RDDBFI Section 1: Short title, extent, commencement and application

Short title, extent, commencement and application

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) This Act may be called the Recovery of Debts and Bankruptcy Act, 1993.

(2) It extends to the whole of India.

(3) It shall be deemed to have come into force on the 24th day of June, 1993.

(4) The provisions of this Act shall apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is not less than twenty lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Bank Sec 2(c) Financial Institution Sec 2(h) Debt Sec 2(g) DRT Sec 2(o)

Legal Commentary & Landmark Judgments: Section 1

Section 1 of the Recovery of Debts and Bankruptcy Act, 1993 (renamed from the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by Act 31 of 2016) defines the short title, universal pan-Indian territorial extent, retrospective commencement date of June 24, 1993, and the jurisdictional pecuniary threshold governing original recovery applications.

Statutory Renaming and Unified Scope: Originally enacted as the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the statute was amended by the Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016) to be cited as the Recovery of Debts and Bankruptcy Act, 1993, establishing an integrated debt recovery and individual insolvency adjudicatory framework.
Universal Territorial Application: Extends to the whole of India; following the enactment of the Jammu and Kashmir Reorganisation Act, 2019, the previous exclusion of the State of Jammu and Kashmir stands abrogated, conferring uniform national jurisdiction across all DRTs.
Statutory Pecuniary Threshold Escalation: Section 1(4) stipulates that the Act applies where the debt due to any bank or financial institution is not less than ten lakh rupees, or such other higher or lower amount (not being less than one lakh rupees) as the Central Government may notify. Vide Notification S.O. 4312(E) dated September 6, 2018, the Central Government raised the minimum threshold to twenty lakh rupees (Rs. 20,00,000), divesting DRTs of jurisdiction over claims below Rs. 20 lakhs.
Exclusive Institutional Standing: Applicability is strictly restricted to debts owed to a 'bank', 'financial institution', or a 'consortium of banks'; private commercial lenders or non-institutional unsecured creditors cannot access the specialized tribunal machinery under Section 1(4).

Key Landmark Precedents:

Union of India v. Delhi High Court Bar Association (2002) 4 SCC 275: The Supreme Court upheld the constitutional validity of the Act and the establishment of DRTs/DRATs, ruling that Parliament possesses legislative competence under Entries 45 and 95 of List I of the Seventh Schedule to establish specialized summary recovery tribunals for banks and financial institutions.
Transcore v. Union of India (2008) 1 SCC 125: A 3-Judge Bench held that the RDB Act and the SARFAESI Act, 2002 provide cumulative and non-mutually exclusive remedies. The initiation of proceedings under Section 19 of the RDB Act does not bar simultaneous or sequential enforcement of security interests under Section 13 of SARFAESI.
State Bank of India v. Ranjan Chemicals Ltd. (2007) 1 SCC 97: The Supreme Court held that once a claim of a bank exceeds the statutory threshold under Section 1(4), DRT has exclusive jurisdiction to try the claim along with any connected cross-suit or set-off transferred from a civil court, preventing parallel conflicting adjudications.

Courtroom Practice & Strategic Litigation Guidance:

In every original application filed under Section 19, verify that the aggregate outstanding debt as of the date of filing strictly equals or exceeds Rs. 20,00,000. If the debt fell below Rs. 20 lakhs prior to filing due to part-payments, the DRT lacks subject-matter jurisdiction, and the claim must be instituted before the competent Civil Court. For claims pending as of September 6, 2018 that were below Rs. 20 lakhs, various High Courts (e.g., Delhi and Bombay) have held that the threshold notification is prospective and does not automatically strip DRTs of jurisdiction over previously instituted matters unless specifically remitted.