The Supreme Court on Wednesday expressed concern over lack of infrastructure, manpower and other facilities at Debt Recovery Tribunals and their appellate bodies and said lakhs of crores of rupees are non-performing assets as the recovery mechanism is not up to the mark.
The bench headed by Chief Justice T S Thakur also said that it may ask the National Law School and IIM at Bangalore to jointly conduct a study as to what “ails” these quasi- judicial bodies -- DRTs and Debt Recovery Appellate Tribunals (DRATs), meant for recovering bad loans of financial institutions.
“We will tell the vice chanceller of the National Law School of Bangalore and IIM, Bangalore to assign the task to their senior faculty members and tell us about the problems being faced by DRTs and the Debt Recovery Appellate Tribunals,” the bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said.
“There are lakhs of crores of rupees as NPAs and one of the reasons for their non-recovery is that the mechanism for recovery is not up to the mark,” it said. There are problems of “infrastructure and manpower and proper training” in recovery tribunals, it said.
The observations came when Solicitor General Ranjit Kumar, appearing for the Centre, said the steps, including amending the law governing the DRTs and the DRATs, have been taken to strengthen the loan recovery system. The court reserved its order on one of the issues, raised in the PIL, relating to lack of infrastructure, manpower and other facilities at DRTs and DRATs which deal with banks and FIIs’ loan recovery petitions.
It was hearing the PIL, filed in 2003 by the Centre for Public Interest Litigation (CPIL), which had originally raised the issue of loans advanced to some companies by state-owned Housing and Urban Development Corporation (HUDCO).
The plea had said that about Rs 40,000 crore of corporate debt was written off in 2015.
The bench clarified that the issue of loan defaults would be dealt by it later.