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TMI Blog2010 (8) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... rtgage property, is filed within the court within whose territorial jurisdiction the mortgaged property is situated. In fact, Section 16 of the CPC mandates in view of the Non-obstante Clause thereof that the territorial jurisdiction will only lie with the court where the mortgaged property is situated and the court where the defendant resides or carries on business or any other part of cause of action arises will not have territorial jurisdiction to try the legal proceedings. 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Section 17(1) of the Securitization Act reads as under:- Section 17 Right to appeal (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, (may make an application along with such fee, as may be prescribed) to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken. 4. The issue is that which is this Debt Recovery Tribunal which has jurisdiction where an appeal under Section 17 has to be filed under the Securitization Act. It is obvious that this DRT which has jurisdiction is the Debt Recovery Tribunal which has jurisdiction to hear the proceedings which are initiated by the bank for recovery of its dues. The DRT which has jurisdiction can be one of the different DRTs in terms of Section 19(1) of the DRT Act i.e. it can be in the DRT where the defendant resides or where the defendant carries on business or where whole or part of cause of action arises in terms of the said Section 19(1). Rule 6 of the DRT Rules, is also a near identical reproduction of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and documents to the secured creditor. This provision will have to be read along with Section 13(4) (a) of the Securitization Act and which reads as under: Section 13(4) (a) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:- (a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset. A conjoint reading of Section 13(4) (a) and 14(1) show that action is taken by the Chief Metropolitan Magistrate for and on behalf of the financial institution where the secured asset is situated. The secured asset is the mortgage property. Under Section 14(1) of the Securitization Act, the concerned Chief Metropolitan Magistrate will be the Chief Metropolitan Magistrate either where the documents are located of which possession is sought by the financial institution through Chief Metropolitan Magistrate or the immovable property is situated of which possession is sought through an application filed under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle Judge of the Calcutta High Court in the aforesaid judgment that only that DRT has jurisdiction to decide the appeal under Section 17(1) of the Securitization Act where the mortgaged property is situated. The learned Single Judge has held that there are two parts of Section 13. The first part ends when an order is passed by the financial institution under Section 13(3A) and the second part starts thereafter when the proceedings under Section 13(4) are initiated. Learned Single Judge, then, has likened the proceedings under Section 13(4) of the Securitization Act to execution proceedings and which have to be filed where the immovable property is situated. Though we agree with the conclusion of the learned Single Judge that the DRT which has territorial jurisdiction where the immovable property is situated is the DRT which has jurisdiction where an appeal under Section 17(1) can be filed, however, we feel that that it is not the exclusive DRT where an application under Section 17(1) can be filed. As already stated in our conclusions hereinabove, the appeal under Section 17(1) can be filed in any one of the DRTs in terms of Section 19(1) of the DRT Act read with Rule 6 of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount due with costs and expenses incurred, no further steps for sale of the property are to take place. In this connection, a reference has also been made by the learned Attorney General to the decision in Narandas Karsondas V. S.A. Kamtam which provides that a mortgagor can exercise his right of redemption any time until the final sale of the property by execution of a conveyance. Shri Sibal, however, submits that it is the amount due according to the secured creditor which shall have to be deposited to redeem the property. Maybe so, some difference regarding the amount due may be there but it cannot be said that right of redemption of property is completely lost. In cases where no such dispute is there, the right can be exercised and in other cases the question of difference in amount may be kept open and got decided before sale of property. A reading of the aforesaid paragraphs clearly shows that the amount which is claimed by the financial institution on passing of an order under Section 13(3A) of the Securitization Act whereby the amount is claimed against the borrower/mortgagor/guarantor etc, the said crystallisation is not final and it can always be challenged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Securitization Act to support the contention of the counsel for the bank that the proceedings under Section 17(1) can only be filed where the branch of the financial institution is located which has disbursed the loan. In fact, as already held by us above, there are no two separate parts of Section 13 as held by the learned Single Judge in the case of Elements Coke (supra) because Section 17(1) proceedings are original proceedings where even the amount which has being claimed by the financial institution by passing an order under Section 13(3A) of the Securitization Act is subject to challenge and the amount which is claimed/demanded in the notice issued under Section 13 (3A) read with Section 13(2) is not final. 10. The last argument of the counsel for the bank in support of the proposition that only that DRT has jurisdiction where the branch of the financial institution is located which has given the loan is on the basis of a decision of the learned Single Judge of this Court in the case reported as State Bank of India Vs. M/s. Samneel Engineering Company Ors. 1 (1997) BC 655. We have read the said judgment and we do not understand how at all it applies to the questi ..... 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