Per Mr Justice A P Bhangale, Hon’ble President

1.      This appeal is preferred against the Judgement and award dated 22.01.2009 passed by the learned District Consumer Disputes Redressal Forum, Amravati in the Consumer Complaint No. 157 of 2008 filed by Complainant Aanand Trilokchand Sanvala. Complainant had obtained loan in the sum of Rs.29,000/-  for to buy Motor vehicle  MH-27/N-7242 on 27.07.2004 repayment was to be made  from August2004  by EMI of Rs.1,426/- for 24 months. Complainant had signed the Cheques, five Cheques were encashed  thereafter cash of Rs.3,500/- was paid till 05.10.2005 thus total sum of Rs.30,334 was paid by the Complainant but the Opposite Party issued notice dated 06.05.2006 demanding sum of Rs.6,806/- and without accepting the amount demanded proceeded to seize the Motor vehicle MH-27/N-7242, adopting illegal procedure, OP proceeded to sell the vehicle on 12.02.2007 without pre-intimation to the complainant and the price received at auction. Under the circumstances the Complainant informed his Bank not to honour the Cheque issued by the Complainant in future and ten filed the Complaint to recover the sum of Rs.30,334/- with interest at the rate of Rs.24% per annum  from the date of the agreement. And compensation in the sum of Rs.50,000/- towards mental anguish and sum of Rs.25,000/- as compensation for misleading the Complainant.

2.      OP denied the claim contended that as the Complainant did not

pay despite the demand from the OP, the vehicle was sold and sale price was deposited towards repayment and even then there is outstanding sum of Rs.8,252 due from the Complainant. The OP resisted the complaint on the ground that there was an arbitration clause in the agreement between the parties, hence complaint is not maintainable.

3.      The question before the Forum below arose as to whether there was deficiency in service on the part of the OP in the matter of seizure of the vehicle, sale of the vehicle without pre-intimation to the Complainant and in the matter of supplying the relevant photocopies of the necessary documents to the Complainant. Forum believed that the Motor vehicle was seized in the presence of the Complainant and that since the Complainant was in arrears of loan he cannot be said to have suffered losses.

4.      Learned Forum below awarded the refund of the sum payable to the Complainant i.e. current market price of the Motor vehicle minus the depreciated costs and the outstanding dues payable by the Complainant = Balance sum payable to the Complainant and compensation in the sum of Rs.3,000/- towards the deficiency in service, costs of litigation  with interest at the rate of Rs.9% per annum .

5.      According the OP the complainant  had  sought finance of Rs.29,000/- from the appellants on 27.07.2004 and hire purchased  2 wheeler Kinetic Velocity  bearing registration number MH-27D-6937. EMI payable for 24 Months each of Rs.1426/- (the aggregate value of Rs.34,224/- inclusive of interest) were not paid regularly by the borrower. First four instalments were paid regularly but next four cheques were bounced and returned dishonoured and had to be represented for encashment and were encashed on 05.10.2005. As on the date of the notice dated 06.05.2006 when notice was issued complainant was in arrears of Rs.6,806/-. The amount demanded remained unpaid.  Finally On 12.07.2006 the vehicle was seized and sold for to recover the outstanding amounts. We do not find anything wrong in the procedure adopted by the Opposite party to the complaint. Learned Forum below erred to appreciate these material facts and reach the logical conclusion of the dismissal of the Complaint.

6.      Under hire purchase system, the legal position is that the purchaser gets the possession of the goods without paying the full price for them. He makes the part payment at the time of purchase and the balance is paid in easy instalments regularly and periodically. The important ingredient of the hire purchase system is that the buyer becomes the owner of the goods only after full and final payment of all the instalments, till then he hires the goods and every instalment is treated as hiring charges paid by him. If the purchaser makes default in the payment of an instalment, the seller can take back the possession of the goods.

7.      Some of the important ingredient of hire purchase system money is paid for goods by means of periodical instalments with the view of completing ultimate purchase. All money being paid in the meantime is regarded as payment of hire and the goods become the property of the buyer’s only when all the instalments have been paid. Hire-purchase is a form of trade in which credit is granted to the customer on the security of a lien on the goods. Hire purchase type of business is usually carried in the case of durable consumer articles like Motor vehicles, sewing machines, televisions, desert

coolers and refrigerators etc.

8.      From the above mentioned legal position it is clear that in this case Complainant took the delivery of the Motor vehicle on the payment of first instalment and can become the owner only after paying the final instalment. Complainant had defaulted to pay regular EMI as promised .Complainant failed to clear the outstanding dues though demanded by notice sent to him to clear the arrears. The consequent action on the part of the OP to resume possession of the Motor vehicle and to sell it was correct in the facts and circumstances of the case.

9.      The terms of the agreement between the parties. Clause 14.0 provided for the default of the borrower. Clause 15.0 allowed the lender’s right to possession. Under the clause 15.3 and 15.4 the borrower has irrevocably authorised the lender to sell the vehicle by private treaty or otherwise and to appropriate the sum recover the outstanding dues. There was no deficiency in service on the part of the OP.  Complaint ought to have been dismissed with costs under the fact and circumstances peculiar to this case. Learned Forum below erred and was misled to partly allow the Complaint on the basis of assumption planked upon oral baseless assertion from the complainant. The position was governed under the bilateral written agreement in this case. The vehicle was sold on 12.07.2006 and the complaint was filed on 12.05.2008. The time gap was also significant as no reason was assigned to justify it.  

10.    We therefore set aside and quash the order passed by the Forum below. Complaint is dismissed. Appeal is allowed accordingly. No order as to costs.