BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMRITSAR.

Consumer Complaint No. 656 of 2015

Date of Institution:6.11.2015

Date of Decision: 20.7.2016  

Major Singh age 33 years son of S. Pritam Singh, resident of H.No.BV8/737, Harkrishan Nagar , Gali NHo. 8, Chheharta, Near Miri Piri Gurudwara, Amritsar

Complainant

Versus

1. Equitas Finance Private Ltd., Ist Floor, B-1, B-Block, New Amritsar,G.T. Road, Amritsar through its Partner/Proprietor/authorized signatory/person over all incharge.
2. Equitas Finance Private Ltd., F-39, Spencer Plaza, No. 769, 4^th Floor, Phase II, Anna Salai,Chennai – 600002, through its Director/Principal Officer /Partner /Proprietor /Authorized   Signatory/Person over All Incharge

Opposite Parties

Complaint under section 11 & 12  of the Consumer Protection Act, 1986 as amended upto date.

Present: For the Complainant: Sh.Deepak Bhandari, Advocate.

              For the Opposite Parties No.1 & 2: Sh.Munish Menon,Adv.

Coram:

Sh.S.S.Panessar President

Ms.Kulwant Kaur Bajwa, Member

Mr.Anoop Sharma, Member  

Order dictated by:

Sh.S.S.Panessar,President.

