The Recovery of Debts Due to Banks and Financial Institutions (Amendment) Ordinance, 2000

• • • - • llBGIS'fERBO 'NO•. DL-3.3004/2000 al ft't~J{ 0( EX.TRAORDINARY '\:111T ll la v:g t PART ll--.Section 1 _ . .Sl.f~~if·( ~ 'R'cfitftr\1 PUB.LI-SH.ED BY AUTHORITY . - - - . - -- . ''. • • ' • - • - ·-- - ··- a ·· - ' < • ( , ' • -. . . . . . . . ' ? .11 . ":ff ~ri-ll. ~"1'1(, lit➔~it 17, 2ooe, +.r 21 1921 , No. t] NEW DELHI, MONDAY, JANUARY 11, 2000 / PAusl 27, 1921 . .__ • • • ~ tWr ~ ~ ~ tiwu ~ "i!1ift t f'"1'1e Pcw'lft af~•t tiifiEt;i t-~ if m ~ ff 1 Separate paging 18 gtven to this Part In order that it may be tiled as a separate compilation. --··TRY OF LAW, JUS:TICE AND COMPANY A.F'FAIRS (Legjslati.ve Dep.artment) . Nev; Delhl the 17-th January. 2000/Pausa 27, 1921 (Saka) • • THE RECOVERY OF DEBTS DUE TO BANKS~AND FINANCIAL • . INS'l1TUTIONS (AMENDMENT) ORDINANCE, 2000 ·• Nol 1 oF 2000 • • ' • Promulgated by . the President in the Fiftieth Year of the Republic-of India.. . "\ .. An Ordinance further to amend the Recovery of Debts Due to Bl!Ilks and Financial • lnstitutions Act, I 993. • WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action; , Now, THEREFORE, in exercise of the powers conferred by clause (.l) of al'licle 12~ of the Constitution, the President ,is pleased to promulgate the followin.g Ordinance:--· 1. (J) This Ordinance may be called the Recovery of De~ Due to Banks and Financial Institutio.ns (Amendment) Ord.inance, 2000-. _ (2:) It shall come into- force a-t once. • I • Short title and corn ... mencement. • • • • , . • • • I .. I . . , ,, .. - r ., • • l • • . ... . • • • • • I ,. . ' • . I • s . • • [PAaT ll-. " • ' ' ' " • 11HB GA~Tffi OF INDIA EXTRAORDINARY =======~~~~~~=================== ...... ~ _. •·. r , Substitution 2. In the Recovery of Debts Due to Banks and Fin~cial Ins~~tions Act. 1993 __ 51 o( t~. • .. 2 • of (hereinafter referred to as the principal Act), for the words the ~res1di~g .~fficer o! ~e dmignation. Appellate Tribunal", ••the Presiding Officer of an Appellate Tnbunal , -the Presiding • Amendment of • • section 2. I • - . I Amendment of • section 7. '· • Amendment of section • , • Officer of a Tribunal or an Appellate Tribunal'': wherever they occur, th~ wor~~ ::the Chairperson of the Appellate Tribunal". ••the Chairperson of an Appellate T{1bu~~.. the Presiding Officer of a Tribunal -or the Chairperson of an Appellate Tnbunal shall respectively be substituted. . .. • • • • 3. • In section 2 of the principal Act;- ' • . (1) after clause (e), the following clause shal~ be inserted, namely:·- -, • • "- '(ea) °Chairperson'' means a. Chairperson of an Appellate Tribunal appointed under section 9; •; _ • • • I ' . ' - . (ii) · for clause {g) .. the following_ clause shall be substitu~, . namely:- . ~ • '(g) "debt'' means any liability (inclusive of interest) which is cl~med as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the • consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award· or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application;'; • (iii) after clause U), the following _clau·se-shall be inserted, namely:- • ' ' . 'Ua) "Presiding Officer'' ·means the Presiding Officer of the , Debts Recovery . Tribunal apPQinted under sub-section (J) of section-4;• . . ' • • . ~ - . ' . •. • " . • 4. In section 7 of _the principal Act, ·: ... • • ' - .. • ~ . • -. • I (a) in sub-section (1), for the words "with a Recovery Officeii·•, the words ·••with one or more Recovery Officers'' shall be substituted; . . , .... ~w. ,. •. (b) . in sub-section (2), for the words ''The Recovery Officer", the words "The - • • Recovery Officers'' shall~ be substituted; • • • • • • , ' (c) in suf>..section (3), for the words 11Recovery Officer", the words • Officers'' shall be substituted. • . , . \ . ' "Recovery 5. In s~tion 8 of the principal Act, after sub-~tion (2). the fo11Qwing suJ>.section shall be inserted, namely:- • • -• •• • I .. . . . . t • • 8. - • ,. - Amendment of section 13. • • . .. • . . • "(3) Notwithstanding anything contained in sub--sections (1) and (2), the Central Government may authorise the Chairperson of an Appell~~ Tribunal to discharge also the functions of the . Chairperson of other Appellate Tribunal.". • • • . 