DRAT tells DRT to decide OA expeditiously in loan restructuring delay case
- DRAT declines interference; asks DRT to hurry OA decision
- Repeated adjournment requests rejected; 180-day limit cited
- Borrower sought more time for restructuring; lenders opposed
New Delhi: The Delhi Bench of the Debt Recovery Appellate Tribunal (DRAT) dismissed the appeal filed by M/s YFC Private Ltd. & Ors. against Bank of Baroda & Ors. over delays linked to loan restructuring. While refusing to interfere with the Debt Recovery Tribunal’s (DRT) order dated 04.09.2025, DRAT directed the DRT to decide the Original Application (OA) under Section 19 of the RDB Act expeditiously.
Case Snapshot
- Parties: M/s YFC Pvt. Ltd. & Ors. (borrowers/appellants) vs. Bank of Baroda & Ors. (lenders/respondents)
- Core issue: Borrowers sought time for loan restructuring; lenders opposed further delay in OA adjudication.
- Tribunal’s concern: OA filed in 2023 still pending, beyond the prescribed 180-day disposal timeline.
- DRAT outcome: Appeal dismissed; DRT told to conclude OA swiftly.
Key Timeline
| Date | Event |
|---|---|
| 2023 | Bank of Baroda files OA under Section 19, RDB Act. |
| Mar 2025 | Joint lenders decline earlier restructuring proposal. |
| 10.07.2025 | DRT grants time; warns that arguments will be heard on 31.07.2025 if not finalised. |
| 31.07.2025 | Further adjournment; matter fixed for final arguments on 04.09.2025. |
| 04.09.2025 | DRT declines another three months; notes 180-day disposal limit and prior indulgence; grants 15 days to withdraw/record consent decree. |
| 03.10.2025 | DRAT dismisses appeal; directs DRT to decide OA expeditiously. |
Tribunal’s Reasoning (Plain Language)
- Proceedings were being dragged by repeated requests for time tied to restructuring proposals.
- Filing/considering a restructuring proposal cannot stall OA adjudication indefinitely.
- The DRT had already shown leniency twice before fixing dates for final arguments.
Final Direction & Effect
- Appeal dismissed: DRAT found no reason to interfere with the DRT’s refusal to grant further time.
- Expedited disposal: DRT instructed to conclude the OA without further delay.
- 15-day window: Borrowers had 15 days before the DRT to withdraw or record a consent decree (as already granted).
What This Means (Practical Impact)
- For borrowers: Restructuring talks won’t automatically pause recovery suits; be ready to argue the OA on merits.
- For banks: Courts may resist prolonged adjournments; push for final hearing if restructuring isn’t progressing.
- For timelines: The 180-day norm for OA disposal remains a strong yardstick guiding tribunals.
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