Consumer forum isn't for debt recovery cases

The National Commission held that a consumer forum is not the right authority for Debt Recovery Tribunal cases, and dismissed the petition

Aruna Trilok Shende had taken a housing loan of Rs 4,00,000 from State Bank of India, Chandrapur Branch. As she defaulted in making timely payment of the instalments, the bank approached the Debt Recovery Tribunal (DRT) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarafesi) Act. After the DRT ruled in the bank's favour, State Bank took possession of Aruna's house on August 18, 2011.

In retaliation, Shende filed a consumer complaint against the bank on May 30, 2015, alleging that the bank had forcibly taken possession of her house without following the prescribed procedure for execution and enforcement of the DRT order. Since the complaint was filed after a lapse of more than two years, she also made an application for condonation of the delay in filing the complaint. The bank contested the case, questioning the jurisdiction of the consumer forum, arguing that the only remedy available to Shende would be to file suitable proceedings under the Sarafesi Act.

Shende’s application for condonation of delay was rejected by the Forum, and her complaint was dismissed. She then approached the Maharashtra State Commission which dismissed her appeal.

Shende then moved the National Commission through a revision petition, contending that delay ought to have been condoned by treating the cause of action to be continuing. Her submission was held to be incorrect, as the bank had taken possession of her house on August 18, 2011, which would be the date when the cause of action arose. So limitation would have to be computed from this date, and the complaint filed on May 30, 2015, was held to be time-barred since it was filed much beyond the limitation period of two years.

Shende argued if the limitation is computed from August 12, 2013, when she obtained the registered sale deed from the office of the sub-registrar, her complaint was in time. The National Commission rejected this argument, observing that the registered sale deed was not a necessary document for the filing of the consumer complaint, and had no bearing on the dispute.

The National Commission noted that Shende’s grievance was about possession of her house having been taken by the bank without following the prescribed procedure under the Sarafesi Act. Since the controversy arose out of the proceedings under the Act, the Commission held that the proper authority to approach would be the DRT, and not the consumer fora constituted under the Consumer Protection Act.

Accordingly, by its order of January 10, 2019, delivered by Justice V K Jain, the National Commission dismissed Shende’s revision petition, holding that the complaint was not maintainable and that it had rightly been held as being time-barred.

The writer  is a consumer activist