Date of Filing: 01/08/2011
Date of Order: 27/08/2011
BEFORE THE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE - 20
Dated: 27th DAY OF AUGUST 2011
PRESENT
SRI.H.V.RAMACHANDRA RAO,B.SC.,B.L., PRESIDENT
SRI.KESHAV RAO PATIL, B.COM., M.A., LL.B., PGDPR, MEMBER
SMT.NIVEDITHA .J, B.SC.,LLB., MEMBER
COMPLAINT NO. 1603 OF 2010
P. Nagendra Babu,
S/o. Papaiah,
New No: 7421, Old No.1077,
Subhash Nagar, Nelamangala,
BANGALORE-562 123.
(Rep. by Advocate Sri.Nataraj.G.) Complainant.
-V/s-
(1) Citi Group Finance Limited,
C/o. Quality Management Services,
No.149, 2nd Floor, 2nd Main,
10th Cross, 1st Stage, Indira Nagar,
Bangalore-560 038.
Rep. by its Manager/M.D.
(2) Citi Corp (Finance) Ltd.,
Regd. Off: Citigroup Centre,
5th Floor, Bandra Kurla Complex,
Bandra (E), Mumbai,
Rep. by its Manager/M.D.
(Rep. by Advocate Sri.Surresh H.V.) Opposite parties.
BY SRI.H.V.RAMACHANDRA RAO, PRESIDENT
ORDER
The brief antecedents that lead to the filing of complainant U/s 12 of the Consumer Protection Act seeking direction to the Opposite Parties to pay Rs.8,36,580/-, are necessary:-
For doing the business of Taxi for his livelihood complainant sought financial assistance from the Opposite Parties for the purpose of purchasing Eicher 10.90 container vehicle, and the Opposite Parties have sanctioned a lona of Rs.6,60,000/- repayable in 47 EMIs at the rate of Rs.16,260/- per month commencing from 31/01/2006 and ending on 31/12/2009 and the loan agreement was entered into. According the complainant purchased the vehicle No.KA-52-1166. The Opposite Parties forcibly took the signature of the complainant on the loan agreement. The complainant was regularly paying the installments due. The complainant was doing transportation of the goods of the D.P. Transport Company from Hyderabad to Bangalore and from Bangalore to Hyderabad. On 25/06/2009 the Driver Hanumanthu and Lohith after unloading the goods at the Bangalore office were parking the said vehicle; at that time 4 to 5 persons claimed to be the representatives of the Opposite Parties forcibly took the possession of the said vehicle and when the driver tried, they were threatened with dire consequences. The Driver immediately contacted the complainant and narrated the incident. The complainant contacted the Opposite Parties about this Goondaism and also of without notice. The Opposite Parties admitted their mistake and did not adhere to the request of the complainant and asked the complainant to come after a week since their Manager has gone out of station. Even after a week the Opposite Parties threatened with dire consequences. The complainant contacted the Opposite Party No.1 which was of no consequence. As on 30/05/2009 the complainant had paid Rs.5,36,580/-. The Opposite Parties have issued a notice dated 26/06/2009 stating about the seizure and claimed an exorbitant amount under various heads. The vehicle has not been released. When the complainant had gone to the office of the Opposite Party No.2, he learnt that the vehicle has been sold behind the back of the complainant without any notice. The Opposite Parties have violated the Supreme Court direction and National Commission’s orders in this regard. As the complainant had paid the amount of Rs.5,36,580/- the same has to be returned with interest and damages of Rs.3,00,000/-.
