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2026 Supreme(Online)(SCDRC) 3032
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
HDFC Bank Limited – Appellant
Versus
Shilpi Siddiqui – Respondent
FIRST APPEAL NO. 388/2024
For the Appellants/Petitioners: Sourav Kumar Jena
For the Respondents: Varun Agarwal, Sachin, Kanishk Dev Sharma
The jurisdiction of Consumer Forums is not barred under the SARFAESI Act, 2002 unless the financial institution has already formally initiated recovery proceedings under said Act, allowing the Commission to grant interim injunctions under the Consumer Protection Act, 2019 to prevent irreparable injury.
Headnote:(A) Consumer Protection Act, 2019 - Section 38(8), Section 100 - SARFAESI Act, 2002 - Section 34, Section 35 - Jurisdiction of Consumer Commission - Interim relief - Restraining financial institution from coercive action - Concurrent jurisdiction - Whether Consumer Commission has power to grant injunction against bank when no proceedings under SARFAESI Act initiated.
(B) Interim Relief - Balance of convenience - Irreparable injury - Trial court granted interim stay against coercive recovery action by bank - Bank challenged on jurisdictional grounds claiming SARFAESI Act override - Held: Consumer Protection Act is a special legislation; in absence of ongoing SARFAESI proceedings, Consumer Commission has jurisdiction to grant interim relief to prevent potential irreparable harm.
Facts of the case:
The respondent (complainant) is the widow of a deceased borrower. After the death of her husband, she sought a claim from the insurance company (OP-2) for the outstanding loan. The claim was repudiated, and the complainant faced potential recovery proceedings from the bank (OP-1). The District Commission granted an interim order restraining the bank from taking coercive action, which was challenged by the bank in appeal.
Findings of Court:
The Commission upheld the District Commission's order, noting that since the bank had not yet initiated proceedings under the SARFAESI Act, the jurisdictional bar under Section 34 does not apply, and the Consumer Commission retains the power to grant interim relief to preserve the subject matter of the dispute.
Issues: Whether the District Commission has jurisdiction to pass an injunction order against a bank despite the provisions of the SARFAESI Act, 2002.
Ratio Decidendi: While the SARFAESI Act is a special legislation, the bar on jurisdiction under Section 34 only triggers upon the initiation of proceedings by a bank; until such time, the Consumer Protection Act provides an additional remedy to an aggrieved consumer, and the Commission maintains the authority to grant necessary interim relief to prevent irreparable private injury. (Paras 11, 14, 15)
Result: Appeal dismissed; District Commission's order upheld.
| Table of Content |
|---|
| 1. summary of lower commission proceedings and initial interim order. (Para 1 , 2) |
| 2. appelant-respondent arguments regarding sarfaesi act vs consumer protection act overlap. (Para 3 , 4 , 5 , 6 , 7) |
| 3. judicial reasoning on the non-applicability of section 34 sarfaesi without initiation of measures. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15) |
| 4. final procedural directives and dismissal of appeal. (Para 16 , 17 , 18 , 19) |
CORAM:
HON’BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON’BLE MS. BIMLA KUMARI, MEMBER (FEMALE)
Present: Mr. Sourav Kumar Jena, Counsel for the Appellant.
Mr. Varun Agarwal and Mr. Sachin, Counsel for the Respondent No.1.
Mr. Kanishk Dev Sharma, Counsel for the Respondent No. 2.
PER: HON’BLE JUSTICE SANGITA DHINGRA SEHGAL, PRESIDENT
JUDGMENT
1. The facts of the case as per the District Commission record are as:
“1. By way of this order, we shall be disposing the application filed by the Complainant by which he has sought directions against the OPs herein. Briefly stated, the Complainant is the wife of one Late Shri Salim Shavas Siddiqui, who was insured and policy holder of the life insurance policy issued by M/s HDFC Life Insurance Company Limited (OP-2 herein) securing the home loan that was extended to him by M/s HDFC Ltd. (OP-1 herein). As the said insured expired, the Complainant herein lodged the insurance claim with OP-2 for payment of the balance outstanding loan of the OP-1. The said claim was repudiated by the OP-2 and the outstanding loan of OP-1 was not cleared by OP-2. The Complainant challenged the said repudiation in the complaint and the sought a direction, inter alia, for the OP-2 to repay the outstanding amount of the loan of OP-1. Although, in the complaint, the Complainant has not sought any specific relief qua OP-1, by way of this application, the Complainant has sought a direction against OP-1 from desisting from any coercive action against the Complainant for recovery of the outstanding loan amount till disposal of this complaint.”
2. The District Commission after taking into consideration the material available on record passed the order dated 15.04.2024, whereby it held as under:
“2. We have issued notice on this application to both the OPs. Both the OPs have filed their respective replies. We have also heard the arguments of the parties before reserving the order on the application. In the meantime, by way of continuous interim orders, the OP-1 was directed not to take any coercive action against the Complainant. The interim order is still continuing till today.
3. In its reply, OP-2 Insurance Company has argued for dismissal of the application in view of their argument that complaint is not maintainable. However as the merits of the complaint is yet to be finally decided, we cannot accept the argument of non-maintainability of the complaint at this stage of deciding the application.
4. OP-1, against whom the prayer of the Complainant in this application is sought, has also filed its reply and the application was argued by Ld. Advocate for OP-1 at length.
5. The Complainant has primarily argued that as the OP-2 Insurance Company has not made the payment of the outstanding loan in accordance with the insurance policy, the loan with the OP-1 remains unpaid. In view of outstanding loan, the OP-1 may initiate recovery proceedings against the Complainant under the relevant law and dispose of the property in question against which the loan was sanctioned by OP-1, if the protection is not granted to the Complainant. Further, if the property is disposed of and loan is recovered by OP-1, in case the Complainant herein succeeding in this case primarily against OP-2 and OP-2 also making the payment in accordance with the policy in question, OP-1 would not be in a position to put the Complainant back in possession of the property in question, against which the loan was sanctioned by OP-1.
6. OP-1, in its reply as well as during arguments argued that the OP-1 s well within its right to
