The main legal point established in the judgment is that the District Consumer Forum has no jurisdiction to entertain complaints related to the SARFAESI Act, 2002, and the remedy for such matters lies with the Debts Recovery Tribunal by way of appeal.

ORDER :

B.M. Bedi, Judicial Member

This revision petition has been preferred by opposite party No. 1 against the order dated 21.8.2013 whereby District Consumer Forum, Bhiwani stayed the recovery of loan amount from the respondent No. 1-complainant till the decision of the complaint.

2. Complainant (respondent No. 1 herein) had availed Cash Credit Facility from the petitioner-Bank to the extent of Rs. 15.00 lacs on the security of the hypothecation and coverage of risk of stock. The Bank had been getting the stocks insured and debiting the premium amount in the account of the complainant. On the intervening night of 4th/5th March, 2011, a theft took place in the insured shop of the complainant. According to the complainant, goods worth Rs. 12.00 lacs were stolen by some unknown persons. Complainant approached the opposite parties to indemnify the loss suffered by it but to no response. Complainant came to know that the Insurance Policy of the stocks of the shop had expired in March, 2010 and thereafter the opposite parties had not taken the new policy. Thus, alleging it a case of deficiency in service on the part of the opposite parties, complainant invoked the jurisdiction of the District Consumer Forum seeking direction to the opposite parties to pay Rs. 12.00 lacs indemnifying the loss caused to the complainant on account of theft in the shop along with interest @ 15% p.a. from the date of theft i.e. 5th March, 2011 till the date of payment; to pay Rs. 50,000 compensation for mental agony and harassment and Rs. 5,500 as litigation expenses.

3. During the pendency of the complaint an application was moved by the complainant for staying the recovery proceedings by the opposite parties by resorting to SARFAESI Act, 2002 as per their notice dated 1.8.2013 for Rs. 16,04,559.66 which included Rs. 12.00 lacs and interest thereupon.

4. Application was opposed by the petitioner-opposite parties taking plea that as per provisions of Section 17 of the SARFAESI Act, District Consumer Forum has got no jurisdiction to entertain and try the complaint and the complainant could have filed an appeal before the Debts Recovery Tribunal under Section 34 of the ibid Act. It was prayed that application moved by the complainant merited dismissal.

5. District Consumer Forum vide order dated 21.8.2013 by allowing complainant’s application, restrained the opposite parties from effective the recovery from the complainant till the final decision of complaint.

6. Aggrieved against the order of the District Consumer Forum, opposite party No. 1 has come up in revision.

Arguments heard file perused.

On behalf of the petitioner it has been argued that as per Clauses 12(a) and 12(b) of the agreement, the petitioner-Bank was not bound to get the stock insured. In support of his argument, learned Counsel for the petitioner referred to Clauses 12(a) and 12(b) of the agreement reproduced hereinbelow:

“12(a) That the said goods and the said debts and assets shall be kept at the Borrower’s risks and expenses and the Borrower shall at their own expense during the continuance of this security keep the said goods in good and marketable condition and in proper working order and shall likewise at its own expense insure and keep insured the said goods against loss or damage by fire, riot, civil commotion and all such other risks as the Bank shall require for the full market/replacement value thereof in an insurance office or offices to be approved by the Bank and shall deliver the policies of insurance to the Bank and shall likewise deliver the receipt for the last premium paid for every such policy of insurance and shall assign to the Bank every such policy of insurance and shall pay to the Bank all proceeds of any policy. In default, the Bank may (but shall not be bound to) keep in good condition and render marketable and in good working order the said goods or effect or renew such insurance. Any premium paid by the Bank and any costs, charges and expenses incurred by the Bank