Orissa

Jajapur

CC/18/2017

Sudhansu Ranjan Mohanty - Complainant(s)

Versus

Authorised Signatory Hinduja Ley Land Finance Ltd. - Opp.Party(s)

Sri Alok Kumar Pani.

24 Nov 2017

ORDER

IN THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, JAJPUR.

                                                        Present:      1.Shri Jiban ballav Das , President

                                                                            2.Sri Pitabas Mohanty, Member,

                                                                            3.Miss Smita Ray, Lady Member.                       

                                              Dated the 24th day of November,2017.

                                                      C.C.Case No.18 of 2017

Sudhansu Ranjan Mohanty  S/O Niranjan Mohanty

At/P.O. Deoda, P.S. Dharmasala

 Dist.-Jajpur.                                                                            …… ……....Complainant .                                                                       .

                   (Versus)

1.Authorised Signatory , Hinduja Ley Land Finance ltd, 3^rd floor

Samsung Plaza-392,BJB Nagar- Lwis Road,Bhubaneswar.

 

2.Branch Manager, Hinduja Ley land Finance Ltd, At. Chorda By pass Road

  P.O. Jajpur Road, Dt.jajpur

 

                                                                                                                            ……………..Opp.Parties.                  

For the Complainant:                                Sri A.K.Pani, Advocate.

For the Opp.Parties :1 and 2                     Sri S.Ch. Pradhan,  R.P. Pradhan, S.K.Pradhan,

                                                                   Sri C.R. Ojha, P.K. Das, Advocates.

                                                                                                    Date of order:   24.11.2017.

MISS  SMITA  RAY, LADY MEMBER  .           

Deficiency in financial service is the grievance of the petitioner.

            The facts as  stated by the petitioner in the complaint petition  in brief are   that the petitioner is an inhabitant of village Deoda which is within the Dist. of jajpur and  is  an unemployed youth having no other source of income to maintain his livelihood under self employment   purpose purchased a 2^nd hand vehicle / Truck bearing Regd. No. OR-04-G-9868  by taking financial assistance amounting to Rs.6,22,626/ from the O.P  on the strength of loan –cum-hypothecation agreement. .  As per terms  and condition of  loan- cum-Hypothecation agreement  the petitioner is required to repay the loan amount along with financial charges  totaling Rs.8,94,445/- (principal amount Rs.6,22,526/-  +  2,71,919 interest )in between 1.10.11 to 1.08.14 in 35 installments . Accordingly the petitioner has already paid Rs. 84,500/- as on  30.7.12 and due to closer of transporting iron ore as well as owing to  illness of his mother the petitioner became defaulter due to financial stringency

            That as per agreement though the petitioner is required to pay the total amount with interest latest by 1.8.14 but the o.ps violating the terms of repayment scheduled repossessed the vehicle on 24.9.12 by using musclemen without giving any pre- repossession notice and seizure list which violate the guide lines of Hon’ble  Apppex court.

            After repossession  of the  above cited vehicle   though the petitioner is running to the O.Ps to release the vehicles but the O.Ps paying  no  heed to the request of the petitioner, subsequently  on 09.3.17 handed over a statement of the alleged vehicle wherein the O.Ps have demanded Rs.5,54,322/- towards balance loan amount. On verification of statement  dt.9.3.17 it is observed that the vehicle has been sold at low price i.e 3,20,000/ on dt. 09.06.13  without following the proper procedure  of auction sale as well as without giving any  pre –sale  notice to the petitioner , for which the petitioner was  unable to release the vehicle in participating the auction sale .

            That in addition to it , it  is also observed in the statement of account  dt.09.3.17 the O.Ps have demanded Rs.6,634/- as additional interest , Rs.12,000/-  as repossession charge, Rs. 45,743/-  as other expenses which was not tenable  in the eye of law. Similarly the O.Ps  also have charges 36% interest  for the defaulted installments which violates the Hon’ble  supreme court and Odisha High court observation  vide WPC (C) No.17720/2008  and 2001-AIR-3091-SC.

            That  owing to such illegal action of the O.Ps  the petitioner has suffered irreparable  loss  which is only due to deficiency  in service as well as unfair trade practice    and accordingly finding no other way the petitioner has filed the present dispute with the prayer to debar  the O.Ps not to collect any amount  towards the loan outstanding of the above alleged vehicle as well as to pay compensation of  Rs.50,000/- to the petitioner , for deficiency in service as well as unfair trade practice .

