Tribunal to be
                        as the Tribunal                   public servants.—
                        may deem fit.
                                                          The Chairperson of an Appellate Tribunal, the
                 1.     Omitted by Act 1                  Presiding Officer of a Tribunal, the Recovery
                        of The Recovery                   Officer, and other officers and employees of an
                        of Debts due to                   Appellate Tribunal and a Tribunal shall be
                        Banks         and                 deemed to be public servants within the
                        Financial                         meaning of section 21 of the Indian Penal
                        Institutions                      Code.]
                        (Amendment)
                        Act, 2000, dt. 25-                1.     Substituted by Act 1 of The Recovery
                        03-2000                                  of Debts due to Banks and Financial
                                                                 Institutions (Amendment) Act, 2000,
1
    [31A Power of Tribunal to issue                              dt. 25-03-2000
         certificate of recovery in case of
         decree or order.—                  33.           Protection of action taken in good faith.

          (1)    Where a decree or order                  No suit, prosecution or other legal proceeding
                 was passed by any court                  shall lie against the Central Government or
                 before the                               against the Presiding Officer of a Tribunal or of
                 commencement of the
      an Appellate Tribunal or against               due to Banks and Financial
      the Recovery Officer for                       Institutions (Amendment) Act, 2000,
      anything which is in good faith                dt. 25-03-2000
      done or intended to be done in
      pursuance of this Act or any rule
      or order made thereunder.         35.   Power to remove difficulties. –

34.   Act to have overriding effect. –        (l)    If any difficulty arises in giving effect
                                                     to the provisions of this Act, the Central
      (l)    Save as provided under                  Government may, by order published in
             sub-section     (2),    the             the Official Gazette, make such
             provisions of this Act                  provisions, not inconsistent with the
             shall      have      effect             provisions of this Act, as appear to it to
             notwithstanding anything                be necessary or expedient for removing
             inconsistent     therewith              the difficulty:
             contained in any other
             law for the time being in               Provided that no such order shall be
             force or in any instrument              made after the expiry of the period of
             having effect by virtue of              three years from the date of
             any law other than this                 commencement of this Act.
             Act.
                                              (2)    Every order made under this section
      (2)    The provisions of this Act              shall, as soon as may be after it is made,
             or the rules made                       be laid before each House of
             thereunder shall be in                  Parliament.
             addition to, and not in
             derogation     of,     the 36.   Power to make rules. –
             Industrial         Finance
             Corporation Act, 1948            (1)    The Central Government may, by
             (15 of 1948) the State                  notification make rules to carry out the
             Financial    Corporations               provisions of this Act.
             Act, 1951 (63 of 1951)
             the Unit Trust of India          (2)    Without prejudice to the generality of
             Act, 1963 (52 of 1963),                 the foregoing powers, such rules may
             the             Industrial              provide for all or any of the following
             Reconstruction Bank of                  matters, namely: -
             India Act, 1984 (62 of
             1984) 1[and the Sick                    (a)    The salaries and allowances and
             Industrial    Companies                        other terms and conditions of
             (Special Provisions) Act,                      service of 1[the Chairpersons,
             1985 and the Small In-                         the      Presiding    Officers],
             dustries    Development                        Recovery Officers and other
             Bank of India Act,                             officers and employees of the
             1989](1 of 1986).                              Tribunal and the Appellate
                                                            Tribunal under Secs. 7,12 and
      1.     Substituted by Act 1 of                        13;
             The Recovery of Debts
           (b)    The procedure for           section 8 and every rule made by the
                  the investigation           Central Government under this Act
                  of misbehaviour             shall be laid, as soon as may be after it
                  or incapacity of            is made, before each House of
                  1
                    [the Chairpersons         Parliament, while it is in session, for a
                  of       Appellate          total period of thirty days which may be
                  Tribunals and the           comprised in one session or in two or
                  Presiding Officers          more successive sessions, and if, before
                  of the Tribunals]           the expiry of the session immediately
                  under sub-section           following the session or the successive
                  (3) of Sec. 15;             sessions aforesaid, both Houses agree in
                                              making any modification in the
           (c)    The     Form     in         notification or rule or both Houses agree
                  which            an         that the notification or rule should not
                  application may             be issued or made, the notification or
                  be made under               rule shall thereafter have effect only in
                  Sec.     19,    the         such modified form or be of no effect,
                  documents      and          as the case may be; so, however, that
                  other evidence by           any such modification or annulment
                  which         such          shall be without prejudice to the validity
                  application shall           of anything previously done under that
                  be accompanied              notification or rule.]
                  and     the    fees
                  payable in respect    1.    Substituted by Act 1 of The Recovery
                  of the filing of            of Debts due to Banks and Financial
                  such application;           Institutions (Amendment) Act, 2000,
                                              dt. 25-03-2000
           (d)    The     Form     in
                  which an appeal 37.   Repeal and saving. –
                  may     be    filed
                  before          the   (1)   The Recovery of Debts Due to Banks
                  Appellate                   and Financial Institutions Ordinance,
                  Tribunal     under          1993 (Ord. 25 of 19930, is hereby
                  Sec. 20 and the             repealed.
                  fees payable in
                  respect of such       (2)   Notwithstanding such repeal, anything
                  appeal;                     done or any action taken under the said
                                              Ordinance, shall be deemed to have
           (e)    Any other matter            been done or taken under the
                  which is required           corresponding provisions of this Act.
                  to be, or may be,
                  prescribed.
1
    [(3)   Every notification issued
           under sub-section (4) of
           section l, section 3 and

								
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