6. In section 13 of the principal Act, in ~ proviso, for the words ''the said Pr~iding • -~­ Officers sh~ll be varied to their .. , the words "the Presiding Officer of a Tribunal or . the • Chairperson of an Appellate Tribunal shall be varied -to his'', shall be substituted. • • • ' • . . . . • • • . - • • , • • .( • ' • • I ' . , . . . ' . . , . : . . . J. .. - . . . • • , • • • • ' • • • \ ' t l ' I • • , . ' I I I i i • I • } l l : I J ' ' ' i I I ' ' I I .. ' ! • • l l , ' ' i I . - 1 . r I l i ' l I I I , 1,- 1 I I • I J l I I I I . 1 ✓ ; I 5 t I ! i t • ' ' , I . : l l·. ~ j t , } f t- ' l I . . I I f- ' - ' . ,, .. ,• ' ' . J .. t ' , , . ' ~: i. ., ,. 1'. , . :{ :r '} . • • I •' • . . ssc. 1] 'l'HE GAZB·t'l'E OF INDIA EXTRAORDINARY . L 7. In section 1 S of the principal Act., • (a) in s~b~sectio~ ~J), in the proviso, for the words "the said Presiding Officer", th~ words the Presidin~ Officer of a Tribunal or the Chairperson of an Appellate Tnbunal 11 shall be subslttuted; ·, : ,; " (b) in_ ~t,..section (2), for _the words ,;the ~residing Officer concerned\ the words the Pre~1d1ng Officer of a Tnbunal or the Chairperson of an Appellate Tribunal'• shall be substJtuted; •• (c) in. s?lrsec~on (3), for. the words "the aforesaid Presidirrg Officer", the words • the ~1d1ng Officer of a Tnbunal 01· the Chairperson of an Appellate TribunaJ" shall be substituted. . 8. After section 17 of the principal Act~ --.the following section shall be inserted, namely:- ,, "17 A: (J) 11te Chairperson of an Appellate Tribunal shall exercise general power of supenntenden~e. ~d control over the Tribunals under his jurisdiction including the power of appra1s1ng the work and recording the annual confidential reports of Presiding Officers. • . • (2) The Chairperson of an Appellate Tribunal having jurisdiction over the Tribunals may, on the application ·of any of the parties or on his own motion after notice tp the parties and after hearing them, transfer any case from one Tribunal for dispos~l to. any other Tribunal. 11 • . 9. For section 19 ·of the principal Act, the following section shall be substituted, namely:- . . "19. (1) Where a bank or a financial institution has to recover ~ny debt from any person, it may _ make an application to the Tribunal within the local limits of whose jurisdiction1- " • ' (a) the defendant, or each of the defendants where ·the~ are ~or~. than ~ne, ·at the . time of making the application, actually ~nd voluntanly resides or cames on business or personally works for gain; or • (b) any of the defendants, where there~ more th~ one, at t?e time of making the application, actually and voluntarily resides or cames on business or personally works for gain; or , - ' (c) the cause of action, whQlly or in part, anse. (2) ·Where a bank or a financial institut!on, which has to ~over its debt f£?m any person, has filed an application to the Tn~un:,tl under ;ub-sect?n {J) and agl!1ns~ te same person another bank or financial institution ~l~o thas a c 1 ~1m tobreckover 6 1ts e ·a1t, then, the later bank or financial institution may 101n e app 1c9:11t an or 1nan~1 , institution. at any stage of the proceedings, before the final order 1s passed, by making . an application to that Tribunal. (J) Every applicati~n under sub-section (J) or s~b-section (2) shall be in such fo1111 and· accompanied by such documents or other evidence and by such fee as may be prescribed: _ ·- • • ... .. .. • 3 Amendment of_ section 15. Insertion of new • • section 17 A. Power of Chairperson of Appellate Tribunal . • • • • Substitution of new . section for section 19 . App1ication to the Tribunal. · • • • .., . ' • .. , . • I , . , •· .. . .. .. .. ,... • • . . ', , • . ' . ..... - __ ,. . ' I . . • • I . , .. . . ., • • • p , . . - ' . . . . . • . : .. . • ' .. . .. t ._-, - ,.,~,,. - • , • • •'• i- - · . , . I • I ► • • • • . ' . . . • • , I • , • .. • • • • ,, • ' ! . 