Order-5.
Date-05/01/2017.
Parties file hazira.
OP files a copy of order of Misc. Case No.4017 of 2016 passed by Judge, City Civil Court, Kolkata.
The petition challenging the maintainability of the case dated 02-01-2017 filed by the OP is taken up for hearing.
In filing the petition it is stated by the OP that the case is not maintainable in fact and in law. It is stated that the complainant approached the OP seeking financial assistance for the purchase of the subject vehicle. The complainant and the OP entered into an agreement of loan cum hypothecation cum guarantee whereby and wherein the OP agreed to grant and the complainant agreed to take the said vehicle at a total loan amount of Rs.5,20,000/-, pursuant to and in terms of the loan agreement the complainant was required to pay the total loan amount in 35 equal monthly instalment of Rs.20,800/- each. The complainant was a habitual defaulter in payment of monthly lease rental and on several occasions defaulted in payment of instalment. Complainant also failed to pay the part of 13th instalment to 16th instalment. As a result, a sum of Rs.75,485/- towards the total arrear outstanding became due and payable by the complainant to the OP. OP on repeated occasions called upon the complainant to clear the outstanding instalments but the complainant failed and neglected to pay the same in terms of the agreement. The said vehicle is at present in the custody of the OP. The OP has already referred the dispute to arbitration by their letter dated 15-11-2016. The said arbitration proceeding is pending for adjudication. Complainant instead of making payment has filed this present consumer complaint. The application has been filed after initiation of matter to arbitration by OP. In such event, the instant complaint is prima facie not maintainable. OP has prayed for dismissal of the case.
Complainant has opposed the petition by filing written objection stating that the instant case is for deficiency in service and unfair trade practice of the OP. It is also stated that the maintainability of a case can only be challenged on the point of jurisdiction at an initial stage and not on factual matrix. It is also stated that there is no bar to initiate a proceeding under Consumer Protection Act in spite of reference of dispute to arbitration. The remedy u/s.3 of the C.P. Act is in addition to and not in derogation to any other laws. It is alleged that OP has forcibly and illegally took possession of the vehicle as the complainant defaulted in payment of EMIs for 5 months. It is also alleged that the OPs have not possessed the vehicle in due possess of law in repossessing the vehicle which amounts not only to deficiency in service but also in unfair trade practice.
Decision with Reasons
Under the Hire Purchase Agreement, it is the financier who is the owner of the vehicle and the person who takes the loan for the vehicle only is a bailee/trustee, therefore, taking possession of the vehicle on the ground of non-payment of instalment has already been upheld to be a legal right of a financier. Hon’ble Supreme Court vide its judgment in Trilok Singh and others vs. Styadeo Tripathy in AIR 1979 SC 850 has categorically held that under the hire purchase agreement, the financier is the real owner of the vehicle. Therefore, there cannot be any allegation against him for having the possession of the vehicle. This view was again reiterated in K.A. Mathai alias Babu and Anr. V. Kora Bibbikutty and Anr. : 1996 (7) SCC 212 ; Jagdish Chandra Nijhawaa v. S.K. Saraf, : 1999(1) SCC 119 and Charanjit Singh Chadha and Orss v. Sudhir Mehra, : 2001 (7) SCC 417, following the earlier judgment of this Court in Sundaram Finance Ltd. v. State of Kerala and another : AIR 1966 SC 1178; Smt. Lalmuni Devi v. State of Bihar and Ors.: 2001 (2) SCC 17 and Balwinder Singh v. Asstt. Commissioner, C.C.E., : 2005 (4) SCC 146.
It is not disputed that the complainant had raised a loan of Rs.5.25 Lakhs to purchase the truck. It is admitted before us that the complainant had defaulted several times in making the payment on the dates when it was due. Further it is not disputed that as per hire purchase agreement the financier was authorized to repossess the vehicle in case of default in repayment of loan instalments. Hon’ble Supreme Court of India in Managing Director, Orix Auto Finance (India) Ltd. case (Supra) has held that the financier can repossess the vehicle if the agreement permits the financier to take the possession of the financed vehicle. There is nothing to show that the vehicle was repossessed forcibly. Mere fact that the possession was taken by the OP cannot be the ground to contend that the hirer is the prejudiced. It is however contended by the complainant that the OP has not violated the due process of law in repossessing the vehicle which amounts not only to deficiency in service but also in unfair trade practice. We find that the OP has filed a case being Misc. Case No.4017 of 2016 before the Judge, City Civil Court, Kolkata and the Misc. Case is ending. It also appears that receiver has been appointed by the Ld. Judge City Civil Court, Kolkata for the purpose of taking over the possession in respect of the subject vehicle. Since a case in Civil Court is pending regarding the subject vehicle. We think that we should not entertain the instant case at this stage. Since, Misc. Case is pending in an appropriate court we think that we should not think it necessary to go into the said question whether the recovery process has been in accordance with law or not. It is true till such time as the ownership is not transferred to the purchaser, the hirer normally tends to be the owner of the goods but that does not entitle him on the strength of agreement to take back repossess of the vehicle by use of force. Guideline which had been laid down by the Reserve Bank of India itself supports and make a virtue of such conduct. If any action is taken for recovery in violation of such guidelines or the principles as laid down by the Hon’ble Supreme Court, such an action cannot but be struck down. Since Misc. Case is pending and possession of the vehicle is taken by the order of a competent Court of Law we are not inclined to entertain the instant complaint, as there may be conflicting of decision.
Hence,
Ordered
That the instant complaint be and the same is dismissed as being not maintainable at this stage. While dismissing the complaint as not maintainable we reserve the right of the complainant to approach the appropriate Civil Court to seek his remedy if so advised. He may take advantage of the ruling of the Supreme Court Laxmi Engineering Works vs. PSG Industrial Institute, (1995) 3 SCC 583 to seek exclusion of time spent before this Forum.
The complaint accordingly is dismissed.
