Orissa

Cuttak

CC/115/2014

Sarada Prasanna Swain - Complainant(s)

Versus

Branch Manager,Indian Bank - Opp.Party(s)

P Parija

05 Aug 2017

ORDER

IN THE COURT OF THE DIST. CONSUMER DISPUTES REDRESSAL FORUM,CUTTACK.

C.C No.115/2014

 

Proprietor,Sri Sarada Prasanna Swain,

M/s. Ankita Chicks & Feeds,

Vill/PO:Adaspur,

P.S:Olatpur,Dist:Cuttack.                                                       … Complainant.

 

                Vrs.

 

1.         Branch Manager,Indian Bank,

Olatpur Branch,At/PO/PS:Olatpur,

Dikst:Cuttack.                 

 

2.        ARMS RETAIL DIVISIION OF ASSET RECONSTRUCTION

CO (INDIA) LTD.through its Authorized Officer,

Branch Office: Room No.1, Plot No.5,

Ground Floor, Industrial Tenement,

Kharvelnagar,Opp. Indusind Bank,

Bhubaneswar-751001,Odisha.                           

 

3.        Authorised Officer,Indian Bank

Circle Office,Indian Bank Building,

B-2(East),Sahidnagar,Bhubaneswar.                                   … Opp. Parties.

 

Present:              Sri Dhruba Charan Barik,President.

Sri Bichitra Nanda Tripathy, Member.

Smt. Sarmistha Nath, Member (W).

 

Date of filing:     14.08.2014. 

Date of Order:  05.08.2017.

 

For the complainant        :       Sri P.Parija,Adv. & Associates.

O.P the No. 1                    :        None.

For the O.P. 2                   :        Sri B.P.Tripathy,Adv. & Associates.

For the O.P.3                     :              None.

.

 

Sri Bichitra Nanda Tripathy, Member.

                The case is against deficiency in service on the part of the O.Ps.

1. In nutshell the case is that the father of the complainant has availed a loan from O.P No.1 amounting to Rs.1,75,000/- of which Rs.50,000/- was towards term loan and Rs.1,25,000/- was towards working capital for his business (M/s. Ankita Chicks & Feeds).  He had given mortgage of landed property valued at Rs.2,50,000/- for availing such loan.  In the meantime father of the complainant expired and the complainant wanted to continue the said loan A/c with O.P No.1by availing higher limit of Rs.10,00,000/- .  Such proposal for a higher limit of Rs.10,00,000/- was not acceptable to the O.P.Bank but Bank agreed to continue the old limit after renewal.  As required by the Bank, the petitioner furnished fresh documents relating to landed property for creating fresh mortgage and the loan A/c started to continue w.e.f 06.10.2008.  On 31.08.2010 the main branch of O.P No.1 send a demand notice to the complainant for public auction of the mortgaged property (i.e. mutation Khata No.1187/336 and plot no.1239/6275-Ao.04 Dec. and plot No.1245- Ao.03 Dec. total Ao.07 Dec.) which is the home stayed land of the petitioner and where the petitioner and his family resides.  The petitioner came to an compromise and agreed to pay a sum of Rs.2,28,273/- in 3 installments towards closure of the loan amount.  He deposited Rs.60,000/- on 04.03.2014.  The O.P No.1 instead of supplying the details of Bank Guarantee  relating to his landed property mortgaged instructed the complainant to repay the balance amount of  loan in 2 installments as agreed earlier i.e. 2nd installments to be paid amounting to Rs.82,136/- by 30.04.2014 and 3^rd installment amounting to Rs.86,137/- to be paid by 31.05.2014.  Since the O.P No.1 did not intimate anything regarding the mortgaged property the petitioner instead of depositing the 2^nd installment approached the O.P No.1 to give particulars relating to mortgaged property.  The petitioner apprehended that the mortgaged property might be auctioned by the O.P, for which he suffered from mental agony and wanted to know details of his mortgaged property relating to loan A/c No.00563672314 with O.P No.1.  Such documents were deposited by his father with the Bank on 03.03.2015(Annexure-1).  The O.P. had issued notice to the complainant to repay the outstanding loan dues with interest failing which the mortgaged property will be auctioned.(Annexure-2)  O.P No.1 has also issued a legal notice for repayment of such loan(Annexure-3).  There was negotiation between O.P No.1 and the complainant and complainant repaid Rs.60,000/- on 04.03.2014(Annexure-4).  O.Ps demanded further payment relating to balance amount payable by the complainant (Annexure-5).  Finding no other way, the complainant has taken shelter of this Forum.  He has prayed to direct the O.Ps to pay Rs.1,00,000/- towards mental agony, Rs.50,000/- towards litigation expenses, Rs.15,000/- towards travelling expenses and also to direct the O.ps to return back the mortgaged property and also to forfeit the rest amount outstanding against said loan account of the complainant in his A/c No.00563672314.
2. O.P No.2 vide their preliminary objection dt.20.10.2014 and written version dt.11.02.2015 has intimated that the complainant was a defaulter and O.P.2 has started legal proceedings against him under provisions of SARFAESI Act.   The consumer forum has no jurisdiction to entertain such petition in view of the bar laid down under Section 34 of Securitisation and Reconstruction of Financial Assets & Enforcement of Security interest Act,2002, & overriding effect of the said Act as prescribed in Section 35.  They have also stated that the Hon’ble Apex Court in the case of United Bank of India Vs. Satyawati Tondon & Other [(2010) 8 SCC 110] clearly observed that

“Many hundred thousand took advantage of easy financing by the banks and other financial institutions but a large number of them did not repay the amount of loan etc.  Not only this, they instituted frivolous cases and succeeded in persuading the civil courts to pass orders of injunction against the steps taken by banks and financial institutions to recover their dues.  Due to lack of adequate infrastructure and non-availability of manpower, the regular Courts could not accomplish the task of expeditiously adjudicating the cases instituted by banks and other financial institutions for recovery of their dues.  As a result, several hundred crores of public money got blocked in un-producting ventures.  In order to redeem the situation, the Government of India constituted a Committee under the chairmanship of Shri T.Tiwari to examine the legal and other difficulties faced by banks and financial institutions in the recovery of their dues and suggest remedial measures.

