Bombay High Court holds Principal Seat at Mumbai retains jurisdiction despite establishment of Kolhapur Circuit Bench

A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat heard a writ petition contesting whether the newly established Circuit Bench at Kolhapur ousted the Principal Seat's jurisdiction under the amended Bombay High Court Appellate Side Rules (Rule 3A). The petition arose from securitisation and recovery proceedings involving a proprietary firm and an asset reconstruction company; the narrow question was whether the matter, originally filed at the Principal Seat in Mumbai, must be transferred to the Kolhapur Bench because the cause of action partly arose in the Kolhapur district.

The Court rejected the petitioners' contention that establishment of the Circuit Bench and Rule 3A divested the Principal Seat of jurisdiction, holding that where the original authority (DRT, Pune) and the appellate authority (DRAT, Mumbai) both fell within the territorial jurisdiction of the Principal Seat, the Principal Seat could continue to entertain the writ. The Court relied on Supreme Court precedents on the doctrine of cause of action and merger of orders, observing that an appellate order formed a substantial part of the cause of action. The Court, in its reasoning, observed: “37. The conclusion as well as the reasoning of the High Court is incorrect. It is unsound because the expression ‘cause of action’ in an application under Article 226 would be as the expression is understood and if the cause of action arose because of the appellate order or the revisional order which came to be passed at Lucknow then Lucknow would have jurisdiction though the original order was passed at a place outside the areas in Oudh. It may be that the original order was in favour of the person applying for a writ. In such case an adverse appellate order might be the cause of action. The expression ‘cause of action’ is well-known. If the cause of action arises wholly or in part at a place within the specified Oudh areas, the Lucknow Bench will have jurisdiction. If the cause of action arises wholly within the specified Oudh areas, it is indisputable that the Lucknow Bench would have exclusive jurisdiction in such a matter. If the cause of action arises in part within the specified areas in Oudh it would be open to the litigant who is the dominus litis to have his forum conveniens. The litigant has the right to go to a court where part of his cause of action arises. In such cases, it is incorrect to say that the litigant chooses any particular court. The choice is by reason of the jurisdiction of the court being attracted by part of cause of action arising within the jurisdiction of the court. Similarly, if the cause of action can be said to have arisen partly within specified areas in Oudh and partly outside the specified Oudh areas, the litigant will have the choice to institute proceedings either at Allahabad or Lucknow. The court will find out in each case whether the jurisdiction of the court is rightly attracted by the alleged cause of action.” The Bench further held that “the contention raised on behalf of the petitioners ... deserves to be rejected,” and directed that “this writ petition will continue to be heard at the Principal Seat at Mumbai.” The interim stay protecting respondents from re-initiating sale proceedings remained in force until the next listing.

Background
The petition arose after M/s. Shekhar Champalal Pagaria (proprietary firm) defaulted on bank credit facilities from Janata Sahakari Bank Limited; secured properties were mortgaged and the loan account was declared NPA. The bank assigned the debt to respondent CFM Assets Reconstruction Pvt. Ltd., and recovery proceedings ensued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Debts Recovery Tribunal (DRT), Pune set aside a sale certificate and directed a fresh sale; on appeal the Debts Recovery Appellate Tribunal (DRAT), Mumbai remanded the matter to the DRT as the tribunal’s order was “non-speaking.” The petitioners challenged the DRAT order by way of writ before the Bombay High Court at Mumbai and obtained an interim direction on 31.07.2025 restraining re-initiation of sale proceedings.

After the Circuit Bench at Kolhapur was established by notification on 01.08.2025, petitioners argued that Rule 3A required all petitions arising from six specified districts, including Kolhapur, to be heard at Kolhapur and thus the present writ—originating from events at Ichalkaranji (Kolhapur district) and contested there—must be transferred. They relied on authorities addressing territorial jurisdiction and the Chief Justice’s roster powers. Respondents countered that both the original authority (DRT, Pune) and the appellate authority (DRAT, Mumbai) fell within the Principal Seat’s territorial ambit, that the appellate order constituted a substantial part of the cause of action, and that precedents allowed the Principal Seat to retain jurisdiction; they relied on Supreme Court decisions including Nasrudin and Kusum Ingots and on a recent Division Bench decision of this Court (Volvo Group India).

The Division Bench analysed Supreme Court and High Court precedents, distinguished a Single Judge decision (Shri Shivneri Sahakari Bank) on its facts, and applied the principle that where an appellate order is within a bench’s territory a writ challenging that order is maintainable there. Concluding that establishment of the Circuit Bench did not oust the Principal Seat’s jurisdiction in the present factual matrix, the Court refused transfer, kept the interim order in place, and listed the petition for hearing on 30.03.2026.

Case Details:
Case No.: WRIT PETITION NO.10011 OF 2025
Case Title: M/s. Shekhar Champalal Pagaria through Proprietor and others Vs. CFM Assets Reconstruction Pvt. Ltd. and others
Appearances:
For the Petitioner(s): Ms. Ayodhya Patki a/w. Mr. Vallabh Tokekar and Mr. Akash Kotecha
For the Respondent(s): Mr. Nikhil Rajani a/w. Mr. Ajay Deshmane i/b. V. Deshpande & Co. (for Respondent No.1); Mr. Darshit Jain a/w. Mr. Parth Mehta, Mr. Anurag Kalavatiya and Mr. Udit Raghuwanshi i/b. Mr. Bhavesh Joshi (for Respondent No.5)

Source: 2026 CaseBase(BOM) 70