Tamil Nadu

StateCommission

FA/1/2014

G. GIRISH - Complainant(s)

Versus

HDFC BANK LTD., MANAGING DIRECTOR - Opp.Party(s)

E.V.R. PRASAD

15 Nov 2021

ORDER

IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:    HON’BLE THIRU. JUSTICE.  R. SUBBIAH ,                                     PRESIDENT

              TMT. S.M.   LATHA  MAHESWARI,                                                       MEMBER

                                                                                                                 

F.A.No.01/2014

(Against the order passed in C.C.No.639/2005, dated 20.06.2012 on the file of the District Commission, Chennai (South)

 

 MONDAY, THE 15^th DAY OF NOVEMBER 2021.

 

Mr. G. Grish,

No.8/113A, Periyarpathai,

Choolaimedu (West),

Arumbakkam,

Chennai – 600 106.                                                                                                                               Appellant/Complainant   

                                     

                      Vs

 

1..  M/s.  HDFC Bank Ltd.,

      Represented by its Managing Director,

      HDFC Bank House,

      Senapathi Bapat Marg,

      Lowerparel  (West),

      Mumnbai – 400 013.

 

2.   M/s. HDFC Bank Ltd.,

      Represented by its Manager,

      56, G.N. Chetty Road,

      T. Nagar,

      Chennai – 600 017.                                                                                                                   Respondents/Opposite Parties

 

Counsel for the Appellant/Complainant           :  M/s. E.V.R.  Prasad,  Advocate.    

Counsel for the Respondents 1 & 2/

               Opposite Parties 1 & 2                   :  M/s. T.K.M. Saikrishnan, Advocate.   

 

          This appeal is coming before us for final hearing on 27.10.2021 and on hearing the arguments of the appellant and on perusing the material records, this Commission made the following;-

 

ORDER

HON’BLE  THIRU. JUSTICE R. SUBBIAH, PRESIDENT.   

1.       This appeal has been filed under section 15 read with section 17(1) (a) (ii) of the Consumer Protection Act, 1986 against the order of the Learned District Commission, Chennai (South) made in C.C.No.639/2005, dated 20.06.2012,  dismissing the complaint filed by the complainant,  appellant herein.  

2.       For the sake of convenience and brevity, the parties are referred to here as they stood arrayed in the District Consumer Disputes Redressal Commission, Chennai (South) (In short, “District Commission”).              

3.      The factual background culminating this appeal is as follows;-  The case of the complainant before the District Commission is that the 1^st opposite party approached him through their Marketing Executive from their Anna Nagar Branch and induced him to avail two wheeler loan from them. Believing the assurance and promises of the opposite parties, the complainant availed two wheeler loan of Rs.30,000/- on 04.06.2002 vide hire purchase agreement and thereby he purchased a Bajaj “Boxer” Motorcycle.  The total sum including interest at the rate of 12.5% per annum for whole time of three years was Rs.41,256/- payable in 36 EMIs of Rs.1146/- per month from June 2002 to May 2005.  While so, the complainant met with a road accident on 06.09.2002 and due to which the complainant was hospitalized for a long time. As a result of which no salary was credited into his Corporate Salary Account and hence his bank account was closed by his banker. This fact was informed to the Nungambakkam Branch of the opposite parties and one Mr. Lakshmipathy, an officer in-charge of the collection agreed to pay or collect cash or Demand Draft through their representatives and as such cheques were given for remaining EMIs as securities. But, when the complainant tendered cash at the counter, the staff concerned refused to receive it and insisted to pay through the representatives after the due date. Later the representatives of the opposite parties used to collect the installment payments and further demanded cheque dishonored charges, late payment charges, etc. which was not accepted by the complainant. Finally, the opposite parties accepted the cash payment on 10.04.2004 for three months without any late fees.  The complainant paid EMIs within 30 days from the due date as agreed and if there was any delay created by the Bank the complainant is not responsible for the same. While so, on 27.08.2004, the 2^nd opposite party returned the demand draft for Rs.9372/- sent by the complainant towards pre-closure amount and asked prepayment fee ignoring the fact that actual amount payable is Rs.6350/-only.  Till January 2004, all the EMI cheques were duly honourerd and no notice of dishonouring was received.  From January 2004 to September 2004  the EMI was paid to the opposite parties by cash/D.D for which certain receipts are yet to be received. While so, the 2^nd opposite party had illegally taken away the vehicle, Bajaj Boxer Motor Cycle bearing Registration No.TN-10-E-0396 by using criminal forces without any notice when the complainant was in Kerala and on returning, the complainant met the officials of the opposite parties and they informed the complainant that he should pay Rs.19,088/- to terminate the loan account without furnishing any details. There is no clause in the agreement empowering the opposite parties to seize the vehicle. Hence, the complainant caused legal notice to the opposite parties claiming the cost of the vehicle and other expenses incurred by him and for compensation of Rs.4,50,000/-  since the opposite parties did not comply with the claim the complainant filed a consumer complaint before the District Commission, claiming direction to the opposite parties to pay a sum of Rs.32,000/- towards the cost of the vehicle, Rs.10,000/- towards repairing charges, Rs.8,000/- as expenses incurred so far and Rs.4,50,000/- as compensation for mental agony, damages etc.,. caused due to the deficiency in service and unfair trade practice committed by the opposite parties with costs.           

