-By Avesta Vashishtha, 1st year law student at RMLNLU, Lucknow
Recently, the Supreme Court of India, while hearing the case of State Bar Council of Madhya Pradesh vs Union of India (2021) ibclaw.in 178 SC, asked the High court(s) to take up cases pending in different Debt Recovery Tribunals (DRT) in India under the writ jurisdiction. The DRTs have been unoperational since the advent of Covid-19 in India. This course of action is a result of the swelling instability in the financial sector because of increased pendency of cases and surge in Non-Performing Assets with the banks. The problem is further aggravated because of unprecedented vacancies in the offices of presiding officers of DRTs.
TERRITORIAL JURISDICTION OF DRTs:-
As per the judicial interpretation of Sec. 17(1A) of SARFAESI Act, 2002 , “an application can be filed within the limits of DRT where the cause of action, whole or in part, arises or the secured asset is located or the branch of secured creditor is maintaining the account of debt”. Further, “the jurisdiction of only one DRT may be opted for challenging all types of notices and not different DRTs”, as laid down in Ramsay Exim And Technology vs Icici Bank Limited And Ant. (2019) ibclaw.in 47 HC.
SCOPE OF JURISDICTION OF HIGH COURT(s) UNDER ARTICLE 226:-
In the present case, the jurisdiction of DRTs, or any other remedy, is not available. Therefore, High court(s) of that particular state where the issue is arising can take up the case under the SARFAESI Act in their writ jurisdictions. The writ jurisdiction of HCs and the SC is available when no other recourse, or statutory remedy is obtainable. It was held in Sarvan Dall Mill (P) Ltd. vs. Central Bank of India that “judicial review under Article 226 is the only remedy available in certain circumstances when no remedy is available and the borrower has to face unsavory action until his right to invoke Sec.17 arises.”
Lately, DRTs in various states have been refusing to admit cases because the offices of presiding officers have been left vacant. The suggestion made by the Supreme Court to transfer cases from DRTs to High court will lead increased time taken for redressal because of the already existing sizeable number of cases present before High courts in India. Tribunals were established for speedy delivery of justice. Therefore, in such circumstances where the stakeholders have to go through a period of uncertainty and no relief is offered by the courts in a timely fashion, their Right to Live Life with Dignity granted under Article 21 gets violated. Aggrieved parties have to bear the brunt until a proper recourse is offered.
LIMITATIONS ON ARTICLE 226:-
Certain restrictions have been put up on the admissibility of a case in High Courts over the years. In the case United Bank Of India vs Satyawati Tondon & Ors (2017) ibclaw.in 81 SC, it was pointed out that “the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. While dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.”
It was further held in Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd. and others that “Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill- suited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution.”
AUTHORITY UNDER SECTION 4(2) OF RDB ACT, 1993:-
It was held in Kerala Fashion Jewellery and Ohrs. v. Union of India and Ohrs. that the jurisdiction of DRT cannot be transferred from one state to another. According to Section 4(2) of RDB Act, 1993, “the power granted to the Central Government is only to authorize the Presiding officer or Judicial Member of any other Tribunal, established under any other law for the time being in force, to discharge the function of the Presiding Officer of Debt Recovery Tribunal.”
In the present case, the DRT of the state in which the cause of action has arisen the jurisdiction of that particular case. In situations where the DRT cannot take in the matter, any other statutory tribunal within that state can take up the case. The contention that the transfer of jurisdiction may not cause difficulties is not well-founded because, as stated previously, High Courts do not have the jurisdiction of taking up cases arising out of DRTs when an effective remedy is available. Further, transferring the issues under DRT of one state to a High Court of another state is inappropriate because these courts are facing increased pendency of cases since the advent of Covid-19. It is imperative to fill the vacancies of presiding officers in DRTs immediately to establish stability and deliver justice to the stakeholders.