1. Major Singh, complainant has filed the present complaint under section 11 & 12 of the Consumer Protection Act on the allegations that  complainant is a peace loving and law abiding citizen and is permanent resident of Amritsar. The complainant got finance one Trolla i.e. 10 tyres vehicle from the opposite parties bearing registration No. HR-68-3220 for the purpose of earning livelihood for himself as well as his family members. Thereafter complainant started paying regular installment of Rs. 12530/- per month as per settlement inter –se complainant as well as opposite parties. Due to some financial problem and unavoidable circumstances in the family, the complainant could not pay two installments  of the said trolla/vehicle in question to the opposite parties and as such after that the complainant approached the opposite parties and requested them to further start receiving regular installments from the complainant , but the concerned employees/officials of the opposite parties did not pay any heed to the request of the complainant. Instead of listening the genuine and legitimate requests of the complainant  or receiving the amount of installment from the complainant, officials of opposite parties without giving any notice/intimation    and without adopting any due course of law have illegally and unlawfully  snatched the abovesaid vehicle/trolla from the complainant on 16.9.2015 by using their power and force.  Thereafter the complainant  approached the opposite parties for a number of times to release/handover  the vehicle/trolla of the complainant, but opposite parties  have refused to  accede to the genuine requests of the  complainant. Rather the opposite parties issued a letter dated 27.9.2015 posted on 1.10.2015 which was received by the complainant on 3.10.2015 vide which the opposite parties claimed Rs. 28,050/- from the complainant within a period of  7 days from the receipt of the said letter. The complainant immediately approached the opposite parties and paid the amount of Rs. 28,050/- to the opposite parties  , but they have intentionally refused to accept the same and rather demanded further amount of Rs. 25000/- illegally and unlawfully . They also refused to release the vehicle in favour of the complainant intentionally, willfully and unlawfully and also started giving threats to the complainant  to further illegally sell out the  vehicle in dispute. Opposite parties have got no right, title or interest  to dispose of the vehicle belonging to the complainant. Since 16.9.2015 the trolla in dispute is lying in the custody of the opposite parties illegally and unlawfully and they have failed to release the same in favour of the complainant without any reasonable excuse. The complainant is ready to pay regular monthly installments to the opposite parties and in this respect complainant requested  the opposite parties on many occasions , but to no effect. The complainant has requested for release of the vehicle/trolla in dispute in his favour and also the opposite parties may be directed to pay compensation to the tune of Rs. 50000/ to the complainant on account of loss/damage of vehicle and for mental torture,pain, agony etc. caused to the complainant. Besides that cost of litigation may also be awarded to the complainant. Hence, this complaint.
2. Upon notice opposite parties appeared and filed written statement contesting the claim of the complainant taking certain preliminary objections therein inter-alia that no cause of action has arisen to the complainant to file the present complaint; that complainant approached the opposite parties for financial assistance for purchase of truck Ashok Layland 2214P which was approved by the opposite parties vide loan agreement No. SLAMTSR0055791 for the amount of Rs.3,99,000/- . At the time of availing  said financial assistance the complainant executed “Loan Cum Hypothecation Agreement” on 23.4.2015 and agreed to pay back the said amount of Rs. 3,99,000/- in equal installments alongwith interest  at agreed rate, commencing from 1.6.2015 payable 1.4.2019, the total interest amount being 1,89,909/- and the same was payable by the complainant in monthly installment5s as per the schedule and agreed to by the complainant at the time of execution of loan agreement.  Accordingly on account of the said financial assistance the complainant purchased the vehicle   which was registered with the  Transport authorities with registration No. HR-68-3220 and as per the  said agreement the same was hypothecated with the opposite parties. The complainant also availed other financial assistances from the opposite parties from time to time to meet expenses in respect to the said vehicle  as shown in the account statement attached herewith. It is worthy mentioning here that the complainant never maintained the financial discipline regarding all the finance facilities and never made the payments of the installments to the opposite parties as per the schedule but the payments were made by him as per his sweet  will which will be  evident from the account statement annexed herewith. The complainant committed default in payment of installments on several occasions. The lapse on the part of the  complainant in maintaining the financial discipline  and the demands raised by the opposite parties are evident from the account statement. The complainant was called upon several times to clear the outstanding dues  vide notices dated 10.8.2015 , 3.9.2015 but the complainant utterly failed to comply with the terms and conditions of the agreement. As per terms and conditions of the Hypothecation agreement dated  23.4.2015 the complainant was liable to pay the installments for the repayment of the loan amount as per the schedule. Further as per terms and conditions of the agreement , the opposite parties were at liberty to inspect view and examine the state and condition of the vehicle(s) and its documents. It is worth mentioning here that  since the complainant had failed to make the payment of the installments in the stipulated  time  and as such he has committed default  which amounted to violation of terms and conditions of the loan agreement and as such he is also liable to pay penal interest on the defaulted amount from time to time ; that complainant does not fall within the definition of consumer as defined in the Consumer Protection Act, 1986 as amended upto date. Infact the finance facility is being availed  by the complainant for purchasing the said vehicle to be used for commercial purpose. The complainant is running  a business of transport. Moreover the conduct of the complainant will be evident from the fact that the complainant  is defaulter in the payment of the installments and has failed to adhere to the terms and conditions of the loan agreement. On merits facts narrated in the complaint have been specifically denied and a prayer for dismissal of the complaint was made.
3. In his bid to prove the case, complainant tendered into evidence his duly sworn affidavit Ex.CW1/A, legal notice dated 5.10.2015 Ex.C-1, original receipt dated 5.10.2015 Ex.C-2, copy of RC Ex.C-3, letter dated 27.9.2015 Ex.C-4, reply to demand notice dated 8.1.2016 Ex.C-5, receipt dated 11.1.2016 Ex.C-6 and closed his evidence.
4. To rebut the aforesaid evidence Sh.Munish Menon,Adv.counsel for opposite parties No.1 & 2 tendered into evidence affidavit of Sh.Rakesh Kumar ,authorized signatory Ex.OP1,2/1, copy of account statement Ex.OP1,2/2, copy of loan agreement Ex.OP1,2/3, copy of notice dated 10.8.2015 Ex.OP1,2/4, copy of notice dated 3.9.2015 Ex.OP1,2/5, copy of notice dated 24.9.2015 Ex.OP1,2/6 and closed the evidence on behalf of opposite parties No.1 & 2.
5. We have heard the ld.counsel for the parties and have carefully gone through the record on the file.
6. Ld.counsel for the opposite parties has vehemently contended that it is an admitted fact that the complainant had purchased a Trolla bearing registration No. HR-68-3220 on the basis of finance facility extended by the opposite parties. It is also an admitted fact that the vehicle in dispute was hypothecated with the opposite parties. The complainant was to make the payment of the loan amount of Rs. 3,99,000/-  in monthly installments alongwith interest. The complainant is guilty of committing defaults time and again in making the payment of the installments. Copy of the statement of account accounts for Ex.OP1,2/2 bears witness to the said fact. The complainant was also issued notices dated 10.8.2015 and 3.9.20154, copies whereof are Ex.Ex.OP1,2/4 and Ex.OP1,2/5 respectively on record directing him to adhere to the payment schedule as per loan agreement executed by him in favour of the opposite parties, but to no effect. It is  as per the provisions of the hypothecation  agreement.  The opposite parties have taken the possession of the vehicle in dispute because the complainant has proved himself to be a chronic defaulter. There is no illegality or infirmity in the said action  of the opposite parties because upto 24.2.106 an amount of Rs. 5,02,570.15 paise is outstanding payable by the complainant. Instant complaint is nothing but an abuse of the process of law and it is requested that the complaint may be dismissed being false and frivolous.

