As regards the first category, dispute could be either fund based or service related. While the former is settled in civil courts, (when they are not criminal in nature and when it is for an amount less than Rs. Ten Lakh) and Debt Recovery Tribunals, latter is decided either by consumer forum or by banking ombudsmen.

As regards the second category, presently, the disputes between the public sector banks are settled in arbitration either by the Legal Department of Reserve Bank (When the amount involved is less than Rs. Fifty Thousand) or by Law Ministry(When the amount exceeds Rs. Fifty Thousand). However, as suggested in para 11 below, disputes between all banks including private sector banks could be delegated to an authority i.e. RBI.

As regards the third category, it is not recognised that there could exist any dispute and hence no forum is available at present to consider any such dispute. 5.The present working group is concerned with the working of the Debt Recovery Tribunals which under present set up considers only dispute exceeding Rs Ten Lakh and only when the application is made by a bank or a financial institution. An application for an amount less than prescribed or a claim by a borrower will lie to a civil court only. This creates multiplicity of fora and this is opposed to the principles of natural justice inasmuch as a borrower is denied access to a forum where a lender can agitate his claim. The Debt Recovery Act requires a bank/financial institution to press its claim in one forum and defend in other forum in the case of set-offsclaimed by the other party. It is therefore necessary that all claims by a banker and customer be decided by one forum barring jurisdiction of any other forum for a similar dispute. No doubt this mays result in one forum being burdened with too many cases and that is where it may become necessary to evolve a procedure which will reduce the time lag in the decisions of the tribunal. It may be seen that under the Act freedom is given to the Tribunals to make their own Procedure, provided the procedure is not violative of Principles of natural justice. Presently, the procedure followed by the Tribunals is more or less that of civil courts resulting in same problems faced by the civil courts and as a result defeating the very purpose of creating these Tribunals. What is required therefore is a complete new approach different from the existing one to look at the procedures to be followed by these Tribunals.

The panacea for the above problems could be found in privatising to the extent possible the procedures butat the same time retaining the authority in the Tribunals, in respect of the same. It is observed from the responses received from the various target groups that the delays is caused mainly in areas like service of notices, recording of evidence and actual recovery process. It is suggested that after a suit is registered with the Tribunal, the service of notice could be undertaken by the lawyer's offices on the lines subpoenas are issued in the U.S.A. through the attorneys offices. After the service of notices even evidence could be recorded and documents taken on record after they are notarised by the notarys public attached to the offices of the advocates. The institution of a snotarys public can be well utilised for this purpose, as they are authorised to administer oath to any person and record statements on oath. Ansy objections raised during recording of evidence can be noted and decided by the Tribunals during the oral submissions which should be entertained by the Tribunals only when the case is readyand ripe for hearing after recording of evidence. The Tribunals should take written submissions osn the evidence from the parties and ask them to confine oral submissions to the points of law. Oral arguments should be brief and should confine to a specified time as may be given by the Tribunal. The Tribunals should give their orders in a open court without losing further time after the arguments and issue certificates of dues when necessary thereafter to its Recovery officer.

The Recovery Officer should be given discretion to take the assistance of agencies like Police or professional debt recovery agencies or such private agencies as exigency requires under the authority or order of the Tribunals in each case. It is suggested in this connection that statute could be amended to provide for licensing and regulating professional debt recovery agencies which would encourage them or even for that matter the factoring agencies to buy the certificates of dues issued by Tribunals at a discount and provideliquidity to the banks and financial institutions.

The whole object of making these suggestions is to reduce the outlay on infrastructure on the part of Tribunals as also reduce the consequential delay caused in the process.

We are aware that the other two areas lie outside the reference of the working group but the idea is that if these suggestions are considered and incorporated in the Act, it would make this Act a self contained code on this subject.

It is suggested that the statute dealing with the debt recovery should be broad based toss include banking ombudsmen and the arbitrators and may be called the Banking Tribunals Act. A statutory recognition to ombudsman in banking with the ouster of jurisdiction of consumer Forum from this area will give the Banking Ombudsman more authority to decide these disputes and will make this forum more effective and efficient too. While the present ombudsman scheme is more or less in order it needs to be amended to give the banks a level playing field. Also, aright of appeal may be provided therein which could lie to Reserve Bank and whose decision could be final leaving no further scope for any judicial review. Also, the subject matter of the dispute mays be confined to only services rendered by the banks.

As regards the arbitration of disputes between the banks (both in public and private sector) it could be delegated to an authority named under the Act which can follow the procedure presently followed for this purpose, i.e. to decide on the basis of records of the parties. RBI can be the appropriate authority for the purpose.

Insofar as the disputes between the banks and the Central bank are concerned, though no such dispute is recognised today there is no objection to make a provision on these lines in a statute for the sake of fairplay and to project a fair image of the Central bank. A provision mays be made to constitute a Tribunal with a judge of a Supreme Court, either retired or puisne, along with an official of the Reserve Bank or Finance Ministry toassist the Judge. The Tribunal could be constituted under the Act by the Chief Justice of India if and when a dispute arises or is contemplated. The decision may be in the nature of a recommendatory award which could be either accepted or not at the discretion of the Governor of the Reserve Bank.