2. In brief the version of the Opposite Parties are:-
The complaint is not in accordance with Section 2(1)(d) of the Act. The complainant is not a Consumer as U/s 2(1)(d) of the Consumer Protection Act. The complaint is also not maintainable in view of the decision of the Hon’ble National Commission reported in R.S.G. Industrial Institute Vs. Laxmi Engineering 1995 AIR(SC)-0-1428. The complaint is also not maintainable in view of Section 5 & 8 of the Arbitration & Conciliation Act. The relationship between the parties are of borrower and financier. The Opposite Parties had sanctioned the financial facilities of Rs.6,60,000/- under the hypothecation agreement dated 31/01/2006 to purchase the vehicle bearing No.KA-02-1166. It has to be repaid in 47 equated monthly installments at the rate of Rs.16,260/- per month commencing from 31/01/2006 till 01/01/2010. The complainant has become defaulter from the beginning and thereby violated the loan agreement. Despite sending notices, demands and requests, the complainant did not come to pay the outstanding balance. The notice dated 23/02/2007, 21/01/2008, 05/02/2008 and 14/02/2008 are produced with the version speak for itself. Hence, the Opposite Parties had no other option, except to exercise the right of repossession. A notice dated 26/01/2009 was issued to the complainant. As the complainant did not re-pay the amount the Opposite Parties repossessed the vehicle on 25/06/2009. In terms of the agreement, the Opposite Parties has sold the vehicle in public auction for an amount of Rs.3,45,000/- and adjusted towards the loan amount. The purchaser has taken possession of the vehicle. As per the loan agreement, the Opposite Parties had appointed K.S.Gautham as Arbitrator in case No.KSG CC FIL 24/2008. As the vehicle was sold and the amount is credited to the loan account, the said Arbitration was not pressed. The complainant has not come to the Forum with clean hands. Hence, the complaint be dismissed.
3. To substantiate their respective cases, the parties have filed their affidavits and after hearing arguments this Forum raised the following points for consideration:-
:- POINTS:-
- Whether the complainant is a Consumer?
- Whether the complaint is not maintainable in view of the provisions of the Arbitration Act?
- Whether the complainant has proved the deficiency in service on the part of Opposite Parties?
- Whether the complainant is entitled to the reliefs prayed for in the complaint?
and held these points against the complainant and dismissed the complaint. Against which the complainant had preferred Appeal No.5263 of 2010 before the Hon’ble State Commission. The Hon’ble State Commission on 07.07.2011 had allowed the appeal set asided the order and remanded the matter to this Forum. Accordingly the parties were notified on 16.08.2011. The parties engaged through their respective advocates, the parties addressed the arguments. Hence the point that arise for our consideration is:-
- What order?
4. Our findings on the above points are:-
Point (A) : As per the final order
For the following:-
REASONS
POINT (A) :-
5. Reading the pleadings in conjunction with the affidavits and documents on record, it is and admitted fact that the complainant had obtained a financial assistance from the opposite parties to a tune of Rs.6,60,000/-, executed hypothecation agreement with the opposite parties on 29.02.2008, purchased the vehicle bearing No. KA-52-1166 a goods vehicle, plying it to the D.P. Transport Company by engaging drivers. It is also an admitted fact that the said loan has to be repaid by the complainant in 47 EMIs at a rate of Rs.16,260/- per month as EMI. It is also an admitted fact that the complainant has committed certain default in payment of the EMIs. EMI should have been paid from 31.01.2006 till 01.01.2010 continuously, as the complainant has committed certain default, paid only certain amount, the opposite party repossessed the vehicle in pursuance of the agreement made on 25.06.2009 and sold it for Rs.3,45,000/- and adjusted it towards the loan and the purchaser has taken the possession of the vehicle.
6. In this regard Hon’ble State Commission has ruled thus:-
The LC for the appellant submits that the respondents have already received an amount of Rs.5,36,580/- towards the vehicle loan and he was hardly due to an extent of less than one lakh of which the appellant was willing to pay the said amount and the contract period was still in life/in force as it was supposed to expire on 31.12.2009. Though there was default in paying the amounts to certain installments, the appellant did manage to pay the installment amounts to the respondents towards the loan. He further submitted that no notice was issued o the appellant before sale of the vehicle. The vehicle in question has been sold without notice or intimation to the appellant and without calling for the public auction. The sale of the vehicle has taken place behind the back of the appellant/complainant.
