DISTRICT CONSUMER DISPUTES REDRESSAL FORUM;BHADRAK

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C.D.Case No.44 of 2011

Sri Namkalyan Mohapatra, aged about 33 years

S/o: Gour Chandra Mohapatra

At: “Kanta Kutir”, Nayabazar,

PO: Naya Bazar, PS/Dist: Bhadrak

                                                       …………………Complainant

                 (Vrs.)

1.         The Branch-in-charge,

            Bajaj Auto Finance Ltd.,

            C/o: Shankar Bajaj,

At: Dahanigadia, N.H.-5,

            PO/PS: Bhadrak(T)

            Dist:Bhadrak-756101

2.         The Bajaj Auto Finance Ltd.,

            C/o: Bajaj Auto Ltd.,

            A/4, Forest Park, Udayan Marg

            Bhubaneswar-751009

3.         The Secretary,

            The Bhadrak Co-operative Urban Bank Ltd.,

            Bhadrak Branch,

            At:College Road,

            PO/PS/Dist:Bhadrak

                                                      ……………………Opp.Parties

Order No.63 dt.16.05.2015:

            Succinctly put, the background facts giving rise to filing of this case are that the Complainant being a young qualified person, serving as Clerk at Bhadrak Art College, Bhadrak, for hisconveyance decided to purchase a Motor Cycle with the financial assistance of O.P.No.1. It was agreed between the Complainant the O.P.No.1 that the Complainant would initially deposit Rs.25,000/- and would repay the loan dues on EMI. It was also agreed that the Complainant would submit 11 nos. of blank cheques as a security for the vehicle. After compliance of all formalities, Forms were dully filled in by the O.P.No.1 at Bhadrak. The Complainant also submitted 11 nos. of blank cheques bearing No.108876 to 108886 of Bhadrak Co-Operative Urban Bank Ltd., Bhadrak Branch, Bhadrak besides his photographs, Xerox copy of voter ID Card and copy of residential certificate etc.. As per dominating instruction of O.P.No.2, Complainant made a formal loan agreement at Bhadrak and demanded the copy of the aforesaid loan agreement. The O.Ps assured to dispatch very soon the same in favour of Complainant through Regd. Post. Accordingly, the loan was sanctioned by the O.Ps and ultimately the Complainant became the owner of the Bajaj Discover DTSI-ES Motor Cycle having engine No.JNGBRA04681, Chassis No.MD2DSJNZZRCA89991 since 23.07.2008 vide Regn.No.OR-22B-9622. It has been alleged by the Complainant that in spite of repeated reminder, telephonic message and personal discussion, the O.Ps played hide and seek game with the Complainant in providing the copy of loan agreement.  On 15.01.2011 at about 7 PM while the Complainant was going to his native village,  Talapada, the staff of the O.Ps and some musclemen of O.Ps illegally and unauthorizedly  for their common intention obstructed the way of the Complainant at Ichhapur under Bhadrak Rural Police Station without issuing any written communication, forcefully repossessed the vehicle in question. Thereafter, the Complainant intimated the aforesaid incident to the IIC, Bhadrak Rural Police Station but after refusal of investigation by the Police authorities, the Complainant was compelled to file a I.C.C. No.48/2011 in the Court of the Ld.SDJM, Bhadrak. Ld.SDJM, Bhadrak  having been pleased passed order directing the IIC, Bhadrak Rural P.S. to investigate into the case u/s.156(3) of Cr.P.C.. After investigation the IIC, Bhadrak Rural P.S. registered PS case against the staff and musclemen of the O.Ps for the offences u/s.294, 323, 379, 506 & 34 IPC. It has been further alleged by the Complainant that recovery of loans or seizure of vehicle could have been done only through legal means. It was the duty of the O.P-Financier to inform the Complainant regarding the outstanding instalment dues and before repossession notice should have been issued to the Complainant. However, after illegal repossession of the vehicle, the Complainant met the O.P.No.1 in his office several times and approached to deliver the vehicle but in vain. Subsequently, the Complainant came to know that the O.P.No.1 has sold the vehicle to someone. As such, due to illegal activities of the O.P.No.1, the Complainant not only sustained financial loss but also suffered from serious mental agony. Hence, the Complainant filed this case on 03.05.2011 praying to direct the O.Ps to return back the vehicle in question, to provide statement of account and loan-cum-Hypothecation agreement, not to charge the payment of interest, penal interest and delay payment charges, if any, from the date of repossession till the vehicle is returned , to pay compensation of Rs.80,000/- towards mental agony, unnecessary harassment, humiliation and personal damage besides litigation cost as the Forum deemed fit.

