D.O.F:19/05/2022
D.O.O:20/11/2023
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KASARAGOD
CC.95/2022
Dated this, the 20th day of November 2023
PRESENT:
SRI.KRISHNAN.K : PRESIDENT
SMT.BEENA.K.G : MEMBER
Raghavan V, aged 64 years
S/o Kunhamma
Vattathode House, Arayi
P.O. Kanhangad South
Hosdurg Village, Kasaragod District
Pin – 671531.
(Adv: Shamseer A) : Complainant
And
- Bajaj Finance Ltd.
C/o Bajaj Auto Ltd, Old Mumbai
Pune Road, Akurdi, Pune – 411035.
Rep. by its Managing Director
- Bajaj Finance Ltd.
Kanhangad Branch
Rep. by its Branch Manager
C/o Zain Bajaj, N.H. Building
Kovvalppally, Kanhangad
Kasaragod District, Pin – 671315.
- Zain Bajaj
Authorized Dealer for Bajaj Motor Cycle
N.H. Building, Kovvalppally
Kanhangad, Kasaragod District
Pin – 671315.
Rep. by its Manager.
- Rinil, aged 35 years
Area Manager, Bajaj Finance Ltd,
Residing at Allakkal House
Valapattanam, Kannur, PIN – 670010.
- Sudheesh, aged 35 years
Collection Agent, Bajaj Finance Ltd
Residing at Kottappara, P.O. Pullur
Hosdurg Taluk, Kasaragod District.
Pin - 671315.
(Adv: Udayakumar R, for OP 1,2 &4): Opposite Parties
ORDER
SRI.KRISHNAN.K : PRESIDENT
The facts of the case is that the complainant purchased a motor cycle from the company of ‘Bajaj Pulsar’ in the year 2019 from opposite party No.3 show room at Kanhangad registration No:KL-60-Q-7313. At the time of purchase, the complainant availed a finance facility, as per the terms, the complainant remitted an amount of Rs.18,800/- (Rupees Eighteen thousand Eight hundred only) as down payment to the opposite party No.3 office and the opposite party No.2 & 3 told that the total amount of the vehicle will come Rs.1,04,000/- (Rupees One lakh Four thousand only). So the complainant paid the balance amount after deducting the down payment made earlier. So the complainant bound to pay EMI of Rs.3,745/- to the opposite party No.1 through bank facility in 24 instalments.
The complainant was regularly remitting the loan instalments through his bank account. On 07/06/2019 onwards to opposite party No.1&2 withdrawing Rs.3,745/- from complainant’s account after the period of 01/05/2019 to 15/02/2022 of the complainant’s Federal Bank account. The account statements of the complainant is shown that the complainant paid an amount more than 4 lakhs to the opposite party No.2.
That the complainant further submits that in the year 2020 March the Covid-19 pandemic is very high in our state, at that time the complainant could not made some instalments to the opposite parties. As per the directions of opposite party No.2 complainant paid amount through their collection agent. The opposite party No.6 not given receipt for the payment of 13-04-2021 and 15/07/2020. The complainant further submits that he had paid more than Rs.85,000/- out of Rs.1,04,000/-. Due to Covid-19 pandemic, government has declared moratorium and such other benefits to the persons who availed loan from different financial institutions. The opposite party No.2&4 contacted the complainant in the month of December 2021 and directed to pay Rs.5,000/- to opposite party No.2 and also informed that the opposite party No.4 were there is the office of opposite party No.3 with amount of Rs.5,000/- as directed by the opposite party No.2,4. The complainant and his son reached office of the opposite party No.3 and went their office after parking the above said motor cycle in the premises of opposite party No.3. After negotiation and payment, the complainant and his son going to the parking place for going to their house but surprisingly the above said motor cycle is not seen there. From this they could understand that the vehicle was taken by the persons of opposite party No.1 and 2 with direction of the opposite party No.4. The complainant contacted opposite parties and agreed to pay balance amount to them. The attempt were in vein. Thereafter complaint was filed before the SHO Hosdurg. But the police has not taken any action, because the opposite parties were highly influential. The complainant had already paid 90% of the amount of the loan to opposite parties. The opposite parties has no right to take the vehicle from the custody of the complainant, which caused mental agony and heavy loss to the complainant. The complainant claims for a direction to give back the above said motor cycle by way of mandatory injunction, and to pay Rs.1,00,000/- as compensation.
The opposite party No.1 filed written version stating that the complainant availed Rs.1,34,820/- for 36 EMI of Rs.3,745/- starting from 06/06/2019 down payment is of Rs.18,800/- is denied. Due to Covid-19, scheduled EMI increased to 44 months. He remitted Rs.72,720/- in balance due. On 10/06/2021, loan recall notice seen for Rs.94,340/- but no positive reply. Vehicle is possessed on 19/12/2021 with knowledge and consent of the complainant. Pre-sale notice dated 03/01/2022 is sent. Vehicle is sold in January 2022 for Rs.38,000/-. Lawyer notice dated 19/01/2022 is replied on 08/02/2022. Then there is no deficiency in service, hence not entitled for any reliefs.
The complainant filed chief affidavit and cross-examined as PW1. Ext.A1 to A9 documents marked. Ext.A1 &A2 are cash receipts. Ext.A3 is the complaint filed before police, Ext.A4 to A8 is the receipts for payment and Ext.A9 is the account statement.
