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GSL (India) Ltd. Versus Asset Reconstruction Co. (India) Ltd. and others

Jurisdiction to entertain the Securitization Application filed by the Petitioner - Held that:- DRT is required to send a copy of the Recovery Certificate for execution to the DRT within whose jurisdiction the property is situated. As mentioned earlier, section 19(23) clearly stipulates that where the tribunal, which has issued a certificate of recovery, is satisfied that the property is situated within the local limits of the jurisdiction of two or more tribunals, it may send copies of the Recov .....

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ction 39 thereof.

DRT whilst deciding whether it has territorial jurisdiction to entertain a Securitisation Application filed under section 17 of the SARFAESI Act would be guided by the principles enshrined in section 19(1) of the RDDB Act and not by section 16 of the Code of Civil Procedure, 1908. Rule is accordingly made absolute and the Petition is granted in terms of prayer clause (a). Securitisation Application is restored to the file of the DRT III, Mumbai, to be decided on me .....

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irag Mody a/w Mr. Vinod Kothari i/b M/s. Apex Law Partners, Mr. B. S. Nagar a/w Mr. Balkrishna Joshi, Ms. Aarti Suvarna i/b Global Law Offices, JUDGMENT [ PER B.P.COLABAWALLA J. ] :- 1. Rule. Respondents waive service. By consent of parties, rule made returnable forthwith and heard finally. 2. By this Writ Petition under Article 226 of the Constitution of India, challenge is laid to the order passed by the Debt Recovery Appellate Tribunal, Mumbai (for short, the DRAT ) dated 8th October, 2013 wh .....

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Securitisation Application as the secured property was situated in the State of Gujarat and therefore the Securitization Application could be filed only within the jurisdiction of the DRT where the secured property was situated. To come to this conclusion, the DRT as well as the DRAT have both relied upon a decision of the Full Bench of the Delhi High Court in the case of Amish Jain and another v/s ICICI Bank Ltd. 2013 (1) D.R.T.C. 70 (Delhi) 3. The brief facts to decide the present controversy .....

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t, the SARFAESI Act ). Respondent No.2 - Company is the successful bidder at the auction sale conducted by Respondent No.1 of the secured assets belonging to the Petitioner. Respondent No.3 is a Company in whose favour the Sale Certificate was issued by Respondent No.1. This was done on the instructions of Respondent No.2. 4. It is the case of the Petitioner that it was incorporated in the year 1982 and is involved in the business of manufacturing synthetic yarns at its factory in adivasi domina .....

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wever, the Petitioner became a victim of unforeseen circumstances and underwent financial problems. In fact, it also made a reference to the BIFR which declared the Petitioner as a sick company under the provisions of the Sick Industiral Companies (Special Provisions) Act, 1985. 5. It appears that some of the Banks and Financial Institutions who had granted financial assistance to the Petitioner, transferred and assigned their security interest in favour of the Respondent No.1 - ARCIL. In view t .....

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ry (for short, the secured property ) and allowed the Petitioner to continue its manufacturing activities. 6. Thereafter, on 19th April, 2011 Respondent No.1 published a public notice for sale of the secured property and also a tender document detailing the terms and conditions and modalities of the proposed auction sale. Thereafter correspondence was exchanged between the Petitioner and Respondent No.1 wherein the Petitioner inter alia brought to the notice of Respondent No.1 that they should d .....

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Mumbai by filing Securitisation Application No.136 of 2011 and inter alia sought a declaration that the sale notice dated 19th April, 2011 is illegal and arbitrary and the DRT be pleased to quash and set aside the same. Whilst this Securitisation Application was pending, Respondent No.1, by public auction, sold the secured property and confirmed the sale in favour of Respondent No.3 (who is the nominee of Respondent No.2, the actual bidder in the auction). A Sale Certificate was also issued in .....

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ndent No.3 and inter alia held that it could not entertain the Securitisation Application filed by the Petitioner as it had no jurisdiction. In a nutshell, the DRT - III, Mumbai held that it had no territorial jurisdiction to entertain the Securitisation Application as the secured property was situated in the State of Gujarat and therefore the same could be filed only within the jurisdiction of the DRT where the secured property was situated. To come to this conclusion, the DRT relied upon a dec .....

