# Ram Pal Soni & Anr v. State of U.P. & Ors

- **Citation:** (2021) 10 ILRA 966
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-07-29
- **Case number:** Misc. Single No. 13556 of 2021
- **Bench:** Ravi Nath Tilhari
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ram-pal-soni-anr-v-state-of-u-p-ors-46436
- **Pages:** 31

## Headnote

A. Civil Law - Tribunal - Jurisdiction -
Recoveries of Debts Due to Banks and
Financial Institutions Act, 1993 - Section 3
- Securitisation and Reconstruction of
Financial
Assets
and
Enforcement
of
Security Interest Act, 2002 - Sections
17(1) & 17 (1-A) - territorial jurisdiction
of Tribunal - Reference to Larger Bench
for
authoritative
pronouncement
-
Whether Section 3 of 1993 Act, can be
read as conferring exclusive jurisdiction
on the Tribunals established there under,
irrespective
of
Section
19
of
the
Recoveries of Debts Due to Banks and
Financial
Institutions
Act,
1993
and
Section 17(1A) of the SARFAESI Act,
rendering Sections 19 and 17(1A) of the
respective Acts as redundant or nugatory
? (Para 58)

B. Civil Law - Tribunal - Jurisdiction -
Recoveries of Debts Due to Banks and
Financial Institutions Act, 1993 - Section 3
- Securitisation and Reconstruction of
Financial
Assets
and
Enforcement
of
Security Interest Act, 2002, 17(1), 17 (1A) - territorial jurisdiction of Tribunal -
Reference to Larger Bench- Whether the
judgment in Saurabh Gupta which lays
down that the Debts Recovery Tribunal,
Allahabad shall have exclusive jurisdiction
to entertain and decide the applications
arisen from 55 districts specified in the
notification dated 05.12.2017, without
noticing S. 19 of the 1993 Act and Section
17(1A) of the SARFAESI Act, as also the
judgment of Hon'ble Supreme Court in
case of Sri Nasiruddin (supra) lays down
the law correctly ? (Para 58)

C. Civil Law - Tribunal - Jurisdiction -
SARFAESI Act, 2002 - Section 17 -
Whether in a case where part of cause of
action to maintain an application under
Section 17(1) of the SARFAESI Act, arises
within the limits of territorial jurisdiction
of Debts Recovery Tribunal, Lucknow, the
Debts Recovery Tribunal, Lucknow will
have the jurisdiction, power and authority
to entertain and decide such application in
10 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
967
view of Sub section (1-A) of Section 17 of
the SARFAESI Act or not ? (Para 58)

Referred to Larger Bench.(E-5)

List of Cases cited:

## Text

_Characters 0–39,894 of 97,389. This is a partial read: ask again with offset=39894 for what follows._

966 INDIAN LAW REPORTS ALLAHABAD SERIES
against
the
domestic
violence.
The
legislature in its wisdom has provided no
limitation for moving application under its
Section 12, so the rigour of provisions of
the Limitation Act, 1963 shall not apply
and the application so moved cannot be
turned down in limine on the ground of
limitation alone. The best approach would
be to apply the criteria of within 'reasonable
period' and what will be the 'reasonable
period', will be decided on the basis of
'factual matrix' of each case, keeping in
mind the principle of 'equity, justice and
good conscience".

The question no.(ii) is answered
accordingly.

91. To conclude neither Section 468
of Cr.P.C. nor the provisions of the
Limitation Act, 1963 shall apply to
application moved under Section 12 of the
D.V.Act.
The
questions
referred
are
decided accordingly.

Let the matter be placed before the
learned Single Judge for final disposal.
----------
(2021)10ILR A966
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 29.07.2021

BEFORE

THE HON'BLE RAVI NATH TILHARI, J.

Misc. Single No. 13556 of 2021

Ram Pal Soni & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Ambika Prasad Mishra

Counsel for the Respondents:
C.S.C., Anand Kumar Singh

A. Civil Law - Tribunal - Jurisdiction -
Recoveries of Debts Due to Banks and
Financial Institutions Act, 1993 - Section 3
- Securitisation and Reconstruction of
Financial
Assets
and
Enforcement
of
Security Interest Act, 2002 - Sections
17(1) & 17 (1-A) - territorial jurisdiction
of Tribunal - Reference to Larger Bench
for
authoritative
pronouncement
-
Whether Section 3 of 1993 Act, can be
read as conferring exclusive jurisdiction
on the Tribunals established there under,
irrespective
of
Section
19
of
the
Recoveries of Debts Due to Banks and
Financial
Institutions
Act,
1993
and
Section 17(1A) of the SARFAESI Act,
rendering Sections 19 and 17(1A) of the
respective Acts as redundant or nugatory
? (Para 58)