The opposite party No.1 filed Ext.B1 to B8 documents marked. Ext.B1 is the loan agreement, Ext.B2 is the loan application, Ext.B3 is the Master Circular of RBI, Ext.B4 is the statement of account, Ext.B5 is the loan recall notice, Ext.B6 is the inventory, Ext.B7 is the Pre-sale notice, Ext.B8 is the legal notice and reply to legal notice.
Points for consideration in the case is that;
- Whether a financier is invested with right to re-possess the vehicle, for which loan has been given by it, by use of force?
- Whether the complainant is entitled for return back the motor cycle?
- Whether the complainant is entitled for compensation? If so, for what reliefs?
All points are discussed together for convenience.
The grievance of the complainant is that he has remitted the major portion of the loan amount and ready to pay the balance amount. But in the meanwhile opposite party No.1 forcefully re-possessed the vehicle. The opposite party denies the allegations continuing that the complainant is permanent defaulter and complainant surrendered the vehicle to opposite party and it was auctioned.
It has been contented by the learned counsel for the opposite party that,
- A financer has legal right to repossess the hypothecated goods without the intervention of the court, it is by virtue of contract and on the basis of the hire purchase agreement.
If muscle men are encouraged to repossess the property, it will create lawlessness and the loance who himself is in financial crisis would be helpless. Further lawlessness cannot be encouraged on the alleged ground that recovery of money through litigation is a delayed process. Dealing with the repossession of the vehicle by the financier the Apex Court, in the case of ICICI Bank Vs Prakash Kaur and others, (2007) 2 Sec 711, that the practice of hiring of recovery agents who are musclemen is deprecated and needs to be discouraged. The relevant observations are as under;
- The finance companies must inform the hires regarding the details of instalments due and payable by a written communication.
- Even before re-possession another written notice must be sent to the hires and only thereafter the vehicles be repossessed.
It is clear that even though hire purchase agreement may give right to re-possession of the vehicle, money lender/financer/banks have no power to take possession by use of force and have to follow the statutory remedy which may be available under the law.
Further the complainant has not transferred the vehicle in favour of the financier at the time of taking the loan.
Any clause in the agreement which gives unrestricted right of entry in the premises of the complainant to take possession of the vehicle would be in violation of the established legal system in a civilized society.
- Code of conduct prescribed by the petition bank for repossessing the vehicle.
Pre-sale letter to the customer 7 days time for repayment it is to be stated that the following procedure prescribed for re-possession is not followed.
Once a vehicle is re-possessed, a pre-sale notice is sent through registered post to the customer to re-pay the total amount for close the loan within 3/7 days from the receipt of the letter.
If the customer comes back within the given time and cleares the negotiated amount the vehicle is to be returned to the customer. If the customer does not respond to the pre-sale communication, the sale proceedings need to be initiated.
As against this, the complainant pointed out that the vehicle was repossessed when he was prepared to pay the amount that prayer was not accepted. From the above, it is clear that the vehicle was sold within short time from the date of possession without complying the due process of law.
In this case, the complainant was requested to pay only Rs.56,454/-. The vehicle sold for a sum of Rs.38,000/- as stated by opposite party.
In view of what we have noted herein, the complainant has suffered loss of money and which caused him mental agony for which opposite party liable to compensate. Re-possessing the vehicle without complying the proceeding is unfair trade practice and deficiency in service. The vehicle is already being sold, we cannot direct opposite party to restore the vehicle to the complainant. According to the statement of account filed by the complainant, he has paid Rs.85,000/-, he is entitled to refund of the said amount but having regard to the fact that the complainant had used the vehicle for some time and the fact that he has saught compensation to the tunes of Rs.1,00,000/-. We direct opposite party No.1 to refund the amount of Rs.50,000/- as compensation along with 9% interest and also cost of the litigation.
In the result, complaint is allowed in part directing opposite party No.1 to refund Rs.50,000/- (Rupees Fifty thousand only) as compensation along with interest 9% per annum from the date of filing the complaint ie,23/05/2022 till the date of payment. The opposite party No.1 shall also pay Rs.5,000/- (Rupees Five thousand only) towards cost of litigation within 30 days of the receipt of the order. All other opposite parties are exonerated from liability.
Sd/- Sd/-
MEMBER PRESIDENT
Exhibits
A1 – Cash receipt dated 14/05/2019
A2 – Cash receipt dated 17/05/2019
A3 – Copy of the complaint filed before SHO
A4 – Receipts for payment dated 28/02/2021
A5 – Receipts for payment dated 31/01/2021
A6 - Receipts for payment dated 31/08/2021
A7 - Receipts for payment dated 21/10/2021
A8 - Receipts for payment dated 22/10/2021
A9 – Account statement
B1 – Loan agreement
B2 – Loan application
B3 – Master Circular of RBI
B4 – Statement of account
B5 – Loan recall notice
B6 – Inventory
B7 – Pre-sale notice
B8 – legal notice
Witness cross-examined
PW1 – Raghavan V.
Sd/- Sd/-
MEMBER PRESIDENT
Forwarded by Order
Assistant Registrar
JJ/
