Date of filing – 10.10.2013
Date of Hearing – 03.03.2017
Challenge in this appeal under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) is to the Judgement/Final Order dated 31.07.2013 passed by the Ld. District Consumer Disputes Redressal Forum, North 24 Parganas at Barasat (for short, Ld. District Forum) in Consumer Complaint no. 472/2012. By the impugned order, the Ld. District Forum allowed the consumer complaint initiated by the Respondent nos. 1 & 2 under Section 12 of the Act with certain directions therein.
The Respondent nos. 1 & 2 herein being Complainants lodged the complaint stating that on 26.09.2012 they purchased a flat measuring about 635 sq. ft. being on the 2nd Floor, Block No. A of the building viz- Karabi Tower lying and situated at Holding No.9/A/3/1, Madhusudan Mukherjee Road, P.S.- Khardah, Dist- North 24 Parganas, at a total consideration of Rs.9,91,100/- from Proforma Opposite Party No.4 Smt. Meena Bhandari. The Complainants have stated that the Complainant no.1 has obtained loan from HDFC Bank to purchase the said flat and after such purchase, have acquired title and possession in respect of the subject flat as mentioned in Schedule-‘B’ to the petition of complaint. In the first part of the month of November, 2012 the officials of United Commercial Bank (OP no.1) visited the flat of the Complainants and asked the Complainants to vacate the flat. On 09.11.2012, the Complainants found that a ‘possession notice’ without addressing anybody was walled up in the main entrance of the ‘B’ Schedule flat and on seeing the same, the Complainants got astonished and rushed to OP no.1 Bank to ascertain the actual state of affairs. The Complainants submit that the OP nos. 2 & 3 in collusion with each other and with the help of OP no.1 Bank are trying to disposses the Complainants from the said suit property. Hence, the Respondent nos. 1 & 2 approached the Ld. District Forum on the allegation of deficiency in services on the part of OPs with prayer for certain reliefs, viz- (a) OP no.1 be directed to recall the notice dated 09.11.2012; (b) OP nos. 2 & 3 be directed jointly and severally to perform their part so that the interest of the Complainants may not be hampered; (c) OP nos. 1, 2 & 3 be directed to pay compensation of Rs.2,00,000/-; (d) OP nos. 1, 2 & 3 be directed to pay litigation cost of Rs.25,000/-.
The Appellant being OP no.1 by filing a written version has stated that the Complainants are not ‘consumer’ within the meaning of the Act and as such they are not entitled to any relief. The OP no.1 has also stated that as per provisions of Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, SARFAESI Act) a Consumer Forum has no jurisdiction to try any matter because they have already initiated action under Section 13(2) & 13(4) of the said Act. The OP no.1 has also stated that the property has been mortgaged to the Bank prior to unauthorised purchase of the flat by the Complainants and as such subsequent transaction of the property or any right, title and interest during the continuation of the mortgage is irregular and not tenable in the eye of law. Therefore, according to the OP no.1, the complaint should be dismissed.
The other Opposite Parties did not file any written version before the Ld. District Forum.
After assessing the materials on record, the Ld. District Forum by the impugned order allowed the complaint with certain directions, as indicated above, which prompted the OP no.1 Bank to prefer this appeal.
I have scrutinised the materials on record and considered the submission advanced by the Ld. Advocates appearing for the Appellant, Respondent nos. 1 & 2, Respondent no.3 and Respondent no.4 respectively. None appears for Pro-Respondent no.5 i.e. the seller of the flat and as such the appeal was heard in absence of Pro-OP no.5.
Having heard the Ld. Advocates for the respective parties and on going through the materials on record, it would reveal that the Appellant is a nationalised bank, Respondent nos. 1 & 2 are purchasers of subject flat i.e. the ‘B’ Schedule as mentioned in the complaint, Respondent no.3 is the developer represented by its proprietor Sri Asit Chakraborty and Respondent no.4 is the Municipality to whom the ‘A’ Schedule property was given by one Nabani Haran Mukhopadhyay and six others by dint of a registered Deed of Gift in the year 2000. The fact remains that after acceptance of Deed of Gift, the Respondent no.4 Municipality mutated its name in the Assessment Registrar of the Municipality and thereafter entered into a Development Agreement with Respondent no.3/developer on 15.04.2000 for development of the land by constructing a G+3 storied building. For the purpose of the said construction, the Respondent no.4 Municipality appointed Sri Asit Kumar Chakraborty Proprietor of Respondent no.3/developer as constituted attorney empowering him to do all necessary acts, works and things in connection with the construction of the said building.
The materials on record indicate that one Sri Subrata Bhattacherjee entered into an Agreement for Sale with the developer in respect of ‘B’ Schedule flat. Ultimately, on 10.03.2003 the developer as well as Municipality executed and registered a Sale Deed and handed over the possession to the said Subrata Bhattacherjee. During his title and possession, the said Subrata Bhattacherjee transferred the ‘B’ Schedule Property to Pro-Respondent no.5 Smt. Meena Bhandari by executing a Sale Deed. Thereafter, the Pro-Respondent no. 5 transferred the said flat in favour of Respondent nos. 1 & 2 by virtue of a registered Sale Deed dated 18.10.2012.