4.    In the written version filed by the 2^nd opposite party, adopted by the 1^st opposite party, it is contended inter alia that several cheques issued by the complainant bounced in the year 2003-2004. As per the clause 3.3, 3.4, of the hypothecation agreement, the borrower cannot instruct the opposite parties to withhold from depositing post-dated cheques or instruct the banker to stop payment.  The borrower is also liable to pay additional charges for the outstanding amount caused due to bouncing of cheques and also liable to reimburse cost and expenses incurred by the bank. The complainant was a chromic defaulter from the beginning and the payment made by the complainant could not be taken as a final settlement since there was a outstanding dues in large and the opposite parties had also sent a statement of account regarding the outstanding dues which has not been produced by the complainant and the said statement was sent along with the letter, dated 27.08.2004 consisting of all the details regarding the same. The cheques issued against the hypothecation or hire purchase agreement are never returned to the borrower. If the borrower has any difficulty, he can issue cheques in different account in his name.  The clause 3.5 of the loan cum-hypothecation agreement deals with the same.

5.       The opposite parties have acted upon as per the loan agreement and since there was a default in repayment of EMIs, as per the clauses 8.2 and 8.3, the Bank shall declare all sums for the full term of the loan immediately due and payable and upon the Borrower failing to make the said payment within 7 days thereof.  The opposite parties have acted legally in accordance with the terms and conditions of the hypothecation agreement. Demand was made for payment of outstanding dues and on failure, the vehicle was repossessed and the same was intimated to the complainant through letter and telegram. The opposite parties have not tried to unjustifiably enrich themselves.  The complainant has already been informed that actual due payable by him was Rs.24,139/-. The complainant has filed this complaint with misrepresentation of facts and hence the opposite parties sought for dismissal of the complaint.         

6.       Before the District Commission, in order to prove their case, the complainant and the opposite parties have filed their proof affidavits separately.  Exhibits A1 to A35 were marked on the side of the complainant. No Exhibit was marked on the side of the opposite parties 1 & 2.    

7.    After hearing both sides and analyzing the materials available on record, the District Commission has held that the complaint is not maintainable before the Consumer Commission since the complaint is civil in nature and accordingly decided that there is no deficiency in service and unfair trade practice on the side of the opposite parties and dismissed the complaint. Aggrieved over the same, the complainant has preferred this appeal before this Commission.   

8.       The counsel appearing for the appellant/complainant submitted that the opposite parties granted hire purchase loan of Rs.30,000/- to purchase a two wheeler to the complainant and accordingly he purchased a two wheeler, Bajaj Motorcycle “ Boxer”  at a cost of Rs.38,925/- bearing Registration No.TN-10-E-0396. The loan amount was repayable in 36 EMIs with 12.5% interest per annum thereon and thereby the monthly EMI comes to Rs.1146/- from June 2002 to 5^th May 2005.  The total amount payable was Rs.41,256/- by way of 35 EMIs by cheques. In fact, the complainant has repaid Rs.40,780/- towards the loan dues including other charges as on 24.09.2004.  In spite of the same, the opposite parties had illegally taken away the vehicle on 12.01.2005 alleging that there was default in repaying the loan by the complainant. The opposite parties did not produce any statement of account before the District Commission to show the actual outstanding amount to be paid by the complainant. In this regard, the counsel for the appellant/complainant invited our attention to the judgment of this Commission pronounced in R.P.No.31/2007, dated 19.06.2008, wherein it has been held that “the statement of accounts is absolutely necessary on the part of the opposite parties to substantiate their stand that the Complainant is committed default in payments of installments. That a particular amount was due to them and that it became necessary to take coercive steps to realize their dues will have to be established by the opposite parties in the proceedings before the District Commission”.  In the instant case, the opposite parties have miserably failed to establish that there was default in payment of EMIs on the part of the complainant. Further, the counsel for the complainant submitted that hire purchase agreement is a contract and repossession of the vehicle is permitted only by an order of the Civil Court and the bank cannot take possession of the vehicle illegally by using muscle power. Further, it is submitted by the appellant/complainant that whenever, the complainant had attempted to pay the installment amount by cash the opposite parties refused to receive the same.  Therefore, there is deficiency in service on the part of the opposite parties.  The District Commission without considering the case of the complainant dismissed the complaint and hence the order of the District Commission has to be set aside by allowing this appeal and the complaint is also to be allowed as prayed for.     

