Supreme Court Requests High Courts To Entertain SARFAESI, Bank Recovery Matters Under Writ Jurisdiction In View Of DRT/DRAT Vacancies

Taking note of the lack of operation of the Debts Recovery Tribunals (DRTs) and the Debt Recovery Appellate Tribunals(DRATs) in many states due to non-filling of vacancies, the Supreme Court on Thursday passed an order requesting the High Courts to entertain applications under the SARFAESI under the writ jurisdiction as an interim measure.

"To resolve the problem for the time being, pending further orders, we request the High Courts to entertain the applications which are to be filed before DRT/DRAT", a bench comprising the Chief Justice of India NV Ramana, Justice DY Chandrachud and Justice L Nageswara Rao ordered.

Once the tribunal is constituted, the matters will be relegated back to them from the High Courts, the Supreme Court added. The bench also asked the Union Governemnt to expedite the appointment process in the mean time.

The Court passed the order taking note of the difficulties created due to the assignment of the jurisdiction of DRTs in one state to DRTs of another State. The Bar Council of Madhya Pradesh approached the Supreme Court pointing out that the transfer of jurisdiction of DRT Jabalpur(MP) to DRT Lucknow(UP) was causing immense hardships to litigants and lawyers.

Senior Advocate Nidhesh Gutpa, appearing for the MP Bar Council, invited the attention of the bench to a judgment passed by the Kerala High Court which held that jurisdiction of DRT cannot be transferred to another State. He added that the Union Government has not challenged that judgment, passed in March 2021, and the same has therefore attained finality. Gupta pointed out that the Kerala High Court had suggested that if there was no other option available, the jurisdiction should be given to other Tribunals within the state.

Attorney General for India KK Venugopal submitted that the hearings are happening via video-conferencing, and hence the transfer of jurisdiction might not be causing difficulties. In response, Gupta submitted that the VC hearings were not effective as only dates are given for the cases from the other state, with no substantive hearing.

As regards the problem of Madhya Pradesh, the Attorney General submitted that though a request was made to CAT at Jabalpur to take over DRT jurisdiction, it declined citing workload. Gupta suggested that there are tribunals like Industrial Tribunals, AFT, Railway Tribunal etc., at Jabalpur with lesser workload.

 "Mr. Gupta says even in VC, no chance is given to cases from other states and only dates are given. This is a violation of the right to access justice", Justice Nageswara Rao observed.

"For the time being, we will ask the committee to expedite the appointments. For the time being, let High Courts entertain these applications", CJI Ramana observed.

The bench dictated the following order in the open court :

"It was brought to our notice that there are problems regarding non-appointment of members to DRTs and DRATs. To resolve the problem for the time being, we request the High Courts to entertain the applications which are to be filed before DRT/ DRAT under Article 226. Once the Tribunal is constituted the matters can be relegated back to the Tribunal".

It may be noted that recently the Bombay High Court had passed a suo motu order for the automatic stay of DRT matters from Maharashtra on conditions taking note of the fact that all 5 DRATs in the country are not operations.

Advocates Siddharth R. Gupta and Mrigank Prabhakar appeared with Senior Advocate Nidhesh Gupta for the State Bar Council.

(Report to be updated after the order is uploaded)

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