B. Civil Law - Tribunal - Jurisdiction -
Recoveries of Debts Due to Banks and
Financial Institutions Act, 1993 - Section 3
- Securitisation and Reconstruction of
Financial
Assets
and
Enforcement
of
Security Interest Act, 2002, 17(1), 17 (1A) - territorial jurisdiction of Tribunal -
Reference to Larger Bench- Whether the
judgment in Saurabh Gupta which lays
down that the Debts Recovery Tribunal,
Allahabad shall have exclusive jurisdiction
to entertain and decide the applications
arisen from 55 districts specified in the
notification dated 05.12.2017, without
noticing S. 19 of the 1993 Act and Section
17(1A) of the SARFAESI Act, as also the
judgment of Hon'ble Supreme Court in
case of Sri Nasiruddin (supra) lays down
the law correctly ? (Para 58)

C. Civil Law - Tribunal - Jurisdiction -
SARFAESI Act, 2002 - Section 17 -
Whether in a case where part of cause of
action to maintain an application under
Section 17(1) of the SARFAESI Act, arises
within the limits of territorial jurisdiction
of Debts Recovery Tribunal, Lucknow, the
Debts Recovery Tribunal, Lucknow will
have the jurisdiction, power and authority
to entertain and decide such application in
10 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
967
view of Sub section (1-A) of Section 17 of
the SARFAESI Act or not ? (Para 58)

Referred to Larger Bench.(E-5)

List of Cases cited:

1. Amish Jain & ors.. Vs ICICI Bank Ltd. 2018
LawSuit (Del) 2370,

2. Ramsay Exim & Technology Pvt. Ltd. & ors.
Vs ICICI Bank Ltd. & anr. 2019 LawSuit (Cal)
1238

3. Y. Abraham Ajith & ors. Vs Inspector of
Police, Chennai & anr.. (2004) 8 SCC 100

4.
Swamy
Atmananda
&
ors.
Vs
Sri
Ramakrishna Tapovanam & ors. (2005) 10
SCC 51

5. Alchemist Ltd. & anr. Vs State Bank of
Sikkim & ors., (2007) 11 SCC 335

6. Saurabh Gupta Vs U.O.I. & ors. Writ-C No.
46965 of 2017

7. Sri Nasiruddin Vs S.T.A.T. (1975) 2 SCC
671

8. Jagannath Temple Managing Committee Vs
Siddha Math & ors., (2015) 16 SCC 542

9.
K.
P.
Manu
Vs
Chairman
Scrutiny
Committee for Verification of Community
Certificate, (2015) 4 SCC 1

10. Jayant Verma Vs U.O.I. (2018) 4 SCC 743

(Delivered by Hon'ble Ravi Nath Tilhari, J.)

1. Heard Shri Ambika Prasad
Mishra,
learned
counsel
for
the
petitioners, Shri J. P. Maurya, learned
Additional Chief Standing Counsel for
the opposite party No. 1, Shri Anand
Kumar Singh, learned counsel for the
opposite party Nos. 3 & 4 through video
conferencing. The opposite party No. 2 is
Debts
Recovery
Appellate
Tribunal,
Allahabad, which has passed the order
under challenge.

2. For the reasons assigned in the
order dated 02.07.2021, issuance of
notice to the opposite party No. 5 was
dispensed with.

3. The writ petition has been filed
for the following reliefs:

(i) Issue a writ, order or
direction in the nature of CERTIORARI,
Quashing/Setting aside the impugned
judgment and order dated 25-03-2021
passed by opposite party No.2 in Regular
Appeal No. 14 of 2021 UCO Bank Vs
Ram Pal Soni and another which is
contained in Annexure No.1 to this writ
petition.

(ii) Issue a writ or direction in
the nature of mandamus commanding the
opposite parties concerned not to disturb
peaceful possession of the petitioners
regarding property in question during the
pendency of the writ petition in the
interest of Justice.

(iii) Issue any other writ, order
or direction be passed which this Hon'ble
Court may deem just and proper under
the facts and circumstances of the case.

(iv) Allow the writ petition with
cost in favour of the petitioner.

4. The petitioner No.1 is the
borrower from opposite party No.4,
United
Commercial
Bank,
Branch
Amethi, District Amethi (in short, ''UCO
Bank'). The petitioner No. 2 is the
guarantor. The loan account of petitioners
became non productive asset (NPA) on
31.03.2017.
968 INDIAN LAW REPORTS ALLAHABAD SERIES

5. The opposite party No. 3-Zonal
Manager/ Authorized Officer, UCO Bank
from its Zonal Office at Lucknow, issued
notice
dated
03.05.2019,
Annexure-3,
under Rule 8(6) of the Security Interest
(Enforcement), Rules, 2002 (in short,
''Rules,
2002'),
framed
under
the
Securitisation
and
Reconstruction
of
Financial Assets and Enforcement of
Securtiy Interest Act, 2002 (in short,
''SARFAESI Act'), to hold public-e-auction
of the property, i.e., the secured assets,
fixing the date as 10.06.2019. Another
notice dated 27.06.2019 was issued from
the Branch Office of the UCO Bankopposite party No. 4, to the petitioners to
deposit the amount which had become
overdue. The e-auction of the property was
held by the Zonal Authority, Lucknow on
28.06.2019
and
the
petitioners
were
informed vide letter dated 03.07.2019. The
petitioner No. 1 filed Writ Petition No.
19204 (MB) of 2019, Ram Pal Soni Vs.
State of U.P. and others, which was
dismissed by a Division Bench of this
Court on 16.07.2019 on the ground of
alternative remedy, available under Section
17 of the SARFAESI Act.

