2005 (4) TMI 619 - HC - Indian Laws

Summary

Issues:
1. Jurisdiction of Civil Court under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
2. Interpretation of Section 34 in relation to jurisdiction of Debt Recovery Tribunal.
3. Applicability of Debt Recovery Tribunal's jurisdiction based on amount involved.
4. Scope of revisional jurisdiction under Section 115 CPC.

Analysis:

1. Jurisdiction of Civil Court under Section 34 of the Securitisation Act:
The petitioner and respondent No.2 filed applications under Order 7 Rule 11 CPC seeking rejection of the plaint, claiming that the jurisdiction of the Civil Court was barred under Section 34 of the Securitisation Act due to a notice issued under Section 13 (2) of the Act. The Civil Judge dismissed the applications, stating that the bar of Section 34 would not apply since the amount sought to be recovered was less than Rs. 10.00 lakhs, and only matters above this threshold could be entertained by the Debt Recovery Tribunal (DRT).

2. Interpretation of Section 34 in relation to jurisdiction of Debt Recovery Tribunal:
The High Court analyzed the provisions of the Securitisation Act and the DRT Act to determine the scope of the Debt Recovery Tribunal's jurisdiction. It was noted that Section 34 of the Act restricts the jurisdiction of Civil Courts where matters fall within the purview of the DRT or the Appellate Tribunal empowered by the DRT Act. The Court clarified that the Securitisation Act applies to cases where the DRT and Appellate Tribunal derive their powers from the DRT Act, emphasizing that the bar of Section 34 does not extend to cases involving amounts below Rs. 10.00 lakhs.

3. Applicability of Debt Recovery Tribunal's jurisdiction based on amount involved:
The Court highlighted that the DRT Act specifies that the DRT has jurisdiction over matters where the amount involved exceeds Rs. 10.00 lakhs. In the present case, the security interest of the petitioner and respondent No.2 was below this threshold, rendering the DRT without jurisdiction to entertain the matter. As a result, the bar of Section 34 of the Securitisation Act did not apply, and the Civil Court retained jurisdiction to grant injunctions, as observed in the impugned order.

4. Scope of revisional jurisdiction under Section 115 CPC:
The Court reiterated the limited scope of revisional jurisdiction under Section 115 CPC, emphasizing that interference is warranted only in cases of jurisdictional errors, illegality, or material irregularity. The judgment emphasized that findings of fact by lower courts cannot be reversed in the exercise of revisional powers. Consequently, the petition was dismissed, upholding the decision of the Civil Judge regarding the jurisdiction of the Civil Court under Section 34 of the Securitisation Act.

In conclusion, the High Court's judgment clarified the interplay between the Securitisation Act, the DRT Act, and the jurisdiction of Civil Courts, ultimately affirming the Civil Court's jurisdiction in cases where the amount involved does not meet the threshold for DRT intervention. The decision underscored the importance of statutory provisions and jurisdictional boundaries in determining the appropriate forum for resolving disputes related to financial assets and security interests.