1. Heard Counsel, and perused the records. This appeal has been presented against the impugned Order dated 15.7.2004 passed by the learned Presiding Officer of the Debts Recovery Tribunal-I, Delhi (hereinafter referred to as 'the DRT') dismissing the application LA.826/2004 filed on behalf of the appellant-defendants to direct the return of the O.A. for presentation to the Tribunal exercising the jurisdiction over Noida (Uttar Pradesh).
2. The respondent-Federal Bank (hereinafter referred to as 'the respondent-bank') filed O.A. 103/2001 before the DRT for the recovery of the money stated to be due to it. In paragraph 16 of the O.A. the respondent-bank has alleged about the creation of an equitable mortgage in its favour in respect of an immovable property at Noida. The respondent-bank has also made a prayer in the O. A. for the sale of the said property for the realisation of the amount stated to he due to it.
The learned Counsel for the appellants contends that Section 16 of the Civil Procedure Code provides that a suit for sale of the .mortgaged immovable property shall be instituted in the Court within the local limits of whose jurisdiction the property is situated, and, therefore, the O.A should have been filed before the Competent Court which has jurisdiction over Noida where the mortgaged property is situated. But, Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the Act') provides that the DRT shall not be bound by the procedure laid down by the Civil Procedure Code. Of course, the learned Counsel for the appellants contends that the procedure prescribed in the Code of Civil Procedure is only based upon the principles of natural justice, and in support of his contention he relies upon the decision of the Hon'ble Supreme Court in Sangram Singh v. Election Tribunal, AIR 1955 SC 425. He also relics upon the decisions of the Hon'ble Supreme Court in Allahabad Bank v.Radha Krishna Maity,Industrial Credit & Investment Corporation of India Ltd. v. Grapco Industries Ltd., II (1999) BC 313 (SC)= V (1999) SLT 310 = (1999) 4 Supreme Court Cases 710, and contends that the Debts Recovery Tribunal need not be bound by the procedure laid down by the Civil Procedure Code, but, it does not, at the same time, mean that it will not have jurisdiction to exercise the power of the Court as contained in the Civil Procedure Code. He also contends that the Debts Recovery Tribunal can even travel beyond the Code of Civil Procedure, but the only fetter would be that it should observe the principles of natural justice. But; these decisions relate to the extent of power of the Debts Recovery Tribunal to pass Order in accordance with the principles of natural justice, and not with regard to the territorial or pecuniary jurisdiction of the Debts Recovery Tribunal. Therefore, these decisions will not help the appellants.
3. But, Section 19 of the Act provides that a bank or financial institution can make an application to the Tribunal within the local limits of whose jurisdiction the defendant or any of the defendants actually and voluntarily resides or carries on business or personally works for gain at the time of making the application, or where the cause of action arose, either whole or in part.
4. Therefore, if the defendant or any of the defendants resides within the local limits of a particular DRT, then the bank or financial institution can file the O.A. before that Tribunal in view of the provisions contained in Section 19 of the Act. In the O.A. the respondent-bank has given the address of the office of the first defendant as at B-381, New Friends Colony, New Delhi, and the residential addresses of the defendants 2 to 4 also as the same. Though in paragraph 5 of I.A. 826/2004 filed on behalf of the appellants before the DRT it has been stated that none of the defendants actually and/or voluntarily resides or carries on business or personally works for gain within the local limits of the DRT at Delhi, there is no mention as to where they reside. So, this denial without any details asto where they actually reside will not be of any avail. Of course, in another paragraph of the said application it has been stated that from the O.A. itself it is apparent that their address is A-16, Sector-6, Noida (U.P.). But, it has not been stated that any of the defendants resides there. In the O.A. the residential addresses of the defendants 2 to 4 have not been stated to be A-16, Sector 6, Noida (U.P.). It is the address of the factory of the 1st defendant-company.
5. Further, I have summoned the records of the DRT also, and I find from the Part-II records of the DRT that at least three affidavits dated 15.10.2001, 25.7.2002 and 21.8.2003 filed by the 2nd appellant-Kamal Sahni, wherein she has stated that she is a resident of B-381, New Friends Colony, New Delhi. Even in the appeal the address for the 1st appellant-company is given as that of office at A-16, Sector-6, Noida. For the other two appellants, their residential addresses have not been given, but it is mentioned that they are having office at A-16, Sector-6, Noida. Their residential addresses have not been given. In these circumstances, it has to be taken that the individual-defendants are residents of B-381, New Friends Colony, New Delhi. Therefore, in view of the provisions contained in Section 19 of the Act, it is clear that the Tribunal at Delhi has the jurisdiction to entertain the O.A.6. Of course, the learned Counsel for the appellants contends that the proceedings involved interpretation of the local laws of Uttar Pradesh, and it is, therefore, necessary to engage Counsel who practices essentially in Uttar Pradesh, and that it is also difficult for the appellants to engage a Counsel from Uttar Pradesh for each of the hearings if the O.A. is heard at Delhi. He contends that in Order that the appellants are not to be troubled, the O.A. should be ordered to be returned for presentation to the Tribunal having jurisdiction over Noida. He also relics upon the decision of the Hon'ble Supreme Court in Union of India v. Ladulal Jain, AIR 1963 Supreme Court 1681. In the said case the Hon'ble Supreme Court, while dealing with Section 20 of the Civil Procedure Code, had observed that the principle behind Clauses (a) and (b) of Section 20 of the Civil Procedure Code is that the suit should be instituted where the defendant is able to defend the suit without undue trouble. The Hon'ble Supreme Court also held that the expression 'voluntarily resides' or 'personally works for gain' cannot be appropriately applied to the case of the Government. This decision again does not help the learned Counsel for the appellants in view of the fact that the O.A. has been filed before a Tribunal within whose local jurisdiction the appellants 2 and 3 reside and the 1st appellant-company has its office.