4 ' · 1HB-GAZB1'1B OP INDIA EXTRAORDINARY (PA&T 11- • - . •~ . Provided that the fee may be prescribed having regard to the amount of debt to be ' recovered: ! · ' . · Provided further that nothing contained in this sub-section rela~ng to fee shall,. apply to cases transferred to the Tribunal under sub-section (1) of sect1on 31. 1 • ( 4) On receipt of the application under sub-section (1) .. or sub-~ec!ion ~2), the Tribunal shall issue summons requiring the defendant to show cause within thirty days of the service of summons ~ to why the relief prayed for should not be granted. (5) The defendant shall. at or before the first hearing or within such time as the Tribunal may pet 11,it, present a· . written statement of his. defence. . ' (6) Where the defendant claims to set-off against the applicant•s demand any ascertained sum of money legally recoverable by·him from such applicant, th.e defendant may, at the first hearing of 1he application, but not afterwards unless pet 1n1tted by the Tribunal, present a written . statement containing the particulars of · the debt sought to be set .. off. .. (7) The •Written statement shall -have ·the .same effect· as a .plaint i" a· cross-suit so as to ena"Ie.the · Tnbunal to pass a• final order in respect both of the original claim and -of the set-off. , • I • • . ~- (8) A defendant in an application may, in addition to his right of pleading a set-off under sub-section (6), set up, . by . way __ of co~nter-claim against the claim of the applicant, any right or cJaim • in respect of a cau~e of action accruing to the defendant against ~e. applicant either before or ~fter. the filing of the application but before the defendant has delivered his defence or before the titne limited for ·delivering his defence has expired; whether such counter-claim is in the nature of a claim for damages or not .. . . . . . (9) A counter--claim under sub-section · (8) shall have the same effect as· a cross-suit so as to ena~le the _Tribunal to pass a final order on die same application, both on the original claim and on the counter-claim. . (I 0) The ._applicant shall be at liberty to'. f~e a ~tten slatement ,in answer to the .. counter-claim ·of the defendant within such · period as may be _fixed by the Tribunal. • -- . • (J /) Where a defendant sets up a counter-claim and the applicant contends that the claim thereby r~s~ ought not to be-disposed of by way of counter~claim but in an • ind~pendent action, th~ applicant may, at any time before issues are settled in relation • to ~ ~ounter-clairfl,. apply to the Tribu~al. f?r an order that _such counter-claim _may be e~cluded, and the Tnbunal may, on the heanng of such application, make such order as it · thinks fit. • . • . . • I • ~ • . . , . ' . - . • • • J • ,. (12) The Tribun~ may make an interim order (~hether by way of injunction or stay or atta~hment)_ agai~st the d~fen~ant to debar him from transferring, . alienating or 01!1erw1se dea~1ng w1~, ?r d1spos1ng. of, .any property and assets belonging to him without the pnor per11uss1on of the Tnbunal. . . . ' . . • • "' • 6 I •. (l3) (A) Where, ··-at ,any . stage of the proceedings, the Tribunal is satisfied by affidavit . or otherwise, tl1a.t the _defendant,. with intent to obstruct or delay or ,frustrate the ~xecution. of .a~ order for the recovery of debt_ that may be passed against him,-- . • - • - t ' • • • • .. • (i) is about ~o dispo~ o( the whole or_ any part of .his property; or . . , . ' . . • • , -. . . • . - . - - , . .. ' .