B B C ASSOCIATES LTD Vs. OMAN INTERNATIONAL BANK SAOG
LAWS(DR)-2004-1-16
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on January 21,2004

Appellant
VERSUS
Respondents

JUDGEMENT

Pratibha Upasani, - (1.) THIS Misc. appeal is filed by the appellants/original defendant Nos. 1 to 3 and 7, being aggrieved by the order dated 11.4.2002 passed by the learned Presiding Officer of Debts Recovery Tribunal-II, Mumbai on Exhibit No. 18 in Original Application No. 719/2001. By the impugned order, the learned Presiding Officer rejected the application made by the appellants praying for dismissing the original application filed by the applicant Bank namely Oman International Bank SAOG, as the Tribunal had no jurisdiction to try, entertain or dispose of the original application.
(2.) I have heard Mr. Nansi for the appellants and Mr. Thakkar for the respondent Bank. I have also gone through the proceedings including the impugned order and in my view, there is no infirmity whatsoever in the order passed by the learned Presiding Officer, which is assailed by the appellants in this appeal. In the application taken out by the defendant No. 1 and which was supported by other defendants, exception was taken to the territorial jurisdiction of the Debts Recovery Tribunal, on the ground that the loan documents were executed at Chennai, mortgaged properties were also in Chennai and all the defendants were also from Chennai. It was therefore contended by the appellants that the Tribunal had no territorial jurisdiction to entertain and try the original application. The respondent No. 1 Bank on the contrary has supported the impugned order. It is contended by the Bank that the Tribunal did have jurisdiction to entertain the original application and dispose of the original application as the cause of action has arisen within the territorial jurisdiction of the Tribunal. Contention of the Bank is that the applicant Bank has its office only in Mumbai and not in Chennai. It is further contended that the money was given from Mumbai and was repayable in Mumbai and in fact some of the instalments were also paid in Mumbai. It is therefore submitted that the application made by the appellants was without any merit and it was rightly rejected by the learned Presiding Officer.
(3.) SECTION 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, states that where a Bank or financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits or 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 resides, or carries 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 resides, or caries on business, or personally works for gain; or (c) the cause of action, wholly or in part, arises, In the present case at hand, it appears that the documents were executed in Chennai and that the mortgaged properties were also in Chennai. It also appears to be admitted fact that all the defendants were from Chennai. However, since the money was given from Mumbai, was repayable in Mumbai and in fact some of the instalments were also paid in Mumbai, where alone the Bank has got its office, it cannot be said that DRT, Mumbai has no jurisdiction to entertain and try the original application. SECTION 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 says that if the cause of action, wholly or in part, arises within the local limits then original application can be filed by the Bank or by financial institution to recover any debt from any person in the same DRT. It also must be stated that the suit filed by the Bank is a simple money claim. It is not a suit for either redemption or foreclosure within the meaning of Order 34 of the CPC. SECTION 16 of the CPC 1908 specifically lays down that subject to the pecuniary or other limitation prescribed by any law, suits-- (a) ...... ...... ...... (b) ...... ...... ...... (c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, (d) ...... ...... ...... (e) ...... ...... ...... (f) ...... ...... ...... shall be instituted in the Court within the local limits of whose jurisdiction the property is situated. However, it has to be kept in mind that this is the requirement envisaged by SECTION 16 of the CPC and that section has no application to the proceedings before the DRT. Before the DRT what is applicable is SECTION 19 alone of the RDB Act. Provision contained in SECTION 19(1) of the RDB Act is the only provision in this context which inter alia lays down that the original application can be filed where the cause of action arises. In the present case at hand, since the cause of action has arisen in Mumbai, at least in part, the DRT, Mumbai, has got jurisdiction to try and entertain the original application.;


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