7. This apart, the learned Presiding Officer of the DRT has also observed that the documents have been executed by the defendants within the territorial jurisdiction of Delhi, and that gives rise to cause of action within the jurisdiction of the Tribunal at Delhi. A perusal of the records of the DRT also shows that there is a hypothecation agreement executed by the 1st appellant-company on 23.3.1998. It specifically says that it was executed at Delhi. There is also a Promissory Note dated 23.3.1998 specifically mentioning the place as New Delhi. There is also a single counter-guarantee dated 23.3.1998, and the place has been shown as New Delhi. There arc also certain guarantee deeds dated 23.3.1998 stated to have been signed at Delhi.
Therefore, it is clear that some of the documents have also been executed at Delhi and, therefore, it is evident that part of cause of action has also arisen within the jurisdiction of the Tribunal at Delhi. But, the learned Counsel for the appellants contends that the factory is at Noida, and the contract has to be performed at Noida, and, therefore, the cause of action arose within the local limits of the Tribunal which exercises the territorial jurisdiction over that area. He, therefore, contends that Clause (c) of Section 19 of the Act should prevail over the Clauses (a) and (b) of Section 19 of the Act.
Section 19 reads as follows: (1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction-- (a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or 8. From the reading of this Section it is clear that the Tribunal within whose local limits defendant or any of them voluntarily resides or carries on business or personally works for gain will have jurisdiction to entertain the O.A. in view of the provisions contained in Clauses (a) and (b). The Tribunal within whose jurisdiction the cause of action, cither wholly or in part, arose will also have the jurisdiction to entertain the O.A. in view of Clause (c). But, it does not mean that only the Tribunal within whose jurisdiction the cause of action arose will have the jurisdiction to entertain the O.A. The use of the term 'or' at the end of each of the Clauses (a) and (b) clearly shows that the O.A. can be filed before the Tribunal within whose jurisdiction defendant or any of them voluntarily resides or carries on business or personally works for gain, or where the cause of action arose, either wholly or in part. Therefore, the convention that Clause (c) of Section 19 overrides other Clauses (a) and (b) of that section, cannot be accepted.
9. Of course, the learned Counsel for the appellants relies upon the decision of the Hon'ble Supreme Court in South East Asia Shipping Co.
Ltd. v. Nav Bharat Enterprises Pvt. Ltd., II (1996) CLT 68 (SC)= (1996) 3 Supreme Court Cases 443. But, that was a case where the contract was executed at, and the performance of the contract was also required to be done in Bombay. Only the bank guarantee was executed at Delhi, and even that was transmitted to Bombay for performance of the contract. It is in these circumstances the Hon'ble Supreme Court held that mere execution of the bank guarantee at Delhi would not give rise to a cause of action there, and that the suit at Delhi was not maintainable.
10. This decision will have no application to the facts of this case.
Because, the 1st appellant has its Office at Delhi. The appellants 2 and 3 reside within the jurisdiction of the Tribunal at Delhi. As pointed out already, even some of the documents have been executed at Delhi by the appellants. Therefore, this decision will not be of any help to the appellants.
11. Of course, the learned Presiding Officer of the DRT has also held that the debtor has to seek the creditor and pay the money and, therefore, the Tribunal at Delhi will have the jurisdiction. The learned Counsel for the appellants relies upon the decision of the Hon'ble the then Punjab High Court in Niranjan Singh v. Jagjit Singh, AIR 1955 Punjab 128, wherein it was held that this principle will not be applicable for determining the local jurisdiction of the Courts.
But, even otherwise, in view of what I have pointed out, it is clear that the Tribunal at Delhi will have the jurisdiction to entertain the O.A.12. Of course, the learned Counsel for the appellants also contends that there were certain other proceedings between the parties before the Hon'ble Allahabad High Court, and that even proceedings for rehabilitation of the 1st defendant are pending before the competent authority at Meerut (U.P.), and, therefore, this O.A. also should have been filed before the competent' Tribunal which exercises jurisdiction over Noida. But, in view of the provisions contained in Section 19 of the Act, which entitles the bank to file the O.A. before the DRT at Delhi, the fact that certain other proceedings were taken before the Hon'ble Allahabad High Court and proceedings for rehabilitation are pending before the competent authority at Meerut (U.P.) will not be of any help to the appellants to say that this O.A. should also be filed before a Tribunal which exercise jurisdiction over Noida.
13. Taking into consideration all these aspects, I am of the view that the appeal has to fail. Accordingly, the appeal is dismissed.