6. The petitioners, thereafter, filed
Securitisation Application (SA) No. 541 of
2019, Ram Pal Soni and another Vs. Zonal
Manager/ Authorized Officer, UCO Bank
and others, before the Debts Recovery
Tribunal, Lucknow (in short, ''DRT,
Lucknow'), under Section 17 (1) of the
SARFAESI Act, in which the respondent
Bank raised a preliminary objection that as
the security asset was located at Amethi,
the DRT, Lucknow, had no jurisdiction,
which was contested by the petitioners. The
D.R.T.,
Lucknow
vide
order
dated
06.08.2019,
rejected
the
preliminary
objection about its territorial jurisdiction
finding that the demand notice and the sale
notice were issued from the Authorized
Officer at Zonal Office of the UCO Bank at
Lucknow, the cause of action in part had
arisen at Lucknow, and the Tribunal had
the jurisdiction to deal with the matter. An
interim protection was also granted that till
the date fixed, the respondent Bank may
proceed with sale, but the sale deed will not
be executed in favour of the auction
purchaser.

7. The Bank, opposite parties filed
Regular Appeal No. 14 of 2020, under
Section 18 of the SARFAESI Act, UCO
Bank,
Branch
Office-Amethi,
District
Amethi Vs. Ram Pal Soni and another,
which, the Debts Recovery Appellate
Tribunal, Allahabad (in short, ''Appellate
Tribunal'), has allowed and has set aside
the judgment of the Tribunal dated
06.08.2019 vide judgment and order dated
25.03.2021, holding that the S.A. No. 541
of 2019 is not maintainable before the
DRT, Lucknow, for lack of territorial
jurisdiction in as much as according to it
the issuance of notices cannot be treated as
cause of action.

8. The Appellate Tribunal, by the
same
order
dated
25.03.2021,
also
transferred the Securitisation Application to
the Debts Recovery Tribunal, Allahabad (in
short, ''DRT, Allahabad').

9. It is this judgment dated
25.03.2021
passed
by
the
Appellate
Tribunal, Allahabad, which is under
challenge in the writ petition.

10. Shri Ambika Prasad Mishra,
submits that an application under Sub
section
(1)
of
Section
17(1-A)
of
SARFAESI Act shall be filed before the
Debts Recovery Tribunal within the local
limits of whose jurisdiction the cause of
10 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
969
action, wholly or in part arises; where the
secured asset is located or the branch or
any other office of the bank is maintaining
an account in which debt claimed is
outstanding for the time being. He submits
that the cause of action has arisen partly
within the territorial jurisdiction of the
DRT, Lucknow, as the demand notice and
sale notice were issued by the zonal
authority of the Bank at Lucknow, and as
the e-auction was also conducted by the
officer sitting at Lucknow, and as such the
DRT,
Lucknow
had
the
territorial
jurisdiction.

11. Shri Anand Kumar Singh, submits
that the DRT, within whose territorial
jurisdiction, the secured asset is located,
will have the jurisdiction and as the secured
asset is located at Amethi, the DRT,
Lucknow, had no territorial jurisdiction. He
has placed reliance on Section 16 of the
Civil Procedure Code (in short, ''CPC'), that
the suits are to be instituted, subject to the
pecuniary or other limitations prescribed by
any law, in court within the local limits of
whose jurisdiction the property situates.
The notices in question, according to him,
would not furnish any part of cause of
action at Lucknow. He placed reliance on
the judgments of Amish Jain & Ors. Vs.
ICICI Bank Ltd., 2018 LawSuit (Del)
2370, and Ramsay Exim and Technology
Private Limited and others Vs. ICICI
Bank
Limited
and
another,
2019
LawSuit (Cal) 1238, which have also been
referred in the impugned judgment of the
Appellate Tribunal.

12. Shri Anand Kumar Singh further
submitted that the Chairman of the
appellate tribunal has the jurisdiction to
transfer the securitisation application from
one DRT to another DRT in view of
Section 17(A)(2) of the SARFAESI Act.
Consequently he submits that the order
under challenge passed by the Chairman of
Appellate Tribunal is within jurisdiction
and calls for no interference.

13. Shri J. P. Maurya, learned
Additional
Chief
Standing
Counsel,
submits that the petitioners' application was
maintainable before the DRT, Lucknow, as
the issuance of notice under Section 13(2),
(4) of the SARFAESI Act, as also holding
of e-auction by the Bank authority from
Lucknow, would, form part of the cause of
action, and in view of Section 17(1-A) of
the SARFAESI Act, the DRT, Lucknow
has the territorial jurisdiction to entertain
the application.

