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DELHI HIGH COURT (DB) (DRAT)
Sanjay Kishan Kaul and Valmiki Mehta, JJ.
Indira Devi and Anr. —Petitioners
versus
Debts Recovery Appellate Tribunal
and Ors. —Respondents
Writ Petition (C) No. 8221 of 2009
Decided on 9.8.2010
For the Petitioners:Mr. R.P. Vats and Mr. Prasanta Verma, Advocates.
For the Respondent No. 2:Pranav Kishore Jha for Lajwinder Singh, Advocates.
For the Respondent Nos. 3 to 16:P.K. Dhamija, Advocate.
IMPORTANT POINT
Appeal under Section 17 of Securitization Act can be filed it in any one of DRT where bank could have filed its original recovery proceedings.
Headnote:Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002—Section 17(1)—Debts Recovery Tribunal (Procedure) Rules, 1993—Rule 6—Appeal—Appeal under Section 17(1) need not be filed only in DRT having jurisdiction where branch of financial institution is located which has disbursed loan—Territorial jurisdiction for appeals to be filed under Section 17(1) is of all DRTs which have jurisdiction in terms of Section 19(1) of DRT Act read with Rule 6 of DRT Rules—An aggrieved person can file appeal under Section 17(1) even where mortgaged property is situated and he is not bound only to file appeal under Section 17(1) before DRT which has jurisdiction over the branch where credit facilities are disbursed. (Paras 8 to 12)
Result: Writ petition allowed.
Valmiki J. Mehta, J.—The issue which arises for determination in the present petition is whether an appeal can or cannot be filed under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘Securitisation Act’) by a borrower/mortgagor where the mortgaged property is situated. Putting it differently, the issue is whether an appeal under Section 17 of Securitisation Act can only be filed where the branch of the bank is situated which has given the loan or it can be filed both in the Debts Recovery Tribunal (DRT) which has jurisdiction where the branch of the bank is situated which has given the loan or that the appeal under Section 17 can also be filed within the jurisdiction of the DRT, where the mortgaged property is situated. Under the provisions of the Code of Civil Procedure, 1908 (CPC), any legal proceeding where the subject matter of the suit is a mortgaged property, is filed within the Court within whose territorial jurisdiction the mortgaged property is situated. In fact, Section 16 of the CPC mandates in view of the non obstante clause thereof that the territorial jurisdiction will only lie with the Court where the mortgaged property is situated and the Court where the defendant resides or carries on business or any other part of cause of action arises will not have territorial jurisdiction to try the legal proceedings.
2. When the Recoveries of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘DRT Act’) was passed, the legislature made a specific departure from the provision of Section 16 of the CPC. In terms of Section 19(1) of the DRT Act, it was not required that the bank should file the proceedings for recovery only within the DRT which had territorial jurisdiction over the mortgaged property and the bank could file the proceedings for recovery either where the defendant resides or carries on business or where whole or part of cause of action arise including where the branch is located. Meaning thereby, the bank can institute recovery proceedings where its branch is situated which advanced the credit facilities to the borrower although the mortgaged property was situated elsewhere, since the place where the loan is advanced is the place where it can be said that the part of the cause of action undoubtedly arises. The relevant provision of DRT Act being Section 19(1) and the Rule of 6 of sthe Debts Recovery Tribunal (Procedure) Rules, 1993 (hereinafter referred to as ‘DRT Rules’) being relevant, the some are reproduced as under:
“Section 19. Application to the Tribunal—(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction:
(a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business or personally works for gain; or
(b) any of the defendants, where there are more than one at the time of making the application, actually and voluntarily resides or carries on business or personally works for gain; or
(c) the cause of action, wholly or in part, arises;
xxx xxx xxx
Rule 6. Place or filing application—The application shall be filed by the applicant with the Registrar within whose jurisdiction:
(a) the applicant is functioning as a bank or financial institution, as the case may be, for the time being; or
(b) the defendant, or each of the defendants where there are more than one, at the time of making application, actually or voluntarily, resides, or caries on business, or personally works for gain; or
(c) any of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain, or
(d) the cause of action, wholly or in part, arises.”
