O r d e r

1. Present appeal has been filed on behalf of appellant/Opposite party Mahindra & Mahindra Financial Services Ltd. for setting aside the judgment and order dated 31.03.2017 passed by the District Consumer Forum, Patna in complaint case no. 156 of 2011 whereby and whereunder appellant has been directed to refund Rs. 3,36,029/- as well as Rs. 15,900/- and Rs. 68,580/- and Rs. 84,480/- to the complainant within two months failing which interest @12% shall become payable.
2. Briefly stated the facts of the case is that complainant had entered into loan agreement on 27.09.2008 with the appellant/finance company upon which a credit facility of Rs. 3,60,000/- for purchase of Mahindra Bolero Pick up was sanctioned. The loan amount of Rs. 3,60,000/- along with other charges was repayable in 35 monthly installments commencing from 27.09.2008 to 30.07.2011. The vehicle was hypothecated in favour of finance company.
3. Complainant was regularly paying the monthly installment however, failed to pay the few monthly installment and on 11.01.2010 while complainant was driving the vehicle with Masur loaded on it opposite party no. 3 and 4 along with 3 musclemen stopped the vehicle and forcibly took its possession without giving any prior notice. Complainant requested to release the vehicle and the bags of Masur then he was asked to deposit Rs. 50,000/- for release of vehicle.
4. Complainant arranged Rs. 50,000/- and paid to opposite party no. 3 but neither the vehicele was released nor any receipt for said payment was given. Complainant on 13.05.2010 visited Patna branch office and met opposite party no. 3 and opposite party no. 4 and requested for payment receipt and release of vehicle, but same was not released. All the Masur loaded on his vehicle was removed by opposite party no. 3 and 4. Complainant lodged complaint case no. 1297/2007 before the CJM on which after enquiry non bailable warrant has been issued against opposite party no. 3.
5. The original registered sale deed, six blank cheques and copy of identity card which were deposited with the finance company as security were not returned to the complainant. Complainant installed accessories worth Rs. 15,900/-  in said vehicle and also paid the charge of body making worth Rs. 68,580/-from his own pocket.
6. Notices were issued to the opposite parties who appeared and filed their written statement.
7. In their written statement opposite party admitted granting of loan to complainant for purchase of vehicle. Repayment of loan was to be made in 35 monthly installments. Cost of vehicle was Rs. 4,46,729/- for which finance of Rs. 3,60,000/- was provided and complainant deposited Rs. 1,10,929/- which included margin money as Rs. 86,729/- documentation charges Rs. 1,000/-, processing fees Rs. 7,200/-, Miscellaneous charges Rs. 3,300/- and first advance installment of Rs. 12,700/- Total amount Rs. 4,43,700/- was to be repaid in 34 installments of Rs. 12,700/- and last installment as Rs. 11,900/-.
8. It was further stated that clause 12 of the loan agreement provided that in event of default by complainant the finance company can repossess the vehicle and can sell the vehicle to recover outstanding dues. Complainant defaulted in the repayment of the monthly installments and accordingly opposite party/finance company exercised its option to repossess the vehicle in terms of agreement. The vehicle was repossessed and sold on 07.05.2010 after inviting quotation from intending purchaser and the hypothecated vehicle was sold to Vijay Kumar Singh who made the highest offer of Rs. 2,58,000/- for the purchase of the vehicle. The outstanding dues against the vehicle was Rs. 3,32,207/- and there is still a deficit of Rs. 47,207/- against vehicle which is recoverable.
9. Earlier also complainant had defaulted in payments of installments and the vehicle was repossessed but the same was released after repayment of the scheduled installments when a sale notice dated 03.02.2009 was sent to complainant to clear the outstanding dues. Complainant again defaulted in repayment of scheduled installments and as such the hypothecated vehicle was repossessed by the finance company.
10. The District Consumer Forum after hearing the parties and considering the materials available on record has held that no document has been filed on behalf of opposite parties to prove that prior to taking possession of vehicle any notice was served on the complainant and has further held that financer has no right to take the possession of vehicle with the help of musclemen which amounts to gross deficiency in service by opposite party and allowed the complaint case, aggrieved by which present appeal has been filed on behalf of appellant/Mahindra & Mahindra Financial Services Ltd.
11. The Counsel for the appellant submits that clause 12 of the loan agreement as entered between the parties stipulates that if complainant fails to pay the installment opposite party can repossess the vehicle in terms of agreement and auction sale the vehicle to recover the outstanding dues as such appellants have acted as per terms and condition of the agreement and no illegality has been committed by them. On the other hand, counsel for the respondent has supported the judgment and order passed by the District Consumer Forum and submits that the order is well reasoned and well considered and passed after proper appreciation of evidences on record and requires no interference by this Commission in appeal.
12. Heard the parties.
13. The loan agreement as enclosed by the appellant clearly stipulates that prior to taking possession of the vehicle the finance company has to issue notice to the complainant to terminate the contract. A notice to pay outstanding dues to the borrower is mandatory in terms of the agreement. There is specific finding by the District Consumer Forum that no such notice was ever served upon the borrower before taking the possession of the vehicle. In their written statement or even in the memo of appeal appellants have nowhere stated about serving of any notice upon the borrower /complainant before taking the possession of the vehicle as such the District Consumer Commission has rightly held the repossession of the vehicle by the appellant/finance company was in teeth of terms and conditions of the loan agreement and is deficiency in service.
14. Neither complainant has stated anywhere in his complaint petition the number of installment paid by the him or the total amount paid by him nor the appellant/finance company has stated anything about repayment of loan or total amount paid by complainant/borrower. Statement of account enclosed is not legible. Appellant has made an specific statement with respect to outstanding dues of Rs. 3,32,207/- on date of auction of vehicle i.e 07.05.2010 which has not been denied by complainant. The only submission made is that loan agreement being civil contract have to be executed through civil contract. Appellants unless equipped with court order for repossessing vehicle, has no authority to take away vehicle forcibly.
15. The vehicle was repossessed by opposite party /finance company on 11.01.2010 and was auction sold on 07.05.2010 when outstanding dues against vehicle was Rs. 3,32,207/-. Highest auction purchaser paid Rs. 2,58,000/- for the purchase of vehicle still Rs. 47,207/- remained outstanding dues against the vehicle. There is nothing on the record to suggest that any attempt was made by complainant to pay the outstanding due of Rs. 3,32,207/- and get the vehicle released in his favour.
16. Earlier also complainant defaulted to pay monthly installment and vehicle was repossessed by the finance company and sale notice dated 03.02.2009 was served upon complainant to clear outstanding dues and thereafter, complainant paid the outstanding dues and got his vehicle released. However, complainant made no attempt this time to pay the outstanding dues and get the vehicle released. Complainant filed complaint case much after repossession and auction sale of the vehicle. Complainant never intended to pay the outstanding dues to the finance company for release of his vehicle.
17. Complainant is a habitual defaulter and instead of paying the outstanding dues filed a criminal case against officers of finance company for forcible repossession of the vehicle upon which trial court took cognizance of offence against officials of finance company and they had to approach Hon’ble Patna High Court which quashed the order of cognizance by order dated 30.06.2013 passed in Criminal Misc. no. 6057 of 2011 (annexure-3).
18. Court can not come to rescue of a habitual defaulter and conduct of complainant can not be ignored. The financer continues to be owner of the vehicle under a hire purchase agreement. The hirer simply pays for use of the vehicle with an option to purchase it. After all the terms of the agreement are satisfied and the option is exercised, a sale of vehicle takes place, which was hired. The financer continues to remain the owner of the vehicle under the agreement till all the installments are paid and borrower exercises the option to purchase it.       No prejudice has been caused to the complainant due to non service of notice of repossession of the vehicle. Complainant had sufficient opportunity to pay the outstanding dues and to get the vehicle released in his favour however, he made no effort in this regard and filed complaint case after more than 1 year of repossession of the vehicle by finance company and after it was auction sold.
19. The Apex court in case of Magma Fincorp Ltd. Vs. Rajesh Kumar Tiwary since reported in 2020 (10) SCC 399 under similar circumstances in paragraph no. 92 to 96 has held as follows:

92. In the instant case, there is no evidence of any loss suffered by the complainant by reason of non-receipt of notice. Admittedly, several installments, remained unpaid. After repossession the complainant contacted the financier and was informed of the reasons for the repossession. He only made an offer to pay outstanding installments and gave an assurance to pay future installments in time. If the financier was not agreeable to accept the offer, the financier was within its right under the hire-purchase agreement. This is not a case where payment had been tendered by the hirer but not accepted by the financier/lender. The complainant had not tendered payment.

93. The financier admittedly paid Rs. 3,15,000/- for acquisition of the vehicle, out of which the financier had been able to realise Rs. 1,19,000/- inclusive of all charges. There was depreciation in the value of the vehicle by reason of usage by the complainant, for about a year. The District Forum did not even notionally assess the depreciation in the value of the vehicle.

94. The District Forum was not justified in directing the financier to pay to the complainant Rs. 2,23,335 being the entire amount paid by the complainant to the financier from the inception as well as the payment of Rs. 1,04,000/ made by the complainant to the dealer along with damage of Rs. 10,000/- and litigation costs of Rs. 1,000/- after the complainant had held and used the vehicle for almost a year. The complainant, admittedly a defaulter, has in effect, been allowed free use of the vehicle for about a year, plus damages, for an error in the notice or repossession, without considering the prejudice, if any, caused to the complainant by the error and consequential non-receipt of the notice, and without making any assessment of the loss, if at all, to the complainant by reason of the error/omission.

95. For the reasons discussed above, the impugned order¹ of the National Commission, the State Commission and the District Forum, under the Consumer Protection Act, 1986 cannot be sustained and the same are set aside.

96. The appeal is accordingly allowed. The financier shall, however pay a composite sum of Rs. 15,000 to the complainant towards damages for “deficiency” in service and costs for omission to give the complainant a proper notice before taking possession of the vehicle.

20. For the reasons as stated above the judgment and order passed by the District Consumer Commission is neither sustainable in law nor on fact as such is set aside. However, the loan account of the complainant shall be deemed to have been settled and no dues is pending against him. Finance company shall not take any steps for recovery of Rs. 47,207/- and shall also refund the documents namely original registered sale deed, six blank cheque of Madhya Bihar Gramin Bank and the copy of identity card to the complainant which were submitted by the complainant as surety for the loan.
21. As admittedly no notice was served upon the complainant before taking repossession of the vehicle which was in violation of terms and conditions of the loan agreement entered between the parties which amounts to deficiency in service as such appellant is directed to pay to the complainant Rs. 50,000/- as compensation within two months from the date of receipt /production of a copy of order passed by this Commission.
22. With aforesaid modification and direction the appeal is disposed of.

(Md. Shamim Akhtar)                                     (Ram Prawesh Das)                                                     (Sanjay Kumar,J)

       Member                                                           Member                                                                     President

Md. Fariduzzama