14. Shri J. P. Maurya, has placed the
judgment of this Court at Allahabad in
Writ-C No. 46965 of 2017, Saurabh Gupta
Vs. Union of India and others, and submits
that in that case it has been held that the
DRT, Allahabad has exclusive territorial
jurisdiction over all the fifty five districts
specified
in
the
notification
dated
15.02.2017, under Section 3 of the Debts
Recovery Tribunal Act, but he submits that
Section 17(1-A) of the SARFAESI Act
finds no consideration.

15. I have considered the submissions
advanced by the learned counsels for the
parties and perused the material on record.

16. In view of the submissions
advanced, points for determination which
arise for consideration are being formulated
as under:-

(i) Whether the Debts Recovery
Tribunal
within
whose
territorial
jurisdiction the secured asset is located,
would only have the jurisdiction where the
application under Section 17(1) of the
SARFAESI Act can be filed, or it can also
970 INDIAN LAW REPORTS ALLAHABAD SERIES
be filed with such Debts Recovery Tribunal
where, the secured asset might not be
located, but the part of cause of action had
arisen?

(ii) Whether by issuance of notice
under Section 13(2), (4) as also holding of
e-auction, from Lucknow by the opposite
party No. 3 at Lucknow, any part of cause
of action has arisen within the territorial
jurisdiction of DRT, Lucknow?

(iii) If the DRT, Lucknow also
had the territorial jurisdiction in view of
Section 17(1A)(a) of SARFAESI Act, the
order of the Appellate Tribunal, Allahabad,
setting aside the order of the Debts
Recovery
Tribunal,
Lucknow,
and
transferring the case to DRT, Allahabad,
can be sustained in law?

17. To consider the aforesaid points
and to appreciate the rival submissions, it is
apt to refer the provisions of Sections 13
and 17 of the SARFAESI Act.

18. Section 13 of the SARFAESI Act
reads as under:

13. Enforcement of security
interest.--(1)
Notwithstanding
anything
contained in section 69 or section 69A of
the Transfer of Property Act, 1882 (4 of
1882), any security interest created in
favour of any secured creditor may be
enforced, without the intervention of the
court or tribunal, by such creditor in
accordance with the provisions of this Act.

(2) Where any borrower, who is
under a liability to a secured creditor
under a security agreement, makes any
default in repayment of secured debt or
any instalment thereof, and his account in
respect of such debt is classified by the
secured creditor as non-performing asset,
then, the secured creditor may require the
borrower by notice in writing to discharge
in full his liabilities to the secured creditor
within sixty days from the date of notice
failing which the secured creditor shall be
entitled to exercise all or any of the rights
under sub-section (4).

[Provided that--

(i)
the
requirement
of
classification of secured debt as nonperforming asset under this sub-section
shall not apply to a borrower who has
raised
funds
through
issue
of
debt
securities; and

(ii) in the event of default, the
debenture trustee shall be entitled to
enforce security interest in the same
manner as provided under this section with
such modiifications as may be necessary
and in accordance with the terms and
conditions of security documents executed
in favour of the debenture trustee.]

(3) The notice referred to in subsection (2) shall give details of the amount
payable by the borrower and the secured
assets intended to be enforced by the
secured creditor in the event of nonpayment of secured debts by the borrower.

(3A) If, on receipt of the notice
under sub-section (2), the borrower makes
any representation or raises any objection,
the secured creditor shall consider such
representation or objection and if the
secured creditor comes to the conclusion
that such representation or objection is not
acceptable
or
tenable,
he
shall
communicate within fifteen days of receipt
of such representation or objection the
reasons
for
nonacceptance
of
the
10 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
971
representation
or
objection
to
the
borrower.

Provided that the reasons so
communicated or the likely action of the
secured
creditor
at
the
stage
of
communication of reasons shall not confer
any right upon the borrower to prefer an
application to the Debts Recovery Tribunal
under section 17 or the Court of District
Judge under section 17A.

(4) In case the borrower fails to
discharge his liability in full within the
period specified in sub-section (2), the
secured creditor may take recourse to
one or more of the following measures to
recover his secured debt, namely:--

(a) take possession of the
secured assets of the borrower including
the right to transfer by way of lease,
assignment or sale for realising the
secured asset;

(b) take over the management of
the business of the borrower including
the right to transfer by way of lease,
assignment or sale for realising the
secured asset:

Provided that the right to transfer
by way of lease, assignment or sale shall be
exercised only where the substantial part of
the business of the borrower is held as
security for the debt:

Provided further that where the
management of whole of the business or
part of the business is severable, the
secured creditor shall take over the
management of such business of the
borrower which is relatable to the security
for the debt;

(c) appoint any person (hereafter
referred to as the manager), to manage the
secured assets the possession of which has
been taken over by the secured creditor;

(d) require at any time by notice
in writing, any person who has acquired
any of the secured assets from the borrower
and from whom any money is due or may
become due to the borrower, to pay the
secured creditor, so much of the money as
is sufficient to pay the secured debt.

