CAIIB BRBL Module C Unit 14 : Procedure Of Tribunals

06/11/2023

Table of Contents

CAIIB Paper 4 BRBL Module C Unit 14 : Procedure Of Tribunals (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 4 (BANKING REGULATIONS AND BUSINESS LAWS) includes an important topic called “Procedure Of Tribunals”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Paper 4 (BRBL) Module C (IMPORTANT ACTS/LAWS & LEGAL ASPECTS OF BANKING OPERATIONS – PART B) Unit 14 : Procedure Of Tribunals, Aspirants must go through this article to better understand the topic, Procedure Of Tribunals and practice using our Online Mock Test Series to strengthen their knowledge of Procedure Of Tribunals. Unit 14 : Procedure Of Tribunals

Application to Tribunals

The purpose for filing application under the Act by a Bank or Financial Institution, is for recovery of the debt due to them. The procedure has to be followed properly.

When a bank or a financial institution has to recover any debt from any person/entity, it is required make an application to the Tribunal [Section 19(1)] within the local limits of whose jurisdiction,

The branch or any other office of the bank or financial institution is maintaining an account in which debt claimed is outstanding, for the time being; or the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or
Any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or
The cause of action, wholly or in part, arises

Banks or financial institution may, with the permission of the Debts Recovery Tribunal, on an application made by it, withdraw the application, for the purpose of taking action under the SARFAESI Act, 2002, if no such action had been taken earlier under that Act: Provided further that any application made under the first proviso for seeking permission from the Debts Recovery Tribunal to withdraw the application made shall be dealt with by it as expeditiously as possible and disposed of within thirty days from the date of such application:

Provided also that in case the Debts Recovery Tribunal refuses to grant permission for withdrawal of the application filed under this sub-section, it shall pass such orders after recording the reasons.

Where a bank or a financial institution has filed application, under Section 19(1) before the Tribunal for recovery of its debt and if from the same person another bank or financial institution has also to recover any debt, then such latter bank or financial institution may join the applicant bank or financial institution in already filed application at any stage of the proceedings before the final order is passed.
Every application to be filed before the Tribunal under Section 19(1) or 19(2) shall be in such form and accompanied by such documents or other evidence and by such fee as may be prescribed. However, when the Civil Suit already filed is transferred to the Tribunal, as provided in Section 31 (1) of the DRT Act, no fees is required to be paid.

On receipt of application under sub-section (1) or sub-section (2), the Tribunal shall issue summons with following directions to the defendant—

To show cause within thirty days of the service of summons as to why relief prayed for should not be granted
Direct the defendant to disclose particulars of properties or assets other than properties and assets specified by the applicant under clauses (a) and (b) of sub-section (3A); and
To restrain the defendant from dealing with or disposing of such assets and properties disclosed under clause (c) of sub-section (3A) pending the hearing and disposal of the application for attachment of properties.

The defendant has to within a period of thirty days from the date of service of summons, present a written statement of his defense. Where the defendant fails to file the written statement within the said period of thirty days, the Presiding Officer may, in exceptional cases and in special circumstances to be recorded in writing, extend the said period by such further period not exceeding fifteen days to file the written statement of his defence.
In case of non-compliance of any order made under clause (ii) of sub-section (4), the Presiding Officer may, by an order, direct that the person or officer who is in default, be detained in civil prison for a term not exceeding three months.
If the defendant claims any amount from the applicant and/or a set off against the applicant’s demand with ascertained sum of money, legally recoverable by him from such applicant, the defendant on the first date should make such claim in the written statement.
A defendant in his application, in addition to his right of pleading a set off under sub-Section (6), may set up a counter claim against the claim of the applicant. Such counter-claim can be for any right or claim in respect of cause of action accruing to the defendant against applicant. But such cause must be accrued before the defendant submitting his defence in given time.
If any of the facts or pleadings in the application or written statement are not verified in the manner provided under sub-section (10A), a party to the proceedings shall not be allowed to rely on such facts or pleadings as evidence
If the defendant fails to furnish security required, the tribunal may pass order for attachment of the whole or part of the property offered as security to the applicant or other property owned by the defendant, sufficient for recovery of debt.
If there is any breach of the orders so passed by the tribunal, the tribunal may order that the properties of the person guilty of the breach of the order be attached and the person be detained in civil prison for a term not exceeding three months
When the property of the defendant against whom the certificate of recovery is issued is situated in the local limits of jurisdiction of more than one tribunal, the tribunal issuing the recovery certificate will send copies of the recovery certificate to such other tribunal in whose jurisdiction the property is situated.
Application received by the tribunal for recovery of debt shall be dealt with as expeditiously as possible, with every effort being made by it to complete the proceedings in two hearings, and it should be attempted that the application is disposed of finally within 180 days from date of receipt of application.

