First Appeal No. 255 of 2015. Case: Shashikala Mandekar Vs LIC Housing Finance Ltd. and Ors.. Jharkhand High CEGAT & CESTAT High Court

Case NumberFirst Appeal No. 255 of 2015
CounselFor Appellant: S.A. Hussain, Advocate
JudgesRakesh Saksena, J. (President) and S.D. Agarwal, Member
IssueSecuritisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Sections 14(3), 34
CitationIV (2015) CPJ 109
Judgement DateOctober 21, 2015
CourtJharkhand High CEGAT & CESTAT High Court


Rakesh Saksena, J. (President)

  1. Appellant/complainant has filed this appeal against the order dated 27.2.2015 passed by the District Forum, Betul in Complaint Case No. 42/2013 whereby the complaint has been dismissed. In short, the facts of the case are that in the month of July 2009 complainant applied for a loan of Rs. 2,50,000 for construction of a house on her land from respondent/LIC Housing Finance Ltd. After completion of the formalities the said loan was sanctioned. According to complainant out of the financed amount only Rs. 2,10,000 were paid to her whereby she constructed some portion of the house, but the respondent/company did not pay Rs. 40,000 out of the sanctioned loan which was to be used for plastering, white washing and affixing the doors in the house. Because of the non-payment of the said amount the house could not be completed and got damaged. Attributing deficiency in service on the part of respondent, complainant approached to the Forum claiming compensation of Rs. 6 lacs for damage of house, Rs. 2 lacs for damage of contents of the house and Rs. 50,000 for mental and physical agony with cost etc.

  2. The respondent No. 2, stated that by 27.4.2009, in total, an amount of Rs. 2,11,000 was paid to complainant. Since no assurance was given by the respondent of getting the loan insured, no premia in that regard were paid by them. For disbursement of further instalment of Rs. 40,000 of the loan it was necessary for the complainant to have regularly paid the repayment instalments, but since she did not pay the said instalments, her loan account was declared "NPA", and action against her under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For brevity hereinafter referred to as the "SARFAESI Act") was initiated. As such, in view of the provisions of Section 34 of the SARFAESI Act the complaint before the Consumer Forum was not maintainable.

  3. The respondent No. 2 also stated that damage in the house of the complainant was the result of the use of below standard material in construction. The respondent/Finance Company could not be held liable for such damage caused to the complainant's house.

  4. Learned District Forum, in view of the fact that proceeding for repayment of the loan was initiated by the respondent/Company under the provisions of SARFAESI Act, held that the complaint before the District Forum was not maintainable and dismissed...

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