Isabella Mariam

The High Court of Calcutta Single Bench of Justice Hiranmay Bhattacharyya held that an application under Article 227 of the Constitution of India cannot be entertained when it seeks to challenge an order passed by the Debts Recovery Appellate Tribunal located within the territorial limits of this Court, if such order arose out of proceedings from a Debts Recovery Tribunal situated beyond its jurisdiction. The Court dismissed the application on the ground of lack of territorial jurisdiction, directing the petitioner to approach the appropriate forum in the State within whose limits the original tribunal is located. The Court made it clear that it had not entered into the merits of the matter and confined its adjudication solely to the issue of jurisdiction.

The dispute originated when the Indian Bank filed an application before the Debts Recovery Tribunal (DRT), Guwahati under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The application sought issuance of a recovery certificate for a debt amounting to Rs. 8,49,31,576.03 as of July 28, 2019, against defendant numbers 1 to 8. The claim also included pendente lite and future interest at contractual rates until realization, along with other reliefs.

Also Read: Supreme Court | S.100 CPC Bars High Courts from Introducing New Grounds Without Pleadings | Kerala HC’s Reliance on S.67 Succession Act Set Aside | Testamentary Succession Restored

The facts of the case reveal that on March 17, 2008, the first defendant company, through its Directors, approached the Bank for financial assistance of Rs. 9.75 crores as term loan. The sanction letter dated March 10, 2009, granted the facility. Loan documents were executed, providing security through hypothecation of movable assets and equitable mortgage of immovable property. Later, by agreement dated August 24, 2012, a pari passu charge was created with another financial institution.

The Bank restructured the loan in March 2014 by sanctioning a Funded Interest Term Loan of Rs. 79 lakhs. Acknowledgements of debt were executed on multiple occasions, including March 23, 2010, March 30, 2013, and October 6, 2016. The loan accounts turned into Non-Performing Assets on March 31, 2016, and notices demanding repayment were issued. Despite receipt, the defendants did not clear the dues.

The DRT Guwahati proceeded ex parte, and on November 24, 2021, directed the defendants to pay Rs. 8,48,31,576.03 with interest at 13% per annum from July 29, 2019, until realization. A recovery certificate was ordered to be issued.

The petitioner, who claimed to be an ex-director of the borrowing company, challenged the ex parte judgment before the Debts Recovery Appellate Tribunal (DRAT), Kolkata. The appeal was registered as Diary No. 502 of 2024. An application for waiver of pre-deposit was filed but was disposed of by order dated July 5, 2024, requiring a 20% pre-deposit of Rs. 8.55 crore within four weeks. Non-compliance led to dismissal of the appeal on September 4, 2024.

Challenging the orders of July 5 and September 4, 2024, the petitioner approached the Calcutta High Court under Article 226. The writ petition was later converted to an application under Article 227. A preliminary objection was raised regarding maintainability based on territorial jurisdiction.

Arguments were advanced by counsel for both parties. The petitioner’s counsel argued that since DRAT Kolkata is situated within the territorial jurisdiction of this Court, the Calcutta High Court has superintendence over it. Reliance was placed on precedents such as Collector of Customs v. East India Commercial Co. Ltd. (AIR 1963 SC 1124) and Kunhayammed v. State of Kerala (2000) 6 SCC 359, stating the doctrine of merger. It was submitted that the situs of the appellate tribunal should determine jurisdiction.

The Bank’s counsel, however, argued that the application was not maintainable, since the original adjudication occurred before DRT Guwahati, which lies outside the jurisdiction of the Calcutta High Court. Reliance was placed on Navin Jain v. State Bank of India (AIR 2002 Cal 223), Ambica Industries v. Commissioner of Central Excise (2007) 6 SCC 769, and Siddhartha S. Mookerjee v. Madhab Chand Mitter (2024 SCC Online SC 4285). It was argued that in cases where an appellate tribunal has jurisdiction over tribunals situated in multiple states, the High Court with jurisdiction over the original tribunal is the correct forum.

Justice Bhattacharyya observed that the issue for determination was confined to territorial jurisdiction under Article 227 of the Constitution in respect of orders passed by DRAT Kolkata in appeals arising from DRT Guwahati. The Court stated: “The ultimate object behind challenging the ex parte judgment and order passed by the DRT before the DRAT Kolkata is to set aside the order passed by the DRT, Guwahati.”

The Court noted the principle of merger but clarified its limits. “It is well settled that once an appeal is decided by an appellate authority, the order of the original authority gets merged with the order of the appellate authority in view of the doctrine of merger and the order of the original authority no longer remains and it is the order of the appellate authority which prevails.” However, it added, “The said decision is, however, not an authority for the proposition that the High Court within whose territorial limits the Appellate Tribunal is located would have the power of superintendence under Article 227.”

On precedents, the Court referred to Ambica Industries and ABC Papers Ltd., stating: “When the appellate court exercises a jurisdiction over a tribunal situated in more than one State, the High Court situated in the State where the First Court is located should be considered to be the appropriate appellate authority.” The Court stated the importance of certainty of forum, quoting: “Certainty of forum would involve unequivocal vesting of jurisdiction to adjudicate and determine the dispute in a named forum. Such an interpretation was held to be clearly against the interest of justice.”

Addressing the petitioner’s argument regarding interlocutory orders, the Court held: “This Court is not inclined to accept such submission as in the event the orders impugned are set aside…the appeal would revive and the same would have the effect of destroying the finality attached to the order passed by the DRT.”

Also Read: Calcutta High Court | Section 94 BNSS Upheld As Valid Power To Call For Documents | Court Declines To Quash Notice In Scholarship Records Investigation

The Court directed: “This Court holds that this application under Article 227 of the Constitution of India challenging the orders of the Debts Recovery Appellate Tribunal, Kolkata in an appeal arising out of an order passed by the DRT, Guwahati is not maintainable before this Court.”

“The petitioner is to approach the High Court of the State within the territorial limit of which the DRT Guwahati is located.”

“It is, however, made clear that this Court has not entered into the merits of the application. Petitioner is left free to approach the appropriate forum in accordance with law. There shall be, however, no order as to costs.”

Advocates Representing the Parties

For the Petitioner: Mr. Jishnu Saha, Senior Advocate; Mr. Ishaan Saha; Mr. Rishab Chandra; Mr. Ibrahim Sheikh; Mr. Ramendu Agarwal
For the Respondents: Mr. S. Pal Choudhuri; Ms. Tithi Paul; Ms. Shilpi Paul

Case Title: Rohit Jain vs. Indian Bank & Ors.
Neutral Citation: 2025: CHC-AS:1705
Case Number: C.O. 1758 of 2025
Bench: Justice Hiranmay Bhattacharyya