Orissa HC Demands Rs.1 Lakh Fine On Bank Loan Defaulter Company Proprietor

The Orissa High Court on Monday has imposed a Rs 1 lakh fine on the proprietor of a bank loan defaulter company, on whose side the district consumer commission (Jharsuguda) had issued a temporary order preventing the auction of property loans for the recovery of the credit amount.

Bench’s Remark

The 2-judge bench of Justice Debabrata Dash and Justice V Narasingh stated, “This Court can’t be oblivious to the conduct of the proprietor in suppressing material facts relating to the pendency of the securitization application before the Debt Recovery Tribunal, while seeking an impugned interim order cannot be lightly brushed aside as it clearly appears to be purposeful to serve the mischievous end.”

The bench ordered the proprietor of the company to invest the amount in the welfare fund of the Jharsuguda district bar association within 28 days.

This conflict shifted to the high court with the chief manager-cum-authorized officer, Union Bank of India, against the temporary order passed by the district consumer commissioner (Jharsuguda) on December 14, 2023.

While rejecting the interim order and proceedings pending in the commission, the bench also assumed the commission to “refrain from judicial adventurism of the present nature” while dealing with such special acts (Consumer Protection Act, 2019).

The bench also claimed that the president and members working in the consumer commissions while taking reliefs sought under the Special Acts have the onerous task “to function within the orbit” provided thereunder.

“The least that can be expected from the President and the Members of the District Commissions is that before passing any order relating to any alleged violation vis-à-vis the provisions of any Special Act, they will test the propositions claiming the reliefs on the touchstone of law governing the field,” the bench added, and it would lead to noticeable litigation and expose the faith of the common people in the fairness and effectiveness of the correct mechanism.

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