Appeal To The Appellate Tribunal

Any person aggrieved by the order passed by the Tribunal or deemed to have been passed by the Tribunal under DRT Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter. However, if the order was made by the Tribunal with the consent of the parties no appeal shall lie.
The appeal is required to be filed within thirty days from the date on which copy of the order is received and it shall be in such form and be accompanied by such fee as may be prescribed.
On receipt of the appeal, the Appellate Tribunal after giving hearing to both the parties pass such orders as it thinks fit either confirming or modifying or setting aside the order passed by the Tribunal. Every order made by the Appellate Tribunal is sent to the parties to the appeal and to the Tribunal concerned.

The appeal filed before the Appellate Tribunal shall be dealt with as expeditiously as possible and it should be attempted that the appeal is disposed of finally within six months from date of receipt of appeal.
There is no provision in the Act for further appeal against the order passed by the Appellate Tribunal. However, writ petition to the High Court under writ jurisdiction of High Court under Article 226 and as well as Special Leave Petition before the Supreme Court is not barred.

Deposit Of Amount Of Debt Due For Filing Appeal

As per Section 21 of the Act, when the defendant against whom the Debt Recovery Tribunal has passed recovery order wants to prefer appeal to the Appellate Tribunal, he is required to deposit 50% of the amount determined by the Tribunal. Without such payment no appeal can be filed.
As the purpose of the Act is to have a fast track remedy for recovery of loans given by banks and financial institutions, the condition of deposit of 50% of the amount found due by the Tribunal is in accordance with the purpose of the Act. Otherwise the remedy of the appeal will be routinely used by the borrowers to delay the recovery procedure and actual recovery.

Procedure And Powers Of The Tribunal And The Appellate Tribunal

The Tribunal and the Appellate Tribunal are not bound by the procedure laid down by the Civil Procedure Code, 1908. It further provides that they shall be guided by the principles of natural justice and subject to the provisions of this Act and Rules there under, shall have powers to regulate their own procedure.
The Tribunal and the Appellate Tribunal, for the purpose of discharging their functions under the Act, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 while trying a suit. Such powers are in respect of summoning and enforcing the attendance of any person and examining him on oath, requiring the discovery and production of documents, receiving evidence of affidavits, issuing commissions for the examination of witnesses or documents, reviewing its decisions, dismissing an application for default, setting aside any order of dismissal of any application for default.
The Tribunal and the Appellate Tribunal are deemed to be a Civil Court for all purposes of Section 195. Any proceeding before Tribunal and the Appellate Tribunal is deemed to be a judicial proceeding.
For the purpose of proof of any entry in the ‘bankers books’, the provisions of the Bankers’ Books Evidence Act, 1891 shall apply to all the proceedings before the Tribunal or Appellate Tribunal.

Note: For application to be filed before the Tribunal the Limitation Act, 1963 apply. This means that the application must normally be filed by the bank or the financial institution within three years from cause of action.

Download PDF

CAIIB 4 Module C Unit 13- Jurisdiction, Powers & Authority Of Tribunals ( Ambitious_Baba )