Eighteen States, Including Two Union Territories, Do Not Have Debts Recovery Tribunal: Union Tells Supreme Court

To be precise, the Bench of Justices Abhay S Oka and Ujjal Bhuyan were informed by Additional Solicitor General K.M. Natraj that 18 States, including two Union Territories, do not have the Debts Recovery Tribunal (DRT). Further, for the Union Territory of Jammu and Kashmir, DRT at Chandigarh and Delhi has its jurisdiction.

The case has its genesis in the Writ petitions filed before the Jammu and Kashmir High Court by borrowers, challenging actions taken against them by banks and financial institutions under the SARFAESI Act. Section 17 of the Act provides the remedy of appeal before the DRTs for the borrowers against the actions taken by the bank. However, the petitioners had argued that the same cannot be said to be an efficacious remedy as the DRTs were not effective due to their remote locations.

They contended that the vast distance to Chandigarh imposed undue financial hardship and violated their fundamental right to access justice, as guaranteed under Article 21 of the Constitution.

The petitioners highlighted the significant challenges associated with traveling to the DRT in Chandigarh, including high airfare costs due to limited air connectivity and lack of direct flights, difficult road conditions, and harsh weather in J&K and Ladakh.

Per contra, banks and financial institutions had contended that Section 17 of the Act provides an alternative remedy, and the High Court should not entertain these writ petitions.

In view of these facts and circumstances, the High Court had held that the absence of DRTs within the Union Territories (UTs) of Jammu and Kashmir and Ladakh violates the fundamental right to easy access to justice enshrined in Article 21 of the Constitution.

Moreover, the Bench of Chief Justice N. Kotiswar Singh & Justice Wasim Sadiq Nargal had also noted that till such a fora or benches are established the litigants can invoke the writ jurisdiction under Article 226 of the Constitution of India.

Acknowledging the existence of an alternative remedy under Section 17, the bench emphasized that the remedy needs to be 'efficacious' to be considered valid. While the DRTs themselves were deemed legally adequate forums, their location in Chandigarh posed a substantial challenge due to the considerable distance from J&K and Ladakh.

It was also emphasized that the geographical distance, economic hardship, and lack of infrastructure significantly hindered access to justice for borrowers in J&K and Ladakh.

Highlighting the imperative of ensuring an effective and just implementation of the SARFAESI Act by providing litigants with a redressal forum that is not only accessible but also efficacious, the bench emphasized that the establishment of local DRTs or alternative benches within Jammu and Kashmir and Ladakh is crucial to mitigate the burdensome and expensive proceedings faced by litigants.

Against this backdrop, the Court held that the writ petitions were maintainable and acknowledged the need for further examination on the merits of each case.

Case Title: JAMMU AND KASHMIR BANK LIMITED v. M/S HOTEL ALPINE RIDGE & ORS., Petition(s) for Special Leave to Appeal (C) No(s). 6897/2024

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