Delay in Loan Restructuring Proceedings: DRAT directs DRT to decide OA Expeditiously [Read Order]
Summary: The DRAT refused to interfere in the order passed by the DRT but directed the DRT to decide the O.A. expeditiously.
The Delhi bench of the Debt Recovery Appellate Tribunal (DRAT) has dismissed an appeal filed against Bank of Baroda & ors on finding delay in loan restructuring proceedings as it was pending adjudication beyond the prescribed 180-day period.
The appeal by M/s YFC Private Ltd. & Ors. was challenging the DRT's order dated 04.09.2025, which had declined the appellant's request for three months' time to restructure their loan account. The appeal was against Bank of Baroda.
However, the DRT, in the interest of justice, granted 15 days of the appellants for filing appropriate applications either for withdrawal or for recording consent decree. Counsel for the appellants would submit that earlier a proposal for restructuring the loan account was made to the Joint Lenders, but the same was declined in the month of March 2025.
She further submitted that thereafter in June 2025 a fresh proposal was moved. In the meantime, O.A. was filed by the bank and vide order dated 10.07.2025 and 31.07.2025, DRT granted time and fixed the matter for 04.09.2025 for final arguments. On that day, thee months' time requested by the appellants was declined.
Per contra, counsel for the respondent submitted that proposal for restructuring of the accounts was submitted, but he opposed the prayer for further extension of time on the ground that the proceedings in the OA cannot be stalled on the ground of filing a proposal for restructuring of the account of the borrower.
It is an undisputed fact that the appellants herein are borrowers and the Original Application (O.A.) under Section 19 of the RDB Act was filed by Bank of Baroda in the year 2023, which is still pending adjudication. It is also not disputed by the parties that the earlier proposal for restructuring of the accounts was declined by the lenders in the month of March 2025 and a fresh proposal was submitted in the month of June 2025, meaning thereby that even after filing fresh proposals three months have already lapsed.
DRT, vide order dated 10.07.2025, granted time up to 31.07.2025 with a direction that if the matter is not finalised, arguments will be heard on 31.07.2025. On 31.07.2025 also the same prayer was made by the appellants. The DRT again sympathetically considered the prayer and adjourned the matter to 04.09 2025 for final arguments.
Again, on 04.09.2025, a prayer was made by the appellants for extension by three months, but the same was declined by the DRT by the impugned order firstly on the ground that the period prescribed for disposal of O.A. filed under Section 19 of the RDB Act of 180 days and secondly on the ground that sufficient time has already been granted.
The Tribunal, presided by Justice Anil Kumar Srivastava observed that the proceedings were being "dragged on" due to the appellants' repeated requests for time, which cannot be permitted in law, especially since the OA filed under Section 19 of the RDB Act in 2023 was still pending adjudication beyond the prescribed 180-day period.
However, the DRT, again, granted 15 days either to withdraw or record consent de ree. All these three orders categorically show that the DRT continuously granted time to the appellants for restructuring of the account but the same was not done. Simply proceedings are being dragged on on this ground, which cannot be permitted in law.
The DRAT refused to interfere in the order passed by the DRT but directed the DRT to decide the O.A. expeditiously.
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