Haryana

Ambala

CC/327/2022

M/S MAIN PAL SHARMA. - Complainant(s)

Versus

UNION BANK OF INDIA. - Opp.Party(s)

ASHUTOSH AGGARWAL

24 Aug 2022

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

 

                                                          Complaint case No.:  327 of 2022.

                                                          Date of Institution           :   10.08.2022.

                                                          Date of decision    :   24.08.2022.

M/s Main Pal Sharma and Co., 17 New Anaj Mandi, Ambala City through its proprietor Sh.Parmesh Kumar.

                                                                                      ……. Complainant.

                                                     Versus

Union Bank of India, 622-23, Katcheri Road, Ambala City, through its Authorized Officer/Branch Manager

                                                                             ..…. Opposite Party.      

Before:        Smt. Neena Sandhu, President.

                   Smt. Ruby Sharma, Member.

Shri Vinod Kumar Sharma, Member.         

                            

Present:       Shri Ashutosh Aggarwal, Advocate, counsel for the complainant.

 

Order:        Smt. Neena Sandhu, President

 

1.                The present complainant has been filed by the complainant under Section 35 of the Consumer Protection Act,  2019 (hereinafter referred to as ‘the Act’) against the Opposite Party (hereinafter referred to as ‘OP’) praying for issuance of following directions to it:-

to pay the claim amount of Rs.4,00,000/- along with interest @ 24,% P.A. from the date of filing of the present complaint till the date of realization of above amount, alongwith with Rs.50,000/- as compensation for the mental agony and wasting of time while making frequent visits in the office of OP and deficient services rendered by the OP towards complaint or any other exemplary relief to which in the opinion this Hon'ble Commission deem fit be also awarded in favour of complainant.

OR

Any other relief which this Hon'ble Commission may deem fit in the facts and circumstances of the case may also be granted in favour of the complainant and against the OP. 

2.             Alongwith this complaint, the complainant has also filed application seeking direction to restrain the OP from auctioning the suit property.
3.           Brief facts of the case are that the complainant is a Commission Agent and a very old customer of the OP and has availed Cash Credit Limit to the tune of Rs.45 Lacs from it. In order to secure the said CC Limit, he mortgaged the property of his brother namely Subhash Chand Sharma i.e. Double Storey Commercial Property Shop No.17, New grain Market, Ambala City. However, due to the detroit market conditions, unforeseen circumstances, policies of the govt., demonetization of currency and taxation aspect etc., the business of the complainant remained unpleasant resulting to which the accounts of the complainant attained irregularity. The OP despite knowing above detailed facts started pressuring the complainant to make the said account regular forthwith, and threatened him that it will take possession of the mortgaged property and shall dispose/sell/auction etc. at throw-away prices. The complainant also apprised the OP with the guidelines issued by the Reserve Bank of India of the Frame Work for Revival and Rehabilitation of micro, small and medium enterprises but to no avail. Thus, the OP instead of extending a helping hand to the complainant to enable it to fulfill its contractual obligations dealt a severe blow by classifying the account of the complainant as NPA illegally against the provisions of law and subsequently instead to bail out the complainant from the financial critical situation, used the law arbitrarily, without following the mandatory and binding provision of law i.e.. "to constitute the designated committee in term of clause 3.3 of the revival frame work for revival and rehabilitation of the Micro Small and Medium Enterprises as per instructions of the Reserve Bank of India in terms of Clause 3.3 of the Frame Work for Revival and Rehabilitation of micro, small and medium enterprises dated 17.3.2016 issued by the Reserve Bank of India before proceeding under the SARFAESI Act." (Annexure P-1). Classification of account as Non-Performing Asset (NPA) is sine qua non of action to be taken u/s 13(2) of the SARFAESI Act. The OP has not mentioned whether the account has been classified as sub-standard; doubtful and loss. The mandatory details elaborating how the account became NPA have not been disclosed even. The OP has capitalized penal interest against the settled law of the Hon'ble Supreme Court in the Ravindra's case. The alleged outstanding includes capitalized penal interest and capitalized interest even on the amount of expenses/charges which the OP cannot claim under law. Now, instead to follow the mandatory and binding provision of law as detailed above, the OP has issued notice of sale of property of the complainant vide letter dated 12-02-2021 intimating him that the property shall be sold by the OP at 11 AM to 1 PM on 30-08-2022 by way of e-auction thereby defeating the legal rights of the complainant illegally and arbitrarily. The complainant also  intimated the OP that the business of the complainant has miserably failed due the Detroit market conditions, unforeseen circumstances, policies of the govt., demonetization of currency and taxation aspect etc. and further due to national lockdown due to spread of pandemic COVID 19 disease but to no avail. Pleading that there is deficiency in providing service and unfair trade practice on the part of the OP, hence, this present complaint.     
4.           We have heard the learned counsel for the complainant at the preliminary stage and carefully gone through the case file.