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igh Court in the case of Amish Jain 2013 (1) D.R.T.C. 70 (Delhi) to come to the conclusion that it did. It is in these circumstances that the Petitioner is before us in our writ jurisdiction under Article 226 of the Constitution of India challenging the correctness, legality and validity of the impugned order passed by the DRAT dated 8th October, 2013. 10. In this background, Mr Samdani, learned senior counsel appearing on behalf of the Petitioner, submitted that the Securitisation Application f .....

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ning of the bid was stated to be in Mumbai at the office of Respondent No.1. The deposit of earnest money as well as the balance amount of the bid was to be made in the name of Respondent No.1 payable at Mumbai. Further, Mr Samdani submitted that as per clause 31 of the tender document, disputes if any, were subject to jurisdiction of Mumbai Courts / Tribunals only. According to Mr Samdani, it is not in dispute that the auction purchaser submitted its bid in the office of Respondent No.1 situate .....

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or objected to the territorial jurisdiction of the DRT and it is only the auction purchaser (Respondent Nos.2 and 3) and who are resident outside Mumbai, have taken this objection. The only objection taken by the auction purchaser is that the secured property is situated outside Mumbai and therefore as per section 16 of the Code of Civil Procedure, 1908 (for short, the CPC ), the DRT - III, Mumbai would have no territorial jurisdiction. In other words, it was the submission of the auction purcha .....

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Securitisation Application filed under section 17 of the said Act is not a suit and therefore, section 16 of the CPC would have no application. Secondly, section 17(7) itself provides that save as otherwise provided in the SARFAESI Act, the DRT shall, as far as may be, dispose of the Securitisation Application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDB Act ) and the Rules framed thereunder. He therefore submit .....

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inal Application can be filed in the DRT within the local limits of whose jurisdiction (a) the Defendant or each of the Defendants where there are more than one, at the time of making the Application actually and voluntarily reside or carry on business or personally works for gain; or (b) any of the Defendants, where there are more than one at the time of making the Application, actually and voluntarily reside or carry on business or personally work for gain; or © the cause of action, wholl .....

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e with the provisions of the RDDB Act, the provisions of section 19(1) of the RDDB Act are to be applied for determining which DRT would have jurisdiction to entertain the Securitisation Application. In other words, it was his submission that the principles enshrined in section 19(1) of the RDDB Act would determine which DRT would have jurisdiction to entertain and decide a Securitisation Application filed by an aggrieved person (including a borrower). It was therefore his submission that lookin .....

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placed heavy reliance on the Full Bench judgment of the Delhi High Court in the case of Amish Jain 2013 (1) D.R.T.C. 70 (Delhi) and submitted that admittedly, the RDDB Act did not contain any provision for determining the territorial jurisdiction of the DRT to decide a Securitisation Application under section 17(1) of the SARFAESI Act. He submitted that the jurisdictional provisions under section 19(1) of the RDDB Act were only applicable when a Bank / Financial Institution approached the DRT fo .....

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section 17(1) of the SARFAESI Act, was the submission. Mr Joshi would therefore submit that the judgment of Delhi High Court in the case of Amish Jain1 would apply with full force and therefore, there is no merit in this Writ Petition and the same ought to be dismissed with costs. 14. With the help of learned counsel, we have perused the papers and proceedings in the Writ Petition alongwith the orders passed by the DRT - III, Mumbai dated 14th August, 2012 and the impugned order passed by the DR .....

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brief the reasons for enacting the RDDB Act as well as the SARFAESI Act and the object sought to be achieved thereby. Prior to 1990, Banks and Financial Institutions were experiencing considerable difficulties in recovering loans and enforcement of securities charged with them. The then existing procedure for recovery of debts due to these Banks and Financial Institutions had blocked a significant portion of their funds in unproductive assets, the value of which deteriorated with the passage of .....

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cial Institutions by following a summary procedure. On 30th September 1990, more than 15,00,000 cases filed by public sector Banks and about 304 cases filed by Financial Institutions were pending in various Courts. The recovery of debts involved in these cases was approximately R.6,013 crores. In order to unlock this huge sum of public money, the Legislature enacted the RDDB Act, 1993. Under this Act, special tribunals were set up such as the DRT and the DRAT. The purpose of setting up these tri .....

