1 min read.Updated: 05 Nov 2016, 02:37 PM ISTShreeja Sen
As on 25 October, there are 95,537 cases pending in 32 debt recovery tribunals, including the cases carried over from last year and new ones added this year
New Delhi: The trends on pending cases in debt recovery tribunals (DRTs) are worrying, according to numbers discussed at a seminar on debt recovery in Gurugram of Haryana on Saturday.
As on 25 October, there are 95,537 cases pending in 32 DRTs, including the cases carried over from last year and new ones added this year. Only 9,918 were disposed of this year, of the total 1,05,455 cases. The amount involved in these cases is over Rs4 lakh crore.
The number of pending cases this year is also higher than the previous three years.
Some of these cases will move to the National Company Law Tribunals, which are set to handle corporate insolvency, which could reduce the stress on the DRTs.
DRTs form another arm of the insolvency scheme that the government put in place through the passage of the Insolvency and Bankruptcy Code this year. DRTs will handle insolvencies for individuals.
Accordingly, the government introduced a slew of reforms to overhaul the DRTs, which the Parliament cleared earlier this year. The bill proposed to speed up the process of recovery and move towards online DRTs including electronic filing of recovery applications, documents and written statements. Further, the debtor will be required to deposit 50% of the amount of debt due before filing an appeal at a DRT. It also made the process time-bound. A district magistrate has to clear an application by the creditor to take over possession of the collateral within 60 days.
The issue of how NCLTs will tackle the pending cases is another area of concern.
At a recent conference in Mumbai, the chairperson of the insolvency and bankruptcy board, M.S. Sahoo spoke about increasing the capacity of NCLTs to tackle the mounting load of cases.
“There are 70,000 matters pending before the DRT. If the (insolvency) law comes into force by 1 December, assuming one fourth of these cases will move to NCLT, 15,000 will move to the tribunal on Day 1. Whether NCLT has that kind of capacity is the question," Sahoo said.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!