Consumer Commission Cannot Grant Any Relief Which Is Subject Matter Of SARFAESI Act: Orissa HC
The Orissa High Court has observed that the consumer commission lacks inherent jurisdiction to grant an injunction or any other relief which is a subject matter under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI’).
The Division Bench of Justice D Dash and Justice SK Jethy observed, “On a conspectus of materials on record in view of the provisions contained in the SARFAESI Act as discussed and unambiguous repeated pronouncement of the Apex Court referred to herein above since the District Consumer Commission lacked inherent jurisdiction as noted, this Court is left with no other alternative but to quash the entire proceeding i.e. C.C. No.91 of 2023 pending before the District Consumer Commission, Jharsuguda as also the order dated 14.12.2023 at Annexure-8 passed in Misc. Case No.31 of 2023 arising out of said C.C. No.91 of 2023.”
Advocate BC Panda appeared for the Petitioner whereas Advocate SK Jethy appeared for the Opposite Parties.
The Chief Manager of Union Bank of India, vide a writ petition, assailed the order passed by the District Consumer Commissioner directing the Petitioner-Bank not to proceed with the auction of secured assets which was being undertaken in terms of the provisions contained in the SARFAESI read with Rule 8 of the Security Interest (Enforcement) Rules, 2002.
The Petitioner submitted that it is settled law that the SARFAESI Act is a Special Act and a Code in itself and the steps taken in terms of the said Act cannot be called into question in a proceeding under the Consumer Protection Act, 2019 (‘CP Act’) and to fortify his submission, he banked upon the provisions as contained in Section 34 and the overriding clause U/s.35 of the SARFAESI Act, 2002.
The Court after perusing Section 34 of the SARFAESI Act has observed that no injunction shall be granted by any Court or other authority in respect of any action in the present day or in future to be taken under the SARFAESI Act and therefore, there cannot be any iota of doubt that the expression “other authority” will encompass the “Consumer Commissions”.
The Court said, “The maxim “ignoratia juris no excusat” applies in equal measure to all including the Consumer Commissions. The least that can be expected from the learned President and the Members of the District Commissions that before passing any order relating to any alleged violation vis-à-vis the provisions of any Special Act they will test the propositions claiming the reliefs on the touchstone of law governing the field which would enable them not to embark upon a journey which will lead to avoidable litigation and denude the faith of the common man in the fairness and effectiveness of the redressal mechanism and which will also not render otiose, the intent of the legislature in enacting Special Statues.”
The Court also observed that if the provisions of Section 35 of the SARFAESI Act read with Section 37 thereof is juxtaposed with Section 100 of the CP Act the irresistible conclusion is that any action that is taken or contemplated under the SARFAESI Act has to be governed by the SARFAESI Act alone and all other laws save and except those as find mentioned in Section 37 of SARFAESI Act have to yield to the same.
The Court also imposed a cost of Rs. 1,00,000/- on the Opposite Party for suppressing material facts relating to the pendency of the Securitization Application before the Debt Recovery Tribunal, while seeking an interim order.
Accordingly, the Court allowed the writ petition and quashed the impugned order.
Cause Title: The Chief Manager-cum-Authorized Officer, Union Bank of India, Jharsuguda v. Rajesh Kumar Agrawal and Anr.
Appearances:
Petitioner: Advocate BC Panda
Opposite parties: Advocate SK Jethy
