Supreme Court Seeks Centre's Stand On Legality Of Attaching DRTs In One State To Those In Other States

The Petition has been filed by M.P State Bar Council through AOR Mrigank Prabhakar against the Delhi High Court's 9^th July order through which the decision on the interim application (seeking stay on the notification) was deferred by six weeks, whilst issuing notices to the Central government, but the prayer for interim stay of the notification wasn't considered.

The Bench of Chief Justice of India, N. V. Ramana, and Justice Surya Kant issued the notice and sought the Centre's response by 6th August 2021.

Senior Advocate Nidhesh Gupta & Advocate Siddharth R. Gupta appeared on behalf of the M.P State Bar Council before the Supreme Court.

The plea before the Court

The plea challenges the being ultra vires and contrary to Section 4 of Recovery of Debts Due to Banks (RDDB Act, 1993) on the ground that the act prohibits the Centre from vesting the powers of DRT of any state to a DRT situated in another state, but rather obliges the Centre to vest it on any tribunal established by its situated within the boundaries of the same state.

The SLP of the Bar Council has also claimed that for the last more than one-year DRT, Jabalpur had been lying vacant.

The plea argues that the Delhi High Court should have decided the issue urgently, at least on the question of stay of the operation of impugned notification issued by the Ministry of Finance, GOI.

The plea submits that instead of deciding the Stay Application expeditiously, the High Court posted it after six weeks awaiting the reply from the Central Government.

The plea further avers that:

"DRTs adjudicate disputes between Banks, Financial Institutions and Borrowers arising under the RDDB Act, 1993 and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 and off lately have come to play important role in the downward trending economic condition of the country, with many commercial entities shutting shop. Disputes arising under Securitisation Act are a major litigation before the DRTs."

Therefore, the Petition before the High Court pleaded that because of the absence of a regular full time incumbent (Presiding Officer) for the Tribunal catering to M. P. & C. G. for almost a year, the pendency has hit the maximum with the Centre completely unmindful of it.

The Petition also pleaded that shifting DRT more than 500 kilometers away was also making it unaffordable, inaccessible, and inefficacious.

Nidhesh Gupta, Senior Counsel appearing for the M.P. State Bar Council argued before the Supreme Court that in fact, the DRT Lucknow had been conferred the jurisdiction which it cannot possess under the parent enactment, RDDBFI Act and therefore it was necessary that the notification has to be stayed in its operation and effect for perpetuating illegality.

On the submissions of the Counsel, the Supreme Court issued notices to the Centre to respond by 6th August 2021.

Case title - State Bar Council of Madhya Pradesh v. Union of India

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