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Supreme Court seeks details of corporates with outstanding dues of over Rs 500 crore

On the last day of Chief Justice T S Thakur’s tenure, a Supreme Court Bench headed by him on Tuesday slammed the government for literally starving the debt recovery tribunals by not providing staff and infrastructure to deliver justice.

It sought details of the corporate entities with outstanding dues of over Rs 500 crore, whose cases are pending for more than 10 years.

Though the 1993 Act provides for the disposal of the recovery applications within 180 days, it asked why many cases are pending for more than 10 years, directing the government to file an affidavit on how it is going to remedy the matter.

Indirectly indicting the government for benefiting the defaulter corporates, the Bench that also comprised Justices A M Khanwilkar and Dr D Y Chandrachud pointed out that the government had itself admitted that more than 70,000 cases involving around Rs 5 lakh crore were pending before the tribunals that were sought to be created to expedite recovery of dues of banks and financial institutions.

Pointing out that 34 debt recovery tribunals and five appellate tribunals can not do much so long as their infrastructure is not commensurate with the burden of work and nature of judicial duties, the Court referred to a letter by the chairperson of the Debt Recovery Appellate Tribunal at Allahabad to the CJI on December 9 tendering his resignation as in the absence of infrastructure and facilities, functioning of the adjudicating body had become impossible. In its 5-page order, the Bench said this is symptomatic of a trend whereby the debt recovery and appellate tribunals suffer from a lack of adequate infrastructure, manpower and resources.

Directing the government to file an affidavit on five points within four weeks, the Bench asked it to furnish the list of the pending cases for more than 10 years in case of the corporate entities with outstanding dues of more than Rs 500 crore and specific plan of action with timelines to upgrade the existing infrastructure.

It also asked the government to state on affidavit if the timelines set in the Act amended in 2016 are capable of being achieved with the existing infrastructure, including judicial personnel and staff and whether any scientific study has been conducted on the availability of infrastructure.

The court also wanted to know whether any scientific study has been conducted on the availability of infrastructure and “what steps the Union government intends to adopt to enhance the infrastructure of debt recovery tribunals and the appellate tribunals in terms of physical infrastructure, judicial manpower and non-judicial personnel required for the efficacious functioning of the tribunals”.   It has asked as to whether there was any specific plan of action, including time schedules within which the existing infrastructure would be upgraded so as to achieve the time frame for disposal indicated in the amended legislation.

In the judgement, the bench also referred to an incident in which the chairperson of the DRAT, Allahabad wrote to the CJI saying he was constrained to tender his resignation from the post due to absence of “infrastructure and facilities”.

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