            The O.Ps have appeared through their learned advocate and  as well as filed the written version  taking  the  following stands.

The O.Ps. is neither in fault nor responsible for petitioner’s gross mistake and fault. The petitioner requested the O.Ps to take a vehicle loan with abiding all the terms and conditions of company. The petitioner signed an agreement with the Hinduja Leyland finance ltd. On 30.09.2011 and borrowed a sum of Rs.6,22,526 and agreed to repay the loan amount in monthly installments @ Rs.11,179/- per month for 1^st five months and thereafter of Rs.30,072/- for rest 30installments. The petitioner also agreed to pay the financial charges of Rs.2,71,919/- and which is to be paid on or before 01.08.2014 . The petitioner  also has  agreed to pay the late penalty and other charges as per terms and conditions of the agreement.

            Though the petitioner has deposited some  amount and thereafter regularly he defaulted to pay the further due amount to the O.Ps though the complainant has committed to pay the installment dues in each month @Rs.30072/- and used the vehicle for his business purpose since 30.09.11 to 24.09.2012 for 12 months but forgot to pay the EMIs regularly. The petitioner  repeatedly defaulted to pay the installment dues.

            Further the O.Ps.  submitted that there is a binding and subsisting Arbitration Agreement between the parties and under clause-23 of the hire purchase agreement executed by the complainant and the guarantor wherein the parties have agreed that in case of any dispute, differences, claims and questions whatsoever arising out of the agreement between the parties, the matter shall be referred to the arbitrator whose decision will he final and binding on  both the parties and the said agreement also contain a ouster clause of jurisdiction of other courts. The O.Ps communicated to the petitioner through notice dt.26.12.14 for repayment of arrear dues, but no  response received from the petitioner for which time and again notices issued to the petitioner for repayment of outstanding dues but the petitioner has no response. Finding no other way the O.Ps. initiated arbitration proceeding against the petitioner and guarantor on dt.05.08.16. The O.Ps. compelled to start  Arbitration proceeding against petitioner as per term and conditions of the hire purchase agreement signed between the parties, for which issued a reference letter to the sole Arbitrator on 5.08.16. The Sole arbitrator issued a notices on 08.08.16 and 4.10.16 to the complainant to present before  his good-self on 30.09.16 and 28.10.16 with claim statement and documents filed by the claimant to defend himself against the proceeding started by the O.Ps. The 1^st and 2^nd hearing notices were sent  to the petitioner by regd. Post with A.D 2^nd hearing notice was received by the petitioner / borrower and 1^st and 2^nd hearing notices were  received by the guarantor. Hence service of notice is held to be  sufficient .  The petitioner neither present in person nor though any representative present before the sole arbitrator nor any communication made by him. The Sole arbitrator again issued final notice on 04.10.16 to the petitioner to present before his good self on 28.10.16 and defend himself against the proceeding started by the O.P. and  if fail to appear either personally or through his pleader / advocate on the date time and place mentioned then in that event, the matter shall be dismissed/ proceeded exparte, as the case may be and shall be determined accordingly. The petitioner neither present in person nor any representative present before the sole arbitrator nor any communication made by him. The sole arbitrator giving plenty opportunity to the petitioner reserved the Arbitration proceeding on 28.10.16 and prepared and signed  on 24.12.16, passing an order of award directing the petitioner to pay the awarded amount of Rs.5,51,617/- as the transaction involved in commercial in nature the tribunal holds that the said sum shall carry interest at 12% per annum from 25.07.16 till its realization and also directed to pay a sum of Rs.2,500/- as cost of this proceeding and Rs.5,000/- as arbitrators fees. After obtaining the Arbitration award the petitioner filed this consumer complaint before this Hon’ble forum by suppressing the Arbitration award. After pronunciation of the Arbitration Award . This consumer complaint is not maintainable in the eye of law. Hence this case is to be dismissed.

            On the date of hearing we heard the learned advocate from  the side  of O.Ps. .  After perusal of the record along  with documents in details  the following issues are framed :-

Issue No.1

            Whether the petitioner  is a consumer who is entitled to maintain the dispute in this Fora ?

Issue No.2

            Whether this Fora gets jurisdiction to adjudicate the present dispute on the point of limitation ?

Issue No.3

Whether this  Fora gets jurisdiction to adjudicate  the dispute as per  Arbitration clause  ?

