The court ruled that notice issued under Section 13 of the SARFAESI Act constitutes part cause of action, allowing jurisdiction for the Debts Recovery Tribunal at Lucknow, and clarified that the SARFAESI Act supersedes conflicting provisions in other laws.

JUDGMENT :

Manish Mathur, J.

1. Heard Mr. Ambika Prasad Mishra learned learned counsel for petitioners, Mr. Dileep Kumar Tiwari learned State Counsel for opposite party No.1, Mr. Anand Kumar Singh learned counsel for opp. parties 3 and 4 and Mr. Gyanendra Mishra learned counsel for opp. party No.5. Notice to opp. party No.2 stands dispensed with.

2. This reference has been made by Hon'ble the Chief Justice vide order dated 23rd April, 2022 and subsequently to this Bench vide order dated 18th May, 2023 in pursuance of questions referred by Hon'ble Single Judge vide order dated 29th September, 2021 passed in Writ C No. 13556 of 2021.

3. The questions framed and referred by the Hon'ble Single Judge are as follows:-

"(A) Whether in a case where part of cause of action to maintain an application under Section 17(1) of the SARFAESI Act, arises within the limits of territorial jurisdiction of Debts Recovery Tribunal, Lucknow, the Debts Recovery Tribunal, Lucknow will have the jurisdiction, power and authority to entertain and decide such application in view of Sub section (1-A) of Section 17 of the SARFAESI Act or not ?

(B) Whether Section 3 of the Recoveries of Debts Due to Banks and Financial Institutions Act, 1993, confers exclusive jurisdiction on Debts Recovery Tribunals established thereunder vide notifications of the Central Government?

(C) Whether Section 3 of the Recoveries of Debts Due to Banks and Financial Institutions Act, 1993, can be read as conferring exclusive jurisdiction on the Tribunals established thereunder, irrespetive of Section 19 of the Recoveries of Debts Due to Banks and Financial Institutions Act, 1993 and Section 17(1A) of the SARFAESI Act, rendering Sections 19 and 17(1A) of the respective Acts as redundant or nugatory ?

(D) Whether the judgment in Saurabh Gupta (supra), which lays down that the Debts Recovery Tribunal, Allahabad shall have exclusive jurisdiction to entertain and decide the applications arisen from 55 districts specified in the notification dated 05.12.2017, without noticing Section 19 of the Recoveries of Debts Due to Banks and Financial Institutions Act, 1993 and Section 17(1A) of the SARFAESI Act, as also the judgment of Hon'ble Supreme Court in case of Sri Nasiruddin (supra) lays down the law correctly ?

(E) Whether the judgment in Saurabh Gupta (supra) is contrary to the law laid down by the Hon'ble Supreme Court in the case of Sri Nasiruddin (supra) and is liable to be declared as not good law ? "

4. During course of hearing, this Court vide order dated 25th January, 2024 framed two additional questions which are as follows:-

"Question No.1:- Whether clause (a) of Section 17(1A) of the SARFAESI Act is to be read ejusdem generis with Clauses (b) and (c) or is disjunctive?

Question No.2:- Whether insertion of Section 17(1-A) in the SARFAESI Act would have any overriding effect over provisions of the Debts Recovery Tribunals Act? "

5. The factual matrix of present dispute is that the respondent bank being UCO Bank granted loan facility to the petitioner from its branch situate in district Amethi, Uttar Pradesh. The loan was secured by mortgage of property situate at Amethi. Borrower who is the petitioner No.1 and the guarantor, petitioner No.2 committed default in repayment of loan whereafter a demand notice was issued by the authorized officer from the zonal office in Lucknow. Possession and sale notice were also issued from the zonal office in Lucknow whereafter the petitioners filed a securitization application bearing No. 541 of 2019 before the Debts Recovery Tribunal, Lucknow.

6. Upon service of notice upon the respondent bank, a preliminary objection was raised regarding jurisdiction of the Tribunal at Lucknow with the submission that territorial jurisdiction pertaining to district Amethi lies with the Debts Recovery Tribunal Allahabad. The aforesaid preliminary objection was rejected vide order dated 6th August, 2019 leading to filing of regular appeal No. 14 of 2020 by the respondent bank,