What Is The Role Of DRAT?

The Debt Recovery Appellate Tribunal (DRAT) is a statutory appellate authority established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. It hears appeals against orders passed by the Debt Recovery Tribunal (DRT) concerning recovery of debts owed to banks and financial institutions. DRAT plays a vital role in ensuring proper and just adjudication of debt recovery disputes and in strengthening the legal framework for debt enforcement in India.

Role and Functions of DRAT

1. Hearing Appeals Against DRT Orders

DRAT entertains appeals filed by parties dissatisfied with decisions or orders passed by the DRT.

It reviews the correctness, legality, and propriety of the DRT’s decisions.

2. Power to Confirm, Modify or Reverse DRT Orders

DRAT has the authority to uphold, alter, or overturn the rulings of the DRT based on facts and law.

It ensures that justice is served by correcting errors or misinterpretations at the tribunal level.

3. Ensuring Timely Disposal of Cases

DRAT functions to expedite the appellate process, reducing delays in recovery proceedings.

Prompt resolution at the appellate level is critical for effective debt recovery.

4. Enforcement and Execution Oversight

DRAT monitors and reviews enforcement actions initiated by the DRT to ensure compliance with legal procedures.

It may intervene if there are violations or procedural lapses in recovery enforcement.

5. Legal Clarifications and Precedents

Through its decisions, DRAT contributes to the development of jurisprudence related to debt recovery.

It clarifies legal points which guide lower tribunals and stakeholders.

Relationship with Other Forums

• Appeals from DRAT lie with the High Court.
• DRAT complements the functioning of DRT and coexists with other forums such as NCLT under the insolvency framework.
• It focuses specifically on appeals related to debt recovery cases handled by DRT.

Example

A bank is dissatisfied with a DRT order which dismissed its recovery claim against a borrower.

Role of DRAT:

• The bank files an appeal with DRAT challenging the dismissal.
• DRAT reviews the case and finds that the DRT erred in law.
• DRAT overturns the DRT’s order and directs the recovery process to continue.
• This enables the bank to recover its dues efficiently.