BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD.
FA No. 243 OF 2014 AGAINST CC No.135 OF 2012
ON THE FILE OF DISTRICT FORUM- III
Between :
H.D.F.C. Bank Ltd.,
VI Floor, Lalal Landmark,
5-4-94 to 97, Ranigunj, M.G. Road,
Secunderabad.
Represented by its Manager – legal Mr. A.Raja,
S/o. Narayana Rao, Age : 33 years, Occ: Pvt. Service,
R/o. Hyderabad. … Appellant / Opposite party
AND :
Gopal Gurjar S/o. Pukram Gurjar,
Age : 35 years, Occ: Pvt. Employee,
H.No.9-1-34/35/2, Langer House,
Hyderabad. …. Respondent/ Complainant
Counsel for the Appellant / Opposite party : M/s. Lotus Law Associates
Sri N.Sudarshan
Counsel for the Respondent/ Complainant :
Hon’ble Sri Justice B.N.Rao Nalla … President
&
Sri Patil Vithal Rao … Member
,
Thursday, the Second day of March
Two thousand Seventeen
Oral Order : (Per Hon’ble Sri. Patil Vithal Rao, Member).
***
Challenge is made in this appeal to the order dated 30.01.2014 passed by the District Consumer Forum –III, Hyderabad (for brevity, “the District Forum”) in C.C.no.135/2012 directing the Appellant herein to pay to the Respondent a sum of Rs. 30,000/- towards compensation and Rs.3,000/- towards costs. The parties will be referred to herein after as arrayed before the District Forum.
2. The factual matrix of the case of the complainant is that he purchased a Bike, Suzuki Access BSII bearing registration no. AP13R2654 by making a down payment of Rs.10,142/- and availing a loan of Rs/35,000/- from the Opposite Party Bank by agreeing to repay the loan in 24 EMIs of Rs.2,109/- each and that even after making payment of Rs.27,417/-, the Opposite Party Bank illegally seized the vehicle on 17.07.2011 by alleging that he was a defaulter and illegally fixed higher EMIs at Rs.2014 instead of Rs.1,607/- and also charged usurious rate of interest amounting to deficiency in service. In the complaint under Section 12 of the Consumer Protection Act, 1986 he sought a direction to the Opposite Party Bank either to return the seized vehicle or to refund it’s value of Rs.47,378/- with interest @ 18% p.a., from the date of seizure with compensation of Rs.50,000/- towards mental agony and costs.
3. The Opposite Party Bank resisted the claim by contending, interalia, that the complainant obtained a loan of Rs.40,500/- with interest @ 22.4% p.a., for a period of 24 months and the EMIs payable was fixed at Rs.2,109/- and that as he failed to pay 5 installments the Opposite Party Bank was constrained to repossess the hypothecated vehicle on 08.09.2011 after giving number of opportunities, both oral and written, to the complainant. They also informed about the seizure to the Police concerned and thus followed due process of law. Thereafter, pre-sale notice issued to the complainant on 09.09.2011 demanding a sum of Rs.32,555/-towards closure of the loan and re-possess of the vehicle. As he failed to pay the said amount, the vehicle was sold on 30.09.201 for a sum of Rs.39,000/- and the excess amount of Rs.6,445/- was credited to the complaint’s account and it was also duly intimated to him. Thus, there is no deficiency in service on the part of the Opposite Party. It’s further defence is that inview of the Arbitration clause in the loan Agreement, the District Forum has no jurisdiction to entertain the dispute.
4. After due enquiry into the matter and by considering respective affidavit evidence and documentary evidence under Ex.A1 to A22,, on behalf of the complainant and Ex.B1 to B9, on behalf of the Opposite Party Bank, the District Forum passed the order, as stated above, which is now under challenge in the present appeal.
