DATE OF DISPOSAL: 25.06.2024.
PER: SMT. SARITRI PATTANAIK, MEMBER (W):
The factual matrix of the case is that the complainant has filed this consumer complaint Under Section 12 of the Consumer Protection Act, 1986, alleging deficiency in service against the Opposite Parties (in short the O.Ps.) and for redressal of his grievance before this Commission.
2. The complainant is a self-employed and to manage his livelihood obtained an auto loan from the O.Ps bearing loan account No.25562811 for Rs.5,28,997/- to purchase a Mahindra Bolero Plus AC and the complainant has made total down payment of Rs.1,32,000/-. After sanctioning the loan issued an approval letter dated 11.09.2013 the O.P.No.1 fixed the installment for repayment of the loan amount was 60 EMI at Rs.14,871/- and the Equal Monthly Installment payment date fixed from 05.11.2013 to 05.10.2028 for fifteen years. The loan amount was disbursed by the O.P.No.1 on 24.09.2013. As per the instruction of the O.Ps the complainant started deposit of installment as per scheduled date without fail and the complainant has deposited 42 EMIs at the rate of Rs.12,642/- till 17.08.2017 out of 60 installments. As the matter stood thus, O.P.No.1 in- connivance with O.P.No.2 issued a notice dated 11.08.2017 charged to pay Rs.2,85.974.37 within 7 days instead of instructing to pay the certain number of EMI amount to the complainant. As a result, the complainant was shocked and tried to arrange said amount to pay O.P.No.1 but in such short period complainant could not be able arrange claimed amount and in constraint deposited Rs.22,000/- on 12.08.2017. Even aftrer received the said EMI amount from the complainant also both the O.Ps seized the vehicle of the complainant bearing Regd. No. OD-07C-7047 on 24.08.2017 en-route intentionally and willfully when the vehicle carries the passenger and to harass the complainant, the O.P.No.1 played its guilty mind and after seized vehicle, the staff of the O.Ps intentionally issued surrender letter vide No.366236 dated 24.08.2017 addressed to HDFC Bank ltd. Bhubaneswar including a Inventory of items in vehicle for and on behalf of the complainant forcefully. It was surprised, when the complainant has received another presale notice dated 24.08.2017 alongwith foreclosure amount notice on 25.08.2017 wherein it was started that, “In the event you wish to obtain resale of the vehicle to yourself, the total dues outstanding and overdue interests including collection, repossession and godown charges amounting to Rs.3,34,581.59 paisa only cleared in full on or before 7th September 2017 and further the O.Ps also have stated in said notice that, in case you do not repay the outstanding dues within the stipulated date, the bank will proceed with auctioning the vehicle without any further notice to you and shall deem it has your consent for disposing the vehicle towards clearing your liability”. While the matter stood thus, the complainant received another notice dated 25.10.2017 that the said vehicle was then disposed off on an “as is where is “ basis as per the rights vested with us under the above referred loan agreement cum guarantee. Against a total receivable from you of Rs.3,34,581.59 paisa as on 24.08.2017 a sum of Rs.2,64,000/- was received from the sale of the vehicle and Rs.36,061.04 was paid towards GST. Hence a sum of Rs.1,08,892.63 paisa is still receivable from, your end under the repayment of the loan taken from us”. It comes to light that, by dereliction of duty and having malafide intention and by adopting unfair trade practices method and by rendering the deficient services to the complainant, both the O.Ps are without sufficient reasonable reason and cause of action and without implicit consent of the complainant, the O.Ps have seized the vehicle on 24.08.2017 en-route to the Bhubaneswar to drop the students at Examination centre to appear their examination. For which, the complainant faced untoward problems from the said students and paid the compensation of Rs.25,000/- and lost the fare amount also for dropping en-route. Both the O.Ps have not gone through the loan account status of the complainant prior to seize of vehicle, issuing of notice and claiming of amounts as outstanding dues and violating the agreements, claimed the huge amount to be paid within a short while which is deficient services and unfair trade practices. Alleging deficiency in service on the part of the O.Ps the complainant prayed to direct the O.Ps to return the vehicle bearing Registration No. OD-07-C-7047 or refund the entire amount deposited by the complainant, compensation of Rs.2000/- per day from the date of seize the said vehicle i.e. 24.08.2017 and litigation costs of Rs.55,800/- in the best interest of justice.
