Local Debt Recovery Tribunal Must Be Established In Jammu And Kashmir, Says Supreme Court

The Supreme Court on Friday (August 2) called for the establishment of local Debt Recovery Tribunals (DRTs) in Jammu and Kashmir.

“Someday it has to done. Looking at the topography of Jammu and Kashmir, it has to be done”, the court said.

A bench of Justice Abhay Oka and Justice Augustine George Masih was hearing a plea by a bank against the Jammu and Kashmir and Ladakh High Court's decision allowing challenges to actions under the SARFAESI Act to be made before the High Court under Article 226 of the Constitution, until local DRTs are established.

During the proceedings, Justice Oka queried why the High Court should not exercise its power under Article 226 in these cases. It has been held that writ petition is maintainable because persons cannot travel to Chandigarh DRT, he said.

The counsel for the petitioner argued that the DRTs are currently functioning virtually, with e-filing and video conferencing available. Therefore, he contended, access to justice is not denied. He added that the Centre previously communicated this stance to the High Court in an affidavit.

Justice Oka responded by questioning the rationale of maintaining local DRTs if virtual connectivity is deemed sufficient. He said that if virtual services were adequate, there would be no need for local DRTs.

“If logic is that we establish tribunals only at two selected places, because there is good connectivity now, then do it in one place”, he remarked.

Solicitor General Tushar Mehta highlighted suggested that the virtual hearing facilities provided by the Chandigarh DRT could be utilized as an alternative to High Court intervention. He highlighted that parties will lose one remedy if the High Court continues to exercise jurisdiction. He agreed that local DRTs would need to be established in Jammu and Kashmir.

The court listed the matter on August 12, 2024.

Background

The J&K High Court had previously ruled that the absence of DRTs within the Union Territories of Jammu and Kashmir and Ladakh infringes upon the fundamental right to easy access to justice under Article 21 of the Constitution. The High Court emphasized that until such tribunals or benches are set up, litigants could invoke the writ jurisdiction of the High Court under Article 226 to challenge actions by financial institutions and banks under the SARFAESI Act.

The Court observed that despite the availability of an alternative forum at the DRT located in Chandigarh, this forum was inefficacious for the litigants in these UTs.

The borrowers, who had approached the High Court, argued that the vast distance to Chandigarh imposed undue financial hardship and violated their right to access justice. They highlighted issues such as high airfare costs, difficult travel conditions, and limited access to affordable legal representation.

The High Court acknowledged the existence of an alternative remedy under Section 17 of the SARFAESI Act but emphasized that the remedy must be 'efficacious.' The Court stressed that while the DRTs themselves are legally adequate, their location in Chandigarh creates substantial challenges due to the distance from Jammu and Kashmir and Ladakh.

Drawing on the case of Anita Kushwaha v. Pushap Sudan (2016), the High Court emphasized that a redressal forum must be easily, readily, and regularly available to effectively serve its purpose.

The High Court noted that virtual hearings had limitations, including connectivity issues and the importance of physical appearances in certain cases. The geographical distance and lack of infrastructure significantly hindered access to justice for borrowers in these UTs.

The High Court also expressed concern about the lack of domestic courts with jurisdiction following the State Reorganisation Act of 2019, which impacted cases under the SARFAESI Act. It highlighted the difficulties faced by litigants due to the lack of local DRTs and observed that the absence of such tribunals denied litigants the comfort and convenience available to those in states with established DRTs.

Case no. – SLP(C) No. 6897/2024

Case Title – Jammu and Kashmir Bank Limited v. M/S Hotel Alpine Ridge and Ors.