            O.Ps 1 & 2 filed written version stating therein that the Complainant had entered into Loan Agreement No.627001466 on 08.08.2008.  The Complainant requested and availed finance facility of Rs.42,168/-(including financial charges of Rs.8,168/- for 24 months tenure)  for purchase of Bajaj Discover.  The monthly instalment to be paid was Rs.1,757/-. The contract period was for 24 months (from 05.09.2008 to 05.08.2010). The said vehicle was hypothecated to the O.Ps till the entire loan amount was cleared. The Complainant defaulted in making payment of agreed instalment dues. The Complainant as on 15.07.2010 was in arrears of Rs.49,557/- i.e. Rs.19,407/- as instalment arrears + Rs.30,150/- as other over dues. After expiry of contract period on 5.8.2010, total amount payable by the Complainant to the O.Ps is Rs.51,314/-(Rs.21,164/- as instalment arrears + Rs.30,150/- as other over dues) (includes one future EMI of Rs.1,757/-). The O.Ps requested the Complaint several times to clear the outstanding amount or to handover the vacant and peaceful possession of the vehicle but the Complainant did not take any interest for clearance of his outstanding nor surrendered back the hypothecated assets. O.Ps further stated that the Complainant  had issued a letter dt.25.06.2010 in his own hand writing duly signed to the O.Ps and agreed that he would  pay an amount of Rs.47,000/- or to surrender the vehicle to the O.Ps on 26.06.2010. But as per the commitment the Complainant neither paid the outstanding amount to the O.Ps nor surrendered the vehicle. O.Ps on 10.07.2010 requested the Complaint to comply with the undertaking given on 25.06.2010 but the Complainant informed that due to financial constrained he was not able to approach on 26.06.2010  and again promised  to approach O.Ps in a day or two or alternatively surrender the vehicle. Later on 15.07.2010 the Complainant approached the O.Ps in the office and showed his inability to proceed with the said contract and requested not to take any legal action and informed that due to financial constraint he is not in a position to clear the balance. The O.Ps 1 & 2 permitted the Complainant to surrender the said vehicle and the vehicle was surrendered to the O.Ps Branch Office on 15.07.2010 for which paper acknowledgement has been collected from the Complainant. Further, on surrender of the vehicle the Complaint informed the O.Ps to sell the vehicle and consented to adjust the sale proceed to this loan account. Thereafter, the O.Ps contacted the Complainant and informed the purchase price which was consented by the Complainant on which the O.Ps disposed of the said vehicle which clearly shows that the Complainant was not interested to take back the disputed vehicle.  The O.Ps disposed of the vehicle on 28.08.2010 for Rs.22,500/- and the sale proceeds were adjusted to the outstanding amount. After adjusting the sale proceeds the Complainant is due and liable to pay Rs.28,814/- against loss on sale which is due and payable by the Complainant. Therefore, the O.Ps 1 & 2 prayed that the Complainant be directed to pay an outstanding amount of Rs.28,814/-.

            O.P.No.3 neither appeared nor filed his written version after receipt of notice. Hence, O.P.No.3 has been set exparte vide order dt.8.05.2015.

            We have heard the Ld.Counsel appearing on both sides and perused the documents available in record. It is submitted on behalf of Complainant that in spite of repeated requests the O.Ps 1 & 2 did not provide the copy of Loan Agreement nor the statement of accounts. On the other hand, the O.Ps 1 & 2 without any written communication forcefully repossessed the vehicle with the help of some musclemen even though a substantial amount was paid by the Complainant towards EMIs and  when  there was  outstanding balance of around 15,000/-. Thereafter, the O.Ps sold out the vehicle in question without intimation to Complainant. Such acts & omissions on the part of O.Ps amount to deficiency in service. On the contrary, the Ld.Counsel for O.Ps 1 & 2 vehemently argued that the vehicle was not forcefully repossessed; rather the Complainant surrendered the vehicle on 15.07.2010 due to his financial constrained and requested to adjust the sale proceeds against his loan account. Thereafter, the vehicle was disposed of on 28.08.2010 for Rs.22,500/-. After adjustment of sale proceeds the Complainant is liable to pay Rs.28,814/- against loss on sale.

            It is not disputed that the Complainant had availed finance facility of Rs.34,000/- plus Rs.8,168/- towards financial charges, all totaling to Rs.42,168/- for purchase of Baja Discover motor cycle from O.Ps 1 & 2 by executing  hire purchase agreement No.627001466 dt.08.08.2008. The aforesaid amount of Rs.42,168/- was to be repaid by the Complainant @ Rs.1757/- in 24 months commencing from 05.09.2008 to 05.08.2010. It is undoubtedly true that the Complainant while purchasing the vehicle has paid certain percentage of vehicle cost towards down payment to M/s. Shankar Bajaj, Charama, Bhadrak and also certain EMIs against the financed amount to O.Ps 1 & 2. It is no doubt true that statement of account was not maintained against the financed amount. Curiously enough the O.Ps 1 & 2 have suppressed the statement of loan account of the Complainant and have not filed the same in this case for the reason best known to them. Complainant during course of hearing stated to have paid 17 EMIs out of 24 EMIs fixed by O.Ps 1 & 2 but in absence of statement of account filed by O.Ps we have no other alternative than to believe the version of Complainant that he had paid 17 EMIs to O.Ps 1 & 2.  The Complainant in his complaint petition has specifically prayed for filing of statement of accounts by the O.Ps. It is best known to O.Ps why they have suppressed the most important piece of document. It has been admitted by the O.Ps 1 & 2 that after surrender of the vehicle on 15.07.2010 by the Complainant, the said vehicle has been sold on 28.08.2010 for Rs.22,500/- out of outstanding balance of Rs.51,314/- against the Complainant after expiry of contract period.

            In the aforesaid premises, the only question for our consideration is as to whether the vehicle in question was repossessed by the O.Ps 1 & 2 illegally by force or after following due process of law. O.Ps 1 & 2 in support of their contention have filed Xerox copy of surrender letter dt.15.07.2010 and letter dt.25.06.2010 purported to have been issued by the Complainant stating therein non-payment of 13 instalments by him and to clear the EMIs along with other dues by 26.06.2010. Complainant denied to have submitted this manuscript to O.Ps 1 & 2. The handwriting of the Complainant has not been proved by the O.Ps through handwriting expert nor has it been addressed to O.Ps 1 & 2. So we do not rely on this document filed by O.Ps 1 & 2. The next document relied on by O.Ps 1 & 2 is letter dt.15.07.2010 which according to version of O.Ps is the surrender letter. It may be true that the Complainant might have put his signature under compulsion on this letter. It appears that the said letter has been prepared and filled up by the O.Ps 1 & 2 for oblique motive on 15.07.2010 to sell the product within 10 days in case he failed to make payment. So we are unable to accept it as surrender letter written by Complainant. Assuming for the sake of argument that the Complainant suo-motto surrendered the vehicle on 15.07.2010 to sell the vehicle within 10 days, we do not understand what prevented the O.Ps 1 & 2 to wait for about 43 days to sell the vehicle on 28.08.2010? So also what prevented the O.Ps to intimate the Complainant to participate in the auction sale of vehicle on the scheduled date and time. Apart from the above, O.Ps 1 & 2 have not filed sale proceeds of the vehicle in this case to prove their case  showing details of the purchaser, its cost, date of purchase etc.  On the contrary, the Complainant has been able to prove his case by filing   Xerox copy of FIR No.43(10) dt.07.02.2011 and order dt.17.03.2011 of the Hon’ble High Court, Odisha in BLAPL No.5432 of 2011 directing to release the petitioner Pradyumna Kumar Mohanty on bail on such terms & conditions as the arresting officer may deem just and proper that the vehicle was forcibly and illegally repossessed by the O.Ps 1 & 2 on 15.01.2011. If actually, the vehicle was surrendered by Complainant on 15.07.2010 and sold by O.Ps on 28.08.2010, why the Complainant intimated the IIC, Bhadrak  Rural Police Station after 6 months of surrender of the vehicle that the O.Ps  repossessed the vehicle  on 15.01.2011  illegally by force and without due process of law  and  on refusal to investigate the matter by Police, he filed I.C.C.No.48 of 2011 in the Court of Ld.SDJM, Bhadrak and  O.Ps filed anticipatory bail before the Hon’ble High Court. Thus, we are convinced that the O.Ps 1 & 2 repossessed the vehicle in question illegally by force and without due process of law and failed to provide statement of accounts which amounted to deficiency in service and negligence in duty.

