DRTs Not Barred From Deciding Jurisdictional Issues As 'Preliminary Issues', Says Gujarat HC [Read Judgment]

The Gujarat High Court has held that the Debt Recovery Tribunals are not barred from deciding a 'preliminary issue' if it is one which goes to the root of the matter and strikes at the very jurisdiction of the Tribunal to decide the application.The bench comprising of Justice Harsha Devani and Justice Vireshkumar B. Mayani was considering a petition seeking direction to the Debts Recovery Tribunal-1, Ahmedabad to frame, consider and decide some issues raised by petitioners as preliminary issues. The bench agreed with the DRT view that all the issues I to XII as referred to in the applications are not issues attracting jurisdiction or bar under any statute and all these issues are mixed questions of law and facts. However, the bench observed: Prima facie, the Act does not contemplate deciding issues as preliminary issues by the Debts Recovery Tribunal. This is more so considering the object behind the enactment, viz., setting up of Special Tribunals for recovery of dues of the banks and financial institutions by following a summary procedure. The intention of the legislature in enacting the Act is to provide for expeditious adjudication and recovery of debts due to banks and financial institutions; therefore, if all the provisions of the Code are applied to proceedings before the Debts Recovery Tribunal, it would defeat the very object of the enactment. Nonetheless, while ordinarily the Debts Recovery Tribunal should not decide issues as preliminary issues, in the opinion of this court, if the issue raised is one which goes to the root of the matter and strikes at the very jurisdiction of the Tribunal to decide the application, the court is of the view that the Tribunal is not barred from deciding such issue as a preliminary issue merely because section 22 of the Act does not specifically refer to the power to frame and decide preliminary issues. However, such power should be exercised sparingly, only in cases where the question of the jurisdiction of the Debts Recovery Tribunal to decide the case is involved. Dismissing the petition on the ground that the issues raised are not touching upon the question of jurisdiction of the DRT, the bench further observed: In the facts of the present case, the petitioners have not contended that the Tribunal lacks the jurisdiction to entertain and decide the application under section 19 of the Act; the preliminary issues raised by the petitioners do not touch upon the jurisdiction of the Tribunal to decide the application made by the respondents; and it has also not been contended that the proceedings are barred by any provision of law. Under the circumstances, considering the nature of the issues raised by the petitioners as preliminary issues, even if the same were pure questions of law, the same would not fall within the scope and ambit of Order XIV rule 2 of the Code.Click here to Read/Download Judgment

DRTs Not Barred From Deciding Jurisdictional Issues As 'Preliminary Issues', Says Gujarat HC [Read Judgment]

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" However, such power should be exercised sparingly, only in cases where the question of the jurisdiction of the Debts Recovery Tribunal to decide the case is involved"

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