No doubt, as per the terms of the loan agreement, if the appellant commits default in payment of installment, the respondent/Ops are entitled to repossesses the vehicle and resell it. But as per the procedure or the law laid down by the Hon’ble Supreme court and the Hon’ble National Commission where it is stated that issuance of presale notice to the complainant is a mandatory/compulsory. The presale notice intimating the date of auction is to be issued by the respondent to the appellant. But on perusal of the order no where it is seen that presale notice with mentioning the date of auction was served to the complainant/appellant prior to the selling of the vehicle in a public auction. Admittedly, auction must be a public auction so that the appellant must be given an opportunity to participate in the bid auction and he gets an opportunity to get back his vehicle by paying the bid amount. Admittedly, in the instant case, the said vehicle in question was sold without intimating the date of auction to the complainant/appellant. There was a gross violation of the law or the procedure laid down by the Hon’ble Apex Court and the Hon’ble National Commission.
That means Hon’ble State Commission has clearly held that the opposite parties have violated the terms and conditions of the law or the order of the Apex Court in the sense the opposite parties have not issued presale notice to the complainant before selling it to the third party. Hence it is deficiency in service. When the appellant court has clearly held that there is deficiency in service in this regard, this Forum is bound by the said order. The said order of the Hon’ble State Commission is not set asided or reversed till date.
7. It is a well known principal of law that a court has a right to pass a right order, also has a right to pass a wrong order, unless the wrong order is set asided by the appellant court, the said order is binding on the parties.
8. In this case regarding the finding of this forum that the complainant is not a consumer has not been discussed or differed by the appellant court as such the complaint has to be dismissed is an untenable contention. The order of this Forum has been set asided by the appellant court. The only point that arise for our consideration is that what is the amount that has to be ordered to be paid.
9. In this case as per Annexure-C of the opposite party dated: 27.06.2009 the complainant was due Rs.2,75,513.69 paise to the opposite party as on the date of repossession and sale. According to the Motor Valuation Report dated: 19.08.2009 i.e., Annexure-E produced by the opposite parties the value of the vehicle was Rs.4,45,000/-. Hence though the opposite party has sold it for Rs.3,45,000/- without notice to the complainant as per the findings of the appellant court, the loss that has been caused to the complainant is Rs.4,45,000/- - Rs.2,75,513.69 paise = Rs.1,69,486.31 paise. This the opposite parties are liable to pay to the complainant. As the property itself is sold to some other person it cannot be ordered to replaced to the complainant. The complainant was due to the opposite party and that amount has to be paid to the opposite party. Hence under these circumstances if we direct the opposite party to pay Rs.1,69,486.31 paise together with costs we think that will meet the ends of justice. Hence we hold the above points accordingly and proceed to pass the following:-
ORDER
1. The complaint is Allowed-in-part.
2. The opposite parties are directed to pay to the complainant a sum of Rs.1,69,486.31 paise within 30 days from the date of this order, failing which it shall pay the said amount with interest at the rate of 12% per annum from 25.06.2009 until payment within 45 days from the date of this order.
3. The opposite parties are also directed to pay Rs.2,000/- to the complainant towards cost of this litigation.
4. The opposite parties are directed to send the amounts as ordered at Serial Nos. 2 & 3 above through DD by registered post acknowledgment due to the complainant and submit the compliance report to this Forum with necessary documents within 45 days.
5. Return the extra sets filed by the parties to the concerned as under Regulation 20(3) of the Consumer’s Protection Regulation 2005.
6. Send a copy of this order to both parties free of costs, immediately.
(Dictated to the Stenographer, transcribed and typed by him, corrected and then pronounced by us in the Open Forum on this the 27th Day of August 2011)
MEMBER MEMBER PRESIDENT
