Heard learned counsel for the appellant.
2. This appeal is filed U/S-15 of erstwhile Consumer Protection Act,1986(herein-after called the Act). Hereinafter, the parties to this appeal shall be referred to with reference to their respective status before the learned District Forum.
3. The unfolded story of the complainant, is that the complainant ,in order to maintain his livelihood has purchased a Tata truck bearing Regd.No.OR-04-E-5039 having got finance by OP No.1 for an amount of Rs.2,69,000/-. It was agreed between the parties that the loan amount would be recovered by 23 installments and EMI was fixed at Rs.16,009/- for 1st 16 installments and for the rest of the period, the EMIs was fixed at Rs.11,174/- w.e.f. 11.02.2006. It is alleged inter-alia that the OP No.2 due to default in payment of EMI, the vehicle in question was seized without prior notice to the complainant. Since, the seized vehicle was not released inspite of the complainant’s approach, the complaint case was filed.
4. The OP No.1 is ex-parte.
5. The OP No.2 filed the written version stating that the complaint case is not maintainable. Further it is stated that the complainant has purchased the truck after being financed from OP No.2 for an amount of Rs.2,69,000/-. He admitted to have seized the vehicle on 26.11.2007 due to default in payment. After repossession, pre-sale notice was given on 06.12.2007 but the vehicle was sold after giving opportunity to the complainant to pay the arrears. Therefore, there is no deficiency in service on the part of the OP No.2.
6. After hearing both the parties, learned District Forum passed the following order:-
Xxxx xxxx xxxx
“ After receiving the presale notice from the OP No.2, the complainant filed this C.D.Case on 24.01.08, praying not to sale the vehicle. Considering his prayer the case was admitted on 14.2.08 and interim order was passed not to sale the vehicle to a third party and the Arbitration proceeding was stayed till disposal. Admittedly an Arbitration proceeding was pending before Mr. Partho Sarathi Ghosh of Kolkata which was initiated by OP No.2 and during pendency of the said arbitration proceeding, the vehicle in question was sold by OP No.2 on 1.2.08. The Arbitrator finally disposed of the Arbitration proceeding vide its order dt.20.3.08. When OP No.2 initiated the Arbitration proceeding it should have waited for disposal of the Arbitration proceeding and should have given an opportunity to the complainant to make payment of the defaulted amounts. Instead of doing so, selling the vehicle during pendency of the Arbitration proceeding clearly amounts to deficiency in service.
As regards to third question for consideration, record reveals that out of loan amount, the complainant has already cleared up a total sum of Rs.2,03,409/- and he was only to pay Rs.65,591/- against the loan amount. That being so and the vehicle having sold during Arbitration proceeding, we direct the OP No.2 to return back the truck bearing Regd. No.OR-4-E-5039 to the complainant within one month of receipt of this order on payment of Rs.81,522/- by the complainant without any interest as awarded by the Arbitrator. Besides the above, OP No.2 is liable to pay a compensation of Rs.5000/- to the complainant within the above noted period.”
7. Learned counsel for the appellant submitted that learned District Forum have passed impugned order without considering the written version with proper perspectives. According to him the complaint is not maintainable because there was arbitration proceeding already started by the OP against the complainant. He further submitted that after issue of proper notice they have sold the vehicle but the complainant has not come down to get release of the vehicle on payment of arrears. It is therefore submitted to set-aside the impugned order by allowing the appeal.
8. Learned counsel for the respondent submitted that arbitration proceeding before being finalized, the complaint case was filed. Further he submitted that there is no notice of arrear by the OP. Also there is no notice issued by OP for repossession of the vehicle. He also submitted that inspite of the restrained order passed by the learned District Forum, the vehicle has been sold by the OP. According to him the arbitration proceeding and the proceeding U/S- the C.P. Act can run parallel and in the instant case while the arbitration proceeding is pending, the complaint case has been filed. He admitted that the arbitration proceeding was closed only during pendency of the complaint case. The restrained order not to sell the vehicle was passed by the learned District Forum before the arbitration award passed. Therefore, he submitted that the impugned order should be confirmed.