5. The contention of the Opposite Party Bank / Appellant, in brief, is that the District Forum has utterly failed to consider that the hypothecated vehicle was seized when the Complainant / Respondent became defaulter and that too after giving due notice to him and that thereafter it was sold in-accordance with law by intimating to the Police concerned and also issuing of pre-sale notice and post sale notice to the complainant. The District Forum also misconstrued the aspect of adjustment of excess balance amount of Rs.6,445/- to the complainant’s account. Thus, there is nothing to show that the vehicle was repossessed illegally but it was re-possessed as per the terms and conditions of the loan Agreement. For these reasons the Appellant / Opposite Party Bank has prayed to allow the appeal by setting aside the impugned order.
6. Despite service of notice, the Respondent did not choose to appear.
7. Perused the written arguments of the Appellant / Opposite Party Bank and heard it’s learned counsel.
8. Now the point for consideration is that:
whether the impugned order is erroneous and illegal both on facts and under law and that as such liable to be set aside?
9. Point :- It is not in dispute that the complainant availed financial assistance to purchase a two wheeler from M/s. Saboo Motors, Hyderabad and agreed to repay the loan in 24 EMIs by executing the Agreement dated 11.03.2010 and that after making part payment, he has committed default on account of which the Opposite Party Bank re-possessed the vehicle. The complainant has alleged that the actual loan amount availed by him was of Rs.35,000/-and that the Opposite Party Bank re-fixed higher EMI’s with usurious rate of interest of 38.25%instead of 9.5% in calculating the outstanding due amount though he has repaid 13 EMIs by the time of seizure of the vehicle on 17.07.2011. Per contra, the Opposite Party Bank has pro-pounded that the actual loan amount barrowed by the complainant was of Rs.40,500/- with interest @ 22.40% p.a., and that the complainant committed default after payment of only 5 installments and that as such the vehicle was re-possessed on 08.09.2011. It is to be noted that the present matter is a Consumer dispute to be tried summarily under the provisions of the Consumer Protection Act, 1986 with regard to deficiency in service, if any, on the part of the Opposite Party Bank. Therefore, we need not delve in depth into the aspect of actual outstanding loan amount due on the part of the complainant since it is not a Civil Suit for recovery of money. In the given circumstance, we have to see the legality or otherwise in repossessing of the hypothecated vehicle of the complainant, by the Opposite Party Bank.
10. As per the complainant, the hypothecated vehicle was seized by the Opposite Party Bank on 17.07.2011 but the Opposite Party Bank has given the said date as 08.09.2011. Be that as it may, the fact remains that the vehicle was seized by the Opposite Party Bank for committing default in repayment of the loan amount by the complainant in terms of the loan Agreement dated 11.03.2010. In this regard, it is to be seen that, though the Opposite Party Bank has alleged that despite giving of number of opportunities to the complainant, both oral and in written form, he did not pay the due amount as per the Agreement and that as such the vehicle was re-possessed, but no such evidence has been placed on record when the Complainant has specifically asserted that the seizure was without prior notice. Evidently, the Opposite Party Bank had sent intimation letters to the Police Station concerned on 08.09.2011, under Exs.B5 & B6 before and after repossession of the vehicle respectively, but virtually there is no evidence to the effect that prior notice was given to the Complainant before seizure as stated supra. Thus, it is clear that the Opposite Party Bank has failed to follow due process of law in repossessing of vehicle from the complainant. Therefore, we have no hesitation to conclude that it has committed deficiency in service entitling the Complainant to claim compensation. This view is forfeited by the following decisions:-
I. ICICI Bank Vs. Prakash Kaur & others, (2007) SCC 711 in which the Hon’ble Supreme Court observed as under:
“Now the bank is the aggressor and the public is the victim. The first step to recovery of the money due is through the so called Recovery Collection Agents. A very dignified term used for paid recovery agents who are individuals and independent contractors hired by the Banks to trace the defaulters and to both physically, mentally and emotionally torture and force them into submitting their dues.
A man’s self respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernized version of Shylock’s pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the Agreement whose fine print is never read or explained to the owner.”
II. Citycorp. Maruti Finance Limited Vs. S.Vijayalaxmi, (2007) CTJ, 1145 (CP), in which the Hon’ble National Commission held as under:-
When a vehicle is purchased by a person (consumer) by borrowing money from the money lender/financier/banker, the consumer is the owner of the vehicle and not the money lender / financier/banker, unless the ownership is transferred.