3. The Commission admitted the case and issued notice to the Opposite Parties. Due to non appearance and filing of written version on time this Commission declared the O.Ps as exparte on 06.01.2023. After lapse of months the O.Ps filed its written version and prayed to set aside the exparte order passed on 06.01.2023 which was rejected by the Commission by want to jurisdiction to receive its own order.
4. The O.Ps filed written version through his advocate. It is stated that the averments made in Para-1 are matter of record and O.P. Bank has nothing to say on the same except the complainant had paid the down payment was paid to the O.P. In Para-2 and 3 are partially matter of record and the rest are not correct hence objected, the entire transaction has been explained and SOA attached at Para No.8 of this written submission/objection. It is denied that, the complainant was paying the amount regularly as there was very much irregularity. It is pertinent to mention here that every time the PDCs provided bounced and later on after much follow up by the answering O.Ps, the EMIs were being paid by the complainant in cash or a later date with much delay. It is evident from the SOA that the PDCs bounced 45 EMIs and cleared only 3 EMIs out of 48 EMIs till the date of taking possession of the vehicle dated 24.08.2017and the Bank had also issued loan recall notice to the customer on 11.08.2017 and demanded Rs.2,85,974.37 but he failed to respond the notice and did not honour the demand in which it was clearly mentioned that failing to pay the demanded amount the asset would cause towards repossession of the asset and accordingly following due procedure of the law the vehicle was taken in to possession. In Para 4 are false, it is a fact that due to continuous default in payment of the installments in due date and in spites of issue of Loan Recall Notice prior to the possession of vehicle and Pre sale notice prior to the auction sale of vehicle the complainant became deaf ear and did not adhere to the said notice for which the O.P. Bank by following due procedure of law taken the vehicle in to possession. Before sale of the vehicle although a presale notice was issued to the customer as lasts opportunity to take back the asset by paying the amount mentioned therein, but he remained silent and failed to come forward either for discussion or for payment and consequently the vehicle was sold as per the due process to the auction purchaser. Hence, the plea regarding willful seizure of the vehicle by the O.Ps bank is false and baseless. As on the date of taking possession of the vehicle the complainant was a defaulter of Rs.2,06,474/- towards principal outstanding and Rs.21,425.91 towards interests outstanding i.e. Rs.2,27,899.91 was pending due to be repaid by the complainant which he has deliberately not disclosed in the complaint petition. As the vehicle was repossessed due to chronic defaulter attitude of the complainant, hence there is no such illegality in doing so by the O.Ps. Due to such irregularities in payment of EMIs within due date the O.Ps was forced to recall the loan account of the complainant by sending LRN basing upon the force closure amount and as no step taken to regularize his loan account the O.Ps were well within their rights to take the repossession of the vehicle. Prior to sale of the vehicle as per the clause of the loan agreement Pre sale notice was also sent to the complainant by the O.Ps by sending another opportunity to take back his vehicle. All the attempts of the O.Ps to redeliver the vehicle to the complainant were fruitless and finally finding no way the vehicle was sold at Rs.2,64,000/- through the process of auction. The amount of auction was adjusted towards total dues. After adjusting the amount, there is a loss on sale amount of Rs.1,08,892.63 and the complainant is liable to pay the same to the Bank. The late payment penalty is 2% per month on over-due EMI as per the Auto loan schedule cum key fact statement of loan agreement. Hence the O.Ps prayed to dismiss the case as not maintainable wither in law or on acts with exemplary cost in the best interest of justice.
