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CS Professional · Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

A court decree for recovery of money in favour of a bank was passed in 1998, before the commencement of the Recovery of Debts Due to Banks and Financial Institutions (Amendment) Act, 2000, and remains unexecuted. Under the Recovery of Debts and Bankruptcy Act, 1993, what may the bank do?

The bank, as decree-holder of an unexecuted pre-2000 decree, may apply to the Tribunal under section 31A. The Tribunal may issue a recovery certificate to a Recovery Officer, who then recovers the amount as if it were a debt recoverable under the Act.

  1. AApply to the Tribunal, which may issue a certificate of recovery to a Recovery OfficerCorrect
  2. BFile a fresh original application before the Tribunal to re-prove the debt from the beginning
  3. CApply directly to the Recovery Officer, who may attach assets without any Tribunal order
  4. DApply to the Appellate Tribunal to transfer the decree to the civil court for execution

Explanation

Section 31A allows a decree-holder whose pre-2000 decree is unexecuted to apply to the Tribunal. The Tribunal may then issue a recovery certificate to a Recovery Officer. The Officer then proceeds as if it were a certificate for a debt recoverable under the Act. A direct approach to the Recovery Officer is wrong because the Tribunal's certificate is needed first.

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