DRT Pulls Up Bank of Maharashtra Over Non-Compliance, Imposes Symbolic Re. 1 Cost
Debt Recovery Tribunal Reprimands Bank of Maharashtra for Defying Judicial Directions; Imposes Personal Cost on Bank Officer and Symbolic Re. 1 on the Bank
In a notable order underscoring judicial accountability in recovery proceedings, the Debts Recovery Tribunal (DRT), Mumbai, sharply criticised the Bank of Maharashtra for failing to comply with its directions in an ongoing debt recovery matter. While the Tribunal imposed a symbolic cost of Re. 1 on the Bank, it directed that ₹20,000 be recovered from the salary and allowances of the concerned bank officer, signalling that responsibility for non-compliance rests with individual officials and not merely the institution.
Background of the Case
The proceedings arose in a recovery dispute connected with the Lilavati Hospital matter, where the DRT had previously issued directions requiring compliance by the Bank of Maharashtra.
According to the Tribunal, despite repeated opportunities and clear judicial directions, the Bank failed to comply within the stipulated time. The Presiding Officer observed that the conduct of the concerned officials reflected a disregard for the Tribunal’s authority and unnecessarily delayed the administration of justice.
DRT’s Strong Observations
The Tribunal expressed dissatisfaction with the Bank’s approach, observing that:
- Judicial orders passed by the DRT are binding and cannot be ignored.
- Public sector banks are expected to maintain the highest standards of legal compliance.
- Failure to comply with Tribunal directions hampers the speedy resolution of debt recovery proceedings.
- Institutional accountability must be accompanied by personal responsibility where lapses are attributable to specific officers.
Symbolic Re. 1 Cost on the Bank
Instead of imposing a heavy monetary penalty on the Bank itself, the Tribunal levied a symbolic cost of Re. 1.
The symbolic nature of the cost conveyed that the Tribunal’s principal concern was not punishment of the institution but recording judicial disapproval of its conduct. At the same time, the Tribunal sought to ensure that taxpayers or the public exchequer did not ultimately bear the burden of penalties arising from the actions of individual officials.
Personal Liability of the Concerned Officer
In a more consequential direction, the DRT ordered that ₹20,000 be recovered from the salary and allowances of Shri Ajay Shivaji Kamble, the concerned Bank of Maharashtra officer responsible for the non-compliance.
By imposing the financial consequence on the officer rather than the institution, the Tribunal emphasised that public officials cannot evade accountability for failing to comply with judicial directions while acting in their official capacity.
Why the Order Is Significant
The ruling reinforces an important principle in debt recovery litigation:
- Tribunal orders must be obeyed promptly by banks and financial institutions.
- Public sector banks cannot treat judicial directions as procedural formalities.
- Courts and Tribunals may increasingly hold individual officers personally accountable for deliberate or unexplained non-compliance.
- Symbolic institutional costs coupled with personal monetary liability may become an effective tool to promote administrative discipline.
Implications for Banking and SARFAESI Proceedings
The order is likely to have practical implications for recovery litigation under the SARFAESI Act, 2002 and the Recovery of Debts and Bankruptcy Act, 1993:
- Banks may strengthen internal monitoring to ensure timely compliance with DRT directions.
- Recovery officers may exercise greater caution in implementing Tribunal orders.
- Borrowers may rely on such precedents where banks disregard procedural or judicial mandates.
- Tribunals may increasingly distinguish between institutional responsibility and individual misconduct while imposing costs.
Broader Legal Message
The DRT’s decision reflects a growing judicial emphasis on administrative accountability. By imposing only a token cost on the Bank while directing recovery from the responsible officer, the Tribunal underscored that public institutions should not be financially penalised for lapses attributable to individual officials. The order serves as a reminder that the rule of law depends not only on the existence of judicial orders but also on their faithful implementation by those entrusted with enforcing them.
