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2016 (12) TMI 810 - SC - Indian LawsMaintainability of appeal - application filed by the appellant under Order VII Rule 11 of the CPC was rejected mainly for the reason that the Tribunal had no jurisdiction to entertain the proceedings under the provisions of Section 1(4) of the DRT Act as the value of the suit was less than ₹ 10 lakh - Held that - The application submitted by the appellant bank under Order VII Rule 11 of the CPC should have been granted by the trial Court as, according to Section 34 of the Act, a Civil Court has no jurisdiction to entertain any appeal arising under the Act. Thus, we hold that the Debt Recovery Tribunal constituted under the DRT Act has jurisdiction to entertain an appeal as per Section 17 of the Act even if the amount involved is less than ₹ 10 lakh. But, the said appellate jurisdiction need not be misunderstood with the original jurisdiction of the Tribunal. For the aforestated reasons, the impugned judgment as well as the order rejecting the application filed under Order VII Rule 11 are set aside. The appeal is allowed with no order as to costs.
Issues:
Jurisdiction of Civil Court under Order VII Rule 11 of CPC in a matter involving the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Recovery of Debts due to Banks and Financial Institutions Act, 1993. Detailed Analysis: Issue 1: Jurisdiction of Civil Court under Order VII Rule 11 of CPC The appellant challenged the rejection of their application under Order VII Rule 11 of the CPC by the trial court, which was upheld by the High Court. The main contention was whether the Civil Court had jurisdiction to entertain the suit against the proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Issue 2: Interpretation of Relevant Statutory Provisions The court examined Section 34 of the Act, which expressly bars the jurisdiction of the Civil Court from dealing with matters arising under the Act. Additionally, Section 1(4) of the DRT Act provides that the provisions of the DRT Act do not apply where the debt due is less than ?10 lakh. The court analyzed the interplay between these provisions to determine the appropriate forum for challenging actions under the Act. Issue 3: Harmonization of Statutory Provisions The court emphasized the need to harmonize the provisions of the Act and the DRT Act. It noted that the legislature intended to limit the original jurisdiction of the Tribunal under the DRT Act to cases where the debt exceeds ?10 lakh. The court highlighted the importance of providing a remedy to aggrieved debtors against actions initiated under the Act. Issue 4: Appellate Jurisdiction of the Tribunal The court clarified that while the Tribunal's original jurisdiction under the DRT Act is limited to debts exceeding ?10 lakh, its appellate jurisdiction under the Act allows for challenges to actions under Section 13 of the Act, irrespective of the debt amount. The court referenced the case of Mardia Chemicals Ltd. to support the availability of a forum for challenging actions under the Act. Issue 5: Decision and Conclusion Ultimately, the court held that the Civil Court lacked jurisdiction to entertain appeals arising under the Act, and the Debt Recovery Tribunal had the authority to hear such appeals under Section 17 of the Act. The court set aside the impugned judgment and allowed the appeal, emphasizing the importance of providing a legal remedy to aggrieved parties under the statutory framework.
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