High Court's Supervisory Jurisdiction Under Article 227 is Tied to the Tribunal's Situs, Not Appellate Tribunal's Location: Calcutta HC Dismisses Challenge to DRAT Kolkata Orders Originating from DRT Guwahati

“Even if the Appellate Tribunal is Located Within the High Court's Territorial Limits, Supervisory Jurisdiction Lies With the High Court Where the Original Tribunal is Situated” — Calcutta High Court dismissed an application filed under Article 227 of the Constitution challenging two orders passed by the Debts Recovery Appellate Tribunal (DRAT), Kolkata, arising from an ex parte recovery order passed by the Debts Recovery Tribunal (DRT), Guwahati.

Justice Hiranmay Bhattacharyya ruled that territorial jurisdiction under Article 227 depends not on the situs of the appellate forum but rather on the situs of the original adjudicating authority (DRT). The Court underscored that “the power of superintendence under Article 227 may be exercised over DRAT physically located beyond its territorial limits if the proceeding is sourced from a DRT situated within its territorial jurisdiction.”

The decision sets a clear and significant precedent by resolving a frequently misunderstood aspect of territorial jurisdiction under Article 227 when appellate tribunals exercise jurisdiction across multiple states.

From Defaulted Loan to Forum Dispute

The dispute arose from a term loan of ₹9.75 crores granted by Indian Bank to Virgo Cements Ltd., which subsequently defaulted. The accounts became NPA on March 31, 2016, prompting the bank to initiate proceedings under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 before the DRT, Guwahati. An ex parte order dated November 24, 2021 held defendant nos. 1 to 8, including petitioner Rohit Jain (ex-director), jointly and severally liable for ₹8.48 crores, along with interest.

Jain filed an appeal before DRAT, Kolkata (Appeal Diary No. 502 of 2024) along with an application for waiver of pre-deposit (IA No. 322 of 2024). On July 5, 2024, DRAT directed a pre-deposit of 20%, and on September 4, 2024, it dismissed the appeal due to non-compliance.

Jain then approached the Calcutta High Court under Article 226, which was subsequently converted into an Article 227 petition, giving rise to the present civil revisional application.

Does Calcutta High Court Have Jurisdiction Under Article 227 Over Orders Passed by DRAT, Kolkata in Appeals from DRT, Guwahati?

The primary question of law was whether Calcutta High Court had territorial jurisdiction under Article 227 to entertain a petition challenging the DRAT’s orders when the original adjudication took place in DRT, Guwahati.

The petitioner argued that since the DRAT is located in Kolkata, the High Court at Calcutta had supervisory jurisdiction under Article 227. He invoked the Doctrine of Merger, citing Kunhayammed v. State of Kerala, (2000) 6 SCC 359, and argued that once the DRAT passed its order, the DRT's order stood merged and the situs of the appellate body (DRAT, Kolkata) determined jurisdiction.

The Court categorically rejected the petitioner’s claim that the location of the appellate tribunal (DRAT Kolkata) determines jurisdiction under Article 227. Instead, it laid down a clear judicial principle:

“An application under Article 227 of the Constitution of India assailing the order(s) passed by the DRATs (interim or final) shall lie only before the High Court within whose jurisdiction the DRT is situated.”

Doctrine of Merger Not Determinative of Article 227 Jurisdiction

The Court clarified that although the doctrine of merger causes the original DRT order to merge into the DRAT's ruling, this doctrine does not override the jurisdictional principle established by the Constitution. It emphasized:

“The situs of the appellate forum does not confer Article 227 jurisdiction where the appellate forum spans multiple States. The doctrine [of merger] cannot override the certainty-of-forum principle and the binding-precedent structure.”

Article 226(2) vs. Article 227: Fundamental Distinction

The Court distinguished between the cause-of-action-based jurisdiction under Article 226(2) and the territorial tethering of supervisory jurisdiction under Article 227:

“While Article 226(2) permits jurisdiction based on the cause of action even beyond territorial seats, Article 227 is territorially tethered to courts/tribunals throughout the territories of the High Court.”

Thus, even if a cause of action partly arises from DRAT Kolkata’s order, it does not vest Article 227 jurisdiction in Calcutta High Court when the original Tribunal (DRT, Guwahati) is situated outside its territorial scope.

These decisions affirm that where appellate tribunals span multiple states, jurisdiction for supervisory or appellate review lies with the High Court where the original adjudicating authority (here, DRT) is situated.

Quoting from Ambica Industries, the Court observed: “If a binding authority of a High Court decision does not extend beyond its territorial jurisdiction, some sort of judicial anarchy shall come into play.”

Interim Orders and Final Orders: No Jurisdictional Distinction

The petitioner argued that since he only challenged interlocutory orders (pre-deposit and dismissal for non-compliance), it would not interfere with the DRT’s final decision. The Court rejected this argument:

“Even an order setting aside the pre-deposit direction would revive the appeal, thereby destroying the finality of the DRT’s order and rendering the matter res sub judice.”

The Court emphasized that jurisdictional principles cannot vary depending on whether the challenged order is interim or final.

Sabbam Hari Not Binding Precedent

Addressing an earlier coordinate bench ruling in Sabbam Hari v. Authorized Officer, C.O. 2328 of 2018, the Court found it non-binding, holding:

“In view of the decisions in Ambica Industries, ABC Papers, and Navin Jain, the decision in Sabbam Hari cannot be said to be a binding precedent.”

No Supervisory Jurisdiction over DRAT Kolkata when Source Tribunal is DRT Guwahati

In summary, the Calcutta High Court held that it lacks territorial jurisdiction under Article 227 to entertain a challenge against DRAT Kolkata’s orders in appeals sourced from DRT Guwahati, which lies outside the Court’s territorial domain.

“The petitioner is to approach the High Court of the State within the territorial limit of which the DRT Guwahati is located. This application under Article 227… stands dismissed for want of territorial jurisdiction alone.”

The judgment sets a firm precedent for jurisdictional clarity and prevents forum shopping, reinforcing the certainty-of-forum principle under India's federal judicial structure.

Date of Decision: September 2, 2025