Read Time: 07 minutes

Delhi State Consumer Dispute Redressal Commission, in its judgment dated 19^th March, held (1) Auction purchaser is not a Consumer under the Consumer Protection Act (2) Subject matter being seized off under the provisions of the SARFAESI Act cannot be adjudicated by the Consumer Forum.

Reliance was placed on State Bank of India v. G. Mahimaiah, decided on 30.10.2015 and Bank of India v. Anil Raveendran, decided on 03.03.2015.

Justice Sangita Dhingra Sehgal and Shri Anil Srivastava, Member State Commission, while hearing a complaint under Section 17 of the Consumer Protection Act, 1986, noted, “the complaint is not maintainable before the Consumer Forum since the complainant being the auction purchaser is not a consumer and thus not entitled to raise the consumer dispute. Secondly the issue, relying on Section 34 of the SARFAESI ACT, cannot be adjudicated by this Commission. Accordingly the complaint is returned granting liberty to the complainant to file it before the appropriate forum.”

Court clarified the position on the present aspect through the following judgments;

In Harianandan Prasad Vs. State Bank of India, decided on 31.05.2012, it was observed,  “Tribunals constituted under the statute are expected to exercise their jurisdiction in accordance with the provisions of the Act under which they have been constituted. There is a clear cut demarcation of the jurisdiction and powers amongst various tribunals and no attempt should be made by one Tribunal to usurp the powers and jurisdiction of other either directly or indirectly.”

Appeal in Consumer Complaint No. 302 of 2012 titled Yashwant G. Ghaisas v. Bank of Maharashtra, where the Top Court said, “The National Commission is not empowered to arrogate to itself the powers which come within the jurisdiction of Debt Recovery Tribunals. This matter is purely covered within the jurisdiction of DRT or DRAT. If there is any grievance against the notice under Section 13 (2) of the SARFAESI ACT that should be brought to the notice of the concerned authority.”

Provisionary backing

Section 34 of the SARFAESI Act, 2002 provides that “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.”

Complainant in the present case approached against the Allahabad Bank, alleging deficiency of service for not having refunded the earnest money deposited by her while participating in an auction for a flat in New Delhi, which was later found to be in litigation before the DRT.

An amount of Rupees 7.90 lacs was paid by the complainant to the respondent bank.

Respondents submitted that the complainant being an auction purchaser cannot agitate issues before the Consumer Forum as the jurisdiction rightfully vests with the DRT established under the provisions of Recovery of Debts due to the Banks and Financial Act 1993 or under the Provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002.

Questions for adjudication essentially were (i) whether the complainant is entitled for refund of the earnest money as prayed for (ii) whether the complainant being an auction purchaser is a consumer within the meaning of Section 2(1)(d) of the Act and whether the subject matter being seized off under the SARFAESI Act can be adjudicated by the Consumer Forum.

Case Title: Smt. Keshmati Meena v. Allahabad Bank | Complaint No. 576 of 2013