[2017] I S.C.R. 401

CENTRE FOR PUBLIC INTEREST LITIGATION

HOUSING & URBAN DEVELOPMENT CORPORATION LTD.

& ORS.

(Writ Petition (C) No. 573 of2003)

JANUARY 03, 20 17

(T.S. THAKUR, CJI, A.M. KHANWILKAR AND,

DR. D.Y. CHANDRACHUD, JJ.) Recovery of Debts Due to Banks and Financial Jnslitutions Act. 1993- EnforcemenJ of Security /merest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 - Requirement of expeditious disposal of proceedings before the Debt

Recut•ery Triburrals - Legislative cha, ges may not by themselves achieve the intended object so long as infratructure provided to the Tribu11als is not commensurate with the burde11 of the work and

nature of judicial duties- Union Government directed to file affidavit dealing with various i:rsues in regard to infrastructure of Debt Recovery Tribunals and Appellate Tribunals.

Parliament enacted the Recovery of Debts Due to Banks and Financial Institutions Act, J993 for providing for the estaNishment of tribunals and appellate tribunals for expeditious adjudication and recovery of dues to banks and financial

institutions. Subsequently, in order to deal with tbe large pendency of c:ases, the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016

has been enaded.

Issuing directions, the Court

HELD: 1. Legislative banges to provide ror expeditious disposal of proceedings before tbc Debt Recovery Tr.ibunals 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. Tbe Debt Recovery Tribunals and Appellate Tribunals suffer from a lack or adequate infrastructure, manpower and resou"es. Haviag due regard to the importaat adjudicatory function whiclt ia entruatcd

A to these Tribunals, the efficaty of parliamentary legislation will depend in a large measure on the efficiency with which the Tribunals discharge their duties. (Para 4) (403-H; 404-A-CJ

2. The Union Government is directed to file an affidavit specificaJiy 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- S(bedules within which the existing infrastrudure 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 teo years and tlte list of corporate entities where the amount outstanding is in excess of Rs.500 crore.

However, the direction for filing of affidavit shall not in any manner affect the functioning of the Committee which has already been constituted by the Union government. (Paras 5, 6] (404-D-GJ

CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 573 of2003.

Under Article 32 of the Constitution oflndia.

Ranjit Kumar. SG, Jaideep Gupta, sr. Adv., Prashant Shushan, Ms. Kamini Jaiswal, Devesh Kumar Agnihotri, Govind Jee. Rohit Kumar Singh, R. Chandrachud, Ms. Binu Tamta, D.L.Chidananda, R.K. Venna, R. R.Rajesh, Ms. Anil Katiyar, Kuldeep S. Parihar, H.S.Parihar, Pranab

Kumar Mullick, Ms. Soma Mullick, Sebat Kumar Deuria, A. Chatterjee, Mudit Sharma, Ms. Nina Gupta, Lalit Bhasin, Ms. Ranu Purohit, Ms. Ruby Singh Ahuja, Vishal Gehrana, Milanda Sharma, Ms. Manik Karanjawala, Pankaj Pandey, P. Panneswaran, Rajeev Sharma, Vikas Mehta, Advs. for the appearing parties.

CENTRE FOR PUBLIC INTEREST LITIGATION v. HOUSING & 403

URBAN DEVELOPMENT CORPORATION LTD.

The Judgment of the Court was delivered by

DR. D. Y. CHANDRACHUD, J. I. 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 institutirins were pending befoie various courts.

The amounts involved were to the extent ofRs. 5,622 crores in dues f public sector banks and Rs. 391 crores of financial institutions. Following the Reports of the Narasimhan Committee and the 2 Tiwari Committee, Parliament enacted the Recovery of Debts Due to Banks and Financia1 Institutions Act, 1'993 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 20 15-

16 these Tribunals disposed of about 16,000 original applications involving a total amount ofRs. 34,000 crores. Since their inception until31 October 2015, the Tribunals had disposed of 1,34,433 original applications leading fl 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.

i Thi~ Court has bet:n apprised, in the submissions filed by the

E Union government, that more than 70,000 cases involving an amount of Rs.S lakh crores approximately are pending before the Debt Recovery Tribunals, of which many are pending for more than ten years .. hogh the Act of 1993 provides for the disposal of recovery ap.plications within one hundred and eighty days, cases have remained pending for years F together. In order to deal with the large pendency of cases,. the .

Enforcement of Security Interest and Recovery of Debt Laws aid Miscellaneous Provisions (Amendment) Bill, 2016 was introduced in the Lok Sabha on 11 May2016. The Bill was refered to a Joint Committee of3 both Houses.ofParl.iament. The Committee presented its Reportto the Lok Sabha on 22 July 20 16. Eventually, a law has been enacted by G 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 themselvs

.• . . . . .

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 judical duties. Recently, the Chairperson of the Debts Recovery Appellate Tribunal at Allahabad addressed a letter on 9 December 20 16 to the Chief Justice oflndia 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 time lines set down in the amended legislation are capable ofbeing achieved with the existing inftastructure includingjudicial personnel and staffing pattern of the Debt Recovery Tribunals and Debt Recovery 4 Appellate Tribunals;

(ii) The underlying basis, if any, upon which the revised tim~ lines have'been stipulated and whether any scientific study has been conducted on the avai labi I ity of infrastructure; i.

(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:SOO crore.

6. T.he affidavit shall be filed within a period of four weeks from today. We clarify that this direction for the filing of a further affidavit

CENTRE FOR PUBLIC INTEREST LITIGATION v. HOUSING & URBAN 405

DEVELOPMENT CORPORATION LTD. [DR. D.Y. CHANDRACHUD, J.]

shall not in any manner affect the functioning of the Committee which A has already been constituted-by the Union government and whose report is awaited.

Ankit Gyan Direetions issued.

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