CENTRE FOR PUBLIC INTEREST LITIGATIONversusHOUSING & URBAN DEVELOPMENT CORPORATION LTD. & ORS.

                        [2017] I S.C.R. 401


        CENTRE FOR PUBLIC INTEREST LITIGATION                           A
                                 v.
HOUSING & URBAN DEVELOPMENT CORPORATION LTD.
                   & ORS.
                 (Writ Petition (C) No. 573 of2003)                     8
                        JANUARY 03, 20 17
        (T.S. THAKUR, CJI, A.M. KHANWILKAR AND,
                 DR. D.Y. CHANDRACHUD, JJ.)
      Recovery of Debts Due to Banks and Financial Jnslitutions
Act. 1993- EnforcemenJ of Security /merest and Recovery of Debt         c
Laws and Miscellaneous Provisions (Amendment) Act, 2016 -
Requirement of expeditious disposal of proceedings before the Debt
Recut•ery Triburrals - Legislative cha,ges may not by themselves
achieve the intended object so long as infra~·tructure provided to
the Tribu11als is not commensurate with the burde11 of the work and     D
nature ofjudicial duties- Union Government directed to file affidavit
dealing with various i:rsues in regard to infrastructure of Debt
Recovery Tribunals and Appellate Tribunals.
      Parliament enacted the Recovery of Debts Due to Banks
and Financial Institutions Act, J993 for providing for the
                                                                        E
estaNishment of tribunals and appellate tribunals for expeditious
adjudication and recovery of dues to banks and financial
institutions. Subsequently, in order to deal with tbe large pendency
of c:ases,the Enforcement of Security Interest and Recovery of
Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016
has been enaded.                                                         F
      Issuing directions, the Court
     HELD: 1. Legislative ~banges to provide ror expeditious
disposal of proceedings before tbc Debt Recovery Tr.ibunals may
not by themselves achieve the intended object so long as the
infrastructure provided to the Tribunals is not commensurate with       G
the burden of the work and nature of judicial duties. Tbe Debt
Recovery Tribunals and Appellate Tribunals suffer from a lack or
adequate infrastructure, manpower and resou"es. Haviag due
regard to the importaat adjudicatory function whiclt ia entruatcd
                                                                        .H
                                 401
402            SUPREME COURT REPORTS                        [20 17] I S.C .R.


A     to these Tribunals, the efficaty of parliamentary legislation will
      depend in a large measure on the efficiency with which the
      Tribunals discharge their duties. (Para 4) (403-H; 404-A-CJ
            2. The Union Government is directed to file an affidavit
      specificaJiy dealing with the following issues: (i) Whether the
B     timelines set down in the amended legislation are capable of being
      achieved with the existing infrastructure including judicial
      personnel and staffing pattern of the Debt Recovery Tribunals
      and Debt Recovery Appellate Tribunals; (ii) The underlying basis,
      if any, upon which the revised timelines have been stipulated and
      whether any scientific study has been conducted on the
c     availability of infrastructure; (iii) Whether, and if so, 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
D     of the Tribunals; (iv) The specific plan of action including time-
      S(bedules within which the existing infrastrudure would be
      upgraded so as to achieve the time frame for disposal indicated
      in the amended legislation; and (v) Empirical data on the pendency
      of cases for more than teo years and tlte list of corporate entities
      where the amount outstanding is in excess of Rs.500 crore.
E     However, the direction for filing of affidavit shall not in any manner
      affect the functioning of the Committee which has already been
      constituted by the Union government. (Paras 5, 6] (404-D-GJ
            CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No.
      573 of2003.
 F
            Under Article 32 of the Constitution oflndia.
            Ranjit Kumar. SG, Jaideep Gupta, ·sr. Adv., Prashant Shushan,
      Ms. Kamini Jaiswal, Devesh Kumar Agnihotri, Govind Jee. Rohit Kumar
      Singh, R. Chandrachud, Ms. Binu Tamta, D.L.Chidananda, R.K. Venna,
      R. R.Rajesh, Ms. Anil Katiyar, Kuldeep S. Parihar, H.S.Parihar, Pranab
G
      Kumar Mullick, Ms. Soma Mullick, Sebat Kumar Deuria, A. Chatterjee,
      Mudit Sharma, Ms. Nina Gupta, Lalit Bhasin, Ms. Ranu Purohit,
      Ms. Ruby Singh Ahuja, Vishal Gehrana, Milanda Sharma, Ms. Manik
      Karanjawala, Pankaj Pandey, P. Panneswaran, Rajeev Sharma, Vikas
      Mehta, Advs. for the appearing parties.
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. HOUSING &                             403
     URBAN DEVELOPMENT CORPORATION LTD.

