Chandigarh

DF-II

CC/139/2014

Balwinder Singh - Complainant(s)

Versus

The Federal Bank Ltd - Opp.Party(s)

Harpinder Kaur Sandhu

10 Jul 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	139 of 2014
Date  of  Institution	:	20.03.2014
Date   of   Decision	:	10.07.2015

 

 

 

 

 

Balwinder Singh s/o Sh.Jangir Singh, R/o Flat No.7, Lal Kothi Naya Gaon, Mohali, District SAS Nagar Mohali.

 

             …..Complainant

Versus

 

The Federal Bank Ltd., Branch Chandigarh, SCO No.139/140, Sector 8-C, Madhya Marg, Chandigarh.

 

….. Opposite Party

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

         MRS.PRITI MALHOTRA             MEMBER

 

 

For complainant(s)      :     Ms.Harpinder Kaur, Counsel for     

                              complainant.

 

For Opposite Party(s)   :     Sh.Nitin Grover, Counsel for Opposite     Party

 

 

PER PRITI MALHOTRA, MEMBER

 

 

            Earlier this complaint stands dismissed for non-prosecution vide our order dated 18.09.2014 against which the complainant preferred F.A. No.333/2014 before the Hon'ble State Commission. The Hon'ble State Commission vide its order dated 31.10.2014 accepted the appeal filed by the complainant and order of this Forum was set aside and the case was remanded back with a direction to restore the same, to its original number & to proceed further, from the stage, at which it was dismissed for non-prosecution, and then decide the same, afresh, on merits, in accordance with the provisions of the Act. However, the complainant was also burdened with costs of Rs.5000/-, which was paid by him.

 

2]        As per the case, the complainant purchased Indica DLS E11, vide invoice No.IND/00376 dated 22.7.2009 having chassis NO. MAT6001429PE43292, Engine No.4751DI05EQZW02782. He took loan of Rs.2,80,000/- for the purchase of the said car, from the Opposite Party. He paid at least 2,70,000/- out the loan amount to the  Opposite Party. It was stated that the complainant failed to pay 8 installments.  When the complainant sent the amount of instalment for the month of February, 2014, it was returned by the bank. It was further stated that, on asking of the complainant, the bank sent an email to him stating that his account had been transferred to ARCIL. He was also informed that the amount of Rs.6000/- remitted by him in January was transferred to ARCIL account. It was further stated that the Opposite Parties did not pay proper attention to the loan case of the complainant. It was further stated that by not accepting the remaining installments of loan, the Opposite Party, was not only deficient in rendering service, but also indulged into unfair trade practice. When the grievance of the complainant was not redressed, therefore, the present compliant has been filed alleging deficiency in service and unfair trade practice on the part of the Opposite Party.

 

3]       The Opposite Party has filed the reply and admitted the grant of loan of Rs.2,65,000/- to the complainant for purchase of new vehicle and accordingly, the complainant signed loan documents (Ann.R-2). It is submitted that the complainant did not adhere to the repayment schedule as agreed and Opposite Party duly communicated to him and hence there was constant default in the repayment of the loan amount, which ultimately lead the loan account of the complainant to be classified as NPA (Non Performing Assets) account.  It is further submitted that whatsoever the amount was deposited by the complainant in the loan amount, the same was duly adjusted towards the loan account, which is clear from the statement of account.  It is pleaded that loan account of the complainant was assigned and transferred to Asset Reconstruction Company constructed u/s 3 of SARFAESI Act and the Asset Reconstruction Company (ARCIL) stepped into the shoe of the answering Opposite Party, which fact is well within the knowledge of complainant.  It is also pleaded that the action of the answering Opposite Party in transferring and assigning the account of the complainant in terms of Section 3 & 5 of the SARFAESI Act, is correct and valid and sustainable in the eye of law and no deficiency was rendered to the complainant.  It is further pleaded that if the complainant is ready to make the payment, then the same may be paid to ARCIL directly. Rest of the allegations have been denied with a prayer to dismiss the complaint.

 

4]       Parties led evidence in support of their contentions

 

5]       We have heard the ld.Counsel for the parties and have also perused the record.  

 

6]       The main grouse of the complainant, in the present complaint, against the Opposite Party is that they did not give proper care and attention to the loan case of the complainant and rendered deficient services.  With this grouse, the complainant submitted that a loan amounting to Rs.2.65 lacs was availed from the Opposite Party for the purchase of one Indica DLS E-11 Car and thereafter paid all the installments except few installments as mentioned in the complaint and in the month of May, 2012, March, 2013 and August, 2013 paid double the installments due on account of his loan.  Further submitted that the complainant was paying installments regularly from the month of Nov., 2013 to Jan., 2014 and when the installment in the month of Feb., 2013 was sent, the same was returned back to the account of the complainant.  On enquiry, the complainant received an e-mail (Ann.C-2) from the Opposite Party which is as under:-

“Your above referred a/c has been transferred to ARCIL, the amount remitted by you in January Rs.6000/- (Rupees Six thousand only) has been transferred to the ARCIL a/c.  Therefore the further remittance you may credit to our suspense a/c 13730051030002 with your a/c detail, we will remit the amount remitted to ARCIL a/c with us.”

   

The complainant claims that the Opposite Party did not issue any notice or even intimated the complainant while transferring his loan account to ARCIL.  Claimed further that still the complainant is ready to clear the loan account, but the Opposite Party bank is not accepting the remaining installments.

