KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION SISUVIHARLANE VAZHUTHACADU THIRUVANANTHAPURAM

APPEAL NUMBER: 562/2013

JUDGMENT DATED :04.03.2014

( Appeal filed against the order in CC.No.451/2012 on the file of CDRF, Ernakulam dated : 31.05.2013)

PRESENT

SRI.K.CHANDRADAS NADAR    : JUDICIAL MEMBER

SRI.V.V.JOSE                                 : MEMBER

M/s.Libran Tours & Travels,

Santhoshi Mansion,

Karuvelipady, Kochi – 682 005

Rep.by its Managing Partner,                      APPELLANT

V.Madhu Ganesh

(By Adv.S.Reghu kumar &

George Cherian Karippaparambil,

Thiruvananthapuram

Vs.

M/s. UCO Bank Ltd,

M.G.Road Branch,

Ravipuram, Cochin – 682 015                             RESPONDENT

Rep.by its Branch Manager

(By Adv.Deepak Joy Kaliyadan, Paravur)

JUDGMENT

SRI.K.CHANDRADAS NADAR    : JUDICIAL MEMBER

          Appellant was the complainant in CC.No.451/2012 in the CDRF, Ernakulam. He approached the Consumer Forum alleging deficiency in service on the part of M/s.UCO Bank Ltd, M.G.Road Branch, Ravipuram, Kochi, the opposite party. The facts alleged in brief were that for the purpose of the partnership firm of the complainant credit facilities were availed from State Bank of Travancore, Panampilly Nagar Branch and the said account was taken over by the opposite party. Initially the cash credit limit was Rs.15,00,000/- and the limit was later enhanced to Rs.30,00,000/- Still later the limit was reduced to Rs.10,51,540/- . The deficiency in service on the part of the opposite party is alleged mainly with regard to an amount of Rs.1, 05,000/-. debited from the complainants account on 23.07.2010. It appears that the appellant submitted cheque No.0330251440 dated 04.10.2007 for Singapore $ 4000 at the counter of the opposite party and it was dishonored. That amount credited on submission of the cheque was really debited three years later. It is further alleged that the complainant requested the opposite party for the dishonoured cheque and it was after several months follow up that the opposite party by letter dated 27.01.2011 informed the complainant that the cheque was lost in transit from the opposite party bank. By the time the opposite party debited the amount and recovered Rs.105000/- from the complainant, his remedies  against the drawer of the cheque was lost because that was after three years. So the complainant claimed Rs.1, 05,000/- with 15% interest from 23.07.2011.

          2.      It appears that based on the cash credit facility huge amount was due to the opposite party bank and they had started proceedings under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, for short the SARFAESI Act. The claim of the complainant was resisted by the opposite party based on the provisions of the said act and they raised the preliminary objection that the Consumer Forum lacked jurisdiction to entertain the claim of the complainant in view of the provisions of the above Act. The Consumer Forum considered this question raised in the version and as per the impugned order held that it lacked jurisdiction to entertain the complaint of the appellant and accordingly dropped the complaint from the file. In passing the order the Consumer Forum relied on three decisions of the Hon'ble Supreme Court of India and mainly the decision of the Hon'ble High Court of Kerala in Punjab National Bank Vs. CDRF, Alappuzha and others, 2011 (3) KHC 511. The Consumer Forum quoted the following passage from the decision referred to above. " The result of the above discussion is that the Consumer Disputes Redressal Forum has no jurisdiction to entertain any complaint in respect of any measures taken by a Bank or a Financial Institution under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the CDRF has no jurisdiction to give any relief whatsoever against the same it is declared so ".