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n India s efforts to achieve success in rapidly developing its economy. While the banking industry in India was progressively complying with the international prudential norms and accounting practices, there were certain areas in which the banking and financial sector did not have a level playing field as compared to other participants in the financial markets of the world. The Government found that there was no legal provision for facilitating securitisation of financial assets of Banks and Fin .....

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t set up two Narsimham Committees and a Andhyarujina Committee for the purpose of further examining banking sector reforms. These Committees, after a detailed study, inter alia suggested the enactment of a new legislation for securitisation and empowering Banks and Financial Institutions to take possession of the securities and sell them without the intervention of the Court. It is acting on these suggestions that the Legislature enacted the SARFAESI Act which came into effect from 21st June, 20 .....

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in the year 2002, the Legislature enacted the SARFAESI Act giving wide powers to Banks and Financial Institutions to enforce their security without the intervention of the Court but subject to the provisions laid down in the SARFAESI Act. Looking to the purpose for enacting these two legislations and the object sought to be achieved thereby, there can be no doubt that the two Acts complement each other. In fact, a close reading of section 37 of the SARFAESI Act shows that the provisions contain .....

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ation of both the Acts viz. the SARFAESI Act and the RDDB Act, would be complementary to each other. This is also reiterated by the Supreme Court in the case of Mathew Varghese v/s M. Amritha Kumar and others. (2014) 5 SCC 610 (paragraphs 45 and 46) 18. Having said this, we shall now refer to certain provisions of the SARFAESI Act in so far as they are relevant to decide the controversy before us. This Act was brought on the statute book to regulate securitization and reconstruction of financial .....

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tion 2(a) to mean the Debts Recovery Appellate Tribunal established under sub-section 1 of Section 8 of the RDDB Act. The words secured asset is defined in Section 2(zc) to mean the property on which the security interest is created and the words security interest are defined in Section 2(zf) to mean the right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment, other than those specified .....

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at notwithstanding anything contained in Section 69 or Section 69A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or tribunal in accordance with the provisions of this Act. Section 13(2) postulates that where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of the secured debt or any installment thereof, and his acco .....

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owed before any of the measures under Section 13(4) are initiated by the secured creditor. Thereafter, Section 13(4) inter alia provides that if the borrower fails to discharge his liability in full within the period specified in the Section 13(2) notice, the secured creditor may take recourse to one or more of the following measures mentioned in sub-section (4) of Section 13. Section 13(4) reads as under:- (4) In case the borrower fails to discharge his liability in full within the period speci .....

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by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt;] (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession .....

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the secured creditor shall vest in the transferee all rights in, or in relation to, the secured asset transferred, as if the transfer had been made by the owner of such secured asset. Section 13(8), thereafter provides for a right of redemption available to the borrower and stipulates that if the dues of the secured creditor together with all costs, charges and expenses are tendered at any time to the secured creditor before the date fixed for sale or transfer of the secured asset, then, the se .....

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n the form and manner as may be prescribed, to the Debts Recovery Tribunal having jurisdiction or a competent court, as the case may be, for recovery of its balance dues from the borrower. 21. Section 14 of the SARFAESI Act, is a provision which entitles the secured creditor to approach the Chief Metropolitan Magistrate or District Magistrate to assist the secured creditor in taking possession of secured asset. For the purposes of taking possession or control of such secured asset, the secured c .....

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f the SARFAESI Act reads as under:- 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 measure had been taken: Provided that different fees may be prescribed .....

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-section. (2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. (3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of Section 13, taken .....

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he business to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of Section 13. (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) of Section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in f .....

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ver, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such application made under sub-section (1). (6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in subsection (5), any party to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expediti .....

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r. (emphasis supplied) 23. On a perusal of the said section, it is clear that any person (including a borrower) aggrieved by any of the measures taken by the secured creditor under section 13(4) may make an Application to the DRT having jurisdiction in the matter within 45 days from the date on which such measures have been taken. Section 17(1) does not stipulate as to which DRT would have jurisdiction to entertain the Securitization Application. However, Section 17(7) reproduced above, stipulat .....

