Notes on Jurisdiction
CHANGE OF PECUNIARY AND TERRITORIAL JURISDICTION OF DRTs in INDIA.
As per recent notification dated October 04, 2022 of the Ministry of Finance, Department of Financial Services, the pecuniary and territorial jurisdiction of Debt Recovery Tribunal (DRT) has been modified. Accordingly, one of the existing DRTs at the Cosmopolitan cities or places like New Delhi (DRT 3), Mumbai (DRT 1) and Chennai (DRT 1) have been given jurisdiction henceforth to deal with all applications involving debt amount of Rs.100 crore and above.
Accordingly, as per the above notification, the DRT established under section 3 of RDB Act at New Delhi [DRT 3], Mumbai [DRT 1] and Chennai [DRT 1] henceforth will continue to deal with the applications involving amount more than Rs. 100 crore pending with them. These three DRTs will also deal with and dispose of all such applications of other DRTs after transfer of the pending applications involving more than Rs. 100 crore under their respective Appellate Tribunal i.e. DRAT New Delhi, DRAT Mumbai and DRAT Chennai.
By implication, DRT 1 Mumbai henceforth will take care of pending applications involving more than Rs. 100 crore pending with itself or on transfer from DRT 2 and DRT 3 of Mumbai DRT, DRT of Pune, DRT Aurangabad, DRT Nagpur and DRT1 & DRT 2 of Ahmedabad. Like- wise, DRT 1 Chennai will henceforth deal with all pending applications involving more than Rs 100 crore from DRT 2 and DRT 3 of Chennai, DRT of Madurai and DRT 1 and DRT 2 of Bangalore, Ernakulam, Coimbatore. DRT 3 New Delhi will deal with all pending applications involving more than Rupees 100 crore from DRT 1 and DRT 2 of New Delhi, DRT of Jaipur, DRT 1 DRT 2 and DRT 3 of Chandigarh.
The rest of the DRTs functioning under the respective Appellate Tribunal i.e. DRAT New Delhi, DRAT Mumbai and DRAT Chennai will continue to deal with the applications involving less than Rs. 100 crore and will have now their modified territorial jurisdiction as specified in these notifications.
Fresh Filing of Cases
It may also be added that henceforth the new filing of application involving debt recovery of Rs. 100 crore and above or less than the amount of Rs. 100 crore, the same will be filed before the aforesaid DRTs as per the jurisdiction given in these notifications.
Effective Date of Implementation
No specific Cut-off Date for implementation is given in the said Notifications, but considering the narrations given in the notification, the date of issue of notification [October 04, 2022] seems will be considered as the effective date of implementation of the above referred notifications.
Contractual Jurisdiction
It is important to note that, in view of the said Notifications, contractual jurisdiction as agreed between the parties under the financing documents may not be relevant for filing of any recovery application involving debt amount of Rs 100 crores and jurisdiction for such application is now conferred only above-mentioned DRTs by way of the present Notifications.
Appellate Jurisdiction of DRTs
In our view any application challenging action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act, 2002, involving debt amount of Rs 100 crores and above before DRT, may, by implication, also be required to be filed before the respective DRTs as per the Notification though the said Notification is silent in that regard.
It is felt that petitions in various High Courts and/or the Supreme Court challenging the Notification on the ground that the parties (defendants) have to face more hardship in view of the altered jurisdictions cannot be ruled out.
Contact Person
In case you need any clarifications, please contact our Senior Partner, A.K. Mishra Advocate & Former Presiding Officer, DRT who is Head of our Litigation Practice. His mobile number is 98300 28660 and his email id akmishra@orbitlaw.co.in / mumbai@orbitlaw.co.in.
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