          3.      In fact, during arguments the learned counsel for the respondent bank relied on the above decision at length. But what is overlooked by the Consumer Forum is that lack of jurisdiction of the Forum is to entertain a complaint in respect of any measure taken by the bank under the SARFAESI Act. This would be the pertinent question for decision. The learned counsel for the respondent urged relying on the decision that the SARFAESI Act being a later enactment and a special enactment, it would over ride the provisions of a general enactment and the earlier enactment. But the Consumer Protection Act itself is a special enactment in its own field. At the same time, that the provisions of a later enactment over rides the provisions of an earlier enactment in case of repugnancy is only one of the rules of interpretation of statutes. When repugnancy  between the provisions of two statutes is set up the first duty of the court would be to try to reconcile both provisions and to see whether the provisions of both enactments can be given effect to. If only this attempt fails the provisions of the later enactment would prevail over the earlier enactment to the extent of repugnancy. In the Punjab National Bank case itself the Hon'ble High Court of Kerala held thus " although the first part of the Section ousts the jurisdiction of only the Civil Court, which will not apply to a CDRF which is not a Civil Court, the latter part of the Section expressly bars the jurisdiction of not only Civil Courts but also other authorities, which would include CDRFs also from granting injunction in respect of any action taken or to be taken in pursuance of any power conferred by or under the SARFAESI Act. The CDRF can not, without grating an injection, restrain financial institutions like Banks from proceeding with an action taken under the SARFAESI Act, for which the CDRF has no powers under S.14(1) of the Consumer Protection Act and such power is expressly barred by S.34 of the SARFAESI Act. As such it is clear that the CDRF can not grant any relief against measures taken by a Bank or Financial Institution under the SARFAESI Act. Therefore, going by the above said provisions of the two Acts themselves, the jurisdiction of the CDRF to deal with matters provided for in the SARFAESI Act is expressly excluded".

          4.      So Hon'ble High Court held that the jurisdiction of the CDRF to deal with matters provided for in the SARFAEASI Act is expressly excluded. In short, the Consumer Forums are granted specific powers to pass orders Under the Consumer Protection Act. So also the SARFAEASI Act confers specific powers to the Debts Recovery Tribunal constituted under that Act. The Consumer Forums can not encroach upon the powers conferred under the SARFAEASI Act. Reading the provisions of Sections 2 (d), 3 & 12 of the Consumer Protection Act. The Hon'ble High Court held that certainly deficiency in service provided by a bank can be the subject matter of dispute before a CDRF. But in the event of a CDRF finding in favour of the complainant it has power to grant only the reliefs provided under Section 14 (1)of the Act. It was further held that going by Section 14 of the Consumer Protection Act the CDRF has no    power to injunct or restrain a bank from enforcing their rights under the loan agreement executed by borrower with them which would include sale of the  mortgaged property for recovery of the loan amounts advanced by the bank to the borrower for which specific purpose the SARFAESI Act was enacted.

          5.      But in Punjab National Bank case referred to what the CDRF, Alappuzha did was exactly that by restraining and prohibiting the bank from taking auction proceedings for sale and other proceedings by them under the SARFAESI Act pursuant to the notice issued to the complainant.

          6.      So also a case is an authority for the proposition which it actually decides. The ratio of a case can not be determined divorced of the facts upon which the decision was rendered. In the Punjab National Bank case what was challenged was the order restraining and prohibiting the bank from taking auction proceedings of sale and other proceedings against the complainant. The Hon'ble High Court held that the Forum lacked jurisdiction to pass such an order under Section 14 of the Consumer Protection Act. We have referred to the facts of this case. If the facts alleged, that the bank remained silent after the dishonor of the cheque presented by the complainant for more than three years by which time his remedy to realize the cheque amount from the drawer of the cheque was lost and the bank never intimated the dishonour of the cheque to the complainant or the loss of the cheque in transit are established it would clearly spell out deficiency in service on their part. There fore to adjudicate this part of the dispute the CDRF, Ernakulam certainly had jurisdiction. The factual scenario that emerges is that the bank has started proceedings under the SARFAESI Act for  the realization of a huge sum. Such proceedings would remain unaffected. At the same time if the deficiency in service alleged with regard to a cheque earlier credited and subsequently debited by the bank is established the bank would be liable to compensate the complainant to the extent of the loss. In the respective fields both the debt recovery tribunal and the CDRF Ernakulam have jurisdiction. So the CDRF, Ernakulam erred in dropping the proceedings at the threashold holding that it had no jurisdiction to entertain the complaint. It follows that the impugned order can not be sustained.

          Hence the appeal is allowed. The order of CDRF, Ernakulam in CC.No.451/12 dated 31.05.2013 dropping the proceedings is set aside. The Consumer Forum is directed to take back the complaint to file and proceed to dispose of the complaint in accordance with Law. The parties shall bear their respective costs in this appeal. They shall appear before the District Forum on 22.04.2014.

K.CHANDRADAS NADAR : JUDICIAL MEMBER

V.V.JOSE                              : MEMBER

Be/