Bombay High Court Clarifies Jurisdiction in Debt Recovery Case
Petition Transfer to Kolhapur Circuit Bench Rejected
Principal Seat Retains Authority Over DRT and DRAT Matters
By Our Legal Correspondent
New Delhi: March 09, 2026:
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In a significant ruling, the Bombay High Court (Principal Seat, Mumbai) dismissed a request to transfer a writ petition filed by M/s Shekhar Champalal Pagaria & Ors. against CFM Assets Reconstruction Pvt. Ltd. to the Kolhapur Circuit Bench. The petitioners had argued that since the dispute arose from districts under Kolhapur’s territorial jurisdiction, the matter should be heard there.
However, the Court, led by Justice Manish Pitale and Justice Shreeram V. Shirsat, held that both the Debt Recovery Tribunal (DRT) and the Debt Recovery Appellate Tribunal (DRAT) are located within the jurisdiction of the Principal Seat, making the transfer request untenable.
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Background of the Case
- Petitioners: M/s Shekhar Champalal Pagaria & Ors.
- Respondents: CFM Assets Reconstruction Pvt. Ltd. & Ors.
- Issue: Jurisdictional objection raised under Rule 3A of the Bombay High Court Appellate Side Rules.
- Petitioners’ Argument: Since Kolhapur Circuit Bench covers districts where the dispute originated, the case should be transferred.
- Respondents’ Stand: The DRT and DRAT are situated in Mumbai, hence jurisdiction lies with the Principal Seat.
The Court agreed with the respondents, emphasizing that territorial jurisdiction cannot override the fact that the original and appellate authorities are located in Mumbai.
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Court’s Observations
- Jurisdictional Clarity: The Court noted that both DRT and DRAT fall squarely under the Principal Seat’s jurisdiction.
- Rule 3A Interpretation: Rule 3A of the Appellate Side Rules does not mandate transfer when the original authority is outside the territorial jurisdiction of the Circuit Bench.
- Judicial Efficiency: Allowing transfers in such cases would create unnecessary complications and delay in financial recovery proceedings.
Impact of the Judgment
- For Financial Institutions: Reinforces certainty in debt recovery litigation, ensuring cases are heard at the Principal Seat.
- For Litigants: Clarifies that jurisdiction depends on the location of the tribunal, not merely the district of dispute.
- For Legal Practice: Provides a precedent for future jurisdictional objections in debt recovery and asset reconstruction matters.
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This ruling strengthens procedural uniformity and prevents forum shopping in financial disputes.
Conclusion
The Bombay High Court’s ruling in M/s Shekhar Champalal Pagaria v. CFM Assets Reconstruction Pvt. Ltd. underscores the importance of jurisdictional discipline in debt recovery cases. By rejecting the transfer plea, the Court has ensured that financial disputes remain under the Principal Seat’s purview, thereby streamlining judicial processes and reinforcing confidence in the legal system.
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