Saurabh Malik
Tribune News Service
Chandigarh, September 8
The Punjab and Haryana High Court has ruled that the jurisdiction of the civil court would be completely barred for adjudication of matters falling within the jurisdiction of the Debt Recovery Tribunal.
The Bench of Justice Jaswant Singh and Justice Harinder Singh Sidhu also made it clear that civil court jurisdiction could be invoked only in limited cases, such as matters where the action of the secured creditor was alleged to be fraudulent or their claim required probe being absurd and untenable.
The Bench added the procedure before the tribunal was “more of a summary nature”. As such, civil court jurisdiction would be permitted to be invoked in cases involving prima facie substantial allegations of fraud. This was because full length evidence would be required to prove such an allegation, which may not be effectively possible during a summary trial before the tribunal.
“The civil court would not have jurisdiction to negate any right of the secured creditor under the Securitisation Act, 2002, qua the secured asset in a civil suit instituted by the borrower/guarantor/any third party qua the secured asset,” the Bench added. A secured creditor is a lender, generally a bank, with the benefit of a security interest over some or all of the assets of the debtor.
The Bench also defined the scope of powers of the District Magistrate exercising powers under Section 14 of the Securitisation Act, 2002, while adding that the provision’s purpose was to provide assistance to the secured creditor to take physical possession of the secured asset.
The Bench added a District Magistrate “would not involve in any process of adjudication of any inter se rights of the parties, while examining any application under Section 14.” A proviso made it mandatory to record the District Magistrate’s satisfaction. But it was to be restricted to factual correctness of the affidavit by the secured creditor. He could not examine the legal validity of the steps taken by the secured creditor. The aggrieved borrower could approach the tribunal. The secured creditor could move the High Court, if the District Magistrate failed to pass the order, or it was not being implemented.
Civil court can’t decide cases in tribunal’s jurisdiction: Punjab and Haryana High Court
{$excerpt:n}