7.       But, however, from the appreciation of the facts and circumstances of the case, it becomes evident that the trolla in dispute is lying in the custody of the opposite party illegally and unlawfully. Before taking the trolla in dispute into custody through their musclemen, the opposite parties failed to issue any mandatory prior notice to the complainant. It is cardinal principle of law that although the opposite party could take the possession of the trolla in dispute ,  but before executing that  a prior legal notice was required to be issued , which is not the case in the present complaint. Reliance in this connection can be had on  L & T Finance Ltd. & Anr.-Petitioners Vs. Rampada Maity-Respondent 2016(2) CLT page 343 (NC) , wherein it has been laid down that in our view when a transporter finance company such as the petitioner before us, finances a vehicle and there is a default on the part of the borrower in servicing the loan taken by him, it must necessarily issue a notice to him expressing its intention to repossess the vehicle in exercise of the power conferred upon it under the loan agreement before the vehicle is actually repossessed by it. The purpose behind insisting upon such a notice being given to the borrower is to give him an opportunity to approach the financer and either bring the payment if already made by him to the knowledge of the financer or to convince the financer that it was on account of reasons beyond his control that he could not service the loan and, therefore, the default committed by him may be condoned. It is quite possible that the financer may get convinced from the circumstances so explained by the borrower and may not insist upon repossessing the vehicle, his primary objective being to recovery of loan given to the borrower and not to repossess the vehicle financed by it. If a vehicle is repossessed, without giving such a notice to the borrower, not only it has the potential to disrupt the business or profession in which the borrower is engaged using the vehicle, it may also result in his image and reputation in the society being lowered on account of the abrupt, sudden and forcible seizure of the vehicle by the financer. If a notice expressing intention to repossess the vehicle on the default of the borrower is given to him, he gets ample opportunity to prevent the proposed seizure by approaching the financer and either paying the amount which he has unable to pay alongwith appropriate interest and/or penalty on that amount or to dispose of the vehicle at his own level and repay the loan taken by him. Therefore, in all fairness, the financer must given a reasonable notice to the borrower before repossessing the vehicle financed by it and in no case the vehicle should be repossessed by use of force. In our opinion, the seizure of the vehicle in such circumstances constitutes deficiency in service causing tremendous mental torture and stress to the borrower who all of a sudden finds himself without the vehicle which he had purchased albit with the financial assistance taken from the lender. The borrower in such circumstances does not get an opportunity to arrange the requisite finances to repay the  amount which he defaulted in paying to the lender before the vehicle comes to be repossessed by the lender. The mental torture and agony would be greater when the vehicle is  repossessed in his absence. We are of the considered view that since there was a deficiency on the part of the company in rendering services to the complainant/respondent, the said company ought to pay suitable compensation to the complainant. Further reliance can be had on Mahabaleshwar Co-operative Bank Ltd.-Petitioner Vs. Vijay Kumar Eshwar Paduvani & Anr.-Respondent 1(2016) CPJ 292 (NC) wherein it has been laid down that bank did not issue any notice prior to seizure of vehicle nor did they declare complainant as defaulter- When bank statement itself shows that only an amount of Rs. 1,45,545/- due on 18.5.2005 then on what basis bank declared that an amount of Rs. 5,82,400/- is due as in June 2005 which is only one month subsequent to 18.5.2005. The Hon’ble National Commission found that deficiency in service and unfair trade practice on the part of the petitioner was established.

8.       Besides making oral requests, complainant also served legal notice dated 5.10.2015 upon the opposite parties, copy whereof is Ex.C-2, the complainant requested the opposite parties to receive Rs. 28,050/- from the complainant as  demanded by the opposite parties as installment, but the opposite parties have failed to comply with the legal notice even. The act of the opposite parties amounts to gross negligence and deficiency in service and they have indulged in unfair trade practice on account of which complainant has suffered great mental tension, agony, harassment and inconvenience besides monetary loss. In such circumstances, complainant is entitled to recovery of the vehicle in dispute . Opposite parties are directed to hand over the possession of the vehicle in dispute within a period of 30 days of the receipt of copy of this order. Besides that opposite parties are also liable to pay a sum of  Rs. 5000/- as compensation on account of mental tension, harassment and inconvenience caused to the complainant by the illegal act of the opposite parties. Cost of the litigation are assessed at Rs. 1000/-. Opposite parties are given 30 days time to comply this order ; failing which, awarded amount shall carry interest @ 9% p.a from the date of passing of the order until full and final recovery  . Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Forum. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.

Dated: 20.7.2016                                                 (S.S.Panessar)                                                                                              President

/R/                                     (Anoop Sharma)                  (Kulwant Kaur Bajwa)

       Member                       Member