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f the SARFAESI Act or the Rules made thereunder shall be in addition to, and not in derogation of the Companies Act, 1956; the Securities Contracts (Regulation) Act, 1956; the Securities and Exchange Board of India Act, 1992; the Recovery of Debts Due to Banks and Financial Institutions Act, 1993; or any other law for the time being in force. 25. On conjoint and harmonious reading of these provisions what becomes clear is that wide powers have been given to Banks and Financial Institutions to en .....

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provide for the establishment of tribunals for expeditious adjudication and recovery of debts due to Banks and Financial Institutions and for matters connected therewith or incidental thereto. Section 2 of the RDDB Act is the definitions clause and defines the words banks , banking company , corresponding new bank , Financial Institutions etc. The definition of the word Tribunal means the tribunal established under sub-section (1) of Section 3 of the RDDB Act. The word debt is defined in Section .....

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or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application; 27. On a plain reading of this definition, it is ex-facie clear that a very wide meaning has been given to the word debt in Section 2(g) and means any liability (inclusive of interest) which is claimed as due from any person by a Bank or a Financial Institution or by a consortium of Banks or Financial .....

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ction, powers and authority to entertain and decide Applications from Banks and Financial Institutions for recovery of their debt, would be exercised by the Debts Recovery Tribunal. Section 18 stipulates that on or from the appointed day, no court or other authority shall have, or be entitled to exercise any jurisdiction, powers or authority (except the Supreme Court and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution of India) in relation to the matters speci .....

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Institution for recovery of its debt. The said section also circumscribes the jurisdiction of the DRT which has to entertain such an Application. Section 19(1) of the RDDB Act circumscribes the jurisdiction of the DRT and reads as under:- 19. Application to the Tribunal.-(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction,- (a) the defendant, or each of the defendants where t .....

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an application made by it, withdraw the application, whether made before or after the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004 for the purpose of taking action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002), if no such action had been taken earlier under that Act : Provided further that any application made under the first proviso for seeking permission from the Debts Recovery T .....

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ntroversy before us but it would be relevant to make note of section 19(23) which stipulates that where the DRT, which has issued a certificate of recovery, is satisfied that the property is situated within the local limits of the jurisdiction of two or more tribunals, it may send copies of the certificate of recovery for execution to such other DRTs where the property is situated. The word may appearing in section 19(23) would indicate that it is at the discretion of the DRT whether or not it w .....

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the case of Bank of Baroda Vs. Balbir Kumar Kaul & Ors. AIR 2010 GUJARAT 124 negated the contention that the word may should be read as shall in section 19(23). In other words, the Division Bench held that the DRT that issued the Recovery Certificate had the discretion to decide whether it should itself execute it against a property not within its jurisdiction or whether it should send it to the concerned DRT for execution. We must also note here that just like section 35 of the SARFAESI Ac .....

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e jurisdiction of the DRT would have to be determined on the basis of section 19(1) of the RDDB Act which stipulates that the DRT shall have jurisdiction to entertain the application filed by the Bank / Financial Institution under section 19 where (a) the Defendant, or where there are more than one, any of the Defendants, at the time of making the Application, actually and voluntarily reside or carry on business or personally work for gain; or (b) the cause of action, wholly or in part, arises. .....

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of the mortgaged property is not determinative of the territorial jurisdiction of the DRT. This is a distinct departure from the provisions of section 16 of the CPC and to which we shall advert to shortly. 32. To understand and deal with the argument of Mr Joshi that only that DRT would have jurisdiction to entertain a Securitsation Application within whose local limits the secured property is situate, it would also be necessary to refer to certain provisions of the CPC. As the preamble suggest .....

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f suits where the subject matter is situate and reads as under:- 16. Suits to be instituted where subject-matter situate.-Subject to the pecuniary or other limitations prescribed by any law, suits- (a) for the recovery of immovable property with or without rent or profits, (b) for the partition of immovable property, (c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, (d) for the determination of any other right to or interest in immovable prop .....

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t within the local limits of whose jurisdiction the property is situate, or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain. Explanation.-In this section property means property situate in India. 33. Section 16 provides that subject to the pecuniary and other limits prescribed by any law, suits relating to immovable and movable property and of the kinds mentioned in clauses (a) to (f) .....