• ·· , , ... . ' .. • ' . ' • • • .. • TIIE GAZE'l*l'E OF INDIA EXTRAORDINARY . 5 , (ii) !s !~ut. to remove ~e whole or any part of his property from the local limits • of the JUnsd1ct1on of the Tnbunal; or . • · • i ' ,· ' • ' ' I ' • ' I ' • ' ' • . .' ' • • ' ' • I . ; .. ' ' i ' • . , .. ', , I ' ' l l ' • .. \' ' • • ' , ' , . i . . . -r ' . . ' - ' ' • . ·- . . ·: . ' ' ' r ' ' ' . I ';• ' • ' ' . •' ,. • • ' ' ' ,. ' . (ii~ is likely to_ caus~ any ~~age or m,ischi~f to the property or affect •its value by trususe or ~reat1ng third party interest, . _ the T~bu~al may direct the def endantJ wjthin a time to be fixed by it, either to furnish • secunty, in such ~um as may be specified in the order, to produce and place at the disposal ~f the Tnbunal, w~en required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the certificate for the recovery of debt, or to appear and show cause why he should not furnish security. 1 (B) Where the defendant fails to show cause why he should not furnish security, or - fails to furnish the security required, within the time fixed by the Tribunal, the Tribunal may order the attachment of the whole or such portion of the properties claimed by the applicant as the properties secured in his favour or otherwise owned by the defendant · as appears sufficient to sa~isfy any certificate for the recovery of debt. • •, . (14) The • applicant shall, unless the Tribunal otherwise directs, specify the property required to be attached and the estimated value thereof. • (15) The Tribunal may also in the order direct the conditional attachment of the whole or any portion of the property specified under :sub-section (14). (16) If .an order of attachment is made. without co1nplying with the provisions of sub- section ( 13), such attachment shall be void. •. • ~ . . . - (17) In the case of disobedience of an order made by the Tribunal :under sub-sections (12); (13) and (18) or breach of any of the ter111s on which the order was made, the Tribunal may .. order the properties of the person guilty of such disobedience or breach to be attached and may also order such person to be ·deµiined • in the ci_vil prison for a ter111 not exceeding three months, . unless in the meantime the Tribunal directs his release. • . (18) -Where it appears to the Tribunal to be just and convenient. the Tribunal may, QY order- • . . • (a) appoi~t a receiver of any property, whether before or after grant of ~ertificate\ • for recovery of· debt; • · • (b) remove any person from the p~ssession or custody of the property; , - . ' ' • • • • • , • - . . . . . . • - • (c) commit the same to the possessio~, •custody or m~riagement. of. the receiver; • . ' . ; -(d) confet upon the receiver all such p9wers, · as to bringing _and defending • sµits , in the courts or filing and def ending applications before the Tri burial and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such -rents and. profits, and the execution of .documents .as the owner himself has, or s1:1ch of those powers as the Tribunal thinks fit; and . . • . . . . (e) appoint a Commissioner for preparatiort of an inventory of the properties of the defendant or for the sale thereof. · • · • • . •• . • ' . ' . . ' · :_ 1 of 19S6. (19) Where a certificate of recovery is issued against a company registered under the Companies · Act, 1956, the Tribunal ~ay 9rder the sale pro~eeds of sue~ _company to .