5. On the date of hearing the Commission heard from the Learned Counsel of the complainant as well as O.Ps and perused the complaint, evidence on affidavit, written argument and documents available on case record. The complainant is a self-employed and to manage his livelihood obtained an auto loan from the O.Ps bearing loan account No.25562811 for Rs.5,28,997/- to purchase a Mahindra Bolero Plus AC and the complainant has made total down payment of Rs.1,32,000/-. After sanctioning the loan issued an approval letter dated 11.09.2013 the O.P.No.1 fixed the installment for repayment of the loan amount was 60 EMI at Rs.14,871/- and the Equal Monthly Installment payment date fixed from 05.11.2013 to 05.10.2028 for five years. The loan amount was disbursed by the O.P.No.1 on 24.09.2013. As per the instruction of the O.Ps the complainant started deposit of installment as per scheduled date without fail and the complainant has deposited 42 EMIs at the rate of Rs.12,642/- till 17.08.2017 out of 60 installments. It is a fact that due to continuous default in payment of the installments in due date and in spites of issue of Loan Recall Notice prior to the possession of vehicle and Pre sale notice prior to the auction sale of vehicle the complainant became deaf ear and did not adhere to the said notice for which the O.P. Bank by following due procedure of law taken the vehicle in to possession. All the attempts of the O.Ps to redeliver the vehicle to the complainant were fruitless and finally finding no way the vehicle was sold at Rs.2,64,000/- through the process of auction. The amount of auction was adjusted towards total dues. After adjusting the amount, there is a loss on sale amount of Rs.1,08,892.63 and the complainant is liable to pay the same to the Bank. As per loan Account No.25562811 of HDFC Bank ltd the complainant deposited Rs.12,642.00 in 42 installments out of 60 installments.
6. The Law is well settled in the SBI v. Rajesh Agarwal in C.A No.:7300 of 2022 the Hon’ble Supreme Court of India held that, “audi alteram partem, which means that a person affected by administrative, judicial or quasi-judicial action must be heard before a decision is taken.” But in the instant case, the opposite party nos. 1 & 2 did not follow the said principle of law maxim ‘audi alteram partem’ at all. The Commission further relied upon Magma Fincorp Limited v. Rajesh Kumar Tiwari reported in (2020) 10 Supreme Court Cases 399, the Hon’ble Apex Court of India held that, it is mandatory to provide or issue proper notice to the borrower. But in the instant case, the opposite party nos. 1 & 2 have not issued proper notice in each and every stages of due process of recovery, repossession and auction sale which is tantamount to deficiency in services. And for which the complainant suffered from the harassment and mental agony. Hence the complainant consumer is entitled to compensation along with other reliefs sought for. In a landmark judgment, Hon’ble Supreme Court of India held in ICICI Bank v. Shanti Devi Sharma & Ors reported in 2008 AIR SCW 6734 that, the banks/financial institutions should follow the RBI Guidelines on Fair Practices Code for Lenders dated 5.5.2003 provides at (v)(c) that is "In the matter of recovery of loans, the lenders should not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc." And in another similar case Manager, ICICI Bank v. Prakash Kaur & Ors reported in AIR 2007 SUPREME COURT 1349 Hon’ble Supreme Court of India held that, “In conclusion, we say that we are governed by a rule of law in the country. The recovery of loans or seizure of vehicles could be done only through legal means. The Banks cannot employ goondas to take possession by force.”
7. On foregoing discussion it is crystal clear that the O.Ps are negligent in rendering proper service to the complainant. And the opposite parties did not follow the conditions of the agreement strictly and pre maturely taken coercive action against the complainant which is tantamount to breach of agreement and trust as per Indian Contract Act. It is suggested in catena of cases to the parties of the Agreement by the Hon’ble Supreme Court of India. Hence, in our considered view there is deficiency in service on the part of the O.Ps.
8. So far as the compensation and cost of the case is concerned, we are convinced that the O.Ps failed to take any effective steps to short out the problem of the complainant, for which the complainant has suffered physically and mentally. As such the complainant is entitled to get compensation and cost of litigation since he has hired the services of an advocate for filing his complaint in this Commission and has incurred expenses attending the case.
As the O.Ps snatched the vehicle plying on the road and sale in auction is a giant action in favour of the complainant. So the complainant failed to manage his livelihood.
Resultantly the Opposite Parties who are jointly and severally liable are hereby directed to pay compensation of Rs.5,00,000/- together with litigation cost of Rs.10,000/- to the complainant within 45 days from the date of receipt of this order. Further it is directed to the opposite parties to inform the CIBIL organization to drop the name of the complainant from the CIBIL list. In the event of non-compliance of the order, the entire dues shall carry interest at the rate of 9% per annum and the complainant is at liberty to recover the said amount from the O.Ps in accordance to the Section 71/72 of the Consumer Protection Act, 2019.
This case is disposed of accordingly.
The Judgment be uploaded on the www.confonet.nic.in for the perusal of the parties.
A certified copy of this Judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 2019.
The file is to be consigned to the record room along with a copy of this Judgment.
Pronounced on 25.06.2024.
