West Bengal

Birbhum

CC/161/2015

Abdul Rejak Khan, S/O Sattar Khan - Complainant(s)

Versus

Branch Manager, Indusind Bank Ltd - Opp.Party(s)

Sanjit Kr Acharya

22 Sep 2017

ORDER

J U D G E M E N T

Shri Biswa Nath Konar, President.

            The case of the complainant Abdul Rejak Khan, in brief, is that he was owner of a vehicle being registration No. WB53B-4051, valued at Rs. 17,60,000/- out of which down payment of Rs. 2,60,000 by the complainant and rest of Rs. 15,00,000/- financed by the O.P IndusInd Bank Ltd and he earns his livelihood from the income derived from said vehicle.

            It is the further case of the complainant that he paid loan amount time to time and he paid Rs. 14,07,275/- but he could not continue in paying the rest installments due to his financial crisis and reported the matter about his financial incapability to the O.P.

            But it is the next case of the complainant that on 24.11.15 the O.P without complying the rules of possession in respect of hypothecated vehicle forcibly took possession of vehicle No. WB53B-4051 without due process of law. He requested the O.P to deliver the vehicle after taking actual dues but they did not response on the urge of the complainant.

            It is the further case of the complainant that he has already paid some portion of the loan amount in cash and O.P already repossessed the vehicle inspite of that they are claiming more amount from him illegally.

Hence, this case for directing the O.P to issue no dues certificate in favour of the complainant against the vehicle being No. WB.53B-4051 and to pass order directing the O.P to pay margin money /down payment of Rs. 2,60,000/- with compensation of Rs. 1,00,000/-.

The O.P M/s. IndusInd Bank Ltd. Suri Branch has contested the case by filing written version denying all material allegation of the complainant, contending, inter alia, that the case is not maintainable and the complaint has no cause of action to bring this case.

It is the case of the O.P that the complainant is not consumer under the O.P.

It is the specific case of the O.P that the complainant approached before them for financial assistance to purchase a vehicle (TATA LPO 1618/62 BS-III) and after being satisfied with the proposal of the complainant the O.P sanctioned loan of Rs. 15,00,000/- to the complainant by entering into loan-cum-hypothecation agreement dated 27.09.13. The financed amount was repayable along with interest of Rs. 4,14,000/- and of Rs. 1,20,000/- of Insurance premium for 2^nd, 3^rd and 4^th year of hypothecation period. So, total agreement value comes to Rs. 20,34,000/- which was repayable by 46 installments and 1^st date of installment was 10.11.2013 and last date of installment is 07.08.2017.

It is the further case of the O.P that the complainant has paid some installments but thereafter he became defaulter and on several requests he did not pay the remaining installments. On 05.05.15 the O.P send a defaulter notice to the complainant but no consequences.

It is the further case of the O.P that thereafter having no other option left in hand the O.P peacefully repossessed the vehicle as per terms and conditions mentioned in Clause 15.3 of loan-cum-hypothecation agreement, as the vehicle is sole security of the loan amount.

Thereafter the complainant rushed to them and asked to release the vehicle. The O.P requested him to repay the loan but he refused to pay anything and the O.P kept the vehicle in their custody. Pre-sale notice dated 14.12.15 was duly served upon the complainant by giving opportunity to repay loan and take release of the vehicle but the complainant did not turn up.

Ultimately the O.P prayed for dismissal of the case.

Considering the complaint and other materials on record with think following points are to be decided in this case.

1.  Whether the complainant is a consumer under Sec. 2(1)(d)(ii) of the C.P. Act.?
2. Whether this Forum has jurisdiction to try this case?
3. Whether there is any deficiency in service or unfair trade practice on the part of the O.P.?
4. Whether the complainant is entitled to get any other relief or reliefs as prayed for?

DECISION WITH REASONS

During the trial the complainant has been examined himself as P.W.1 and submitted some documents. He was cross examined by the O.P.

The O.P has not submitted any oral evidence but submitted some documents.

Heard both sides.

Point No.1:: Evidently the complainant obtained loan from the O.P Bank after hypothecating his vehicle being No. WB53B-4051.

So, the relation between the parties has been established.

During hearing of argument Ld. Advocate/Agent of the O.P submitted that in the present case relation between the complainant and the O.P is Financier and loanee, so the Financer is not a service provider.

In support of his contention he cited a ruling reported in (3)CPJ247(NC) where Hon’ble National Commission pleased to hold that under a hire purchase transaction the Financier does not render any service within meaning of C.P Act, 1986 and the petitioner is thus, not a consumer. But in ruling reported in 2009(3) CPC 136(NC) Hon’ble National Commission relying upon the ruling reported in 2007(2)SCC711 by Hon’ble Supreme Court in a case of repossession of vehicle for default in installment of loan by the petitioner and forceful repossession of the same, Hon’ble National Commission pleased to hold that the O.P/Financer is liable for deficiency in service and directed to pay a penal compensation.

