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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
UJJAL BHUYAN, A. VENKATESHWARA REDDY, JJ.
M/s. Maruthi Ginning and Pressing Factory and Others – Petitioners
Versus
The Recovery Officer, Debts Recovery Tribunal-II, Hyderabad and Others – Respondents
WP No. 29918, 29928, 31871, 32730 of 2021, 1980, 3396, 3415, 3451, 7516, 8115 of 2022
Decided On : 01-07-2022
Constitution of India, 1950 - Article 226 and 32 - SARFAESI Act - Section 17 - Recovery of Debts and Bankruptcy Act, 1993 - Section 19 - Loan - Debts Recovery - Power of High court to issue writs - There are two Debts Recovery Tribunals in Hyderabad i.e. Debts Recovery Tribunal-I, Hyderabad and Debts Recovery Tribunal-II, Hyderabad - Both Tribunals have territorial jurisdiction over State of Telangana - For a short while, both Tribunals did not have presiding officers after superannuation of incumbent presiding officers - As a result, a number of writ petitions came to be filed - Subsequently, new presiding officer has joined in Debts Recovery Tribunal-I at Hyderabad, but Debts Recovery Tribunal-II, Hyderabad is still without any presiding officer - Whether a subject matter taken up by Debts Recovery Tribunal-II, Hyderabad or any order passed by the said Tribunal on a dispute arising out of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly ‘the SARFAESI Act’ hereinafter) when both parties to the dispute as well as the cause of action had arisen in the State of Andhra Pradesh. It was on that basis that contention has been advanced that since Debts Recovery Tribunal-II, Hyderabad is subject to the superintendence of this High Court under Article 227 of the Constitution of India, a writ petition arising out of a securitization application either decided or pending pertaining to the above four districts of Andhra Pradesh or against an order passed therein would be maintainable.
Findings of the Court:
Petitioner has prima facie to establish that a legal right claimed by him has either been infringed or is threatened to be infringed by respondent within the territorial limits of High Court’s jurisdiction. Such legal right or infringement thereof has taken place within State of Andhra Pradesh - By filing securitization application or passing of orders there on by Debts Recovery Tribunal-II, Hyderabad no legal right of petitioner can be said to have been infringed by respondent within territorial limits of this High Court - Court answer the question framed by us in the Order dated in negative - Consequently, Court hold that any order or proceeding of Debts Recovery Tribunal-II, Hyderabad pertaining to issues arising from State of Andhra Pradesh including above four districts would not confer jurisdiction on High Court for State of Telangana at Hyderabad to adjudicate.
Result: Writ Petitions are dismissed.
JUDGMENT :
UJJAL BHUYAN, J.
1. We have heard Mr. V.V. Ramana, Mr. T. Vijay Kumar, Mr. P. Nagendra Reddy, Mr. D. Raghavulu, Ms. P. Hamsa Durga, Ms. Mohana, Mr. Venkatesh and Mr. G.K. Deshpande, learned counsel for the petitioners. Also heard Mr. Ch. Srinivas, Mr. K. Viswanadham, Mr. A. Krishnam Raju and Mr. Maruti Jadav, learned counsel for the respondents.
2. On our request, Mr. B.S. Prasad, learned Advocate General for the State of Telangana had appeared and assisted us in the hearing.
3. The core issue which has arisen for consideration in this batch of writ petitions was summed up by this Court in the order dated 03.12.2021 passed in Writ Petition No. 31871 of 2021. Therefore, relevant portion of the order dated 03.12.2021 is extracted hereunder:
We may mention that the loan transaction had taken place at Dharmavaram in the State of Andhra Pradesh. The borrowers and the bankers are also at Dharmavaram, so also the guarantors. For administrative exigency, disputes arising under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 from Rayalaseema region of the State of Andhra Pradesh are being taken up by the Debts Recovery Tribunal-II, Hyderabad.
Question for consideration is whether any order or proceeding of the Debts Recovery Tribunal-II, Hyderabad pertaining to issues arising from the State of Andhra Pradesh would confer jurisdiction on the High Court for the State of Telangana to adjudicate.
We would like to request the learned Advocate General for the State of Telangana to assist us in the matter.
Let a copy of this order be served in the office of learned Advocate General for the State of Telangana. Since we are examining this issue, we expect that no coercive steps shall be taken by the respondent/Bank till we decide this issue.”
4. Thus, the issue arising in all the writ petitions is that whether a subject matter taken up by the Debts Recovery Tribunal-II, Hyderabad or any order passed by the said Tribunal on a dispute arising out of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly ‘the SARFAESI Act’ hereinafter) when both the parties to the dispute as well as the cause of action had arisen in the State of Andhra Pradesh?
5. In view of the issue under consideration, it may not be necessary for us to narrate the facts of each individual case.
6. Before proceeding further, we may mention that there are two Debts Recovery Tribunals in Hyderabad i.e. Debts Recovery Tribunal-I, Hyderabad and Debts Recovery Tribunal-II, Hyderabad. Both the Tribunals have territorial jurisdiction over the State of Telangana. For a short while, both the Tribunals did not have presiding officers after superannuation of the incumbent presiding officers. As a result, a number of writ petitions came to be filed. Subsequently, new presiding officer has joined in the Debts Recovery Tribunal-I at Hyderabad, but Debts Recovery Tribunal-II, Hyderabad is still without any presiding officer.
7. Government of India in the Ministry of Finance issued Notification SO 254 (E) dated 25.01.2017. The notification states that vide earlier notification of Government of India in the Ministry of Finance dated 21.09.1999 Central Government had established one Debts Recovery Tribunal at Hyderabad for the then composite State of Andhra Pradesh. Thereafter, vide the notification dated 26.02.2002 Central Government established another Debts Recovery Tribunal at Visakhapatnam in the composite State of Andhra Pradesh. After bifurcation of the unified State of Andhra Pradesh into the States of Telangana and Andhra Pradesh, Central Government considered it necessary to establish one more Debts Recovery Tribunal at Hyderabad in
Article 226 of the Constitution of India was amended by the Constitution (15th Amendment) Act, 1963 whereby Clause (1A) was inserted in Article 226 thereby introducing the concept of cause of action,....
The jurisdiction of a High Court under Article 227 pertains only to the Debts Recovery Tribunal located within its territorial limits, not an appellate tribunal for matters originating outside its ju....
The jurisdiction for challenging appellate tribunal orders lies in the High Court corresponding to the original tribunal's location, affirming the principle that appellate orders merge with original ....
The main legal point established in the judgment is the interpretation of 'cause of action' and the concept of territorial jurisdiction under Article 226 of the Constitution in relation to the notice....
A High Court's jurisdiction under Article 226(2) requires that part of the cause of action arises within its territorial limits.
The court ruled that the High Court lacks jurisdiction to entertain writ petitions when the integral part of the cause of action arises outside its territorial limits, despite minor connections to th....
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