Gujarat High Court seeks Central government response on DRT jurisdiction change in matters above ₹100 crores

The Gujarat High Court on Thursday issued notice to the Central government on a petition challenging an October 4 notification transferring all matters involving debt amount of ₹100 crores and above to the Debt Recovery Tribunals (DRT) benches at Mumbai, Chennai and Delhi. .A bench of Chief Justice Aravind Kumar and Justice Ashutosh J Shastri briefly heard advocates Masoom Shah and Vishwas Shah, before issuing notice to the Central government seeking its response on the petition..The petitioner Om Fresh Fruits Private Limited, took exception to the Central government's notification dated October 4, 2022 revising the jurisdiction of the DRTs. By virtue of this notification, the Union Ministry of Finance revised the jurisdictions of the DRTs at Mumbai, New Delhi and Chennai. Only these DRTs will now adjudicate cases wherein the amount involved is more that ₹100 crores.All other DRTs will deal with the applications involving less than ₹100 crores.In its plea, the petitioner contended that as per Section 19 of the Recovery of Debts and Bankruptcy Act, an application by the bank has to be filed before the DRT within whose 'local limits' the branch of the bank is located or where the defendant resides or carries on business or where the cause of action arose. The plea emphasised on the words 'local limits' as opposed to 'pecuniary limits'."The notification is antithesis to the will of the parliament. It is settled law that subordinate law cannot override statutory law," it was submitted.It was also contended that Section 17(1A)(b) of the Act of 1993 requires DRT to have circuit hearings to further access to justice. But the notification goes diametrically against the said objective laid down by the parliament, it was stated.Pertinently, the plea said that the Supreme Court has on numerous occasions held that the government should set up a permanent bench of tribunal wherever the seat of the High Court is located.However, what the notification has done in the present case is to take away the jurisdiction of the DRT at Ahmedabad and give it to another State, the plea pointed out..Pertinently, the plea also challenged Section 3 of the 1993 Act to the extent it permits classification on the basis of amount of debt. "Further, the power to establish the jurisdiction cannot be given to the Central government as the same is the owner/ controls maximum banks (i.e. nationalised banks) and hence, there is conflict of interest and bias," the petition said..Advocate Shah had, on November 7, mentioned the matter before CJ Kumar's bench seeking an urgent hearing, however, the request was not granted. The counsel had emphasised that any notification or decision usually has a prospective effect. "The DRT Ahmedabad was seized with my matter in which the amount involved is more than ₹100 crore. But because of this notification, now my matter has been transferred to DRT Mumbai," Shah had pointed out while emphasising that the notification cannot be applied retrospectively.