JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER

            This revision is directed against the order of the State Commission Himachal Pradesh dated 09.10.2009 whereby the State Commission upheld the order of the District Forum Kullu in Consumer Complaint No. 103/2007 and dismissed the appeal.

2.         Briefly stated, the facts relevant for the disposal of the revision petition are that respondent filed a consumer complaint alleging that he being an unemployed person, with a view to earn his livelihood, decided to purchase a Swaraj Mazda Truck.  The respondent for that purpose approached the opposite party for financial assistance.  The petitioner agreed to finance the truck to the extent of Rs.3,58,000/-.  The balance consideration amount was paid by the respondent complainant.  The loan amount as per the agreement was to be paid in 47 equated monthly instalment of Rs.11,340/- payable w.e.f. July 2002.  The respondent complainant regularly paid the instalments till July 2005. Due to some unavoidable reasons, the complainant could not pay the EMI due for period ending August 2005.  It is alleged that because of said default, the petitioner opposite party forcibly seized the vehicle.  The respondent, thereafter, offered to pay instalments for the August and September 2005 but the petitioner opposite party refused to accept the payment and failed to deliver back the possession.  Being aggrieved, the complainant instituted a civil suit in the Court of District Judge Kullu which was subsequently withdrawn.  Thereafter, respondent filed consumer complaint in the District Forum.

3.         The petitioner opposite party resisted the complaint.  It was pleaded that complaint is not maintainable on the ground of jurisdiction and also that complainant is not a consumer as he had availed service of the petitioner for commercial purpose.  It was also pleaded that complaint was not maintainable in view of arbitration clause in the loan agreement.

4.         On merits, it was pleaded by the opposite party that complainant had been irregular in the payment of instalments.  He was repeatedly asked to pay the instalments of loan and finance charge on due date but the complainant ignored the notices of the opposite party.  Therefore, the opposite party took possession of subject vehicle on 19.09.2005 in exercise of its rights as owner of the vehicle under Hire-Purchase Agreement.  It was pleaded that no force was exercised while taking over possession of the vehicle.  Even after taking possession of the vehicle, the complainant was called upon to pay the entire outstanding dues of the loan and finance charges but the complainant failed to pay the entire dues.  Therefore, the opposite party was compelled to sell the vehicle on 23.01.2006.  The vehicle was sold for Rs.1,60,000/- which  had been appropriated against the loan account of the complainant and sum of Rs.1,98,359/- is still due from the complainant.

5.         The District Forum on consideration of the pleadings of the parties and evidence allowed the complaint and ordered thus:

“The question arises of determination of the compensation payable to the complainant.  As noticed above, the complainant had paid Rs.5,53,000/- for the vehicle in question.  It is true that complainant had plied the vehicle for about 3.1/4 years.  However, it had not at all been established that on 19.09.2005, the vehicle had turned a scrap.  Even scrap was being sold at the rate of Rs.20/- per kg in 2006.  Therefore, the alleged sale of the vehicle for Rs.1,60,000/- is clearly wrong.  The vehicle in question had not met with accident at any stage.  No such allegation had  been made by the opposite party.  The ld. Counsel for the complainant had stated that that the complainant had been himself driving the vehicle.  The value of the owner driven vehicle does  not depreciate rapidly.  After taking into consideration, the facts and circumstances of the case, we find that on 19.09.2005 the market value of the vehicle, in any case, could  not be said to be below Rs.3,00,000/-.  The opposite party could not be allowed to be judge of its own case and determine the market value of the vehicle at Rs.1,60,000/-. Even if, an amount of Rs.1,00,000/- approximate was payable to the opposite party by the complainant as on 19.09.2005, the complainant is entitled to compensation of Rs.2,00,000/- from the opposite party for forcible seizure and subsequent disposal of the vehicle.  The complaint under section 12 of the Act of the complainant for recovery of the amount of Rs.2,00,000/- is  hereby allowed against the opposite party with interest at the rate of 9% p.a. from the date of institution till payment with costs assessed at Rs.2000/-. “

6.         The petitioner  being aggrieved of the order of the District Forum preferred an appeal before the State Commission. The State Commission did not find merit in appeal and dismissed the same vide impugned order.

7.         Notice of revision petition was sent to the respondent but the respondent failed to put any appearance.  Respondent was, therefore, proceeded ex parte.

8.         Learned counsel for the petitioner has taken us through the record as also the pleadings and submitted that it is undisputed that subject vehicle was financed by the petitioner under Hire Purchase Agreement and that the possession of the vehicle was taken over by the petitioner because the respondent complainant had defaulted in payment of EMI (s) against the loan on the due date.  Learned counsel has argued that it is well settled that under Hire Purchase agreement, it is the financer who is owner of the vehicle and, therefore, taking possession of the vehicle by the petitioner on the ground of non payment of instalment is legal right of the petitioner and as such,  the petitioner cannot be said to have committed deficiency in service.  It is argued that Fora below ignoring the aforesaid aspect have committed grave error in granting compensation  to the respondent complainant. In support of his contention, learned counsel for the petitioner has relied upon judgment of Supreme Court in the matter of Suryapal Singh Vs. Siddha Vinayak Motors and Anr. III (2012) CPJ 4  (SC) as also the judgment of Coordinate Bench of this Commission in Shriram Transport Finance Co. Ltd. Vs. Chaman Lal IV (2012) CPJ 93 (SC).

