- (1.) THE following issue has been raised in this revisional application before this Court for its consideration : whether the Debt Recovery Tribunal (DRT) at Calcutta has jurisdiction to entertain an application under S. 17 of the securitisation and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002 (hereafter referred to as the sarfaesi Act) over the subject-matter of the dispute arising out of an action taken by the concerned bank against the borrower as per S. 13 (4) of the said Act for realisation of its dues by sale of the mortgaged property of the petitioner at Gujarat?
(2.) IN fact, the petitioner (borrower) invoked the jurisdiction of the Debt Recovery tribunal at Calcutta for redressal of its grievances arising out of the action taken by the bank (secured creditor) under S. 13 (4) of the said Act, as according to the petitioner, part of the cause of action has arisen within the territorial jurisdiction of the said Tribunal. The part of the cause of action which according to the petitioner arose within the jurisdiction of the said Tribunal, are as follows : - 1. Pursuant to the request made by the petitioner, UCO Bank, Ashram Road Branch, ahamedabad sent its proposal dated 23rd august, 2003 to the UCO Bank Head Office, Credit department at 10 BTM Sarani, kolkata-700001 (hereafter referred to as the head Office of the Bank) inter alia for sanction of the said credit proposal favouring the petitioner. 2. Pursuant to the said request made by the Ahmedabad Branch of the said Bank, the head office of the bank by its letter dated 13th November, 2003 advised the ahmedabad Branch that competent authority had sanctioned the credit proposal on 7th November, 2003 subject to the terms and conditions enclosed in Annexure "2" with its memorandum dated 29th October, 2003. The said letter dated 13th November, 2003 was issued from the head office of the bank which is situated within the jurisdiction of the Tribunal at Kolkata. 3. Ashram Road Branch of the said bank issued a notice on 3rd March, 2006 under section 13 (2) of the said Act alleging that the petitioner committed default in payment of its dues as per the terms and conditions of sanction of its credit proposal. The said notice which was addressed to the petitioner was served upon the petitioner at its registered office at 7/1, Lord sinha Road, Kolkata within the jurisdiction of the said Tribunal. Pursuant to the said notice the petitioner submitted its representation on 28th April, 2006. Such representation was sent from the registered office of the petitioner at kolkata to the branch of the said bank at ahamedabad. The said representation was received by the branch of the said bank at ahamedabad. 4. Since the said representation was not considered by the said bank, a writ petition being W. P. No. 13158 (W) of 2006 was moved by the petitioner before this Hon'ble Court and the said writ petition was ultimately disposed of on 25th May, 2006 after a contested hearing by granting liberty to the bank to take appropriate steps in accordance with law to protect its interest and directing the bank to consider the said representation of the petitioner and inform the decision to the petitioner before taking steps. 5. Pursuant to the said direction passed by this Hon'ble Court in the aforesaid writ petition, the Ashram Road Branch of the said bank disposed of the petitioner's said representation and ultimately communicated its decision from the said branch of the bank to the petitioner's Advocate at 6, Old Post office Street, Kolkata-1 within the jurisdiction of the said Tribunal. 6. On 25th May, 2006 the concerned bank issued a notice for taking possession of the factory, plant and assets of the petitioner situated at ahamedabad and the copy of the said possession notice was also served upon the petitioner at its registered office at lord Sinha Road within the jurisdiction of the Tribunal. 7. Challenging the said action of the bank, the petitioner on or about 22nd June, 2006 filed an application under Section 17 of the said Act before the learned DRT-1 at kolkata. An interim order of injunction was passed by the said Tribunal on 30th June, 2006 directing the parties to maintain status quo. Such injunction was passed on the petitioner's application for interim injunction. Though the bank accepted the said order without filing any appeal, but subsequently the bank challenged the territorial jurisdiction of the said Tribunal to entertain the said application under Section 17 of the said Act, as according to the bank, the said Tribunal has no territorial jurisdiction to entertain the said application as no part of the integral part of the cause of action for the said application had arisen within the territorial jurisdiction of the said tribunal.
(3.) THE sum and substance of the contention of the bank regarding the lack of territorial jurisdiction of this Tribunal to entertain the said application is as follows : - 1. Though notice under Section 13 (2) of the SARFAESI Act is a condition precedent before measures under 13 (4) of the said Act can be taken but it does not form an integral part of the cause of action and the receipt of the notice Itself does not give any cause of action to the borrower since it is not the issuance of the notice under Section 13 (2) of the SARFAESI act that give rise to the cause of action but non-payment of demand raised in the said notice which gives right to the bank to take over the mortgage assets of the defaulting borrower under Section 13 (4) of the said Act. 2. The right of the petitioner (borrower)to approach the Debt Recovery Tribunal under Section 17 of the SARFAESI Act accrues only after measures are taken under sub-section (4) of Section 13 of the said Act. As such, service of notice of Section 13 (4) of the said Act forms an integral part of the cause of action to approach the Debt Recovery Tribunal under Section 17 of the said act. 3. Measures under Section 13 (4) of the sarfaesi Act deals with enforcement of security interest only and therefore, any proceeding of this nature arising out of the enforcement action has to bar co-relation with territorial limits within which such, security interest is enforced. Admittedly the mortgage properties and/or the securities all situate at Ahamedabad in respect of which possession notice was issued. 4. The bank having its head office at kolkata is of no consequence as each banking branch is treated as a separate entity and thus cannot cloth the Debt Recovery tribunal, Kolkata any jurisdiction to entertain the said appeal as the sanction of the loan proposal was, in fact, given by the branch office at Ashram Road Branch at ahamedabad. 5. Similarly, (i) service of notice under section 13 (2) of the said Act upon the petitioner at its registered office at Kolkata and/or (ii) sending of representation from the from the registered office of the petitioner and/or (ii) receipt of the communication of the bank's decision from its Ashram Road branch by the petitioner at its registered office address at Kolkata and/or (iv) service of notice under S. 13 (4) of the said Act upon the petitioner at its registered office at kolkata, are of no consequence as the aforesaid acts and/or action do not form an integral part of the cause of action so far as enforcement of security is concerned as per section 13 (4) of the said Act. ;