INDIRA DEVI Vs. DEBT RECOVERY APPELLATE TRIBUNAL

JUDGEMENT

(1.) 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 (hereafter 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 Debt 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.

(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 6 of the Debt Recovery Tribunal (Procedure) Rules, 1993 (hereinafter referred to as the 'DRT Rules') being relevant, the some are reproduced as under:

(3.) As per Section 17 of the Securitization Act, an appeal has to be filed in the Debt Recovery Tribunal having jurisdiction. This provision of Section 17(1) of the Securitization Act reads as under: