Page 19 - Banking Finance November 2019

LEGAL UPDATE

LEGAL

CASES
CASES
CASES
CASES
CASES

Definition of consumer Tenant cannot squat on secured asset
interpreted The right of a tenant in a flat, which was mortgaged by a defaulting landlord
borrower, came up in the Supreme Court in the
The definition of ‘consumer’ in the case, Bajrang vs Central Bank of India. The resi-
Consumer dential flat in Mumbai was secured asset. Then
Protection the bank tried to take possession of it, invoking
Act, despite
an amend- the Securitisation Act (Sarfaesi), the tenant ob-
ment, still tained a stay against the landlord who sought his
seems to be a point of discord. The eviction. The bank alleged that the landlord and
Supreme Court has set aside the judg- the tenant were in collusion to defeat its rights.
ment of the National Consumer The Bombay High Court had given judgment in favour of the bank. The tenant
Commissio n in a case in which a non- appealed to the Supreme Court, which dismissed it. It ruled that the tenant was
resident Indian who had worked in overstaying and the right of the secured creditor was above that of the tenant.
Denmark booked a shop under con- Reflecting the bank’s argument, the court also observed that” such devious prac-
struction to start a business in India tices by the borrower to obstruct the rights of the bank cannot be appreciated.
to earn a living.
State housing board can fix price of plot
Though the builder had promised to
deliver the shop in two years and The Supreme Court has set aside the judgment of the Patna High Court and
was paid 80 percent of the cost, the asserted that the Bihar State Housing Board had the
possession was not given, leading to power to fix the price of plots given in auction as it is a
a consumer complainst alleging de- commercial decision. In this case, the board had invited
ficiency in service and unfair trade bids for a large plot nad the only applicant was Radha
practice. The Nation Commission Healthcare Institute. However, the plot was not allot-
held that he was not a consumer as ted despite paying the earnent money.
he wanted to start abusiness and, The institute was later offered two smaller plots, which were accepted but the
therefore, he was not a consumer. value was disputed by the institute. It moved the high court, which asked the
However, the Supreme Court re- board to charge the price proportionate to the price advertised earlier. The
versed the finding in the case, Sunil board appealed to the Supreme Court. It stated that the board took commer-
Kohil vs Purearth Infrastructure. The cial decision. In the matter of fixation of price, the board has a right to fix it.
court stated that the person wanted The board was “more than indulgent” in allotting plots to the institute. in fact,
to earn a living by self-employment. “public property could not be disposed of without any advertisement and with-
Such a person is a consumer accord- out giving opportunity to eligible persons to apply in a transparent non-discrimi-
ing to the definition found in the Act. natory manner,” the judgement underlined.

BANKING FINANCE | NOVEMBER | 2019 | 19