When jurisdiction is challenged, the same should be decided first

 

When jurisdiction is challenged, the same should be decided first.

When jurisdiction of a Debts Recovery Tribunal (DRT) is itself challenged, the same should be decided before any other issue is taken up. A DRT cannot proceed to hear a case if its jurisdiction to hear a case itself is under question. DRTs can hear a case subject to provisions of the RDB Act. For this the claim must be related to a Banking claim. The claim amount should not be less than Rs. 10 lakhs, and the defendants must be within its jurisdiction. Also, cases which are pending in the civil Court would be transferred to the DRT if any of the above conditions are satisfied. Cases which are in appeal stage cannot also be transferred to the DRTs. Amongst other things, a case which has already been decided by the civil court cannot be taken up the DRT. If jurisdiction of the DRT to hear a case is challenged on the ground that it has already been decided by the civil court, or is pending in a civil court, that issue should be first decided, and only then can the DRT proceed to hear further. One such case came up before the DRAT Allahabad. A bank had filed a civil case against a borrower for the recovery of its dues. The case came to be dismissed as the bank failed to pay the court fees in time. After some time the bank filed an fresh application for restoration of the case. In the meanwhile DRT was constituted. The case was then transferred to the DRT. The DRT refused to entertain the case and transferred it back to the civil court. The civil finally dismissed the case in 2004 for want of steps. In the meanwhile, in the year 2000 the Bank filed a fresh application before the DRT. The DRT passed an ex-parte order and issued a Recovery Certificate as well. The borrower then approached the DRT and sought restoration of the application. Amongst the grounds agitated by the borrower, one was that the DRT had no jurisdiction hear the matter as the case was pending before the civil courts. This restoration application also came to be dismissed. In appeal, the DRAT set aside the orders passed by the DRT. It was held, amongst other things, that the question of jurisdiction is a very crucial which has to be decided first. Whether, on the day the impugned order was passed, the DRT had jurisdiction or not should be decided first. This can be done only if the parties are given an opportunity to file their written statements and are heard. If the DRT did not have jurisdiction to hear the case itself in the first place, it could not have placed the borrowers ex-parte and also could not have passed any orders itself. It is now a well settled principle when jurisdiction of a DRT is challenged, the same should be heard and disposed off in the first instance. Only then can the DRT proceed to hear other matters. [Read full text of B.J. Nagrath & Others, Appellants v. Bank of India, Respondent dated 09-11-2005]