5.                 Learned counsel for the complainant submitted that since the OP did not follow due procedure before proceeding with the case under SARFAESI Act as such, the said act, amount to deficiency in providing service, negligence and adoption of unfair trade practice on its part.  In support of his contention, learned counsel  for complainant, has relied upon the judgment dated 01.07.2015 passed by Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in Revision Petition No.1295 of 2015, in the case titled as ‘Bank of Baroda Vs. Minaben R.Bane’.

6.                 It may be stated here that in the case Bank of Baroda Vs. Minaben R.Bane’ (Supra) , the bank did not pay insurance premium nor did it obtain insurance policy, the Hon’ble National Commission, has held that there is deficiency in service on the part of the Bank. Pendency of a case under SARFAESI Act nothing to do with the facts involved. But in the present case, due to non-payment of the loan amount, the account of the complainant was declared NPA, thus bank cannot be said to be deficient in providing services. Since, the facts of the present case are different from the facts of the case of Bank of Baroda Vs. Minaben R.Bane’ (supra), therefore, the law laid down by the Hon’ble National Commission in the said case is not applicable in the present case. Admittedly the proceedings in the matter have already been initiated by the OP under the SARFAESI Act and the same are pending under it. As per Section 34 of SARFAESI Act which reads as under:-

“….34. Civil court not to have jurisdiction.  No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts 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 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 (51 of 1993)….” 

Neither the Civil Court nor any other authority can arrogate to itself, the right to make decisions or interfere with proceedings under the SARFAESI Act. A similar question as to whether, the Consumer Foras have jurisdiction to decide any matter, when the proceedings under SARFAESI Act is pending, fell for determination before the Hon’ble National Commission in Traxpo Trading Co. Vs. The Federal Bank Ltd, I (2002) CPJ 31 (NC) wherein it was clearly held that under Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, jurisdiction of this Commission is barred, where the Bank has filed suit for recovery, before DRT. Similar view was reiterated by the Hon’ble National Commission in Standard Chartered Bank vs Virendra Rai, Revision Petition No. 721 Of 2013 decided on 1 April, 2013. Relevant part of the said order is reproduced hereunder:-

“……13. Last, but not the least, this Commission clearly, specifically and unequivocally held in Traxpo Trading Co. Vs. The Federal Bank Ltd, I (2002) CPJ 31 (NC) that under Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, jurisdiction of this Commission has been barred, where the Bank has filed suit for recovery, before DRT.

 14. Under these circumstances, the proceedings pending before the District Forum are hereby quashed and the revision petition is accepted. The complaint is dismissed.

Copy of this order be sent to the State Commission and District Forum to follow the order passed by this Commission, time and again, without caring whatever their personal views are. …..”

7.                 Since, as stated above, in the present case also, the OP bank has initiated the proceedings under the SARFAESI Act, as such, the principle of law laid down by the Hon’ble National Commission in the cases referred to above are squarely applicable to the present case.  This Commission therefore did not vest with jurisdiction to entertain the present complaint.
8.                 For the reasons recorded above, this complaint stands dismissed in limini with no order as to cost. Consequently, the application filed by the complainant seeking directions to retrain the OP from auctioning the suit property also stands dismissed having been rendered infructuous. However, the complainant is at liberty to avail other legal remedy, if any, available to him under the law. Certified copy of this order be supplied to the complainant, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

Announced on 24.08.2022.

 

          (Vinod Kumar Sharma)            (Ruby Sharma)     (Neena Sandhu)

          Member                                   Member                    President