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iled where the mortgaged property was situated. In contrast, we do not find any such provision / stipulation in section 19(1) of the RDDB Act. If a Bank/Financial Institution has to recover its dues either by enforcement of its security (immoveable or movable or both) or otherwise, it has to approach the DRT under section 19 of the RDDB Act. In such a case, the jurisdiction of the DRT is determined as per section 19(1) of the RDDB Act. In such a scenario, even though the mortgaged property may b .....

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actually and/or voluntarily reside or carrying on business or personally work for gain; or (b) the cause of action, wholly or in part, arises. For the DRT to entertain an Original Application filed by the Bank or Financial Institution under section 19 of the RDDB Act, the provisions of section 16 of the CPC would be wholly inapplicable. 34. As noted earlier any person (including borrower) aggrieved by any of the measures taken by the secured creditor under Section 13(4) of the SARFAESI Act may .....

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) of the RDDB Act. 35. As noted earlier, the RDDB Act as well as SARFAESI Act were brought into force to ensure quick and speedy recovery of loans and outstandings of Banks and Financial Institutions. This was necessitated in view of the fact that the legal framework that was then existing was highly inadequate for speedy recovery of these dues. It is, therefore, clear that these two legislations seek to achieve the same object and are complementary to each other. Section 17(7) of the SARFAESI A .....

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of the DRT entertaining a Securitization Application under Section 17 of the SARFAESI Act has to be decided on the basis of Section 19(1) of the RDDB Act. In other words, the DRT entertaining the Securitization Application filed by a borrower or any other aggrieved person would entertain the same where (a) the Defendants, or where there are more than one, any of the Defendants, at the time of making the application, actually and voluntarily reside or carry on business or personally work for gain .....

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e disposed of by the DRT, in accordance with the provisions of the RDDB Act, insofar as they are applicable. Section 19(1) of the RDDB Act categorically circumscribes the jurisdiction of the DRT to entertain an Original Application filed by a Bank/Financial Institution for recovery of its dues. It stipulates that where a Bank or Financial Institution has to recover any debt from any person, it may make an application to the DRT within the local limits of whose jurisdiction (a) the defendant, or .....

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e SARFAESI Act. 37. We do not think that the principles enshrined in Section 16 of the CPC would apply to a Securitization Application filed by a borrower under Section 17 of the SARFAESI Act. As Section 17 itself suggests, an application under the said provision is filed by any person (including a borrower) to challenge any of the measures referred to in sub-section (4) of Section 13 taken by a secured creditor. The measures referred to in Section 13(4) are either to take possession of the secu .....

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any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. 38. It is these actions of the secured creditor that are challenged by any person aggrieved (including a borrower) under Section 17 of the SARFAESI Act. In other words, the Securitization Application is made to a tribunal with limited jurisdiction to decide whether the measures taken under Section .....

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f the CPC, on the other hand, stipulates that subject to the pecuniary or other limitations prescribed by any law, suits of the nature prescribed in clauses (a) to (f) thereof shall be instituted in the court within the local limits of whose jurisdiction the property is situate. Since we are of the view that the Securitization Application can never be termed as a suit as understood in Section 16 of the CPC, the provisions thereof would be inapplicable to a Securitization Application filed under .....

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transferred by the secured creditor under the provisions of the SARFAESI Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request in writing the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, within whose jurisdiction any such secured asset may be situated or found. Despite the fact that the Legislature specifically empowered the concerned Magistrate to pass orders under section 14 of the SARFAESI Act in rel .....

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T. As per the provisions of the SARFAESI Act, it is only the DRT that would have exclusive jurisdiction to entertain any challenge to the measures taken under section 13(4) of the SARFAESI Act. This is clearly spelt out from section 34 of the SARFAESI Act which stipulates that no civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter which the DRT or the DRAT is empowered by or under this Act to determine, and no injunction shall be granted by any court .....

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under the provisions of the RDDB Act. Its jurisdiction is circumscribed by the provisions of section 19(1) thereof. Considering the fact that the Legislature decided that all Applications filed under section 17(1) of the SARFAESI Act can be entertained only by the DRT (being a preexisting tribunal established under the provisions of the RDDB Act), would also persuade us in taking the view that its jurisdiction ought to be decided on the basis of the principles enshrined in section 19(1) of the R .....