9. Considered the submission of learned counsel for the respective parties, perused the DFR and impugned order.
10. It is admitted fact that the vehicle has been financed by the OP NO.2. It is also not in dispute that there was agreement executed between the parties, the vehicle was hypothecated with the OP. It is also not in dispute that due to non-payment of certain installments the vehicle was repossessed by the OP on 26.11.2007. It is also not in dispute that the vehicle was sold on 01.02.2008. Now the only question arises whether the repossession is illegal or not. The complainant has admitted that there is some arrear EMI to be paid before seizure. It is only stated in para-10 that the complainant has paid Rs.2,03,409/- out of Rs.2,69,000/- and he was to pay Rs.65,591/-. But here they admitted that no single notice was issued by the OP to the complainant before the repossession of the vehicle but notice was issued to the complainant to show how much outstanding was to be payable by him failing which the action as deemed proper would be taken. This is a hire purchase agreement. Clause-14(3) is filed before us to show that the repossession in the fact and circumstances is a legal. Clause-14(3) is as follows:-
“ Then and on the occurrence of any such event, the rights of the Hirer/s under the Agreement shall forthwith stand determined ‘IPSOFACTO” without any notice to the Hirer/s and further all arrear installments and other dues and the installments due for the balance of the said term shall without any abatement thereupon become due and payable immediately by the Hirer/s and if shall be lawful for MAGMA or Bank/F and/or its agent without prejudice to its any other right including right of suit. ,without notice to the Hirer/s to enter into any premises of the Hirer/s to enter into any premises of the Hirer/s or at such other place the said Asset(s)/vehicle(s) may be lying and to remove and take possession of the said Asset(s)/vehicle(s), without being liable to any quarter for trespass or otherwise, to sell or cause to be sold or otherwise dispose of all or any part of the said asset(s)/vehicle(s) or any fittings thereof, either by public auction or private treaty an at such times and places, either in one for or several lots and in such manner as MAGMA may think fit without responsibility on MAGMA for default of any persons employed by MAGMA or otherwise and after deducting the commission to which MAGMA is entitled and all charges and expenses paid or incurred to apply the net proceeds of such sale in or towards the liquidation of all outstandings than due to MAGMA from the Hirer/s under the said hire purchase facility including interest and the charges and expenses (as between attorney and client) and if the sum realized by such sale should be insufficient to cover the outstandings/amount due to MAGMA, the Hirer/s agrees and undertakes to pay to MAGMA by cash on demand any balance then due by him. All account of sales rendered to the Hirer/s by MAGMA shall be conclusive evidence both in an out of Court or all matters therein stated.
Provided always that MAGMA may at its sole option give back the possession of the Asset(s)/Vehicle(s), whose possession has been retaken by it to the Hirer/s without affecting any of its rights hereunder and on giving back the possession of the Asset(s)/Vehicle(s) this Hire Purchase Finance Agreement shall stand revived and all the terms and conditions shall be binding on the parties hereto.”
11. The aforesaid clause is clear to show that the first notice should be served indicating the outstanding against the loanee. If the notice gives time to pay but it is not paid, then without notice the vehicle can be repossessed. Here, in the instant case when no notice as required under agreement is issued, the next step for repossession even without notice as per the agreement is illegal.
12. It is also admitted fact that learned District Forum has passed order on 14.02.2008 not to sell the vehicle. But it is admitted fact that the vehicle was sold on 01.02.2008 after repossession of same. The arbitration award only passed on 20.03.2008. When the repossession is illegal as per observation above, the sale of same is also illegal. Of course it is revealed from order dtd.14.02.2008 that the arbitration proceeding has been stayed by the learned District Forum. In our opinion learned District Forum should not have passed the order because the arbitrator is not sub-ordinate to the quasi-judicial body nor necessity for touching the proceeding of arbitration. It is ….. law that both the Arbitration and Conciliation Act,1996 and the Consumer Protection Act,1986 having distinct relief to be granted, may be followed by the respective parties. The Arbitration Tribunal being not subordinate to the Consumer Forum, latter should have directed as such. Be that as it may, the sale is illegal.
13. In view of aforesaid discussion, we are of the view that there is deficiency in service on the part of the OP for not following the agreement for repossession of the vehicle and sale of the vehicle consequently. Learned counsel for the appellant urged before us that the operative portion of the order is confusing and thereby the Court should intervene. The aforesaid operative portion of the order is virtually found to be puzzled one because the order can be only passed to return the vehicle but since it has been sold, the amount as ordered against the complainant should not be allowed to recover and no necessity of giving any remark against the arbitration proceeding. Besides for the illegal seizure and sale the compensation amount should be allowed payable by the OP to the complainant. Therefore, while modifying the operative portion of the order we hereby direct OP without demanding any arrear outstanding, issue NOC to the complainant and pay compensation of Rs.5,000/- and Rs.10,000/- towards cost to the complainant which should be complied by the OP within 45 days from the date of this order, failing which all the payments would carry 7 % interest from the date of impugned order till realization.
The appeal is disposed of accordingly. No cost.
Free copy of the order be supplied to the respective parties or they may download same from the confonet or webtsite of this Commission to treat same as copy of order received from this Commission.
DFR be sent back forthwith.