9.         We have considered the submissions made on behalf of the petitioner and perused the record.  From the pleadings of the respondent complainant it is evident that respondent  had defaulted in payment of EMI due in August 2005 and because of this reason, the opposite party had seized the subject vehicle.  Petitioner has placed on record copy of the finance agreement executed between the parties.  On perusal of the agreement, it is evident that subject vehicle was financed by the petitioner insurance company under Hire Purchase cum Guarantee Agreement.  Para 2 of the agreement which deals with title and ownership of motor vehicle reads as under:

II. TITLE AND OWNERSHIP OF THE MOTOR VEHICLE

1. TITLE AND OWNERSHIP OF THE MOTOR VEHICLE: The hirer(s) acknowledges, confirms and declared that he holds the motor vehicle, as a mere bailee of the owner and that he shall not have any proprietary right, title, or interest. In the motor vehicle, the owner’s absolute ownership right and title thereto and that he shall not at any time advance or make any claim adverse to or in derogation of the owner’s absolute ownership right and title. It is however clarified that in the event of hirer(s) qualifying to exercise and thus exercising his option to purchase the motor vehicle, then on such purchase being completed the hirer(s) liability under the terms of this clause shall cease and the hirer(s) shall, as an from the date of such purchase hold the motor vehicle in his capacity as the owner.

    

2. IDENTIFICATION : The owner may at all times during the subsistence of this agreement, require plates or making to affixed to or placed on the motor vehicle, indicating the owner’s interest therein.

    

3. Hirer(s) not to sell/assign : The hirer(s) agrees and undertakes not to transfer, sell assign, sublet, pledge, hypothecate or otherwise encumber or suffer any lien or charge any interest of whatsoever nature to be created or permit or allow any third person to use the motor vehicle without the prior consent of the owner in writing.

    

4. Entry in R.C. Book : The owner agrees to permit the hirer(s) to have the registration of the motor vehicle in his/her/their own name provided that in the said Registration Certificate the name of the owner is endorsed as follows:

    

   The motor vehicle above described is held under a hire-purchase agreement with Shriram Transport Finance Company Ltd.

    

   The hirer undertakes to supply details of the motor vehicle within three days of the receipt of the registration number from the Road Transport Authority himself, or direct the dealer to supply the same, in the specified format. The said details shall be deemed to form an integral part and parcel of this agreement.

    

5. Right to Inspection : The owner or any person authorized by the owner shall be entitled from time to time and at all times during the continuance of this agreement, to enter upon the premises in which the motor vehicle is for the time being placed or kept for the purpose of confirming the existence of inspecting and examining the conditions and maintenance of the motor vehicle.

    

10.       On reading of the above, it is clear that under the agreement, ownership of the vehicle vested with the petitioner and respondent complainant till the clearance of the loan was a mere bailey of the petitioner without any propriety title over the vehicle.  Therefore, in our considered view, because of failure of the complainant to pay the EMI (s) on due dates, the petitioner was justified in taking possession of the vehicle and the aforesaid act of the petitioner cannot be termed as deficiency in service.  Hon’ble Supreme Court in the matter of Suryapal Singh ( supra) while dealing with import of Hire-Purchase Agreement particularly in the context of non payment of instalment and repossession of the vehicle has held as under:

“1.          This petition has been preferred against the judgment and order 19.10.2011 of the National Consumer Disputes Redressal Commission.  Prima facie it appears that the three Counts below erred in not considering the facts of the case in correct perspective.  Under the Hire Purchase Agreement, it is the financier who is the owner of the vehicle and the person who takes the loan retain the vehicle only as a bailee/trustee, therefore, taking possession of the vehicle on the ground of non-payment of instalment has always been upheld to be a legal right of the financier.

2. This Court vide its judgment in Trilok Singh & Ors. V. Satya Deo Tripathi, 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 @Babu & Anr. V. Kora Bibbikutty & Anr., 1996 (7) SCC 212; Jagdish Chandra Nijhawan V. S.K. Saraf, IX (1998) SLT 477=IV (1998) CCR 118 (SC)=1999 (1) SCC 119; Charanjit Singh Chadha & Ors. V. Sudhir Mehra, II (2007) CPJ 41 (SC)-VI (2001) SLT 312=2001 (7) SCC 417, following the earlier judgment of this Court in Sundaram Finance Ltd. V. The State of Kerala & Anr., AIR 1966 SC 1178; Smt. Lalmuni Devi V. State of Bihar & Ors., I (2001)SLT 26=I (2001) CCR 9 (SC)=2001 (2) SCC 17 and Balwinder Singh V. Asstt. Commissioner, V (2005) SLT 195=III (2005) CCR 8 (SC)= 2005 (4) SCC 146.

3. In view of the above, prima facie we are of the view that the Courts below has committed an error in granting compensation to the present petitioner and which appears to be non-sustainable in law.  In view of the above, issue notice to the petitioner as well as to the respondents why the judgments and order impugned be not set aside.  The petitioner is restrained to make any recovery from the respondent of the amount which has been awarded to him by the Courts below.”

11.       The Fora below obviously have passed the orders in ignorance of the above noted pronouncement of the Supreme Court. Therefore, impugned order cannot be sustained.

12.       It may not be out to mention that petitioner has placed on record copies of default notices dated 07.08.2003, 04.11.2003, 22.04.2004, 17.06.2004, 05.08.204, 20.09.2004, 18.02.2005 given to the complainant before taking over possession of the vehicle.  Even three demand-cum-sale notices dated 21.09.2005, 13.10.2005 and 22.10.2005 were served upon the respondent to pay the amount due and taking his vehicle back but the complainant failed to respond.  If the petitioner after serving due notices have seized the truck and sold it to recover its loan, it cannot be held to be guilty of deficiency in service.  Therefore, also, impugned order cannot be sustained. 

13.       In view of the above, we are of the opinion that impugned order is based upon the incorrect appreciation of fact and law.  Revision petition is allowed, impugned order is set aside and complaint is dismissed.