                                                             The Parliament enacted the Recovery of Debts Due to Banks and Financial Institutions Act,1993.( for short, the DRT Act’).  The new legislation facilitated creation of specialized forums, i.e, the Debts Recovery Tribunals and the Debts Recovery Appellate Tribunals for expeditious adjudication of disputes relating to recovery of the debts  due to banks and financial institutions  Simultaneously, the jurisdiction of the civil courts was barred and all pending maters were transferred to the Tribunals from the date of their establishment.”

In para-5, the Hon’ble Court further held as follows:-

“5. Section 34 lays down that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Tribunal or Appellate Tribunal is empowered to determine. It further lays down that no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken under the SARFAESI Act or the DRT Act.  Section 35 of the SARFAESI is substantially similar to Section 34(1) of the DRT Act.  It declares that the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.”

In view of the aforesaid observations of the apex Court, Section 34 of the Securitization Act also creates a bar that no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to banks and Financial Institutions Act,1993.  So there is a total bar for passing any interim order of injunction against the action taken by the secured creditor under Section 13(4) of the Act.

 Another decision of Hon’ble High Court of Orissa in the case of Central Bank of India & Another Vs. Rama Chandra Sahoo & Others [2011(I) OLR 1046] clearly states that “the jurisdiction of the District Consumer Disputes Redressal Forum is ousted in view of Section 34 of Securitization Act.  The Hon’ble Court categorically stated that the  District Consumer Disputes Redressal Forums of the State are passing certain orders, which are neither within their jurisdiction nor in conformity with legal provisions, either deliberately or due to lack of adequate legal knowledge, we direct the Commissioner-cum-Secretary to Government in Food and Civil Supplies and Consumer Affairs Department as well as the Principal Secretary to Government in Law Department to probe into the matter and if necessary, make adequate arrangement for improvement of the libraries and orientation programme for the Presidents and Members the District Consumer Disputes Redressal Forums of the State enabling them to be acquainted with provisions of different Statute vis-à-vis Consumer Protection Act.”

On 18.08.2014 this Hon’ble Forum has passed an interim order not to initiate any coercive action against the complainant.  On 28.09.2016 advocate for complainant filed application to be covered U/S-11 instead of Section-4.  He also filed application to include Authorized Officer,Indian Bank Circle Office, Indian Bank Building, B-2(East) Sahid Nagar,Bhubaneswar as O.P No.3.

3. O.P.s 1 & 3 did not appear for which they were set exparte on 09.05.2017.
4. We have gone through the case in details.  The complainant had availed a loan from O.P No.1 and did not repay the dues in time and became a defaulter.  The action initiated against him by O.P No.2 is as per SARFAESI Act.  Vide W.P( C ) No.688 of 2011 in the matter of application under  Articles 226 & 227 of the Constitution of India in the case of Central Bank of India Vrs. Rama Chandra Sahoo and Others [(2011(1) OLR-1046)]. It was held in the said case as follows:-

“The moot question that arises for decision in this case is whether in view of Section 34 of the Securitization Act, the Consumer Forums have any jurisdiction to entertain the application, pass the interim order and decide the same finally.”

Let us notice the provision of Section 34 of the Securitization Act, which reads thus:-

“34. Civil Court not have jurisdiction.  No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debt Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act,1993”.

The said Act was put to test of judicial scrutiny in many decisions; one of such is the case of United Bank of India Vrs. Satyawati Tondan & Others,AIR 2010 SC 3413, wherein the apex Court has held as follows vide paragraph-5.

“5. Section 34 lays down that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Tribunal or Appellate Tribunal is empowered to determine. It further lays down that no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken under the SARFAESI Act or the DRT Act.  Section 35 of the SARFAESI is substantially similar to Section 34(1) of the DRT Act.  It declares that the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.”

In view of the aforesaid observations of the apex court, Section-34 of the Securitization Act also creates a bar that no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under recovery of Debt Due to Banks and Financial Institutions Act,1993.  So there is a total bar for passing any interim order of injunction against the action taken by the secured creditor under Section 13(4) of the Act. 

In the case at hand, there is express bar for passing of any order of injunction and the Civil Court or other authority has no jurisdiction to entertain any suit in respect of any mater.  The words, “other authority” have been interpreted by the Hon’ble apex Court.  In the case of Rajasthan State Electricity Board,Jaipur Vrs. Mohanlal & Others, AIR-1967 (SC) 1857, Paragraph-5 of which is quoted herein below.

“the meaning of “other authority” though in the aforesaid case has been interpreted for the purpose of Article 12 of the Constitution of India, the same interpretation is applicable to the District Consumer Disputes Redressal Forum and it comes within the meaning of “authority”.

                                                                            ORDER

                Basing on the facts and circumstances as stated above, we have observed that this Hon’ble Forum has no jurisdiction to entertain such cases.  Hence the case is dismissed.

Typed to dictation, corrected and pronounced by the Hon’ble Member in the Open Court on this the 5^th day of August,2017 under the seal and signature of this Forum.

 

                                                                                                                                       (Sri B.N.Tripathy )

                                                                                                                                             Member.

                                                                                                                                       (   Sri D.C.Barik  )

                                                                                                                                             President.

                                                                                                                                          

                                                                                                                                      (Smt. Sarmistha Nath) 

                                                                                                                                    Member(W).