HDFC Bank Limited v. Consumer Dispute Redressal Forum
2010-12-14
C.K.ABDUL REHIM
body2010
DigiLaw.ai
JUDGMENT C.K. Abdul Rehim, J. 1. Challenge in this Writ Petition is against Exts.P3 and P8, which are the complaint filed by the second respondent before the first respondent Forum as well as the interim order issued by that Forum, respectively. 2. Petitioner is a banking company. The second respondent had availed a term loan from the Lord Krishna Bank which got merged with the Centurion Bank and subsequently got merged with the petitioner Bank. According to the petitioner, the loan in question was secured through mortgage of immovable properties. But the second respondent had defaulted repayment and the Bank had issued repeated demands. The second respondent thereupon approached the first respondent Forum by filing Ext.P3 compliant disputing the demand on the ground that the rate of interest claimed is exorbitant. 3. During pendency of Ext.P3 compliant, the petitioner Bank proceeded with steps as contemplated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and Ext.P4 notice was issued under S.13(2) of the Act. Ext.P5 is the version filed by the petitioner Bank before the Forum against the complaint. But when the second respondent was issued with Ext.P4 notice he approached the Forum by filing Ext.P6 interim application to which the petitioner Bank had filed Ext.P7 objections (counter). The first respondent Forum had considered Ext.P6 application and inspite of the objections raised by the petitioner Bank, regarding the maintainability of the compliant, the forum had issued Ext. P8 order restraining the petitioner from proceeding with any further steps against the property in question. 4. From Ext.P8, it is evident that the first respondent Forum considered the question regarding maintainability of a compliant against steps initiated under the SARFAESI Act. But the Forum observed that by virtue of decision of the Honourable Supreme Court in Kishorilal V. E.S.I. Corporation (2007(II)CPJ 25(SC)) jurisdiction of consumer forums should be construed liberally to bring more cases for speedy disposal and therefore applying it can be found that there is no bar for the forum to exercise jurisdiction with respect to proceeding initiated under the SARFAESI Act. 5.
5. I am of the view that considering settled the legal position as held by the Honourable Supreme Court in Mardia Chemicals v. Union of India (2004 (2) KLT 273 (SC) = AIR 2004 SC 2371 ) and in a series of subsequent decisions, as evident in S.34 of the SARFAESI Act there is an express bar of jurisdiction of Civil Courts and other authorities from granting injunction with respect to any action taken under the SARFAESI Act. Further, under S.35 of the Act it is clear that the provisions shall have an overriding effect with respect to any other law for the time being in force, notwithstanding nothing inconsistent contained therein. Under such circumstances, interference made by the first respondent Forum against steps initiated under the SARFAESI Act, through Ext.P8 interim order, is without jurisdiction and the said order is unsustainable under law. 6. Under the above circumstances, I am of the view that Ext.P8 order is liable to be quashed. However learned counsel appearing for the second respondent had submitted that in view of pendency of the complaint before the Forum and in view of Ext.P8 order the said respondent was not able to file objections/representations against Ext.P4 notice, which was issued under S.13(2). Going by the provisions of the SARFAESI Act it is evident that on receipt of 13(2) notice, the borrower or guarantor is entitled to file objections/representations and the Bank will be at an obligation to consider such objections, as provided under S.13 (3A). Considering the fact that the proceedings was stayed by the Forum, I am of the view that it is only just and proper to afford such an opportunity to the second respondent. 7. Under the above circumstances, the Writ Petition is allowed and Ext.P8 order of the first respondent Forum is hereby quashed. The second respondent is given liberty to file objections/representations against Ext.P4 notice, within a period of two weeks from the date of receipt of a copy of this judgment. Needless to say that the petitioner Bank shall not proceed with further steps pursuant to Ext.P4 notice until such objection is considered and appropriate decision is taken and intimated to the second respondent.