 

7]       On the other hand, the Opposite Party Bank while claiming no deficiency in service, submitted that as the loan account of the complainant has been assigned and transferred to the Asset Reconstruction Company (ARCIL) construed u/s 3 of SARFAESI Act, so the Asset Reconstruction Company had stepped into the shoes of the answering Opposite Party.  Further claimed that in view of Section 34 of the SARFAESI Act, the jurisdiction of Civil Court as well as other authority has been barred.  With the above submissions, the Opposite Party submitted the reason for the assignment of the loan account to ARCIL. Stated that the complainant was sanctioned loan amount of Rs.2.65 lacs on 22.7.2009 for the purchase of the vehicle vide agreement annexed as Ann.R-2 and apparently, the complainant did not adhered with the repayment schedule and there were constant defaults in the repayment of the loan amount despite consecutive default of 7 EMIs.  Resultantly, the account of the complainant was classified as NPA account as per the RBI guidelines.  Clarified further that as per the RBI and Bank norms, if there is default in three consecutive EMIs, the loan account would automatically slipped into NPA account.  Clarified further that an e-mail dated 10.9.2013 (Ann.R-5) was also sent to the complainant demanding the deposit of entire outstanding loan amount i.e. Rs.1,28,372/- as on 9.9.2013 or to clear the arrears of Rs.50,383/-, which complainant failed to adhere, so the account remained as NPA account. 

 

8]       Further submitted that as per Section 5 of the SARFAESI Act notice to the borrower regarding the assignment of the NPA loan account is not mandatory and the same is not against the public policy, so there is no illegality in assignment of the loan account of the complainant in favour of ARCIL without notice and is duly permissible under the provisions of SARFAESI Act.

 

9]       The availing of the loan amount of Rs.2.65 lacs on 22.7.2009 is proved vide Ann.R-2 and from the copy of the statement of account Ann.R-4, it is evident that the complainant failed to adhere the repayment schedule not only once but on repeated occasions.  Documents Ann.R-3 to Ann.R-3/E reveals that the complainant was regularly intimated for the defaults by the Opposite Party.

 

10]      The statement of account (Ann.R-4) reveals that there are consecutively 7 defaults from Sept., 2011 to March, 2012 due to which the loan account of the complainant was bound to be declared as NPA account.  It is settled rule of law that if there is default in three consecutive EMIs, the loan account would automatically slipped into NPA Account.  The record reveals that the complainant himself did not adhere with the terms & conditions of the loan documents and several letters and reminders were sent to the complainant to regularize the account, but the complainant failed to maintain the financial discipline. By virtue of Clause 27 of the Loan Agreement (Ann.R-2 Page-55), the Opposite Party Bank was at liberty either to proceed against the borrower (complainant) under the civil law for recovery of the amount due, or was consented by the complainant to recovery the dues under the provisions of the SARFASI Act, 2002.

 

11]      The Opposite Party was constrained to exercise its legitimate right under the provisions of Securitization and Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 (hereinafter to be referred as SARFAESI Act) being a secured creditor under the terms of the said Act. Due to constant failures to adhere the repayment schedule, the complainant’s account was assigned to ARCIL, the authority constituted under SARFAESI Act, which is legal enough and there is no such deficiency in service on the part of the Opposite Party.  The perusal of the provisions of SARFAESI Act reveals that the jurisdiction of Civil Court or any other authority has been barred except that of the Hon’ble Supreme Court & Hon’ble High Court, exercising jurisdiction under Section 226 & 227 of the Constitution.  It is right to clarify that under the SARFAESI Act, a Special Tribunal has been created to exercise on and from the appointed day, the jurisdiction, power and authority to entertain and decide applications from the Banks and Financial Institutions for recovery of debts due to such Banks and Financial Institutions.  For such view we are well guided by the judgment of the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in case of Indo Pacific Housing Finance Ltd. & Anr. Vs. Gopala Shetty, II (2014) CPJ 638 (NC) wherein it is held that in view of Section 18 of SARFAESI Act, the Fora  under the Consumer Protection Act, 1986 did not have the jurisdiction to try the suit relating to recovery of debts due to banks and financial institutions. Section 18 of the SARFAESI Act clearly bars the jurisdiction of any Civil Court or authority to entertain complaint/suit relating to recovery of loan amount by the Bank or Financial Institutions.    

 

12]      Likewise in the present complaint, the proceedings under SARFAESI Act had already been instituted against the complainant. So, as per the decision held by Hon’ble National Commission, in the above referred judgment, this Forum has no jurisdiction to entertain the complaint filed by the complainant.   

 

13]      For the reasons stated above, the present complaint is dismissed with no order as to cost.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

10.07.2015          

                                                                                     

 (RAJAN DEWAN)

PRESIDENT

 

 

 

(JASWINDER SINGH SIDHU)

MEMBER

 

 

 

 (PRITI MALHOTRA)

MEMBER

Om                                                                                                                       

 

 

DISTRICT FORUM – II

CONSUMER COMPLAINT NO.139 OF 2014

PRESENT:   None   Dated the 10th day of July, 2015

O R D E R                        Vide our detailed order of even date, recorded separately, the complaint has been dismissed against Opposite Party.                    After compliance, file be consigned to record room.

 

(Priti Malhotra)	(Rajan Dewan)	(Jaswinder Singh Sidhu)
Member	President	Member