2010 (8) TMI 886 - HC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction for filing an appeal u/s 17 of the Securitisation Act.
2. Interpretation of Section 19(1) of the DRT Act and Rule 6 of the DRT Rules.
3. Applicability of Section 14(1) of the Securitisation Act.
4. Analysis of relevant case law and judicial precedents.

Summary:

1. Jurisdiction for filing an appeal u/s 17 of the Securitisation Act:
The primary issue is whether an appeal u/s 17 of the Securitisation Act can be filed in the DRT where the mortgaged property is situated or only where the bank branch that disbursed the loan is located. The court concluded that an appeal can be filed in any DRT that has jurisdiction under Section 19(1) of the DRT Act, which includes the DRT where the mortgaged property is situated.

2. Interpretation of Section 19(1) of the DRT Act and Rule 6 of the DRT Rules:
Section 19(1) of the DRT Act allows banks to file recovery proceedings in the DRT where the defendant resides, carries on business, or where the cause of action arises. Rule 6 of the DRT Rules mirrors this provision. The court held that since banks have the option to file recovery proceedings in multiple DRTs, a borrower/mortgagor should similarly be allowed to file an appeal u/s 17 in any of these DRTs.

3. Applicability of Section 14(1) of the Securitisation Act:
Section 14(1) of the Securitisation Act involves the Chief Metropolitan Magistrate or District Magistrate assisting in taking possession of secured assets. The court reasoned that if a bank can take action through a magistrate where the property is situated, a borrower should be able to file an appeal in the DRT with jurisdiction over the property.

4. Analysis of relevant case law and judicial precedents:
The court referenced the Calcutta High Court's decision in Elements Coke Pvt. Ltd. Vs. UCO Bank, agreeing that the DRT where the mortgaged property is situated has jurisdiction but not exclusively. The court also discussed the Supreme Court's decision in Madia Chemicals Ltd. & Ors. Vs Union of India & Ors., clarifying that proceedings u/s 17(1) are original jurisdiction proceedings, not merely execution proceedings.

Conclusion:
The court concluded that an appeal u/s 17(1) of the Securitisation Act can be filed in any DRT that has jurisdiction under Section 19(1) of the DRT Act, including where the mortgaged property is situated. The writ petition was allowed, setting aside the order of the Debt Recovery Appellate Tribunal and upholding the order of DRT-III, New Delhi, confirming its territorial jurisdiction to entertain the appeal.