Sri Partha Kumar Basu, Hon’ble Member:

This is a complaint case regarding a dispute in the banking sector against the OPs who are office bearers of the bank with a prayer by complainant for a direction on the OPs to pay a compensation with cost for their negligent act, unfair trade practices and deficiency in services.

The gist of the complaint as averred by the complainant Sri Rathin Chandra Saha is against the O.P. Nos. 1 and 2 and 3 who are the zonal / circle office, chief manager and the branch manager respectively of the O.P. bank. The case of the complainant is that he was approved with a cash credit loan under bank’s trade scheme from the O.P. 2 for maintaining living expenses by mortgaging a property when the O.P. Nos. 2 and 3 sanctioned the cash credit loan on 29.02.2008 and 21.07.2010against a guarantor of the loan being his spouse namely Shyamali Saha. The O.P. No. 2 bank issued a demand notices dated 19.04.2017 on the complainant for non-payment of dues of Rs. 3,53,436.82/- as on 30.07.2016 and another demand notice dated 06.10.2017 for Rs. 3,49,557.82/-. The complainant made time prayer by letter dated 05.01.2018 to repay loan before the bank authorities but the O.P. No. 2bank sent a possession notice dated 03.11.2018 on the mortgaged property. The petitioner approached district authoritiesfor remedial measures through petition dated 18.03.2019. But still the bank notified the mortgaged property for e-auction by publishing notice on 14.02.2021 as per demand notice dated 07.06.2018 with mention of possession taken on 03.11.2018 and outstanding balance of Rs. 3,49,557.82/- against the mortgaged property. The petitioner again approached the district authorities vide letter dated 15.02.2021 and the O.P. No. 1 bank prayed for waiver of interest by letter dated 04.03.2021 and 13.03.2021 for allowing to pay only the principal amount of Rs. 3,95,200/- and for return of the registered deed of the mortgaged property but the O.P. No. 3 branch rejected the prayer of the complainant by letter dated 12.03.2021 and 18.03.2021.Being aggrieved, the complainant approached the district commission with an application u/s 12 of C.P. Act, 1986 with a prayer to refund the sum of Rs. 45,642.18/- which got accrued as interest on loan along with a compensation of Rs. 1lakh and cost thereof. Exhibits A to E x. J were marked by the complainant as part of the proof at evidence stage to substantiate his case.

The O.Ps. opposed the move of the complainant by filing W/V in which it is contended that the complainant as per his letter dated 05.01.2018 admitted his inability to repay the loan. In the W/V the O.Ps. did not oppose any of the records and documents exhibited by complainant but contested that the letter dated 13.03.2021 filed by the complainant is not in full and final settlement of the loan account or not a full reimbursement of loans and interests and refused to issue clearance certificate in respect of the loan account and to return the title deed that was mortgaged against the loan till full repayment of all dues thereof. Neither there was any assurance from the O.P. Bank to the complainant cum borrower to deposit Rs. 3,95,200/- by waiver of the balance interest accrued in the loan account.   

The bank also contested that the this consumer commission cannot forestall the proceeding notified under the SARFAESI Act under any manner being the complainant defaulter in the matter of repayment in time in line with the terms and condition of the loan disbursement agreement and the mortgaged property which belongs toShyamaliSahabeing wife of the complainant Rathin Chandra Saha and guarantor of the said loan account No. 1990510000090 at UCO bank, Baruipur Branch. Due to non-repayment, the loan account of M/s Ma Laxmi Bhander whose proprietor is the complainant, became Non Performing Assets (NPA) since 30.07.2016 and thereafter on 30.09.2017, when proceedings were initiated under SARFAESI Act preceded by demand notices dated 19.07.2017 and 06.10.2017. The outstanding balance as on 30.09.2017 stands Rs. 3,49,557.82/- along with accrued interest which became classified as NPA and the aforesaid 2 notices  dated 19.07.2017 and 06.10.2017 were duly served upon the complainant cum borrower who failed and neglected to repay the outstanding amount and accordingly the authorised officer of the bank took symbolic possession on 03.11.2018 of the mortgaged property in line with SARFAESI Act and published the same in print media on the same date as general notice for e-auction to recover the outstanding bills due to repeated failure to repay the loan inspite of getting multiple opportunities. The O.P. bank contended that after initiation of processing under the SARFAESI Act the complainant deposited Rs. 3,95,200/- suo moto on 04.03.2021 in the loan account but the balance remains outstanding. In the demand letter for Rs. 3,49,557.82/- the interest amount was added up to 30.06.2017 which further got accrued over time. After initiation of proceeding under SARFAESI Act, the O.P. official of the bank have no authority to waive the interest to any borrower, when the borrower could have approached the authorised officer under SARFAESI Act and as such the prayer of the complainant vide letter dated 04.03.2021 praying for waiver of outstanding dues and releasing mortgaged property was rejected by the O.P. bank by letter dated 12.03.2021. As per section 18 and 34 of the SARFAESI Act, no tribunal, forum, court has the jurisdiction to adjudicate any dispute on going under the purview of SARFAESI Act, once the action of proceeding is initiated under the SARFAESI Act for which the appropriate forum is DRT. The O.P. bank filed several judgements of various higher forums to lend support to their contention regarding adjudication under the SARFAESI Act which cannot be addressed by the Consumer Disputes Redressal Commission.