In a democratic country having well established independent judiciary and having various laws it is impermissible for the money lender / financier/banker, to take possession of the vehicle for which loan is advanced, by use of force.
Legal or judicial process may be slow but it is no excuse for employing musclemen to repossess the vehicle for which loan is given. Such type of ‘instant justice’ cannot be permitted in a civilized society where there is effective rule of law. Otherwise, it would result in anarchy that too when the borrower retorts and used the force.”
The learned counsel for the Appellant / Opposite Party Bank has vehemently contended that by virtue of the loan Agreement dated 11.03.2010 under Ex.B2, the Appellant / Opposite Party Bank has every right to repossesses the vehicle. In support of his contention he has relied on the unreported decision dated 21.07.2005 of the Hon’ble National Commission in : Parameswary Vs the General Manager, VST Service Station, Gandhi Nagar, Vellore, Tamilnadu and Others.” In the said case the Complainant had kept the hypothecated vehicle with the Opposite Party no.1 for repairs after the accident and that after attending the repairs the Opposite Party no.1 directly handedover the vehicle to the Opposite Party no.2 Financier without intimation to the Complainant since, the Complainant failed to settle the repair charges in time. Thereafter, the Opposite party no.2 Financier lodged a claim with the Opposite Party no.3 Insurer Company for indemnifying the cost of repairs. Subsequently, the vehicle was sold to a 3rd person and the repair charges were settled to the Opposite Party no.1 directly by the Opposite Party no.3 Insurance Company. Thus, there was no opportunity to the Financier to give advance notice to the complainant and that the hypothecated vehicle was never seized directly by the said Financier. But, the facts of the present case on hand are entirely different.
11. In the present case, the fact remains that the Opposite Party Bank repossessed the vehicle, though illegally, only on account of the default committed by the Complainant in repayment of the loan amount as per the terms and conditions of the loan Agreement. Thus, there is negligence to some extent on the part of the Complainant himself. The learned District Forum did not consider this aspect. In almost similar circumstances this Commission in the decision dated 02.01.2017 in F.A.no.1238/2013 between “HDFC Bank Ltd., AND Md. Azher Ale,” reduced the compensation amount of Rs.25,000/- awarded by the District Forum to Rs.10,000/-. By applying the same parameter we are inclined to reduce the compensation of Rs.30,000/- awarded by learned District Forum to Rs.15,000/- to meet the ends of justice.
12. It is pertinent to note that, after seizure of the vehicle the Opposite Party Bank sold it in a public auction by giving due intimation to the Complainant for a sum of Rs.39,000/- on 30.09.2011 and after adjusting the outstanding due amount of Rs.32,555/-credited the excess balance amount of Rs.6,445/- to the credit of the Complainant under due intimation vide Ex.B9.
13. We have perused the impugned order. The learned District Forum has meticulously considered the entire material evidence placed on record and came to the conclusion with sound and convincing reasons but unfortunately erred the aspect of negligence, noted supra, on the part of the Complainant in making payment of the EMIs as per the terms and conditions of the loan Agreement which is the root cause of the present dispute. Therefore, we have to invoke the Appellate jurisdiction in reducing the quantum of compensation by modifying the impugned order to meet the ends of justice. We also note that the learned District Forum has rightly answered to the objection of the Opposite Party Bank with regard to the Arbitration clause incorporated in the loan Agreement by stating that despite said clause a consumer can approach the District Forum under Section (3) of the Act, 1986 which is an additional but not derogatory remedy available to him. In this view of the matter, we hold that the appeal is fit to be allowed in part in the light of the observations made above.
14. The point is answered accordingly.
15. In the result, the appeal is partly allowed by modifying the impugned order directing the Appellant Bank to pay a compensation of Rs.15,000/- with costs of Rs.5,000/-within a period of 30 days from the date of receipt of a copy of this order.
PRESIDENT MEMBER
Dt. 02 .03.2017
