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Judgment
The appellant filed the O.A. bearing No. 02/2026 titled as State Bank of India v. M/s AGS Transact Technologies Limited & others which was stated to be pending before the DRT-III, Delhi.
The DRT-III, Delhi vide impugned order dated 04.05.2026 has ordered to return the Original Application along with the documents by observing that the appellant has failed to establish that any substantial or integral part of the cause of action has never been arisen within the territorial jurisdiction of Delhi. The relevant portion of the impugned order dated 04.05.2026 is reproduced as under:
8.In view of the foregoing discussion, this Hon'ble Tribunal holds substantial that the Applicant Bank has failed to establish that any or integral part of the cause of action arose within the territorial jurisdiction of Delhi. The entire loan accounts, transaction including sanction, disbursement, maintenance of declaration of NPA and issuance of recall notice also admittedly situated took place at Mumbai and all principal parties are at Mumbai. Mere existence of a branch office of the Security Trustee at New Delhi or execution of certain ancillary documents through such office does not confer territorial jurisdiction upon this Tribunal under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993. Consequently, this Hon'ble Tribunal lacks territorial jurisdiction to entertain the present Original Application.
9.In line with the same, the Registry is thus directed to return the Original Application along with all accompanying documents to the applicant bank. Further, a certificate regarding the court fees, in accordance with the applicable rules for filing before the competent Tribunal.
Sh. Bheem Sain Jain, Counsel for the appellant has referred the part of the Original Application which deals with the jurisdiction and is reproduced as under:
That vide Security Trustee Agreement dated 24.05.2024, the Defendant No.4 with branch office at 610, 6th Floor, Ansai Bhawan, Kasturba Gandhi Marg, New Delhi-110001 executed at New Delhi, was appointed as Security Trustee to act for and on behalf of the Applicant Bank including for execution of the financing and security documents, holding security etc. In pursuance to the aforesaid, various the loan and security documents including Master Facility Agreement dated 24.05.2024, Deed of Hypothecation dated 24.05.2024, Deed of Guarantee dated 28.05.2024 etc have been executed by the Defendants in favour of Defendant No.4 acting as Security Trustee for and on behalf of Applicant Bank at its aforesaid New Delhi branch office which falls within the jurisdiction of this Hon'ble Tribunal. Under the Security Trustee Agreement dated 24.05.2024, therefore, the New Delhi jurisdiction has been specified and agreed upon. Further, the amount claimed by the Applicant Bank, as due from the Defendants, is more than Rs.100.00 crores, and as such the Applicant Bank declares that the subject-matter of recovery of debts due falls within the territorial and pecuniary jurisdiction of this Hon'ble Tribunal as per the Notification S.O. 4718(E) dated 04.10.2022 published by the Gazette of India. Thus, part cause of action including the grant of loan in pursuance to execution of Master Facility Agreement dated 24.05.2024, creation of security in terms of surety under the Deed of Guarantee dated 24.05.2025 etc. having arisen New Delhi, branch of security trustee situated at New Delhi and subject matter i.e. recovery of amount of more than Rs. 100.00 crores, this Hon'ble Tribunal has territorial jurisdiction in terms of Section 19(1)(c) of the Recovery of Debts and Bankruptcy Act, 1993.
Sh. Bheem Sain Jain, Counsel further stated that the many-many documents pertaining to the loan transactions were executed in Delhi and even the defendant no.4 was entrusted with the loan documents vide Security Trustee Agreement dated 24.05.2024 at Delhi. It is further stated that the various loan and security documents including Master Facility Agreement dated 24.05.2024, Deed of Hypothecation dated 24.05.2024 and other documents have been executed in Delhi. It is further argued that the part of the cause of action has been arisen within territorial jurisdiction of Tribunal situated at Delhi.
Chapter-IV of Recovery of Debts and Bankruptcy Act, 1993 deals with the procedure of Tribunals. Section 19(1)(c) deals with the application with the Tribunal and it provides that any Bank or Financial Institution can make an application for the recovery of any debt from any person within the local limits of whose jurisdiction the cause of action wholly or in part arises.
The DRT-III, Delhi in impugned order dated 04.05.2026 has nowhere stated or observed that the part of the cause of action was not arisen within the territorial jurisdiction of Delhi but only observed that the substantial or integral part of the cause of action has not been arisen within territorial jurisdiction of Delhi. Various documents pertaining to the loan were executed in Delhi. The present O.A. can be entertained within the territorial jurisdiction of Delhi. Accordingly, the impugned order dated 04.05.2026 is set aside.
The DRT-III, Delhi is directed to proceed with the trial of O.A. bearing No.02/2026 in accordance with law. The appellant is directed to appear before the concerned DRT-III, Delhi on 17.08.2026.
The copy of this order be sent to DRT-III, Delhi for information and compliance.