·be distributed among its secured creditors 1n accordance wit~ the prov1s1ons of section 529A of the Companies Act, 1956 and to pay the surplus, 1f any, to ,the company~ . • ·, { . ' ·-~ \,. ., . ,· ' ' . . . . ' . •. . ' • ' . . ·, • ... - • • . - • • • I • . . • - • • • • • • • • • • • ' t . ' - \ ' • • • . . ' • •• . . .. ' • • • • ' . . . • , . . • .. .. · . ' . . ' . , • • • • • . . . .,, • • • ' • • . \ ' • • .. . , ,. 6 • Amendment of -section 27. Amendment of section 28'. • Substitution • of new section for section 30. Appeal . against the , order of , Recovery Officer. • • ' • 1HB GAZB'l'rR OF INDIA BXTRAORDINAllY [PAlT ll- t ,. 1· • '\ C • (20) The Tribunal may, after giving the applicant and the defendant an oppo~nity-of being heard, pass such interim or final order, including the order for payment of interest ~m the date on or before which payment of the amount is found due _upto the date of realisation or actual payment, on the application as it thinks fit to meet the ends of • • • Justice. (21) The Tribunal shall send a copy of ev~ry order pas~ by ii ·to the applicant and the defendant. (22) the Presiding Officer shall issue a certificate under his signature on the basis of the order of the Tribunal to the Recovery Officer for recovery of the amount of debt specified in the certificate. , • • • (23) Where the Tribunal, which has issued a certificate of recovery, is satisfied that the property is situated within the local limits of the jurisdiction of two or more Tribunals, it may send the copies of the certificate of recovery for execution to such other Tribunals where the properly is situated: Provided that in a case where the Tribunal to which the certificate of recovery is sent for execution finds that it has no jurisdiction to comply with the certificate of recovery, it shall return the same to the Tribunal which has issued it. . -. \. I (24) The application made to the Tribunal under sub-section (J) or sub-section (2) .. :, . shall be dealt with by it as expeditiously as pos~ible and endeavour shal_l be made by • it to dispose of the application fina1ly within . one hundred and eighty days from the date of receipt of the application. • (25) The Tribunal may make such orders and ·give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its· process or to secure the ends of justice.". - . • A 10. In section 27 of the principal Ac~ in sub•section ( 4), after the words ''is reduced", the words .. or enhanced .. shall be inserted .. • • 11. In section 28 of the principal Act, after sub-section ( 4), the. following sub-section shall be inserted. namely:- • • • · • ' •t(4A) The Recovery Officer may, by order, at any stage of the execution of the certificate of recovery, require any person, and in case of a company. any of its officers against whom or which the certificate of recovery is \ssued. to declare on affidavit the particulars of his or its assets. u. , , . . 12. For section 30 of the princ~pal:. \ Act. the following section shall , be substi~ted, namely:- • •• \ . "30. (1) Notwithstanding anything contained in section 29, any pet'son aggrieved by _ an order of the Recovery Officer made under · this Act may, within thirty days from the date · on which a copy of the order is issued to him.. prefer an appeal to the Tribunal. • ·. (2) On receipt of .'11 appeal under sub--section (J), the Tribunal may, after giviog . an opportunity to the appellant to be he,ar~ and after making such inquiry as it deems • / . \ • • J. • • • • • -,. • • 4 \ / ,,. • •• • • • . . . . . . , ' • ,.. • ' • i ,• ,,,. • . ; . - I 4S of ·1860. 1 of 1986. 1 of 1986. • .39 of 1989. 