Plea In Kerala High Court Challenges Tribunal Reforms Act, Appointments Of DRT Ernakulam Presiding Officer & DRAT Chennai Chairperson

The plea states that the two appointments were not in accordance with the directions laid down by the Supreme Court in Rojer Mathew v South Indian Bank Ltd., mandating selection of tribunal members to be judicially dominated and overseeing of appointments by an independent National Tribunals Commission (NTC). It is submitted that these requirements were not followed in the case of constitution of the DRT Ernakulam and the appointment of 4th respondent (Su Williahm) as Presiding Officer.

The petitioners are alleging that the DRT, Ernakulam (5^th respondent) has not given them a fair trial and that it was behaving as if it is an appendage to the Finance Ministry. It is also submitted that the lead national bank in the area sponsors the temporary staff of the DRT with the Central Government taking over the supervision of the tribunal.

“The Central Government therefore has taken over the function of supervision of Debt Recovery Tribunals and this attitude of the Government has given an impression to the 5th respondent that it is duty bound to obey the directions of the Central Government and do all necessary to help the Bank to recover the debt without any adjudication,” states the plea.

The writ prays for a declaration that proviso to Section 3(1) along with Sections 3(7), 5 and 7(1) of the Tribunal Reforms Act 2021 and Rules thereunder to be unconstitutional and ultra vires Articles 14, 21 and 50 of the Constitution. It also sought for a declaration that the appointments of 4th respondent as presiding officer of the DRT, Ernakulam and 2nd respondent as the chairperson of DRAT, Chennai to be unconstitutional.

A prayer is also made to direct the Central Government to constitute a NTC for appointments in the DRT and DRAT. It also sought a writ of prohibition to the Finance Ministry to refrain from exercising administrative control over the DRAT, Chennai.

The petitioners in the case include Jis International Exports Pvt. Ltd., its managing director, director and another company managed by them.

According to the plea, the petitioners had availed a cash credit and a working capital term loan from Indian Overseas Bank. Thereafter, alleging default in repayment, the bank had issued a demand notice and took symbolic possession of six items of the petitioners' property. However, the petitioners are contending that the alleged mortgage claimed by the bank is not approved.

The plea also makes out that in addition to the above, the bank also issued a prohibitory order to the registered tenant of the 1^st petitioner and thereupon, the tenants have ceased to pay monthly rent to the petitioners. Challenging the order, a SA is filed before the DRT. While this case was pending, the bank instituted proceedings before the Magistrate Courts having jurisdiction to take physical possession of the property.

At this juncture, the petitioner approached the High Court vide OP(DRT) No. 1/2022 since there was no regular sitting in the DRT to avail interim relief to stall physical possession. Accordingly, a stay was granted for some time to enable the petitioners to approach the DRT and the petitioners sought stay of physical possession by Magistrates.

The DRT granted only a conditional stay on payment of around Rupees 5.4 crores. In between, while the plea for stay was posted for hearing, the bank obtained order for physical possession, it is stated in the plea. Another set of litigation followed this.

In the present proceedings, the petitioners have asked for an interim relief to stay the proceedings for taking physical possession of their properties.

When the matter came up for consideration on Friday (October 10), Justice Mohammed Nias C.P. observed:

"Any measures taken by the respondents pending the writ petition will be subject to the result of the writ petition."

The matter is posted on November 3 for further consideration.

The petition is moved by Advocates Nisha George, George Poonthottam (Sr.) and Kavya Varma M.M.

Case No: WP(C) No. 37508/2025

Case Title: M/s Jis International Exports Pvt. Ltd. and Ors. v. Union of India and Ors.

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