Government of India Volume I: Analysis and Recommendations

ANNEXES
(b) Efficiency of DRT: Suitably amend RDDBFI to place an obligation on the appropriate
entity to ensure efficient and effective functioning of the system.
(c) Training of judicial and recovery officers: Suitably amend RDDBFI and SAR-
FAESI to place a duty on the appropriate entity for training of judicial and recovery
officers.
(d) Uniform procedures: Amend RDDBFI to reflect the principle that uniform
procedures must be followed by all DRTs.
(e) Comprehensive rules on procedures: Detailed rules of procedure under
the Civil Procedure Code, 1908 and rules of evidence under the Indian Evidence
Act, 1872 are not required to be followed. Keeping this in mind, the
rules of procedure for DRTs under RDDBFI, namely the Debt Recovery Tribunal
Rules, 1993, were drafted. The rules of procedure were intended to be light
touch by allowing significant liberty to the tribunals to devise their own methods
and standards This has led to inconsistent and differing approaches taken
by different DRTs. There is a need to set out comprehensive if not detailed, set
of rules of procedure applicable to hearings before DRT to increase certainty
of procedure and provide guidance to practitioners.
(f) Quantitative measurements of performance: Amend RDDBFI and SARFAESI
to ensure reporting requirements by appropriate authorities for preparing annual
reports which detail revenues received through filing fees, resource allocation,
steps taken towards efficient functioning of the tribunals, statistical
analysis of cases and workload, time taken to dispose cases, and reasons for
delay.
(g) Funding and resource allocation: There is a need to rethink the funding and
resource allocation for DRTs in India. Tribunals do not function efficiently if
they are not well funded and do not have sufficient resources at their disposal.
The recommendations are two fold:
i. Independence: Currently, resource allocation for DRTs is done through
the Ministry of Finance, through the budgetary process. Financial sector
regulators in India, such as SEBI and IRDA, have the ability to charge fees
from regulated entities to cover the cost of their functioning. Independence
in funding and resource allocation is important for effective functioning
as it allows the entity the operational flexibility. The recommendation
is therefore to amend RDDBFI recognising the principle of independent
resource allocation.
ii. Quantum of fees: There is merit in empowering the DRTs to determine
the filing fees by keeping in mind the overall costs for their effective functioning.
The applicants who file petitions before DRTs are financial institutions
which can afford to pay for speedy recovery of loans made by
them. 2 Currently, only the Central Government has the power to make
regulations prescribing the fees. Since the recommendation of this WG
is to grant more independence to DRTs for allocating resources, deciding
the quantum of fees should be their prerogative and is a necessary outcome
of such independence.
(h) Adopting information technology: Indian courts have been slow in adopting
information technology. While there has been some improvements in
communication to the public through websites; there is no movement towards
integrating the entire court process into an electronic form. Digitisation
of court records and computerisation of registries would be beneficial
2 At present, the cost of filing an original application before the DRT is Rs. 12,000 when the amount of debt owed
is Rs. 10 lakhs, subject to a maximum cap of Rs. 1.50 lakhs.
FINANCIAL SECTOR LEGISLATIVE REFORMS COMMISSION 189