            In this connection, we rely on the decision of the Hon’ble National Commission in the case of M/s. Sundaram Finance Ltd., Through, Sh.D.Vilasrao, Authorised Representative Vs. Sh.Atul Kumar reported in 2014(4) CPR 724 (NC), where in it has been held that:

“Vehicle cannot be repossessed by Financier by adopting extra legal means”.

Financial service-Vehicle loan-Forcible repossession of vehicle-Complaint allowed by Fora below-In absence of any evidence to the contrary to rebut averment of Complainant, District Forum rightly ignored contention of O.Ps in this regard and proceeded to deal with complaint-No musclemen can be allowed to interfere with peace of society and vehicle cannot be repossessed without intervention of Court. Similarly, the Hon’ble National Commission in the case of HDFC Bank Limited Vs. Balwinder Singh {III(2009) CPJ 40(NC)} has observed that ;

“The Commission also referred to the State Commission’s Order, which had observed that the alleged letter produced by the bank purporting to the Complainant voluntarily handing over possession of the vehicle was unreliable and that no notice was given to the Complainant at the stages of repossession and sale of vehicle. In dismissing the petition, the Commission relied upon its judgment in Citicrop Maruti Finance Limited Vs. S.Vijayalaxmi [III(207) CPJ 161(NC)] where it had strongly deprecated such practices. The commission dismissed the petition and awarded Rs.25,000/- as exemplary costs”.

 Further, the Hon’ble Supreme Court in the case titled  as Manager, ICICI Bank Ltd. Vs. Prakash Kaur & Ors., wherein it has been held that loan for purchase of vehicle-default in repayment-seizure of vehicle by use of force-recovery of vehicle or seizure of vehicle could be done only through legal means-banks cannot employ goondas to take possession by force. Loan for purchase of vehicle-seizure of vehicle by use of force- Practice of hiring recovery agents, who are musclemen, deprecated which needs to be discouraged- Bank should resort to procedure recognized by law to take possession of vehicle in cases where the borrower may have committed default in payment of installments instead taking resort to strong facilities. Accordingly, it is ordered:

                                                            O R D E R

            For the forgoing reasons, we allow the complaint against the O.Ps 1 & 2 in part and dismissed exparte against O.P.No.3. The O.Ps 1 & 2 are directed to pay a consolidated amount Rs.50,000/- to the Complainant towards compensation, issue No Dues Certificate in favour of the Complainant without charging anything and to pay litigation cost of Rs.5,000/- within a period of 30 days of receipt of this order, failing which interest @ 9%  per annum shall be paid by them from the date of  illegal repossession i.e. 15.01.2011 till its realization.