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Institutions are recovered in an expeditious manner, the Legislature first enacted the RDDB Act in 1993 and thereafter the SARFAESI Act in 2002. It is for this very reason that the RDDB Act specifically stipulates (Section 22 thereof) that the DRT and DRAT shall not be bound by the procedure laid down by the CPC but shall be guided by the principles of natural justice, and subject to the other provisions of the Act and Rules, the DRT and DRAT shall have powers to regulate their own procedure in .....

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the CPC whilst deciding matters brought before them, we are of the view that Section 16 of the CPC would be inapplicable in the facts of the present case. 42. There is yet another reason for holding that the jurisdiction of the DRT to decide a Securitization Application under Section 17 ought to be decided on the principles enshrined in Section 19(1) of the RDDB Act rather than on the basis of Section 16 of the CPC. In many cases, the Securitization Notice issued under Section 13(2) of the SARFA .....

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titled to take measures as contemplated under Section 13(4) thereof against all the secured assets. In such a scenario, as per the provisions of Section 16 of the CPC, challenge to the aforesaid measures would have to filed in two different DRTs and there is every possibility of conflicting decisions being rendered on the measures initiated on the basis of the very same notice issued under section 13(2) of the SARFAESI Act. 43. To elaborate this point further, take for example that a challenge i .....

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t contemplated such a situation. Furthermore, we think that this would run counter to the very object and purpose of the SARFAESI Act inasmuch as the secured creditor would then be made to run from pillar to post to defend two separate Securitization Applications in two different places thereby further delaying the recovery of its dues. 44. Looking to all these factors, we are clearly of the view that the DRT whilst entertaining a Securitization Application under Section 17 of the SARFAESI Act w .....

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at a Securitization Application can be filed only in the DRT within whose jurisdiction the secured property is situated. The reasoning of the Delhi High Court can be found in paragraphs 11,12,13,15,16,17, 21, 22 & 23 thereof which read as under:- 11. We are however of the opinion that the Division Bench fell in error in assuming the debt/money recovery proceedings to be initiated by the Bank under the DRT Act as equivalent to legal proceedings subject whereof is a mortgaged property, within .....

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, only for recovery of money and territorial jurisdiction whereof was governed by Section 20 of CPC, containing the same principles as in Section 19(1) of the DRT Act. We are therefore unable to accept that any departure qua territorial jurisdiction has been made in the DRT Act, as has been observed by the Division Bench in Indira Devi. 12. The proceedings in the DRT for recovery of debt, culminate in a Certificate of Recovery which is equivalent to a Money Decree of a Civil Court. Just like a M .....

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tuated. Section 25 provides for modes of recovery of the debts specified in the Certificate, including by attachment and sale of property. The recovery proceedings under the DRT Act are thus equivalent to a suit for recovery of money before a Civil Court and cannot be said to be for enforcement of mortgage. Thus it cannot be said that the DRT Act has made any departure from Section 16 of the CPC. 13. We may however notice that in State Bank of India v. Samneel Engineering Co., MANU/DE/0462/1995 .....

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the DRT Act. This Court explained that the DRT Act had made the recovery of debt as distinct from enforcement of mortgage, a cause of action and for this reason the situs of mortgaged property, relevant under Section 16 of the CPC, had become irrelevant. We respectfully concur. Though this judgment of a Single Judge of this Court was cited before the Division Bench in Indira Devi but was held to be not applicable. The Division Bench did not notice that this Court in Samneel Engineering Co. has h .....

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to construe the proceeding as for enforcement of mortgage. We further find Samneel Engineering Co. to have been followed in State Bank of India v. Gujarmal Modi Hospital & Research Centre for Medical Sciences, 61 (1996) DLT 614 as well as in Hindustan Laminators Pvt Ltd. v.Central Bank of India, AIR 1998 Cal 300. ******* 15. We may mention, that while in the DRT Act, there is no mention of mortgage and even an application under Section 19(1) is required to only specify the properties requir .....

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e view that the question of territorial jurisdiction for the remedy of appeal provided in Section 17(1) of the SARFAESI Act has to be construed in the said light and not in the light of the DRT Act making a departure from the principle enshrined in Section 16 of the CPC. 17. Section 17(1) of the SARFAESI Act provides for filing of the appeal/application thereunder not to any DRT but only to the DRT having jurisdiction in the matter . However, such jurisdiction is not specified. To determine whic .....