Gone through the complaint case in detail alongwith perusal of all records and documents. The arguments were heard in full.

The complainant admittedly took cash credit loan for running a grocery shop to earn and maintain livelihood as a proprietor of his firm from OP Bank against mortgage of property held in favour of his spouse but failed to make timely repayment due to loss in business and problems due to his health. The complainant submits that he never wanted to deceive the opposite parties in re-payment and paid off the principal amount but prayed for waiver of the accumulated interest.

The opposite parties least went ahead and carried on with their activities and initiated the actions by floating the e-auction process for the property mortgaged for the loan which was notified to the complainant by the OPs. The mortgaged property was auctioned with intimation to complainant with mention of reserve price in the notice. The complainant never complained about not intimating him about selling the mortgaged property neither about any low reserve price. This complainant has paid the principal amount of outstanding loan but asks for waiver of interest.  As OP bank went ahead with e-auction process of mortgaged property and since there was no remedy available from the opposite parties, the complainant has filed this complaint case at this district commission.

It is observed from records that there is no additional ingredient available during the filing of evidence by both side and exchange of questionnaires and replies. There is no quarrel between the contesting parties regarding the fact part of this dispute.

Further, the opposite parties have provided few citations to substantiate their case stating that the higher Courts clearly mentioned that the Consumer Commissions have no right to interfere with the SARFAESI proceedings of the bank and given the judgments in support since The Consumer Protection Act is a general enactment and the SARFAESI Act is a special enactment. Actually The Consumer Protection Act was enacted in 1986, whereas the SARFAESI Act was enacted in 2002. Under Section 34 of the SARFAESI Act, the jurisdiction of the civil courts for entertaining any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by the said Act to determine is barred 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 the said act. Under Section 35 of the SARFAESI Act, the provisions of the said act is to 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. The SARFAESI Act is a comprehensive law providing for all aspects relating to the subject dealt with by that legislation and the Act provides to persons aggrieved by measures taken under the Act a remedy by way of challenging the action taken under the act before a Quasi-judicial authority namely DRT or DART, with a right to file a further appeal before the DRT/DART making the legislation a self-contained one.

In this respect the following issues have arisen out :-

Point 1: Which is the latest law - whether it is SARFAESI Act or the Consumer Protection Act AND whether the commission has the power to examine the case, if the actions taken by the opposite parties are based on SARFAESI act?

Point 2: If Point no 1 is in affirmative, then whether any deficiency of service by the opposite parties with respect to the complainant and if so, what relief he is entitled to?

To answer the above queries, this commission has gone through the exhibits, complaint petition, W/V, evidences and questionnaire /replies and arguments. This commission also gone through the SARFAESI act and the scope of the consumer commission when actions are taken based on the SARFAESI proceedings. Both the points are taken up for the sake of brevity and to avoid repetitions.

The enforcement of SARFAESI Act 2002 alongwith additional updates on the SARFAESI  (Amendment) Act, 2020came into force on 23.01.2020, whereas the latest amendment to the Consumer Protection Act 1986 was the major one and the Consumer protection Act 2019was enacted on 09.08.2019 and came into force on20.07.2020. Hence this commission is of the view that the Consumer Protection Act2019 is the latest one and the Section 34 and Section 35 cannot prevent the Consumer Protection Act to look into the cases which involves SARFAESI Act.

The objective of the Consumer Protection Act is to see any violation of the consumer rights or any unfair trade practices followed against the consumers or any deficiency of services against the consumers and not to override any other law for the time being in force. 