4 I .. . -.. . • • • ' ' • • SBc. 1) '.IHB GAZE"t"IE OF INDIA EX11lAORDINARY • fit, <:<>'16rin, modify or~ aside the order made by the Recovery Officer in exercise of his powers under SCCbons 25 to 28 (both inclusive).". · 13. In section 31 °~ the p~ncipal Act, in sub-section (2)ili clause (b) the words •or de novoh shall be 9mitted. ,. • . . ' • 14. After section 31 of the principal Act, the following section shall be in~rted, namely:- • "31A. (1) Where a decree or order has been passed by any court before the commencement of the Recovery of Debts Due to Banks and Financial· Institutions (Amendment) Ordinance, 2000 and has not yet been executed then the decree-holder may apply to the Tribunal to pass an order for .. recovery of the a~ount. . . ' (2) On receipt of an application under sub-section (1) the Tribunal may issue a certificate of recovery to a Recovery Officer. ' (3) On receipt of a certificate under sub-section (2). the Recovery Qfficer shall proceed to recover the amount as if it was a certificate in respect of a debt recoverable under this Act. u. • . - 15.~ For section 32 of the principal Act, the following section shall~ be substituted, namely:- . . . -~. ~- 7 • ., Amendment • of section 31 . Insertion of • new section 31A. Power of Tribunal to issue certificate of recovery in case of decree or order not executed. · Substitution of new: section for section 32. Chairperson, Presiding Officer "32. The Chairperson of an Appellate Tribunal, the Presiding Officer of a Tribunal, the Recovery Officer and · other officers and employees of an Appellate Tribunal and a Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.". f and staff of ; • • - • . ' • 16. In section 34 of the principal Act, in sub-section (2)., for the ·words, brackets and figures "and the Sick Ir,dustrial Companies (Special Provisions) Act. 1985", the following shall_ be substituted. namely:- · "the Sick Industrial Companies (Special Provisions) Act, • 1985 and the Small Industries Development Bank of India Act, 1989''. • • Appellate Tribunal and Tribunal to be public servants. Amendment of sect.ion 34. 17. ·in section· 36 ()f the principal Act,- Amendment of (a) in sub-s'!Ction (2) .. - I ,, section 36. • (i) in clause (a), for the words "the Presidi~g Officers", the words "the ' Chairpersons, the Presiding Officers .. shall be substituted; (ii) in clause (b), fo! the w~rds "the_ Presidini Officer ·of~ Tribunal and , Appellate Tribunals••, the w?rds t~e ·Chai~ion&~ of A~~pellaw .···~:-'.1~u.iials~and the .. ~. presiding Officers of tJ:te Tnbuna~s shall be~u~:,_Wute~, • . ,':, .. • ., . . ... . ., • I . • . . ' . .. ~ . .. • ' , • • ~ . • -'\~ ·-· ". ~ • ., • ' . t ; ....... • ( , ' • • , . .. 1 ~ . ' • • ,. . \ -.. : . . ' •• - ' ... • • . . \. ' _,. . . . , . •. • . . • ' ' . . • •• 4 • • 1 • . . '\ 8 111B GAZ8'11'B OF INDIA EXTRAORDINARY [PAIT II-Sac. 1) --.. . • • (b) for sub-section (3) 11 the following sub-section shall be substituted, namely:- 1'(3) Every notification issued under sub-section (4) of section 1, section 3 and section 8 and every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament. while it is in session1 for a total period of thirty days which may be comprised in one session or in two or more successive sessions1 and if, before the expiry of the session immediately following the session or ·the successive sessions aforesaid, both Houses agree in making any modification in the notification or rule or both Houses agree that the notification or rule should not be issued or made, the notification or rule shall thereafter have effect onJy in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulmenr shall be without prejudice to the validity of anything previously done under that notification or rule.". • , • • . ' ·----- , , .. • • ' .. . . . . . . . . • • I ( ' .. ' • ' • ' .. ' I , . . . . • . . ' • .. - K. R. NARA YANAN, Pr,, .... _.ident. RA<,rJJJJR SINGJ I, · "' . . , • .. . ' ' I • . • • . ' , •• PRINTED BY THE MANAO~R, OOVERM.IBNT OF lNDlA PR~S (PLU), MINTO ROAD, NEW DEUU AND PUBLISHED BY THE CONIROU.ER OF PUBUCATIONS, DELHI, 2000. • • - . .. --··-- •• • • ...... , MGIP(PLU)MRN0-3288Gl-17-1 .. 20Q0. ., • J J l J •