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curity are in accordance with the provisions of the SARFAESI Act and the Rules made thereunder . The measures which the Bank/Financial Institution is empowered to take under Section 13(4) of the SARFAESI Act are of taking over possession or management as aforesaid of the secured asset. Of course, the action of so taking over possession or management is to be preceded by (a) the borrower under a liability under a secured agreement making any default in repayment of the secured debt or any install .....

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of such representation. Though, it could well be argued that the DRT within whose jurisdiction Bank/Financial Institution to whom the borrower is indebted is situated, would also have jurisdiction to adjudicate whether the action under Section 13(4) of taking over possession/management is in accordance with the aforesaid procedure but the explanation to Section 17(1) of the SARFAESI Act clarifies that the communication of the reasons to the borrower for not accepting the representation or the l .....

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the said DRT only which can be said to be having jurisdiction in the matter within the meaning of Section 17(1) of the Act. ******* 19. As far as Section 17(7) of the SARFAESI Act requiring disposal of appeals under Section 17(1) of the SARFAESI Act, as far as may be in accordance with the provisions of the DRT Act and the Rules framed thereunder is concerned, though the learned Single Judge of this Court in Upendra Kumar v. Harpriya Kumar, MANU/DE/0136/1978 had held that Section 21 of the Hind .....

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provisions of CPC and thus the provisions of CPC as partake of the character of substantive law are also by implication to apply to the proceedings under the Hindu Marriage Act and the use of the expression as far as may be is intended to exclude only such provisions of CPC as may be inconsistent with any of the provisions of the Hindu Marriage Act. Applying the said law, Section 17(7) of the SARFAESI Act is to be read as providing for disposal of appeal under Section 17(1) of the SARFAESI Act i .....

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s of the Act in which reference to another legislation is made, it would be permissible. Similarly, in Ujagar Prints v.Union of India, (1989) 3 SCC 488 a five Judge Bench of the Supreme Court held that the Legislature sometimes takes a shortcut and tries to reduce the length of a statute by omitting elaborate provisions where such provisions have already been enacted earlier and can be adopted for the purpose in hand. The expression so far as may be was held to be meaning to the extent necessary .....

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stretch of imagination be equated with an appeal under Section 17(1) of the SARFAESI Act. We are therefore of the view that there is no provision in the DRT Act providing for territorial jurisdiction of an appeal under Section 17(1) of the SARFAESI Act and the question of application thereof under Section 17(7) does not arise. Under Section 17(7) of the SARFAESI Act only that much of the DRT Act can be said to be incorporated therein as is contained in the DRT Act and not more. Whether a particu .....

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t the provision for territorial jurisdiction under Section 19(1) of the DRT Act is only qua the applications to be made by the Bank or Financial Institution for recovery of its debt. However, a proceeding under Section 17(1) of the SARFAESI Act is initiated not by the Bank or the Financial Institution but by a person including the borrower aggrieved from the measures taken by the Bank or Financial Institution under Section 13(4) of the SARFAESI Act. We are thus of the view that notwithstanding S .....

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for applications for recovery of debts by the Banks/Financial Institutions. The same can have no application to the appeals under Section 17(1) of the SARFAESI Act which are to be preferred, not by the Banks/Financial Institutions, but against the Banks/Financial Institutions. 46. We have carefully perused the reasoning of the Full Bench of the Delhi High Court in the case of Amish Jain 2013 (1) D.R.T.C. 70 (Delhi) and with the great respect and utmost humility, we are unable to agree with the v .....

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n during the course of any business activity undertaken by it under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the Application. We are therefore clearly of the view that proceedings under section 19(1) of the RDDB Act are not merely proceedings for recovery of d .....

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. As mentioned earlier, section 19(23) clearly stipulates that where the tribunal, which has issued a certificate of recovery, is satisfied that the property is situated within the local limits of the jurisdiction of two or more tribunals, it may send copies of the Recovery Certificate for execution to such other tribunals where the property is situated. The word may clearly indicates that this provision is discretionary and not mandatory in nature. Under section 19(23), discretion is given to t .....

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