Order No. 20/ Dated 08.05.2019

FINAL ORDER

            The instant hearing arises out of an application dated 30.01.2019 filed by the OPs praying for rejection of the complaint on the ground that U/section 34 of the Securitization & Reconstruction of Financial Assets & Enforcement of Security  Interest Act, 2002 Consumer Forum have no jurisdiction to entertain the complainant.

            The Ld. Advocate appearing for the OPs has submitted that the relation between the parties to the complaint petition is Borrowers and Financer and the complainants obtained loan from the OPs/Bank and also failed to pay monthly installments as per terms and conditions of the loan. Thus, the account of the complainants/Borrowers become Non-performing Assets as per guidelines of R.B.I. He has further contended that notice dated 06.01.2018 under Section 13 (2) of the SARFAESI Act, 2002 was sent to the complainants and after expiry of 60 days the OPs though its Authorized Officer issued notice dated 17.03.2018 U/section  13 (4) of the SARFAESI Act, 2002 to the complainants who filed an application U/section 17 SARFAESI Act, 2002   against  the OPs before the Debts Recovery Tribunal-III, Kolkata being S.A. No.  156 of 2018 which is still pending for adjudication. The Ld. Advocate for the OPs has further contended that the Hon’ble Apex Court has been pleased to observe that the consumer Forum have no jurisdiction to entertain any suit as per section 34 of the SARFAESI Act, 2002. Thus, the complaint is liable to be dismissed.

            On the contrary, the Ld. Advocate for the complainants has submitted that the OPs have failed to produce repayment schedule of loan for the period from July, 2008 to July, 2011 the reason best known to them. He has further contended that the subject matter of the complaint petition is on the imposition of incorrect rate of interest of home loan and other related deficiency of services/unfair trade practices by the OPs. Ld. Advocate for the complainants has urged that issuance of notice U/sections 13 (2) and 13 (4) of the SARFAESI Act shall not take any of the jurisdiction of the Forum for adjudicating the deficiency in service by the OPs under the Consumer Protection Act, 1986  and both the notice of the OPs/Bank are subjudice before the Debt Recovery Tribunal in connection with S.A. No. 156 of 2018. Thus, the Forum is quite competent to entertain the Consumer complaint as Section 34 of SARFAESI Act does not hit the complaint case. Accordingly, the Ld. Advocate for the complainants has prayed for rejection of the Miscellaneous Application with cost.

DECISION

We have scrutinized the materials on record and considered the submission advanced by the Ld. Advocates appearing for the parties.

Having heard the Ld. Advocates for the respective parties and on going through the materials on record it appears that OP-1 is a Banking Company incorporated under the Companies Act, 1956, OP-2 is the Chairman and OP-3 is the Branch Manager of OP-1 Bank. Undisputedly, the complainants have purchased the subject flat after obtaining home loan from the OP-3 Bank. The relationship between the complainants and OPs is Borrowers and Financer. Complainants failed to pay E.M.I. of loan to the OP-3 Bank and the subject flat is under the mortgage to the OP/ Bank. Admittedly on 06.01.2018 & 17.03.2018 notices under Sections 13 (2) and 13 (4) of the SARFAESI Act were duly served upon the complainants.

Section  32 of the SARFAESI Act provides-“No suit proceeding or other legal proceedings shall lie against any secured creditor or any of its officers or Manager exercising any of the rights of the secured creditor or borrower for anything done or omitted to be done or in good faith under the Act.”

Again Section 34 creates a specific bar in entertainment of an application where the property is under mortgage before the secured creditor i.e. the Bank.

In R.P. No.  4196 of 2014 (Chief Manager Bank of Baroda  vs. Sri Prabi Chaki & Anr.) the Hon’ble National Consumer Commission has observed-“…………….This is well settled that the Consumer Fora have got no jurisdiction wherever the SARFAESI Act is applicable”. The Hon’ble Supreme Court while affirming  the observation of the NCDRC, in case of Yashwant G. Ghaisas & Ors. - vs.- Bank of Maharashtra in Civil Appeal No. 1359 of 2013 decided on 01.03.2013, was pleased to hold;-

The appellants challenged the action of the Bank by filing a complaint under Section 12 of the Consumer Protection Act, 1986. The National Commission referred to Section 34 of the 2002 Act, whereby  jurisdiction of all courts and authorities to entertain challenge to the action taken by the Bank has been ousted and dismissed the complaint by recording the following observations:-

“19. The National Commission is not empowered to arrogate to itself the powers which come within the jurisdiction of Debt Recovery Tribunals. This matter is purely covered with the jurisdiction of DRT or DRAT. If there is any grievance against the notice U/section of 13 (2) of the SERFAESI Act that should be brought to the notice of the concerned authority……………”

Admittedly the complainants have filed an application U/section 17 of the SARFAESI Act, 2002 against the OPs before the Debts Recovery Tribunal-III, Kolkata, being S.A. No.  156 of 2018 which is still pending for disposal. The loan account of the complainants/ borrowers become Non-performing Assets as per guidelines of RBI and notices U/sections 13 (2) and 13 (4) of the SARFAESI Act were duly served upon the complainant. U/s 34 of the SARFAESI Act, 2002 Consumer Forum is not empowered to arrogate to itself the powers which come the jurisdiction of Debt Recovery Tribunals. This matter is purely covered within the jurisdiction of DRT or DRAT. In case the Banks are working within the ambit of SARFAESI  Act, it cannot be said to be deficiency on the part of the Bank. In the instant case OPs/ Bank has acted within the ambit of SARFAESI Act, 2002.

For the reasons aforesaid, the Miscellaneous Application is liable to be allowed.

Hence,

ORDERED

That the Miscellaneous Application dated 30.01.2019 is allowed on contest. However, there will be no order as to costs.

Resultantly, the complaint case is dismissed being not maintainable.

Thus, the M.A. No. 46 of 2019 is disposed of.