Submissions to the Parliamentary Joint Committee
Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill 2016
The Centre for Law & Policy Research (“CLPR”) is a non-partisan, not-for profit law and policy research institution based in Bangalore. We have in the past, made submissions on the draft Insolvency and Bankruptcy Code to the Joint Committee of Parliament. We have also worked extensively on the implementation framework of the Insolvency and Bankruptcy Bill 2015. (See generally, Aparna Ravi, “Implementing the New Insolvency Law” Business Standard, March 26, 2016)
The Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill, 2016 (“2016 Amendment Bill”) is an attempt to create an umbrella framework for banking and insolvency related matters, and for expediting the process of debt recovery. As per the Statement of Objects and Reasons, the government wants to bring in these amendments in keeping with its goal of easing the regulatory regime for doing business and responding to the changing credit landscape. This will be done, keeping in mind the importance of facilitating an investment climate for ensuring higher economic development and growth. In doing so, it seeks to amend four laws: (i) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), (ii) Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDB Act), (iii) Indian Stamp Act, 1899 and (iv) Depositories Act, 1996.
This submission and response by the CLPR is on Part III of 2016 Amendments which relate to the Recovery of Debts Due to Financial Institutions Act, 1993 ( RDB Act). As per the Statement of Objects and Reasons, these amendments are being proposed to facilitate the speedy disposal of cases by the Debt Recovery Tribunals. However, the amendments suggested, give the Tribunals draconian powers in the name of speedy disposal. They deny basic principles of natural justice, are one-sided in favouring banks and financial institutions and violate basic principles of a fair trial.
Read Sudhir Krishnaswamy’s and Jayna Kothari’s full piece here.