(5) Any payment made by any
person referred to in clause (d) of subsection (4) to the secured creditor shall
give such person a valid discharge as if he
has made payment to the borrower.

(5A) Where the sale of an
immovable property, for which a reserve
price has been specified, has been
postponed for want of a bid of an amount
not less than such reserve price, it shall be
lawful for any officer of the secured
creditor, if so authorised by the secured
creditor in this behaalf, to bid for the
immovable property on behalf of the
secured creditor at any subsequent sale.

(5B) Where the secured creditor,
referred to in sub-section (5A), is declared
to be the purchaser of the immovable
property at any subsequent sale, the
amount of the purchase price shall be
adjusted towards the amount of the claim of
the secured creditor for which the auction
of enforcement of security interest is taken
by the secured creditor, under sub-section
(4) of section 13.

(5C) The provisions of section 9
of the Banking Regulation Act, 1949 (10 of
1949) shall, as far as may be, apply to the
972 INDIAN LAW REPORTS ALLAHABAD SERIES
immovable property acquired by secured
creditor under sub-section (5A).

(6) Any transfer of secured asset
after taking possession thereof or take over
of management under sub-section (4), by
the secured creditor or by the manager on
behalf of the secured creditor shall vest in
the transferee all rights in, or in relation to,
the secured asset transferred as if the
transfer had been made by the owner of
such secured asset.

(7) Where any action has been
taken against a borrower under the
provisions of sub-section (4), all costs,
charges and expenses which, in the opinion
of the secured creditor, have been properly
incurred by him or any expenses incidental
thereto, shall be recoverable from the
borrower and the money which is received
by the secured creditor shall, in the
absence of any contract to the contrary, be
held by him in trust, to be applied, firstly,
in payment of such costs, charges and
expenses and secondly, in discharge of the
dues of the secured creditor and the residue
of the money so received shall be paid to
the person entitled thereto in accordance
with his rights and interests.

(8) Where the amount of dues of
the secured creditor together with all costs,
charges and expenses incurred by him is
tendered to the secured creditor at any time
before the date of publication of notice for
public auction or inviting quotations or
tender from public or private treaty for
transfer by way of lease, assignment or sale
of the secured assets,-

(i) the secured assets shall not be
transferred by way of lease assignment or
sale by the secured creditor; and

(ii) in case, any step has been
taken by the secured creditor for transfer
by way of lease or assignment or sale of the
assets before tendering of such amount
under this sub-section, no further step shall
be taken by such secured creditor for
transfer by way of lease or assignment or
sale of such secured assets.

(9) Subject to the provisions of
the Insolvency and Bankruptcy Code, 2016,
in the case of financing of a financial asset
by more than one secured creditors or joint
financing of a financial asset by secured
creditors, no secured creditor shall be
entitled to exercise any or all of the rights
conferred on him under or pursuant to subsection (4) unless exercise of such right is
agreed upon by the secured creditors
representing not less than sixty per cent in
value of the amount outstanding as on a
record date and such action shall be
binding on all the secured creditors:

Provided that in the case of a
company
in
liquidation,
the
amount
realised from the sale of secured assets
shall be distributed in accordance with the
provisions
of
section
529A
of
the
Companies Act, 1956 (1 of 1956):

Provided further that in the case
of a company being wound up on or after
the commencement of this Act, the secured
creditor of such company, who opts to
realise his security instead of relinquishing
his security and proving his debt under
proviso to sub-section (1) of section 529 of
the Companies Act, 1956 (1 of 1956), may
retain the sale proceeds of his secured
assets after depositing the workmen's dues
with the liquidator in accordance with the
provisions of section 529A of that Act:
10 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
973

Provided
also
that
liquidator
referred to in the second proviso shall
intimate the secured creditor the workmen's
dues in accordance with the provisions of
section 529A of the Companies Act, 1956 (1
of 1956) and in case such workmen's dues
cannot be ascertained, the liquidator shall
intimate the estimated amount of workmen's
dues under that section to the secured
creditor and in such case the secured creditor
may retain the sale proceeds of the secured
assets after depositing the amount of such
estimate dues with the liquidator:

Provided also that in case the
secured creditor deposits the estimated
amount of workmen's dues, such creditor
shall be liable to pay the balance of the
workmen's dues or entitled to receive the
excess amount, if any, deposited by the
secured creditor with the liquidator:

Provided also that the secured
creditor shall furnish an undertaking to the
liquidator to pay the balance of the
workmen's dues, if any.

Explanation.--For the purposes of
this sub-section,-

(a) "record date" means the date
agreed upon by the secured creditors
representing not less than sixty per cent in
value of the amount outstanding on such
date;

(b) "amount outstanding" shall
include principal, interest and any other dues
payable by the borrower to the secured
creditor in respect of secured asset as per the
books of account of the secured creditor.