During hearing of argument Ld. Advocate/Agent of the O.P further submitted that the complainant in his cross-examination admitted that he used vehicle for commercial purpose. So, he is not consumer under the C.P Act. But by filing evidence on affidavit the complainant specifically stated that he used to maintain his livelihood from income derived from the vehicle in question and he has no other source of income and no cross examination was made on behalf of the O.P challenging such evidence.

In view of our above made discussion we are constrained to hold that the complainant is a consumer under Sec. 2(1)(d)(ii) C.P. Act.

Point No.2:: Total valuation of the case is Rs. 3,70,000/- with interest and compensation which is far less than maximum limit of the pecuniary jurisdiction of the Forum i.e. Rs. 20,00,000/-.

Office of the O.P Bank is situated at Suri within jurisdiction of this Forum.

So, we find that this Forum has both the pecuniary and territorial jurisdiction to try this case.

Point No. 3 and 4:: Both points are taken up together for convenience of discussion as they are related to each other.

The complainant in his complaint and evidence stated that he was owner of a vehicle being registration No. WB53B-4051, valued at Rs. 17,60,000/- out of which down payment of Rs. 2,60,000  was made by the complainant and rest of Rs. 15,00,000/- financed by the O.P IndusInd Bank Ltd and he earns his livelihood from the income derived from said vehicle.

The copy of the loan agreement with scheduled shows that the cost / market value of the vehicle in question was Rs. 17,60,000/- and the complainant took loan of Rs. 15,00,000/- after paying down payment of Rs. 2,60,000/- and he was to repay the loan by 46 installments and agreement value was Rs. 20,34,000/-. But he paid loan amount time to time and he paid Rs. 14,07,275/- but he could not continue in paying the rest installments due to his financial crisis and reported the matter about his financial incapability to the O.P. and he has already paid some portion of the loan amount in cash and O.P already repossessed the vehicle, inspite of that they are claiming more amount from him illegally.

            On the other hand O.P Bank in their W.V admitted that the complainant took loan of Rs. 15 lakh for purchasing a vehicle and entered into loan agreement.

It is the case of the O.P that he has paid some installments but thereafter he became defaulter and on several requests he did not pay the remaining installments. On 05.05.15 the O.P send a defaulter notice to the complainant but no consequences.

It is also the case of the O.P that thereafter having no other option left in hand the O.P peacefully repossessed the vehicle as per terms and conditions mentioned in Clause 15.3 of loan-cum-hypothecation agreement, as the vehicle is sole security of the loan amount and thereafter the complainant rushed to them and asked to release the vehicle. The O.P requested him to repay the loan but he refused to pay anything and the O.P kept the vehicle in their custody. Pre-sale notice dated 14.12.15 was duly served upon the complainant by giving opportunity to repay loan and take release of the vehicle but the complainant did not turn up.

During hearing of the argument Ld. Advocate/Agent of the complainant claimed that no reminder or pre-sale notice was served upon him. Rather the O.P took forceful possession of the vehicle in question and illegally sold the same during pendency of the case even without taking permission/intimation of/to the Forum.

We find that regarding service of reminder notice dated 05.05.15 and pre-sale notice dated 14.12.15 upon the complainant, the O.P Bank has filed Xerox copy of said two notices with Xerox copy of postal registration slip regarding sending of said notices through registered post. But no A/D card or track report regarding service of said notices is forthcoming before this Forum especially when the complainant has denied such service. We find that O.P Bank nowhere in W.V or any other document disclosed actually when the auction sale of the vehicle in question was made and which manner said action was taken place.

However, we find from the statement of a/c of the complainant that the vehicle in question which was valued at Rs. 17,60,000/- on 28.09.2013 i.e. at the time of granting of loan, the same was sold at Rs. 7 lacs and said money was deposited in the account of the complainant on 05.01.16 i.e. after filing of the present case.

So, it is clear that the said vehicle valued at Rs. 17,60,000/- was sold out at Rs. 7 lacs only within about two years.

Considering overall matter into consideration and materials on record we are constrained to hold that O.P Bank illegally repossessed the vehicle in question without serving proper reminder / pre-sale notice and sold out the same in a fake auction sale (without publishing any notice in newspaper or otherwise and without adopting proper procedure of auction sale.) at very nominal price of Rs. 7 lacs.

During hearing the argument Ld. Advocate/Agent of the complainant submitted that repossession of the vehicle forcibly without service of valid notice amounts to deficiency in service and the O.P Bank is liable to pay compensation.

In support of his contention he cited a ruling reported in 2009(3) CPC 136(NC) where in a case of hire purchase agreement of vehicle, the complainant/ loanee defaulted in payment of installments and the O.P/Financial service took forcible seizure of the vehicle by hiring muscleman for recovery of the amount.

Hon’ble National Commission pleased to hold that excuse for use of force for repossessing the vehicle on account of slow procedure of law cannot be allowed and such practice of repossessing hypothecated goods amounts to taking law in their hand and is not permissible.

Hon’ble National Commission in the said ruling further pleased to hold that no notice was given before repossessing the vehicle by force and sold without prior notice. O.P held liable to pay market value of the vehicle with 9% P.A interest.

Hon’ble National Commission further pleased to hold that however, if there is some balance in A/c books against the complainant, the same would be null and void.

We find that in the said ruling Hon’ble National Commission pleased to rely upon the ruling reported in 2007(2)SCC 711 where

Hon’ble Apex Court please to observe that practice of hiring of recovery agents who are muscleman is depreciated and needs to be discourage. The Bank should resort to procedure recognized by law to take possession of the vehicle in cases where the borrower may have committed default in payment of the installment instead of taking resort to strong arm tactics.

We further find that in the said ruling Hon’ble National Commission please to formulate the procedure of auction sale also.

During hearing Ld. Advocate/Agent of the complainant further submitted a ruling reported in 2007(2)CPC 183(Delhi State Commission) wherein case of seizure of the vehicle by Financer, said Financer sold the same at much less price for non-payment of installment. Dist. Forum allowed the case with direction to O.P to refund margin money with cost.

On appeal Hon’ble State Commission pleased to hold that Financer shall, while adjusting the sale price of the repossessed vehicle shall calculate the market value at the depreciated value i.e. amounting to 5% p.a. in case of passenger vehicle and refund the balance amount including the amount contributed by the consumer towards the price of the vehicle after adjusting the loan amount.

We find that in the present case market value of the vehicle in question was Rs. 17,60,000/-. If we assessed depreciated value 10% p.a. in case of the vehicle in question then in view of the above cited ruling valuation of the vehicle will be Rs. 17,60,000/- - Rs. 3,52,000/- (10%  i.e. Rs. 1,76,000/- for two years) = Rs. 13,18,000/-.

Ld. Advocate/Agent of the complainant submitted another ruling reported in 2009(3)CPC160(N.C) wherein TATA Indica DLS car was purchased by the respondent with the financial assistance from HDFC Bank. As there was some default, muscleman engaged by the HDFC Bank/its agent forcibly took the possession of the vehicle, which compelled the consumer to file a complaint before Dist. Forum.

The Dist. Forum allowed the case.

On appeal Hon’ble State Commission pleased to hold that the O.P shall pay the balance amount to the complainant within 30 days from the date of receipt of the order, failing which they would be liable to pay the same with penal interest amounting to 12% P.A. w.e.f the date of filing of the present case i.e. 01.10.2007 till realization.

We further find from the statement of account of the complainant submitted by the O.P Bank that Rs. 22,30,904/- has been credited in his account, out of which Rs. 7 lakhs was deposited by the O.P Bank as sale price of the vehicle.

So, the complainant actually paid/deposited Rs. 22,30,904/- - Rs. 7,00,000/- = Rs. 15,30,904/- to the O.P Bank.

Now let us consider the dues of the complainant to the O.P Bank.

Financer O.P is entitled to get Rs. 15,00,000/- as loan amount + Rs. 2,07,000/- as interest (actual interest was Rs. 4,14,000/- but dues have been paid before completion of 46 instalments) + Rs. 90,000/- as premium of the vehicle = Rs. 17,97,000/-.

We find that the complainant entitled to adjust

                        Rs. 15,30,904/- (as credited amount)

                  (+)Rs. 13,18,000/-(as market value of the vehicle after depreciation)

                                   Rs 28,48,904/-

            So, actual dues of the complainant from the O.P will be

                                    Rs 28,48,904/-

                               (-) Rs. 17,97,000/-

                        Rs 10,51,904/-

 

Considering overall matter into consideration, materials on record and relying upon the rulings cited above we are constrained to hold that the O.P/Bank repossessed the vehicle in question illegally and also sold to the same at very nominal price by illegal auction sale which amounts to illegal trade practice and deficiency in service. The O.P is liable to issue no dues certificate in favour of the complainant in respect of vehicle in question after adjustment. The O.P/Bank is liable to pay Rs. 10,51,904/- to the complainant as due amount to the complainant with 8% interest from the date of filing of this case till realization. The complainant is not entitled to get any other compensation.

Accordingly the case succeeds.

Proper fees have been paid.

Hence,

O R D E R E D

that C.F case No. 161/2015 be and the same is allowed on contest against the O.P with cost of Rs. 2000/-.

The O.P IndusInd Bank Ltd. is directed to pay Rs. 10,51,904/- to the complainant as due amount to the complainant with 8% interest from the date of filing of this case i.e. 28/12/2015 till realization.  No other compensation is awarded.

The O.P/ Bank is also directed to issue no dues certificate in favour of the complainant in respect of vehicle in question after adjustment.

The aforesaid order will be complied with by the O.P within one month from the date of receipt of a copy of this order failing which the complainant shall be at liberty to resort to due process of law and procedure. 

Copy of this order be supplied to the parties each free of cost.