SARFAESI – Territorial Jurisdiction – DRT having jurisdiction over few properties is obliged to exercise its jurisdiction over all the properties of borrower (even though not falling in its jurisdiction) arising out of same cause of action

Mr. Rajesh Bindal, J.:- The petitioners have approached this Court impugning order dated 4.8.2015 (Annexure P-6) passed by the Debts Recovery Tribunal-II, Chandigarh (for short, ‘the Tribunal’), whereby it has declined to exercise jurisdiction with reference to the property situated at Chandigarh, as the Tribunal was exercising jurisdiction over the properties falling within the State of Punjab.

2. While giving the background of the case with reference to loan raised by the petitioners, the securities furnished and the classification of the loan as NPA by the bank, learned counsel for the petitioners submitted that a demand notice dated 8.3.2013 (Annexure P-1) was issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the SARFAESI Act’), by Punjab & Sind Bank, Sector 47, Chandigarh Branch. The notice clearly mentioned the properties situated in the State of Punjab and house situated at Chandigarh. Immediately thereafter, the bank issued possession notice under Section 13(4) of the SARFAESI Act on 22.6.2013 (Annexure P-2).

3. Challenging the action of the bank, the petitioners approached the Tribunal, by filing S.A. No. 334 of 2013. Vide order dated 15.1.2014, keeping in view the fact that the physical possession of basement and ground floor of residential property located at Chandigarh had been taken, the bank was permitted to put the property on sale without dispossessing the petitioners from the first floor of the property. However, vide order dated 4.8.2015, the Tribunal refused to exercise jurisdiction with reference to the property situated in Chandigarh as it was opined that the Tribunal has territorial jurisdiction only for the properties situated in the State of Punjab. The aforesaid order has been impugned in the present writ petition.

4. The arguments raised by learned counsel for the petitioners is that the loan was raised from the bank located at Chandigarh. To secure the same, properties situated in the State of Punjab and Union Territory, Chandigarh, were submitted as collateral securities. There is one single notice issued by the bank seeking to take action under the SARFAESI Act mentioning details of all the properties situated in the State of Punjab and at Chandigarh. To challenge the same, the petitioners filed SA No. 334 of 2013 before the Tribunal having jurisdiction with reference to properties located in the State of Punjab. SA was entertained. Various orders were passed even pertaining to the property situated at Chandigarh, but all of a sudden vide impugned order, the Tribunal directed that claim made in the SA with reference to the property situated at Chandigarh is not maintainable before the Bench as it has jurisdiction only for the properties situated in the State of Punjab. The order passed by the Bench will result in anomalous situation and multiplicity of litigation. It may result in passing of different/ contradictory orders by two different Benches pertaining to same issue, only for the reason that the securities furnished may be located in different jurisdictions. Reference was made to Full Bench judgment of Delhi High Court in Amish Jain and another vs ICICI Bank Limited – [2013(3) Law Herald (SC) 2209 (Delhi) (FB)] : 4 (2012) BC 552 (FB) Delhi, wherein it has been opined that the application under Section 17 of the SARFAESI Act can be filed before the Tribunal within whose jurisdiction the property/ secured asset is located, though issue regarding jurisdiction with reference to the fact where secured assets are located within the jurisdiction of two different Tribunals was not under consideration. Reference was also made to a judgment of Madurai Bench of Madras High Court in Civil Revision (MD) No. 694 of 2014 (PD) M/s Asian Health and Nutri Foods Limited and others vs The Debts Recovery Tribunal and another, decided on 24.6.2014, wherein it has been opined that any loanee is entitled to fil