(10) Where dues of the secured
creditor are not fully satisfied with the sale
proceeds of the secured assets, the secured
creditor may file an application in the form
and manner as may be prescribed to the
Debts
Recovery
Tribunal
having
jurisdiction or a competent court, as the
case may be, for recovery of the balance
amount from the borrower.

(11) Without prejudice to the
rights conferred on the secured creditor
under or by this section, secured creditor
shall be entitled to proceed against the
guarantors or sell the pledged assets
without first taking any of the measured
specifies in clauses (a) to (d) of sub-section
(4) in relation to the secured assets under
this Act.

(12) The rights of a secured
creditor under this Act may be exercised by
one or more of his officers authorised in
this behalf in such manner as may be
prescribed.

(13) No borrower shall, after
receipt of notice referred to in sub-section
(2), transfer by way of sale, lease or
otherwise (other than in the ordinary
course of his business)any of his secured
assets referred to in the notice, without
prior written consent of the secured
creditor.

19. Section 17 of the SARFAESI Act
reads as under:-

17. Application against measures
to recover secured debts].--(1) Any person
(including borrower), aggrieved by any of
the measures referred to in sub-section (4)
of section 13 taken by the secured creditor
or his authorised officer under this
Chapter, may make an application along
with such fee, as may be prescribed, to the
Debts
Recovery
Tribunal
having
jurisdiction in the matter within forty five
974 INDIAN LAW REPORTS ALLAHABAD SERIES
days from the date on which such measure
had been taken:

Provided that different fees may
be prescribed for making the application by
the borrower and the person other than the
borrower.

Explanation.--For the removal of
doubts, it is hereby declared that the
communication of the reasons to the
borrower by the secured creditor for not
having accepted his representation or
objection or the likely action of the secured
creditor at the stage of communication of
reasons to the borrower shall not entitle the
person (including borrower) to make an
application to the Debts Recovery Tribunal
under this sub-section.

(1A) An application under subsection (1) shall be filed before the Debts
Recovery Tribunal within the local limits
of whose jurisdiction--

(a) the cause of action, wholly or
in part, arises;

(b) where the secured asset is
located; or

(c) the branch or any other
office of a bank or financial institution is
maintaining an account in which debt
claimed is outstanding for the time being.

(2) The Debts Recovery Tribunal
shall consider whether any of the measures
referred to in sub-section (4) of section 13
taken
by
the
secured
creditor
for
enforcement of security are in accordance
with the provisions of this Act and the rules
made thereunder.

(3)
If,
the
Debts
Recovery
Tribunal, after examining the facts and
circumstances of the case and evidence
produced by the parties, comes to the
conclusion that any of the measures
referred to in sub-section (4) of section 13,
taken by the secured creditor are not in
accordance with the provisions of this Act
and the rules made thereunder, and require
restoration
of
the
management
or
restoration of possession, of the secured
assets to the borrower or other aggrieved
person, it may, by order,--

(a) declare the recourse to any
one or more measures referred to in subsection (4) of section 13 taken by the
secured creditor as invalid; and

(b) restore the possession of secured
assets or management of secured assets to
the bo
rrower or such other aggrieved
person, who has made an application under
sub-section (1), as the case may be; and

(c) pass such other direction as it
may consider appropriate and necessary in
relation to any of the recourse taken by the
secured creditor under sub-section (4) of
section 13.

(4)
If,
the
Debts
Recovery
Tribunal declares the recourse taken by a
secured creditor under sub-section (4) of
section 13, is in accordance with the
provisions of this Act and the rules made
thereunder, then, notwithstanding anything
contained in any other law for the time
being in force, the secured creditor shall be
entitled to take recourse to one or more of
the measures specified under sub-section
(4) of section 13 to recover his secured
debt.
10 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
975

(4A) Where--(i) any person, in an
application under sub-section (1), claims
any tenancy or leasehold rights upon the
secured asset, the Debt Recovery Tribunal,
after examining the facts of the case and
evidence produced by the parties in
relation to such claims shall, for the
purposes
of
enforcement
of
security
interest, have the jurisdiction to examine
whether lease or tenancy,--

(a)
has
expired
or
stood
determined; or

(b) is contrary to section 65A of
the Transfer of Property Act, 1882 (4 of
1882); or

(c) is contrary to terms of
mortgage; or

(d) is created after the issuance of
notice of default and demand by the Bank
under subsection (2) of section 13 of the
Act; and

(ii) the Debt Recovery Tribunal is
satisfied that tenancy right or leasehold
rights claimed in secured asset falls under
the sub-clause (a) or sub-clause (b) or subclause (c) or sub-clause (d) of clause (i),
then notwithstanding anything to the
contrary contained in any other law for the
time being in force, the Debt Recovery
Tribunal may pass such order as it deems
fit in accordance with the provisions of this
Act.

