MR. UTPAL KUMAR BHATTACHARYA, HON’BLE MEMBER.
Being aggrieved with the impugned judgment and order passed by the Ld. District Forum, Birbhum in Complaint Case No. 161/2015, allowing the complaint on contest against the Appellant/O.P. with cost of Rs.2,000, the Appellant/O.P. filed the instant appeal.
The Appellant/O.P. was directed to pay Rs.10,51,904/- to the Respondent/Complainant with 8% interest from the date of filing of this case i.e. 28.12.2015 till realization.
The Appellant/O.P. was further directed to issue No Due Certificate in favour of the Complainant in respect of vehicle in question after adjustment.
The Appellant/O.P. was also under direction to comply with the order within one month from the date of receipt of the order, failing which, as directed, the Respondent/Complainant would be at liberty to resort to due process of law and procedure.
The fact of the case was that the Respondent/Complainant purchased one vehicle taking loan of Rs.15,00,000/- from the Appellant/O.P. Bank. In addition to the said loan amount, the Respondent/Complainant had to contribute a down payment of Rs.2,60,000/- so as to ensure completion of transaction for purchase of the vehicle valued at Rs.17,60,000/-.
The Respondent/Complainant who was supposed to make the payment of the entire loan inclusive of interest and insurance premium for 2nd, 3rd and 4th year of hypothecation amounting to Rs.20,34,000/- (15,00,000+4,14,000+1,20,000) in 46 instalments, paid an amount of Rs.14,07,275/- through instalments time to time and defaulted in paying the rest instalments thereafter due to some financial predicament.
The rest amount, since remained unrealized after repeated persuasions, the Appellant/O.P. Bank repossessed the vehicle allegedly resorting to coercive measure and realized the outstanding dues selling the property at an absurdly low price and not adopting the laid down procedure for such sale.
The Respondent/Complainant then filed the complaint case before the Ld. District Forum praying for passing an order directing the Appellant/O.P. to issue No Due Certificate in favour of the Complainant in respect of the subject vehicle, to pay the margin money of Rs.2,60,000/-, a compensation of Rs.1,00,000/- and a litigation cost of Rs.10,000/-.
Heard Ld. Advocates appearing on behalf of both sides.
The Ld. Advocate appearing on behalf of the Appellant/O.P. submitted that at para 2 and para 5 of the complaint petition, the Respondent/Complainant had acknowledged the receipt of the loan amount and also acknowledged himself as defaulter in repayment as well.
Repeated persuasions made for realizing the loan being gone in vain, the Appellant/O.P. Bank had no option left other than resorting to repossess the vehicle. The Appellant/O.P. did that and as contended, did exactly what was permitted to do as it would reveal from the order of the Hon’ble Apex Court in SLP (crl) O. 8907 of 2009 [Anup Sarmath – vs. – Bholanath Sharma & Ors.] wherein, in the case note, referring to the Constitution of India – Article 136 – S.L.P. (crl), the Hon’ble Court had outlined the provisions that in an agreement of hire purchase, the purchaser remained merely a trustee/bailee on behalf of the financier/financial institution and ownership remained with the later. Thus, in case, the vehicle was seized by the financier, no criminal action could be taken against him as he was repossessing the goods owned by him.
Ld. Advocate went on to refer another decision of Hon’ble National Commission in Revision Petition No. 1485 of 2012 [Pramod Kumar Rai – vs. – Shriram Transport Finance Co. Ltd.] wherein the Hon’ble National Commission observed, “being a defaulter, the contract was ceased on 23.05.2011. The State Commission held that Finance Company is fully competent to secure repayment of its loan amount. The complainant is a defaulter and cannot deserve advantage of his default. The State Commission was kind enough and ordered that in case of insalments in arrears were deposited by the complainant, the finance company shall release the truck in his favour”. Similar observation was made by the Hon’ble Commission in [Surendra Kumar Agarwal – vs. Telco Finance Limited and Anr.] reported in II (2010) CPJ 163 (NC).
Ld. Advocate referred to running page 40 wherein the repayment schedule, duly delineated, was supplied to the borrower. The borrower, as contended, was given reminder in running page 42 for repayment of outstanding dues and cautioned about penal action that the O.P. Bank was contemplating in case of non-payment of the said overdues any longer.
Referring to running page 43 and 44, the Ld. Advocate submitted that the statement of repayment laid down therein was indicative of the irregularities in repayment.
Ld. Advocate referred further to running page 46, being the pre-sale notice issued by the Appellant/O.P. Bank towards the sale of the subject vehicle. Pointing out the postal slip imprinted on the body of the notice, the Ld. Advocate went on to submit that the sale of the subject vehicle was conducted after said pre-sale notice being duly served upon the Respondent/Complainant.
Since the measure adopted by the Appellant/O.P. Bank towards realization of the loan was in conformity with the well settled norms and procedure, the Ld. Advocate concluded his submission with the prayer for allowing the appeal setting aside the impugned judgment and order.
The Ld. Advocate appearing on behalf of the Respondent/Complainant, per contra, focused on the three determining points narrated hereunder:-
- The Appellant/O.P. did not file any oral evidence. It only had filed the some documents as it would reveal from page 2 bottom under the head “Decision with Reason” in the impugned judgment and order.
- The vehicle was forcefully repossessed and sold without publishing sale notice in the newspaper as per norms and not even ensuring service of the pre-sale notice upon the Respondent/Complainant as has been observed at page 5, para 1 of the impugned judgment and order.
