Apropos of this, a landmark judgment from the Orissa High Court has demarcated jurisdictional perimeters between Consumer Commission and matters pursued under Securitisation and Reconstruction of Financial Assets Enforcement Of Security Interest Act, 2002 (SARFAESI Act). The court conclusively held that consumer commissions do not even have inherent jurisdiction to grant any relief whatsoever relating to the causes governed by SARFAESI Act.
The Case Overview
This was a case where the Chief Manager of Union Bank In India had filed an appeal against the order of District Consumer Commission, Jharsuguda. The bank was asked by the Commission not to go ahead with auction of secured assets which it has started under SARFAESI Act. The Division Bench of Justice D Dash and Justice SK Jethy, while quashing the proceedings stressed that the Consumer Commission's had no jurisdiction in this regard.
Key Legal Standpoints
1. Refer to the SARFAESI Act as a Special Act:
The SARFAESI Act has been referred to as a special legislation and an exhaustive code in itself, exclusively to address the issue of securitization and reconstruction of financial assets and enforcement thereof. This act establishes a process for banks to recover non performing assets without the finding of or intervention by courts.
2. Jurisdictional Clarity:
Section 34 of the SARFAESI Act categorically provides that no Court or other authority shall grant any injunction in respect of any action taken or to be take under this Act. The High Court held that 'other authority' included Consumer Commissions and would thus extend to cover the SARFAESI Act which indeed vested additional powers in SEBI, NHB etcusepara14.
3. Rules of Interpretation
It is a well established legal maxim that if certain provisions are explicitly provided, the legislature very consciously chose not to include them in any other provision i.e. Special statues so special laws apply:
In this context, the Court referred to an oft-quoted legal maxim "ignorantia juris non excusat" (ignorance of law excuses no one) and emphasized that all judicial fora, including Consumer Commissions are supposed to be alive as well as abide by various jurisdictional limitations specifically legislated under special statutes like SARFAESI Act. The High Court stressed that said bodies must not issue orders in matters manifestly out of their jurisdiction thereby leading to frivolous litigation and undermining faith among the public on legal system.
Court's Decision
Having examined the relevant sections of SARFAESI Act and those under Consumer Protection Act, Orissa High Court held that District Consumer Commission had documented beyond its jurisdiction. The Court held that no action under the SARFAESI Act could be taken in violation of its own provisions and it warranted not giving effect to any contrary or conflicting orders passed by other authorities including Consumer Commissions.
Further the Court Oil cited Section 35 of SARFAESI Act which provides that its provisions ave effect notwithstanding anything inconsistent therewith contained in any other law except those mentioned in section 37 Of T. This also reinforces the supremacy and exclusiveness of SARFAESI Act in recovery related to financial asset.
Implications and Costs
While setting aside the Consumer Commission's order, the High Court slapped a cost of Rs. 1 lakh on that opposite party for suppression of vital information about Securitization Application pending before Debt Recovery Tribunal. This fine demonstrates the Court's disdain for parties withholding information to get favourable interim orders.
Conclusion
This decision of the Orissa High Court is very important as it reinfroces territorial limits among different judicial bodies and special statutes. The Court made a significant observation here that the Consumer Commission cannot offer any relief with regard to matters governed by the SARFAESI Act and this makes sure that financial institutions across India can go ahead with asset recovery without facing clashing orders. This bolsters the statutory framework with a structured legal mechanism to recover financial assets in India and, thereby enhances confidence on our soverign law enforcement as well.
This judgement serves as a reminder to all judicial/quasi-judicial bodies that they ought not overstep their jurisdiction and prohibits misuse of the mechanism which shall ensure the sanctity/efficiency i.e. promptness of administration justice.undo.setContent.textContent = "In conclusion, this judgment is an alert for each cathedral-judiciary/judiciae cardinal truth-that it cannot trespass its powers by way control hence that these complete can be put sacred lamp lite slightly.";