(5) Any application made under
sub-section (1) shall be dealt with by the
Debts Recovery Tribunal as expeditiously
as possible and disposed of within sixty
days from the date of such application:

Provided that the Debts Recovery
Tribunal may, from time to time, extend the
said period for reasons to be recorded in
writing, so, however, that the total period
of pendency of the application with the
Debts Recovery Tribunal, shall not exceed
four months from the date of making of
such application made under sub-section
(1).

(6) If the application is not
disposed of by the Debts Recovery Tribunal
within the period of four months as
specified in sub-section (5), any part to the
application may make an application, in
such form as may be prescribed, to the
Appellate Tribunal for directing the Debts
Recovery Tribunal for expeditious disposal
of the application pending before the Debts
Recovery Tribunal and the Appellate
Tribunal may, on such application, make
an order for expeditious disposal of the
pending application by the Debts Recovery
Tribunal.

(7) Save as otherwise provided in
this Act, the Debts Recovery Tribunal shall,
as far as may be, dispose of the application
in accordance with the provisions of the
Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of
1993) and the rules made thereunder.

20. ub section (1-A) of Section 17 of
the SARFAESI Act was inserted by the Act
No. 44 of of 2016 w.e.f. 01.09.2016, which
clearly provides that an application under
sub-section (1) shall be filed before the
Debts Recovery Tribunal within the local
limits of whose jurisdiction-

(a) the cause of action, wholly or
in part, arises;
976 INDIAN LAW REPORTS ALLAHABAD SERIES

(b) where the secured asset is
located; or

(c) the branch or any other office
of a bank or financial institution is
maintaining an account in which debt
claimed is outstanding for the time being.

21. Section 17(1A) of SARFAESI
Act is very specific and unambiguous.
Therefore, an application under Section
17(1) of the Act is maintainable before the
Debts Recovery Tribunal within the local
limits of whose jurisdiction the cause of
action wholly; or in part arises, even if the
secured asset is not located within the
territorial limits of such Debts Recovery
Tribunal. This is not to say that an
application under Section 17(1) cannot be
filed before the Debts Recovery Tribunal
within the local limits of whose jurisdiction
the secured assets is located, but, this is to
say that if the jurisdiction falls within the
two or more Debts Recovery Tribunal, in
view of clauses (a), (b) and (c) of Section
17(1A), the application under Section 17(1)
can be filed before any of those Debts
Recovery
Tribunals
by
any
person,
including the borrower aggrieved by any of
measures referred to in Section 13(4) of the
SARFAESI Act.

22. Now, the Court proceeds to
consider the judgment delivered by the Full
Bench of the Delhi High Court in the case
of Amish Jain (supra), on which the
learned counsel for the opposite parties has
placed much reliance and which has also
been relied upon by the Appellate Tribunal.

23. In Amish Jain (supra), the
question before the Full Bench was, if an
application
under
Section
17(1)
SARFAESI Act can be filed, not only in
the Debts Recovery Tribunal having
jurisdiction where the mortgaged property
is situated, but also in DRT having
jurisdiction where the branch of the Bank /
Financial Institution, which has disbursed
the loan is situated, as well as in all DRTs,
which would have jurisdiction in terms of
Section 19(1) of The Recoveries of Debts
Due to Banks and Financial Institutions
Act, 1993 (DRT Act) read with Rule 6 of
the Debts Recovery Tribunal (Procedure)
Rules, 1993 (DRT Rules).

24. In Amish Jain (supra), it was
held as under in paragraph Nos. 16 to 24:

16. We are therefore of the view
that the question of territorial jurisdiction
for the remedy of appeal provided in
Section 17(1) of the SARFAESI Act has to
be construed in the said light and not in the
light of the DRT Act making a departure
from the principle enshrined in Section 16
of the CPC.

17.
Section
17(1)
of
the
SARFAESI Act provides for filing of the
appeal / application thereunder not to any
DRT but only to the "DRT having
jurisdiction in the matter". However, such
jurisdiction is not specified. To determine
which DRT will have jurisdiction in the
matter, we have to find as to what is to be
the matter for adjudication in a proceeding
under Section 17(1) of the SARFAESI Act
and what relief the DRT is empowered to
grant in the said proceeding. The scope of
a proceeding under Section 17(1) of the
SARFAESI Act is described in Section
17(2) of the SARFAESI Act as of "whether
any of the measures referred to in SubSection (4) of Section 13 of the SARFAESI
Act taken by the secured creditor for
enforcement of security are in accordance
with the provisions of the SARFAESI Act
and the Rules made thereunder". The
10 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
977
measures which the Bank / Financial
Institution is empowered to take under
Section 13(4) of the SARFAESI Act are of
taking over possession or management as
aforesaid of the secured asset. Of course,
the action of so taking over possession or
management is to be preceded by (a) the
borrower under a liability under a secured
agreement
making
any
default
in
repayment of the secured debt or any
installment thereof; (b) the borrowers
account in respect of such debt being
classified as non-performing asset; (c) the
Bank / Financial Institution requiring the
borrower by notice in writing to discharge
in full his liabilities within sixty days and
giving details of the amount payable and
the secured asset intended to be enforced in
the event of non-payment; d) consideration
of representation if any made by the
borrower thereagainst and communication
to the borrower of the reasons for nonacceptance of such representation. Though,
it could well be argued that the DRT within
whose
jurisdiction
Bank
/
Financial
Institution to whom the borrower is
indebted is situated, would also have
jurisdiction to adjudicate whether the
action under Section 13(4) of taking over
possession / management is in accordance
with the aforesaid procedure but the
explanation to Section 17(1) of the
SARFAESI
Act
clarifies
that
the
communication of the reasons to the
borrower
for
not
accepting
the
representation or the likely action of the
Bank / Financial Institution shall not entitle
the borrower to make an application under
Section 17(1) of the SARFAESI Act. Thus
the cause of action for the appeal under
Section 17(1) of the SARFAESI Act is the
taking over of the possession / management
of the secured asset and which cause of
action can be said to have accrued only
within the jurisdiction of the DRT where
the secured asset is so situated and the
possession thereof is taken over. We are
thus of the view that it is the said DRT only
which
can
be
said
to
be
having
"jurisdiction in the matter" within the
meaning of Section 17(1) of the Act.

