Bombay High Court Stays Centre's Notification Limiting Jurisdiction Of Cases Above Rs 100 Crores To 3 DRTs

Justice Ravindra V. Ghuge And Justice Sanjay A. Deshmukh issued notice to the central government and stayed the notification in a writ petition challenging its constitutionality.

"Prima facie, it appears from the record that, the Debts Recovery Tribunals established at various locations, would now be divested of their jurisdiction, on the ground of pecuniary limitation created by a Notification, without any amendment to the RDB Act. This appears to be unsustainable", the court stated.

Advocate A. A. Yadkikar submitted that all cases valued above Rs. 100 Crores under the jurisdiction of DRTs under the Chennai, Delhi, and Mumbai DRATs have been transferred to the DRT-1 Chennai, DRT-3 Delhi, and DRT-1 Mumbai respectively. This defeats the very purpose of establishing the DRTs at various locations in each state, Yadkikar argued.

The court said that prima facie, the notification is divesting the jurisdiction of DRTs at various locations by creating a pecuniary limitation without any amendment to the Recovery of Debts and Bankruptcy Act, 1953. This appears to be unsustainable, the court observed.

The court noted that if matters are transferred from the various DRTs to a particular DRT and subsequently the notification is struck down, those matters would have to be transferred back to the to the respective DRTs which originally had the jurisdiction.

"We are also conscious that, if the matters are transferred from various Debts Recovery Tribunals to a particular Debts Recovery Tribunal as per the impugned Notification, and subsequently, if the Notification is held to be unsustainable, all the transferred matters, which could be in several thousands, will have to be transferred back to the Debts Recovery Tribunals, which originally had the jurisdiction."

The court considered the seriousness and urgency of the issue and directed the government to file its reply 15 days before the next date of hearing, i.e., January 04, 2023.

Case no. – Writ Petition No. 11164 of 2022

Case title – Ishwarlal Shankarlal Lalwani v. Union of India