Issue No.4

            Whether there is any deficiency in service on the part of the O.P, so far as  seizure and sale of the alleged vehicle is concerned  ?

 Issue No.5

Whether  the petitioner  is entitled to any relief ?

            At the initial stage we make it clear that we are going to decide the dispute on the   facts  and circumstance of the present  dispute  as per observation of Hon’ble Supreme court  reported in 2001(2)CPR-108-S.C

Answer to issue No.1

            It is un disputed fact that the complainant has availed the  loan from the O.Ps. As against such loan the petitioner  is paying interest which is consideration and  in the expression of service and the interest so paid by  the petitioner  in repayment of loan is consideration .As such the petitioner  is a consumer as per observation of Hon’ble Supreme court reported in 1995(2)SCC-150-S.C(Consumer unit and Trust society Vrs. Chairman M.D Bank of Boroda)  (2000)CPJ-115- Vimal ch. Grover Vrs. Bank of India)

Answer  to issue No.2

            The stand taken by the O.Ps at the time of hearing that the present dispute is barred by limitation as provided under C. P.Act. .  It  is our considered views that the cause of action arises i.e  on 09.03.17, when the O.Ps handed over the computer generated statement  of Account  of the alleged  vehicle to the petitioner for payment of Rs.5,54,.322/- Thereafter the next day the petitioner has filed the present dispute against the O.P on dt.10.03.17.  More over the petitioner filed the Account statement  dated  09.3.17  with an affidavit.  This Fora  also has given  an  opportunity to the O.Ps.  for filing counter affidavit against this  document but the O.Ps  did not take any steps on the matter. As such the dispute is within the period of limitation as per section 24 (A)  of  C.P. Act 1986.

Answer to issue No. 3

            The view taken by the O.Ps  that as per agreement the dispute shall be adjudicated by the Arbitrator but not by  this Fora, which  is also not  sustainable  in  view of Hon’ble Supreme court  reported in 2004- CTJ(1) Supreme Court - (Secretary, Co-operative Agriculture  Society  Thirunugam Vrs. M.lalitha)  wherein it is held that:

“Arbitration Clause has no bar for entertaining the dispute  by the  Consumer fora.”

More over the  O.Ps have   taken the plea in the written version  Arbitration  Award has already been passed  on  24.12.16  before filing of present dispute but there is no evidence / documents annexed with such written version  . In the circumstances  this fora vide its order dt.4.8.17 directed the petitioner along with  O.Ps.  as follows:

            ‘ The advocate  for complainant  is directed to file documents if any by way of an affidavit . The advocate  for O.Ps.   also directed to file annexed documents / Arbitration Award copy as stated  in the written version  along with the pre-repossession notice and pre-sale  notice with postal receipt by way of an affidavit on 4.09.17 positively for proper adjudication of the dispute.

and the direction of this  fora already communicated to the learned  advocate  for both the parties . But  the O.Ps  at belated stage i.e  on the date of hearing (posted for  last chance )  only filed  loan agreement,*  Arbitration award copy dt.24.12.16  , * Demand notice dt.26.12.14 ,02.04.15 ,  * Repayment schedule   and statement of accounts  with an affidavit after giving several opportunity by this fora  .More over the petitioner filed a citation of Hon’ble Supreme court vide civil appeal no.(S) 91/2012 as well as Hon’ble High court of  Odisa ARBP No.49/2009  wherein it is held that  ;

            ‘As the cause of action had taken place here on entered  into agreement at jajpur district for availing the  loan for purpose of purchasing  a finance   commercial vehicle conferring jurisdiction by appointing an arbitrator at mum on the basis of the said clause, is void ab  initio in law . Arbitrator appointed must be a person of the State of Orissa particularly having regard to the cause of action which taken place in entering into the loan agreement at Cuttack. Therefore , the appointment of arbitrator at Mumbai on basis of the arbitration clause and proceeding held  during pendency of this proceeding, is void ab initio in . The arbitration proceeding and the award passed is a nul in the eye of law for the reason that the arbitrator who has  been appointed to conduct the proceedings at Bombay  when the cause of action took place at Cuttack on the basis the arbitration clause, which I have already held void for reason that the arbitration proceedings and award are void in law . Hence  the award is liable to be set aside in view of decision of the Allahabad High Court  in the case of Unive Construction (Supra) relied upon by Mr. Mukherji .Accordingly the award is set aside.”

