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Section 16: Orders constituting Tribunal or an Appellate Tribunal to be final, and not to invalidate its proceedings

Recovery of Debts and Bankruptcy Act, 1993 • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1993
Section 15 All 37 Sections of Recovery of Debts and Bankruptcy Act, 1993 Section 17

Legal Commentary & Landmark Judgments: Section 16

Section 16 enacts a finality clause shielding the Central Government's orders appointing Presiding Officers and Chairpersons from being questioned in civil courts or through collateral proceedings.

  • Bar on Collateral Challenge to Appointments: Section 16 commands that no order of the Central Government appointing any person as the Presiding Officer of a Tribunal or as the Chairperson of an Appellate Tribunal shall be called in question in any manner.
  • Prohibition on Questioning Constitution: No act or proceeding before a Tribunal or an Appellate Tribunal shall be called in question in any manner on the ground merely of any defect in the constitution of a Tribunal or an Appellate Tribunal.
  • Preservation of High Court Judicial Review: While Section 16 bars suits in ordinary civil courts and collateral attacks in debt litigation, it does not and cannot extinguish the constitutional power of judicial review vested in High Courts under Article 226 and the Supreme Court under Article 32.
Key Landmark Precedents:
  • Union of India v. Delhi High Court Bar Association (2002) 4 SCC 275: The Supreme Court held that Section 16 is intended to prevent frivolous and obstructionist litigation by defaulting borrowers challenging the administrative constitution of tribunals to stall recovery of bank dues.
  • Pushpa Devi Saraf v. Jai Narain Parasrampuria (1992) 2 SCC 676: The Supreme Court affirmed that statutory finality clauses protect administrative appointments from collateral questioning in the course of substantive litigation between private parties.
  • L. Chandra Kumar v. Union of India (1997) 3 SCC 261: The Constitution Bench held that statutory provisions seeking to confer absolute finality on executive notifications cannot exclude constitutional judicial review under Articles 226, 227, and 32.
Courtroom Practice & Strategic Litigation Guidance:

In DRT or DRAT proceedings, borrowers frequently seek to derail recovery by questioning whether the Presiding Officer's extension notification was gazetted in time. Invoking Section 16, counsel for the bank must immediately move the Tribunal to discard such collateral attacks, as the appointment order is protected by statutory finality and can only be examined in a direct writ petition before the High Court.

Section 15 All 37 Sections of Recovery of Debts and Bankruptcy Act, 1993 Section 17