- There was no documentary evidence towards servicing of the pre-sale notice upon the Respondent/Complainant. No A/D receipt showing service was produced. There was, of course, only a copy of the postal receipt imprinted on the body of the pre-sale notice at running page 46 but, it was not supported with track report confirming delivery of the said pre-sale notice. There was no copy of the newspaper publication towards sale of the said vehicle through open auction.
As he contended, the sale was effected without allowing the Respondent/Complainant the opportunity to participate in the bid. The vehicle worth of Rs.17,60,000/-, plying on the road for only two years, was ultimately sold at a price of only Rs.7,00,000/- which was extremely detrimental to the interest of the Respondent/Complainant.
As he went on to submit that the Respondent/Complainant had strongly challenged the claim of due service of pre-sale notice upon him by the Appellant/O.P. Bank. It was now the turn of the Appellant/O.P. Bank to disprove the above contention of the Respondent/Complainant as the onus was upon him to do so. The Appellant/O.P. Bank hopelessly failed to submit any documentary evidence in support of his claim towards due service of the pre-sale notice upon the Respondent/Complainant.
Ld. Advocate, in the above context, cited the decision of the Hon’ble National Commission in [Magma Fincrop Limited – vs. – Nazia Parvin] reported in 2018 (3) CPR 367 (NC) wherein the Hon’ble National Commission was pleased to observe that prior to sale of repossessed vehicle in accordance with the principle of natural justice, the borrower had to be put to notice.
He went on to refer to further the decision of the Hon’ble National Commission in [Punnusamy (Dr.) and Anr. – vs. Ramakrishnan] reported in IV (2006) CPJ 213 (NC) wherein the Hon’ble National Commission, in case of any allegation remaining uncontroverted by way of filing any counter affidavit, observed the allegation stood proved.
The Ld. Advocate also referred to the decision of the Hon’ble National Commission in [Magma Fincrop – vs. – Baburam Manjhi] reported in 2017 (1) CPR 747 (NC) wherein the Hon’ble National Commission condemned forceful repossession mentioning that this act was deprecated by the Hon’ble Apex Court also.
With the submission as above, the Ld. Advocate prayed for the appeal to be dismissed affirming the impugned judgment and order.
Perused the papers on record. Considered the submissions of Ld. Advocates appearing on behalf of both sides.
We have no doubt that there was default in making repayment of loan by the Respondent/Complainant. The record also revealed that the Respondent/Complainant was cautioned about adverse action likely to be taken in case immediate repayment of the overdue amount was not made by the Respondent/Complainant. The Appellant/O.P., in the given circumstances, had enough reasons to take lawful step for repossessing the vehicle which he did. We did not find in the record any indication or evidence that coercive measure were adopted by the Appellant/O.P. in repossessing the subject vehicle.
We are concerned about the process adopted for repossessing the vehicle and sale it off for recovery of the overdue amount. The Appellant/O.P. claimed that a pre-sale notice was served upon the Respondent/Complainant. The receipt of the Indian Post imprinted on the body of the copy of the sale notice was emphasized upon to be treated as a conclusive evidence of service of notice upon the Respondent/Complainant.
The record, however, was devoid of any receipt of acknowledgement from the Respondent/Complainant, nor the record was supported with postal track report confirmatory to the service of the said pre-sale notice upon the Respondent/Complainant, as claimed.
We did not find in the record any newspaper advertisement towards sale of the subject vehicle through open auction. It was, therefore, an obvious corollary that the Respondent/Complainant was deprived of the information of sale of the vehicle and thereby participating in the auction sale for repurchasing the said vehicle.
A vehicle which was of a purchase value of Rs.17,60,000/- two years back, was sold away at a cost of Rs.7,00,000/- only. The Learned District Forum had rightly appreciated that the sale value, even on applying depreciation @ 10% per annum should not have been so less an amount.
Keeping in view the facts and circumstances narrated above, we have no hesitation to hold that there was gross deficiency in rendering services by the Appellant/O.P. financing Bank but, we are convinced with the inexplicable decision of the Learned District Forum in allowing the complaint awarding the benefit to the Respondent/Complainant beyond pleading. The Respondent/Complainant in the prayer part of the complaint claimed Rs.2,60,000/- being the paid amount of margin money, Rs.1,00,000/- as compensation and Rs.10,000/- as litigation cost. Ld. District Forum had the authority to direct a payment of Rs.3,70,000/- at best inclusive of all the above components together. The Ld. District Forum appeared to have passed an order upon the Appellant/O.P. for payment of Rs.10,51,904/- to the Respondent/Complainant with 8% interest from the date of filing the complaint case till realization.
Since it lacked the authority to sanction any amount beyond pleading, we are of the considered view that the impugned order should be suitably modified.
Hence, ordered, that the Appeal be and the same stands allowed in part. The Appellant/O.P. Bank is hereby directed to issue a no objection certificate in respect of the subject loan to the Respondent/Complainant. It is also directed to pay Rs.2,60,000/- being the amount of margin money along with a compensation and cost of Rs.1,00,000/- and 10,000/- respectively to the Respondent/Complainant within 45 days from the date of the instant order. Failing which, simple interest @ 9% per annum shall accrue to Rs.2,60,000/-, being the total of the amount payable as margin money and compensation, from the date of default till the entire amount is fully realized. The impugned judgment and order stands set aside.