            Hence in absence of any documentary evidence from the side of the O.Ps  like postal receipt/ receipt of acknowledgement / notice for arbitration proceeding to the petitioner as well as   as per above citation the cause of action arises at Cuttack and the Arbitration award passed at Chennai violating the guide line of Appex court   we have  no hesitation to decide the present dispute.

Answer to issue no.4 and 5

            There  are vital issues and  arises  on separate cause of action  where we are to verify only  whether there is any deficiency of service on the part of the O.ps and if so whether the petitioner is entitled for any relief as prayed in the complaint petition.

1.it is alleged by the petitioner that on 24.09.12 the O.Ps  unauthorizedly  and illegally has seized the vehicle by using muscle man .  As against such grievance , the O.P  have  taken the stand that since the petitioner is a chronic defaulter and did not repay the loan amount in time.,  the O.Ps was entitled to seize  the vehicle . on the above allegation and counter allegations we are of the opinion that the O.ps are entitled to exercise its right because the petitioner is a defaulter .

2 Further it is alleged by the petitioner  without giving any repossession  and pre sale notice the O.p after repossessing the vehicle have  sold the alleged vehicle  at lower price . As against such grievance  of the petitioner  the O.Ps have  taken the stand that the O.Ps. have  issued the notice to the petitioner on 26.12.14  and 02.04.15 for repayment of outstanding dues but silent about repossession notice and pre sale notice ( where as repossessed the vehicle i.e on 24.09.12 and subsequently sold ie. On 09.06.13)  , which are required to given an opportunity to the petitioner to release  the alleged vehicle . Further  the O.Ps have  taken only the plea that the dispute is not maintainable before this Fora  as per  arbitration clause . On the other hand the petitioner categorically  denied the pleas  of the O.Ps

.owing to such situation  we do not found a single scrap of  paper which will support   the O.Ps such as   pre-sale notice, pre-repossession  notice and postal receipt / acknowledgement  in stead of several opportunity are  given by this  Fora . and the o.ps also took time on 04.09.12 and 11.09.17 to produce the same as instructed by this  Fora.  It is also surprising  that the O.Ps are  silent about the date of auction of the vehicle as well as the procedure adopted by the O.Ps.  in auction of the said vehicle and the actual auction price of the vehicle. The O.Ps also have  not intimated to the petitioner in which date the alleged vehicle shall be  put to auction sale as a result the petitioner lost an opportunity  to take part in sale process  to purchase the vehicle repossessed from the petitioner . In our opinion the o.ps ought to have intimated the date of  sale to the petitioner ,so that he would have been able to  participate the said sale process.

            Besides that it has been further alleged by the  petitioner that he  has never been  intimated that the O.Ps are going to dispose of the vehicle by way of auction no notice was  sent to him recalling the loan /repossession and regarding  auction sale of the vehicle .

            Further no  public notice having being given by the O.Ps  in news paper before selling the vehicle repossessed from the petitioner . Thereafter it can not  be said that the vehicle was sold by following a fair transparent   process . This was not only another act of deficiency of service on the part of the O.Ps.   in rendering service to the petitioner but also patent unfair trade practice

            The next aspect comes for consideration is whether the ,mode of seizure and sale of the alleged vehicle is tenable in eye of law .

                                In this contest after perusal of the observation of Hon’ble Supreme Court reported in 2006-CTJ-209 (SC)( M.D Orix Auto Vrs. Josvinder Singh)  we are inclined to hold that though the O.P. is empowered as per term and condition of the agreement to seize and sale the financed  vehicle in case of default of monthly installments of the loan but such seizure and sale must be as per law in view of the observation of Hon’ble National Commission reported in 2016(2)CLT-31-N.C (A.V.Finance India Pvt.Ltd Vrs.Ramdas Raghunath Patil) wherein it is held that observation of Hon’ble Supreme Court reported in 2007(36) OCRCSC (Manager ICICI Bank Ltd Vrs. Pravash Kour & Others) 2016(1)CLT-310-N.C(Kotak Mahindra Bank Ltd Vrs.M.D. Sarif Ansori)  wherein it is held that:

                                “ vehicle repossessed and sold by financer without notice illegal “.

                                In this contest we make it clear that no wherein  the hypothecation agreement of the alleged vehicle empowers,   the O.P to take such action violating the guide line of Hon’ble Supreme Court ,Hon’ble National Commission and Hon’ble State Commission Delhi reported in 2012(2)-CLT-72-SC, 2007(3)CPR-191, 2005-CTJ-522 respectively (Citi Crop Maruti Finance Ltd Vrs.Vijaya Laxmi) wherein it is held that:

                                “ Seizures  of the vehicle must be through court.”

