In the matter of Ramsay Exim and Technology Private Limited v. ICICI Bank Limited, the issue which came for consideration before the Calcutta High Court was whether separate notices under Section 13(4) of the SARFAESI Act, pertaining to different secured assets for a single debt, can be challenged in a single application under Section 17 of the SARFAESI Act.

It was contended by the respondents that if there is a single debt secured by several assets, separate applications have to be filed by the petitioner for each secured asset under Section 17 in the tribunal having jurisdiction in respect of such assets.

The aforesaid contention was rejected by the Court, which opined that for a single debt, the borrowers are entitled to file a single application under Section 17(1) of SARFAESI Act in a tribunal having jurisdiction of the borrowers' choice, as provided in Section 17(1A) of the SARFAESI Act, putting in a single fee pertaining to the debt-in-question. `

Further, in relation to the issue of jurisdiction of the tribunal, the Court noted that location of the asset cannot be the sole determinant of the jurisdiction of the tribunal and held as follows:

“A perusal of Section 19(1) of the DRT Act, in conjunction with Section 17(1A) of the SARFAESI Act, indicates that the primary consideration for ascertaining the jurisdiction of the tribunal is not restricted to the situs of the secured asset but is primarily based on the debt itself, be it with regard to the place where the cause of action, wholly or in part, arises or the branch or any other office of a bank or financial institution where it is maintaining an account in which the debt claimed is outstanding for the time being or (in the DRT Act) the defendant resides or works. The only additional feature in sub-section (1A) of Section 17 of the SARFAESI Act is clause (b) thereof, which confers jurisdiction additionally on the Debts Recovery Tribunal where the secured asset is located. However, clauses (a), (b) and (c) of sub-section (1A) are disjunctive and it is the option of the applicant in an application under Section 17 of the SARFAESI Act to choose any of the forums. In such view of the matter, the location of the asset cannot be the sole determinant of the jurisdiction of the tribunal.

Even the measures under Section 13(4) relate to the debt and the security interest arising therefrom and cannot be determined on the basis of the assets, possession of which would come into play only in the event the borrower fails to pay the debt. Even enforcement under Section 14 has to await the adjudication under Section 17 of the SARFAESI Act, if an application is filed under the said provision. Hence, the territorial location of the assets is irrelevant for the purpose of deciding the jurisdiction of the tribunal. Jurisdiction of the tribunal, however, is a primary determinant for deciding as to whether the applicant under Section 17 has to approach different tribunals pursuant to different notices under Section 13(2) or Section 13(4) issued by the secured creditor in respect of such several assets, with several applications, or to file a single application under Section 17 in consonance with the debt-in-question, since the situs of action is tied up with the debt itself.”                                                                                                      (emphasis supplied)

This update has been contributed by Arka Majumdar (Partner) and Debanik Bid (Associate).