'Recovery Officer acts in an arbitrary manner. Analyze the statement in the light of the provisions of Recovery of Debts and Bankruptcy Act, 1993 citing judicial pronouncements, if any.
CS Professional · Corporate Restructuring, Insolvency, Liquidation & Winding-up · PYQS · June 2025
'Recovery Officer acts in an arbitrary manner. Analyze the statement in the light of the provisions of Recovery of Debts and Bankruptcy Act, 1993 citing judicial pronouncements, if any.
Answer & Explanation:
The Recovery of Debts & Bankruptcy Act, 1993 was enacted to provide for speedy adjudication of matters relating to recovery of debts due to banks and financial institutions. The Act provides for setting up separate tribunals to hear such matters and these are termed as Debt Recovery Tribunals (DRT). A DRT shall consist of one person, known as the Presiding Officer, along with one or more Recovery Officers who shall operate under superintendence of the Presiding Officer. On receipt of the decree from the Presiding Officer, the Recovery Officer is duty bound to make recovery in the manner provided under the Act. In the case of UOI vs. Delhi High Court Bar Association , it was held that realization of dues by Recovery Officers shall be made in accordance with the Income-tax Rules, 1962. A detailed procedure for recovery is contained in these Rules, including provisions relating to arrest and detention of the defaulter. Further, as per Section 30 , any person aggrieved by the order of the Recovery Office has the right to appeal to the Tribunal. Thus, there is an appellate forum available against any order of the Recovery Officer. Hence, sufficient safeguard has been provided in the event of the Recovery Officer acting in an arbitrary or an unreasonable manner. Thus, it cannot be said that the Recovery Officer acts in an arbitrary manner.
Topics: Debt Recovery
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