9.      The learned counsel for the respondents/opposite parties submitted that the appellant/complainant was a chronic defaulter right from the beginning.  All the allegations levelled against the opposite parties are denied. The complainant has availed a loan of Rs.30,000/- for purchasing a two wheeler motor cycle and hire purchase agreement was entered into between the complainant and the respondents/ opposite parties.  Since there was a shortfall in the amount to be paid, the demand draft for a sum of Rs.9372/- sent by the complainant was returned to the complainant on 27.08.2014 and the same was intimated to the complainant by a letter dated 27.08.2014 and a foreclosure statement was also sent to the complainant along with said letter which has been marked as Ex A9. But, the complainant did not come forward to settle the entire outstanding amounts after returning the said demand draft to foreclose his loan account. Further as per the clause 7 of the hypothecation agreement, the borrower is liable to pay prepayment fees at 2% on foreclosure and only on full settlement the post-dated cheques will be returned.  Clauses 3.3 and 3.4 of the hypothecation agreement clearly state that the borrower cannot instruct the opposite parties to withhold from depositing the post-dated cheques or instruct the bankers to stop payment.  As the complainant has defaulted in repayment of the installments, as per the hypothecation agreement, the vehicle was repossessed and therefore there is absolutely no deficiency in service on the side of the opposite parties and as such the District Commission has rightly decided the complaint by dismissing the same and hence the appeal is to be dismissed.      

10.    Keeping the submissions made on either side, we have gone through the entire materials on record.   The appellant/complainant availed a loan from the respondents/ opposite parties’ bank to purchase a two wheeler on hypothecation agreement. The hypothecation agreement empowers the bank to exercise the right to repossess the vehicle if the borrower defaulted in repayment of the loan and till the last payment is made.  In this regard, it would be appropriate to note the relevant clauses 8.2 and 8.3 in the agreement. According to the above clauses, even if there is a single default in repaying the loan amount, the bankers are entitled to repossess the vehicle. Therefore, in accordance with the said clause, the bank has repossessed the vehicle.  It is well-settled principle of law that the financier continues to be the owner of the vehicle covered by the hire purchase agreement till all the installments are paid as he has exercised the option to purchase the vehicle on hire purchase. Thus, when the financier takes possession of the vehicle as the hirer, has defaulted in payment of installment in terms of the hire purchase agreement till the last payment is paid by the hirer, as the ownership of the vehicle remains with the financier. In the instant case, there was a default in paying the installments and hence the opposite parties are entitled to repossess the vehicle and therefore there is no deficiency in service on the part of the opposite parties.

11.      Though elaborate submissions were made by the complainant with regard to the various payments made by the complainant to the opposite parties since they are disputed by the bank the same cannot be adjudicated in the consumer complaint since the said dispute needs elaborate evidence. If the appellant has any grievance with regard to the payment made by him he has to approach the Civil Court to get his grievances redressed. In this regard, the Hon’ble Supreme Court, in the Civil Appeal No.5622 of 2019, in its judgment, dated 01.10.2020 has held as follows;

        “The law which emerges from the judgments of the Court referred to above, is that goods are let out on hire under a Hire Purchase Agreement, with an option to purchase in accordance with the terms and conditions of the Hire Purchase Agreement.  The hirer simply pays for the use of the goods and for the option to purchase them.

          Until the option to purchase is exercised by the hirer, upon payment of all amounts agreed upon between the hirer and the Financier, the financier continues to be owner of the goods being the subject of hire purchase.  Till such time the hirer remains a trustee and/or bailee of the goods covered by the Hire Purchase Agreement.

              The Financier continues to remain the owner of the vehicle, covered by a hire purchase agreement till all the hire installments are paid and the hirer exercises the option to purchase.  Thus, when the Financer takes re-possession of a vehicle under hire, upon default by the hirer in payment of hire installments, the Financier takes repossession of the Financer’s own vehicle.” 

12.    From the detailed discussions held as above, we come to the conclusion that there is no deficiency in service on the part of the opposite parties since they have exercised their power of repossession of the vehicle empowered in the hire purchase agreement. The District Commission after carefully considering the above facts of the case has rightly held that there was no deficiency in service on the side of the opposite parties and thereby dismissed the complaint in which we do not find any error or infirmity and therefore the appeal is liable to be dismissed confirming the order of the District Commission.    

13.         In the result, the appeal is dismissed confirming the order of the District Commission, Chennai (South) made in C.C.No.639/2005, dated 20.06.2012.  There shall be no order as to costs in this appeal.                              

 

 

 

S.M. LATHA MAHESWARI,                                                                                                                        R. SUBBIAH,

           MEMBER.                                                                                                                                             PRESIDENT. 

 

Index: Yes/No

TCM/SCDRC/Chennai/Orders/November/2021