18. Further, the relief to be
granted by the DRT in an appeal under
Section 17(1) of the SARFAESI Act, if
successful, is (under Section 17(3)) of
restoration of possession / management of
the secured asset to the borrower and to
pass such order as it may consider
appropriate and necessary in relation to
the recourse taken by the Banks / Financial
Institution under Sub-Section (4) of Section
13 of the SARFAESI Act. This relief also,
we find, the DRT within whose jurisdiction
the secured asset to be so restored to the
borrower is situated, to be the most
competent to grant and implement. The
orders which the DRT under Section 17(3)
of the SARFAESI Act may be required to
pass may also entail exercising jurisdiction
over the CMM / DM which is approached
by the Bank / Financial Institution for
assistance for taking over possession /
management. Notice in this regard may be
taken of Kanaiyalal Lalchand Sachdev Vs.
State of Maharashtra (2011) 2 SCC 782
and of United Bank of India Vs. Satyawati
Tandon (2010) 8 SCC 110 suggesting that
appeal under Section 17(1) can be filed
after the Bank has filed application under
Section
14,
even
if
possession
/
management has not been taken. In such a
situation, DRT may be required to issue
direction to the CMM / DM approached by
the Bank / Financial Institution. As already
noticed in the referral order dated
26.07.2012, Section 3(2) of the DRT Act
requires the notification constituting the
DRT to specify the area within which the
said DRT shall exercise jurisdiction. A
978 INDIAN LAW REPORTS ALLAHABAD SERIES
DRT at Delhi, as in the facts of the present
case, would have no jurisdiction over the
DM at Meerut or for that matter over the
property at Meerut. We are of the view that
exercise of jurisdiction under Section 17(1)
of the SARFAESI Act by DRTs of a place
other than where the secured asset is
situated is likely to lead to complexities and
difficulties and which are best avoided. It
may also be mentioned that the remedy
under Section 17(1) is available not only to
the borrower or mortgagor, but also to any
other person aggrieved from the measures
under Section 13(4). In Satyawati Tandon
supra it was invoked by the guarantor. If it
were to be held that more than one DRT
will have jurisdiction, it may also lead to
remedy under Section 17(1) against same
action under Section 13(4) being invoked
by different persons before different DRTs.

There is no provision in the DRT
Act for transfer of proceedings from one DRT
to
another.
The
Supreme
Court,
in
Authorized Officer, Indian Overseas Bank
Vs. Ashok Saw Mill (2009) 8 SCC 366 has
held the scope of a proceeding under Section
17(1) to be extending to scrutinizing even the
steps taken by the Bank / Financial Institution
subsequent to measures under Section 13(4).
Such scrutiny by the DRT may entail
adjudication of disputes as to preservation
and protection of the secured asset (see Rule
4 of the Security Interest (Enforcement)
Rules, 2002), valuation of the secured asset
(Rule 5), sale thereof (Rules 6 to 8) and in the
case of the borrower being a company in
liquidation, distribution of sale proceeds
thereof or between more than one secured
creditor of the secured asset (see Section
13(9) of the SARFAESI Act). Such scrutiny by
DRT of post Section 13(4) measures may yet
further enlarge the number of persons
interested in invoking the remedy under
Section 17(1). Also, all these disputes bear
closest proximity to the place where the
secured asset is situated and the DRT having
jurisdiction over that place would be the most
suitable DRT to entertain such disputes.

19. As far as Section 17(7) of the
SARFAESI Act requiring disposal of appeals
under Section 17(1) of the SARFAESI Act,
"as far as may be" in accordance with the
provisions of the DRT Act and the Rules
framed thereunder is concerned, though the
learned Single Judge of this Court in
Upendra Kumar Vs.