      The Judgment of the Court was delivered by                                A
       DR. D. Y. CHANDRACHUD, J. I. Prior to the establishment
of Debt Recovery Tribunals, as on 30 September 1990, more than fifteen
lakh cases filed by public sector banks and about three hundred and four
cases filed by financial institutirins were pending befoie various courts.
The amounts involved were to the extent ofRs. 5,622 crores in dues ~f          B
public sector banks and Rs. 391 crores of financial institutions. Following
the Reports ofthe Narasimhan Committee and the 2 Tiwari Committee,
Parliament enacted the Recovery of Debts Due to Banks and Financia1
Institutions Act, 1'993 for providing for the establishment oftribunals and
appellate tribunals for expeditious adjudication and recovery ofdues due
to banks and financial institutions.                                           c
        2. At present, thirty four Debt Recovery Tribunals· and five.
Appellate Tribunals are functioning in the country. In financial year 20 15-
16 these Tribunals disposed ofabout 16,000 original applications involving
a total amount ofRs. 34,000 crores. Since their inception until31 October
2015, the Tribunals had disposed of 1,34,433 original applications leading     fl·
to the recovery of an amount of Rs. 70,725 crores. The Tribunals are
also vested with the jurisdiction to entertain securitization applications.
under the Securitisation and· Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002.
      i Thi~ Court has bet:n apprised, in the submissions filed by the          E·
Union government, that more than 70,000 cases involving an amount of
Rs.S lakh crores approximately are pending before the Debt Recovery
Tribunals, of which many are pending for more than ten years..~ho~gh
the Act of 1993 provides for the disposal ofrecovery ap.plications within·
one hundred and eighty days, cases have remained pending for years F
together. In order to deal with the large pendency of cases,. the .
Enforcement of Security Interest and Recovery of Debt Laws ai~d
Miscellaneous Provisions (Amendment) Bill, 2016 was introduced in the
Lok Sabha on 11 May2016. The Bill was refer~ed to a Joint Committee
of3 both Houses.ofParl.iament. The Committee presented its Report·to
the Lok Sabha on 22 July 20 16. Eventually, a law has been enacted by G
both the Houses of Parliament and published in the E-gazette on .16
August 2016.
     4. Legislative changes to provide for expeditious disposal of
proceedings before
               .•
                   the Debt Recovery
                             .  .
                                     Tribunals ·may not
                                                     .
                                                        by themselv~s
                                                               . .
                                                                               H
    404            SUPREME COURT REPORTS                           [20 17] I S.C.R.


    A     achieve the intended object so long as the infrastructure provided to the
          Tribunals is not commensurate with the burden of the work and nature
          of judic~al duties. Recently, the Chairperson of the Debts Recovery
          Appellate Tribunal at Allahabad addressed a letter on 9 December 20 16
          to the Chief Justice oflndia recording that he was constrained to tender
          his resignation from the post of Chairperson since, in the absence of
    B
          infrastructure and facilities, the functioning ofthe adjudicating body over
          which he presided had become impossible. This is symptomatic of a
          trend whereby the Debt Recovery Tribunals and Appellate Tribunals
          suffer from a lack of adequate infrastructure, manpower and resources.
          Having due regard to the important adjudicatory function which is
    c     entrusted to these Tribunals, the efficacy of parliamentary legislation
          will depend in a large measure on the efficiency with which the Tribunals
          discharge their duties.
                5. We accordingly direct the Union Government to file an affidavit
          specifically dealing with the following issues:
    D           (i) Whether the time lines set down in the amended legislation are
          capable ofbeing achieved with the existing inftastructure includingjudicial
          personnel and staffing pattern of the Debt Recovery Tribunals and Debt
-         Recovery 4 Appellate Tribunals;
                (ii) The underlying basis, if any, upon which the revised tim~ lines
    E     have'been stipulated and whether any scientific study has been conducted
          on the avai labi Iity of infrastructure;
                                                                               i.
                (iii) Whether, and if so, 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
    F     manpower and non-judicial personnel required for the efficacious
          functioning ofthe Tribunals;
                .(iv) The 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; and
    G
                (v) Empirical data on the pendency of cases for more than ten
          years and the list of corporate entities where the amount outstanding is
          in excess of Rs:SOO crore.
                6. T.he affidavit shall be filed within a period of four weeks from
          today. We clarify that this direction for the filing of a further affidavit
    H
  CENTRE FOR PUBLIC INTEREST LITIGATION v. HOUSING & URBAN                 405
  DEVELOPMENT CORPORATION LTD. [DR. D.Y. CHANDRACHUD, J.]


shall not in any manner affect the functioning of the Committee which      A
has already been constituted-by the Union government and whose report
is awaited.
Ankit Gyan                                            Direetions issued.




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