The Kerala HC stayed a notification for transferring cases involving debts of 100 crores and more to the DRTs

On Friday, the Kerala High Court stayed a notification issued by the Central government transferring all cases involving debts of 100 crores and more to the Debt Recovery Tribunals (DRTs) in Mumbai, Chennai, and Delhi. 

According to Justice Bechu Kurian Thomas, if the notification does not stay until the matter is decided, litigants will be prejudiced.

As a result, the court stayed the notification in so far as it transfers jurisdiction over all applications of a debt amount of over 100 crores to DRT-I, Chennai from the DRTs I and II, Ernakulam.

It was necessary for the petitioner to approach the High Court in the present case after a securitization application challenging the sale of the petitioner's property was returned by DRT-I Ernakulam with instructions to present it at the Chennai DRT-I since the sale notice was for recovery of ₹976.57 Crores.

According to the petitioner, the notification, issued under the RDB Act, cannot cover applications filed under the SARFAESI Act.

A prejudicial effect was also claimed on the right of the petitioner and other similarly situated individuals to access a court by taking it out of Kerala and granting it to a tribunal in another state, rendering the fundamental right practically otiose.

Accordingly, the notification itself violated Article 14 of the Indian Constitution by being ex-facie arbitrary, the petitioner argued.

Prima facie, the petitioner's submissions were found to be valid.

The Court noted that a reasonable distance-accessible adjudicatory mechanism is an essential element of the right to access a court of law established by the Supreme Court as a fundamental right.

The Court also observed that the principle squarely applies to the instant case, at least prima facie.

It further noted that the Bombay HC recently stayed the notification and accordingly, stayed the notification until the matter is disposed of.