The Appellant has raised a serious question challenging the capacity of the Respondent nos.1 and 2 as a ‘consumer’. Ld. Advocate for the Appellant has submitted that the Ld. District Forum did not discuss whether the Respondent nos. 1 & 2 were consumer or not and proceeded to decide the case on merit. For appreciation of the situation, it would be worthwhile to reproduce the provisions of Section 2(1)(d) of the Act which provides -
“Consumer means any person who –
- buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other then the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
- hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person (but does not include a person who avails of such services for any commercial purpose”.
Explanation:- for the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment”.
Undisputedly, the Respondent nos. 1 & 2 has purchased the ‘B’ Schedule flat from Pro-Respondent no.5 ‘as is where basis’ for consideration is. The Pro-Respondent no.5 sold away the subject flat to the Respondent nos. 1 & 2 and did not promise to render any service. In fact, one Sri Subrata Bhattacharjee has purchased the flat from the developer. The said Subrata sold away the said flat to Pro-Respondent no.5 and subsequently, Pro-respondent no.5 resell the flat to the Respondent nos. 1 & 2. It means and indicates that there was no element of service behind such transactions. The relationship between the Respondent nos. 1 and 2 on the one hand and Respondent no. 5 on the other hand in my view, is of purchaser and seller of the flat, which would be governed by the law of contract and not under the Act. In other words, no privity of contract exists between Respondent nos. 1 and 2 and the Appellant. On that score alone, the Ld. District Forum should have dismissed the complaint.
It remains undisputed that Sri Asit Kumar Chakraborty being proprietor of Respondent no.3 construction firm after Development Agreement with Respondent no.4 Municipality approached to the Appellant Bank for obtaining loan for the purpose of raising construction in ‘A’ Schedule property to the petition of complaint. In the process, the developer kept the ‘A’ Schedule land under mortgage to the Bank. Admittedly, on 09.12.2012 a possession notice under Section 13(2) of the SARFAESI Act has been handed up in the subject property.
I have given due consideration to the submission made by the Ld. Advocates appearing for the parties. The order of Hon’ble High Court reveals that challenging the order of the Ld. District Forum, a writ petition was moved in the Hon’ble High Court and the Hon’ble High Court dismissed the same as an appeal lies against the Judgement and order and as such has not gone into the merits of the matter in dispute. The Ld. District Forum has observed – “No doubt notice under Section 13 of the SARFAESI Act is issued. But mere issuing of notice it does not curtail right of any Civil Court or Forum but the basis of the notice prima facie must be proved or shown before the Forum but the same has not been proved .......”. Such an observation is totally inconsistent with the provisions of Section 32 or 34 of SARFAESI Act or the guidelines enunciated by the Hon’ble National Consumer Commission or by the Hon’ble Supreme Court. Section 32 of the SARFAESI Act provides – “No suit, prosecution 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.4196/2014 (Chief Manager, Bank of Boroda – vs. – Sri Prabir 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 this Commission in case of Yashwant G. Ghaisas & Ors. – vs. – Bank of Maharasthra in Civil Appeal No.1359/2013 decided on 01.03.2013, was pleased to hold;-
“The appellants challenged the action of the bank by filing a complaint under Section 21 of the Consumer Protection Act, 1986 (for short, ‘the 1986 Act’). 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 under Section 13(2) of the SARFAESI Act that should be brought to the notice of the concerned authority. .........”.
Considering the materials referred above and after giving due consideration to the submission advanced by the Ld. Advocates appearing for the respective parties, it appears to me that the Ld. District Forum has passed an elaborate judgement discussing so many details but when it is quite apparent that the Respondent nos. 1 & 2 do not fall within the category of ‘consumer’ as defined in Section 2(1)(d) and further a notice under Section 13(2) of the SARFAESI Act has already been issued by the Appellant Bank on 09.11.2012 over the subject property, the Ld. District Forum should have dismissed the complaint in view of the specific provisions of Section 34 of the SARFAESI Act, 2002.
For the reasons aforesaid, the impugned order being not sustainable in the eye of law, the appeal is allowed on contest. However, there will be no order as to costs in this appeal.
The impugned Judgement/Final Order is hereby set aside.
The Respondent nos. 1 & 2/Complainants are given liberty to seek redressal of their grievances before the appropriate Court/Forum and in doing so, they may seek assistance in respect of the limitation from the authority reported in (1995) 3 SCC 583 (Laxmi Engineering Works – vs. P.S.G. Industrial Institute).
The Registrar of this Commission is directed to send a copy of this order to the Ld. District Consumer Disputes Redressal Forum, North 24 Parganas at Barasat for information.