                                “Repossessed vehicle can not be sold without notice to owner”.

                                           and

  2016 (2)CPR-342(N.C) (General Manager L & T Finance Ltd Vrs. Rampada  Maity) wherein it is held that:

                                “repossessed vehicle must be sold by following a fair and transparent process.”

Similarly we are also inclined  to verify whether the selling of the above vehicle was a bonafide one. In this contest it is alleged by the petitioner that without giving an opportunity to the petitioner,  the O.Ps.  have  sold the vehicle at their sweet will. In such situation we do not find any documents from the side of O.Ps  regarding the date of auction of the said vehicle which violates the  guide line of appellate  Forums reported in 2010(1) CPR-118-A.P,2004(3) CPR-154-Odisha, wherein it is held that:

‘Auction  sale must be bonafide one and date of auction of vehicle must be intimated to hirer / loanee .  

And

2006-CPJ-438-Chhatisgarh State commission   (Bikram sah thakur  vrs. I.C.I.C.I Bank ) wherein it is held that     

Vehicle sold without issuing pre-sale notice to complainant deficiency in service proved –o.p liable to refund the entire amount paid by the complainant”.

Along with 2008(3) –CPR-45-N.C(Tata Finance ltd, Vrs. francies  Soeiro )

2015(2)-CPR-584-N.C(Magma finance ltd. Vrs Tikeswar Barik) wherein it is held that

                                “ Financer can not resort to extra legal means to repossess vehicle “.   

       2015 (2)CPR-901(S.C) ( Citi  Crop Maruti Finance Vrs. S.Vijay  Laxmi) wherein it is held that :

“ even in case of mortgage goods subject to hier purchase agreement recovery process has to be in accordance with law “.

And 2015(2) CPR-375 N.C   STIFAN  Tigga  Vrs. Cholomondalam Investment and Finance ltd, wherein it is held that :

            “Financer can not  resort to extra legal means to recover loan amount “.

It is also surprise to mention here that regarding outstanding amount of   the petitioner as stated with an affidavit in respect of the alleged vehicle that on 9.3.17 the o.ps handed over a computer generated  account statement   mentioning  that “  claim statement for  arbitration”

where the outstanding amount reflected as Rs. 5,54,322/- to  which the O.P did not object the computer generated account statement dt.9.03.17 by filing any counter affidavit though  this Fora has given several opportunity  to the O.Ps. On the other hand  on dt. 22.09.17  the O.Ps. filed a computer generated account statement 0f dt.-04.02.2016 where as mentioned that “ claim  statement  for  Arbitration “ dues  Rs.5,51,617/- subsequently   the plea in the written version  taken by the O.Ps  that the arbitration award passed against the petitioner i.e dt.28.12.16 as Rs.5,51,617/- + 2,500 cost + 5,000/ arbitration fee and arbitration award carry 12% interest   till its realization ( But it is surprise to mention here that when the O.Ps  taken the stand  in their written version that the arbitration award  has been passed on 24.12.16  but in which  circumstances  the awarded amount was not reflected the computer generated statement  giving by the O.Ps i.e on 09.03.17 to the petitioner .  In this contest  it is not under stood  which statement  of the O.P  is correct . 

In view of the above observation from our side it is cristal clear that the O.Ps have committed gross negligence and patient deficiency of service as well as unfair trade practice by selling the above vehicle without following the proper procedure of law  for which the petitioner suffered irreparable loss . In this point  the law is conclusively in the petitioner’ favour and consequently the dispute must succeed and hereby allowed.

Hence this order        

In the net result the dispute is allowed against the O.Ps.  on contest as per observation of own state Commission  vide C.C. Case No. 76/2007 . The O.Ps  are directed  not to recover any  outstanding amount  against of  the alleged  vehicle  bearing Regd. No. 0R-04-G 9868 from the petitioner  . Further the O.Ps are also  directed to pay Rs.30,000/-as compensation  to the petitioner ( for harassment  and mental  agony ) within one month from the date of receipt of this order  , failing which the  petitioner is at liberty to take shelter of this fora for realization of the award amount . No cost.

            This order is pronounced in the open Forum on this the 24th day of November,2017. under my hand and seal of the Forum.