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2023 Supreme(Online)(KER) 12252
HIGH COURT OF KERALA
N. NAGARESH, J
NAIJO K OUSEPH – Appellant
Versus
THE REGISTRAR – Respondent
OP (DRT) 483 2023
K.SANEESH KUMAR, P.SHRIHARI, V.B.SANTHINI
Jurisdictional authority dictates the registration of Securitisation Applications, emphasizing the need for resolution before enforcement actions can occur.
Headnote:
Securitisation - Debt Recovery - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2), 13(4) - The court highlighted the importance of jurisdiction in determining where Securitisation Applications should be filed and deferred coercive proceedings pending resolution of the statutory appeal.
Fact of the Case:
The petitioners sought to set aside a Registrar's order declining to register their Securitisation Application, asserting that properties involved fell under the jurisdiction of the Debt Recovery Tribunal.
Finding of the Court:
The court recognized the petitioners' right to appeal and ruled that coercive actions related to property possession must be paused while waiting for the tribunal's decision on the registered appeal.
Issues: Whether the Registrar of the Debt Recovery Tribunal was correct in declining to register the Securitisation Application based on property location and if coercive actions could continue before the appeal resolution.
Ratio Decidendi: Jurisdiction determines the appropriate venue for Securitisation Applications; pending appeals must be afforded the opportunity for resolution before any coercive measures are enacted.
Final Decision: The court directed the DRT to issue orders on the appeal within two weeks and deferred coercive actions based on the magistrate's order.
JUDGMENT
Dated this the 16th day of November, 2023 The petitioners have approached this Court seeking to set aside Ext.P9 order passed by the 1st respondent-Registrar of Debt Recovery Tribunal and to direct the 1st respondent to number Ext.P1 S.A on the files of the Debt Recovery Tribunal- 1, Ernakulam and to consider interim application for stay filed in Ext.P1 S.A. within a time frame.
2. The petitioners are debtors to the 2nd respondent-
Bank. The 2nd respondent-Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 . When the Chief Judicial Magistrate Court, Thrissur passed Ext.P8 order dated 20.09.2023 in Crl.M.P. No.8060 of 2023, the petitioners filed Ext.P10 appeal before the Debt Recovery Tribunal. The Registrar of the Debt Recovery Tribunal declined to register the application of the petitioner under Sub-Rule (4) of Rule 4 of the Debts Recovery Tribunal (Procedure) Rules, 1993 . 3. The petitioners state that the Securitisation Application relates to four properties, out of which three items are situated in Ernakulam and which would fall within the jurisdiction of DRT-1. One item of property is in Thrissur District and it is on that ground alone that the petitioners’ S.A was declined to be numbered.
4. Aggrieved by Ext.P8 order, the petitioners have preferred Ext.P10 memorandum of appeal under Rule 5(5) of the Debts Recovery Tribunal (Procedure) Rules, 1993 . The petitioners state that the DRT heard Ext.P10 appeal on 14.11.2023 and orders are reserved. In the meanwhile, respondents are rushing to take over the property of the petitioners.
5. Standing Counsel entered appearance and resisted the writ petition. The Standing Counsel denied all the allegations made by the petitioners in the writ petition. On behalf of the respondents, it is pointed out that the petitioners are basically challenging an order of the Chief Judicial Magistrate Court, Thrissur, which deals with taking over possession of the secured property of the petitioners situated in Thrissur District. Therefore, the petitioners ought to have filed an S.A. in a Tribunal having jurisdiction over the area. Having not been done so, the petitioners cannot aspire to get any order from this Court in this O.P (DRT). The Standing Counsel pointed out that huge amounts are due from the petitioners and the present litigation is only an attempt to prolong repayment/recovery of money due from the petitioners.
6. I have heard the learned counsel for the petitioners and the learned Standing Counsel representing the Bank. 7. Evidently, an order has been passed by the Chief Judicial Magistrate Court, Thrissur (Ext.P8) in respect of one item of property given as security by the petitioners. When the petitioners challenge the recovery proceedings initiated by the Bank, necessarily the petitioners may have to challenge proceedings in respect of all the four items of properties given as security. Admittedly, three items of properties would fall within the territorial jurisdictional limit of DRT-1, Ernakulam. Nevertheless, the Registrar of DRT has declined to number the appeal of the petitioners on the ground that one of the properties is situated within the limits of Thrissur.
8. The petitioners have filed Ext.P10 statutory appeal, against the order of the Registrar, which has been heard and reserved for orders by the Tribunal. As the petitioners have invoked their statutory remedy and the matter has been heard by the DRT, it would be only just and proper that coercive proceeding pursuant to Ext.P8 shall stand deferred till the DRT passes orders on the appeal.
In the circumstances, the O.P (DRT) is disposed of directing the DRT to pass and issue orders on Ext.P10 appeal within a period of two weeks from today. Any coercive proceedings pursuant to Ext.P8 shall stand deferred till then.
Sd/-
N.NAGARESH JUDGE