With respect to the jurisdiction of the Consumer Disputes Redressal Commission, this commission is of the view that if the interest and rights of the consumers are violated, it can step in and analyse the case. According to Section 100 of the Consumer Protection Act 2019 or Section 3 of the Consumer Protection Act 1986which states that :-

‘The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force’

Also, the Supreme Court in the case CIVIL APPEAL NO. 3581-3590OF 2020 M/S. IMPERIA STRUCTURES LTD. …Appellant VERSUS ANIL PATNI ANDANOTHER …Respondent mentioned that :-

“the court referred to its earlier judgments of the Hon'ble Supreme Court and the judgments of the various Hon'ble High Courts which consistently held that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.”

Also, u/s 34 of the SARFAESI Act, no civil court has jurisdiction to entertain any suit or proceeding in respect of any matter which a DRT or DART 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 actor under the recovery of debts due to banks and financial institutions act, 1993 (51of 1993). But Consumer Disputes Redressal Commission is not a civil court. In Malay Kumar Ganguly vs Sukumar Mukherjee &Ors on 7 August 2009, it was held by the Hon’ble Supreme Court :-

“The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court”.

The Consumer Protection Act, 2019 (CPA) is a special act created by the Parliament to protect the interests of consumers and to provide for the establishment of Consumer Commissions for redressal of consumer grievances. The SARFAESI Act is also a special act created by the Parliament to enable banks and financial institutions to recover their dues from borrowers who have defaulted on their loan payments.

Section 100 of the CPA Act provides for the validity of proceedings initiated under the CP Act, even if there are parallel proceedings initiated under other laws or regulations, including the SARFAESI Act. However, the scope of the Consumer Commission is limited when a proceedings are initiated under the SARFAESI act and they have jurisdiction to examine the deficiency in service or unfair trade practice committed by the bank, and not to interfere with proceedings initiated under the SARFAESI Act. The jurisdiction of the Consumer Commission is limited to the provisions of the CPA act, and it cannot set aside the provisions of any other law or regulation. Hence this commission can see any deficiency in service or unfair trade practice committed by the opposite parties which violates the right of the consumers.

May it be mentioned that The SARFAESI Act is a later act than the Consumer Protection Act. The SARFAESI Act is a special enactment, and the Consumer Protection Act is a general enactment. It is settled law that the provisions of a special enactment would override the provisions of a general enactment. The SARFAESI Act provides for specific remedies to aggrieved persons for challenging proceedings under the said Act. Therefore, if it is to be held that Consumer Disputes Redressal Forum has also jurisdiction to entertain challenge against proceedings under the SARFAESI Act, that would be hit by Section 34 in so far as that would be inconsistent with the provisions of the SARFAESI Act.

With respect to this complaint, this commission must give attention to the following points.

Since the loan Account became NPA due to the non-repayment of loan, the opposite parties have every right to invoke SARFAESI Proceedings to recover the outstanding loan amount from the complainant. This commission out rightly rejects the allegation mentioned by the complainant that the opposite is invoking the SARFAESI act to put mental pressure and agony to the complainant. It is the duty of the complainant to repay the loan without any default and if they failed to repay the loan, they need to face the consequences of the same. It is true that the complainant has taken a business loan from the OP bank mortgaged property which is in the name of his wife. But from the time of taking loan, the loan was not properly repaid by the complainant regularly despite repeated notices from the opposite parties. The loan account became NPA though the opposite parties have given sufficient time to the complainant to regularize the account before taking any action from their end. The complainant did not utilize the opportunity provided by the opposite parties to repay. Later, demand notice u/s 13(2) of Securitisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act 2002 (SARFAESI Act) was issued by the Authorized officer calling upon the complainant to pay back the sum with further interest failing which bank was constrained to initiate measures enumerated u/s 13 (4) of SARFAESI Act. But even after the notice, no action was taken by the complainant as well as the co-obligants. Hence possession notice under section 13(4) of the SARFAESI Act was issued to the complainant with respect of the immovable property mortgaged to the opposite parties and the opposite parties took symbolic possession. As the complainant was given enough time at each stage of the proceedings to payback the outstanding loan amount to the opposite parties but failed to utilize the same, hence there is no deficiency of service or unfair trade practice followed by the opposite parties in the entire transactions. They have utilized the legal rights available for them to recover the outstanding amount. The allegation by the complainant that he has paid principal but not the interest that was not waived by OP Bank which tantamounts to deficiency in service by OP is untenable.

As a result, this complaint case fails to succeed.