PRESENT:      Sh.Neeraj Sharma, Adv. for complainant

Sh.Sandeep Suri, Adv. for OPs.

                              ---

PER LAKSHMAN SHARMA, PRESIDENT

          Sh.Manawar Ali has filed this complaint under section 12 of the Consumer Protection Act, 1986 praying therein that OPs be directed:-

i)              Not to put to auction the car in question.

ii)         Return the possession of the car.

iii)    Reschedule the car loan and not charge any interest for the period 05.05.08 till the car is delivered to complainant.

iv)         Pay a sum of Rs.90,000/- as compensation for the period commencing on 05.05.08 till the delivery of car.

v)              Pay a sum of Rs.5,00,000/- as punitive damages for physical harassment and mental agony.

vi)         Pay a sum of Rs.11,000/- as litigation expenses.

2.        In brief, the case of the complainant is that he took a loan of Rs.3 lacs from OP-Bank for purchase of Tata Indica DLS Model Car bearing registration No.CH-03-U-6336 on 25.07.2005. The said loan was to be paid in 60 equated monthly installments @ Rs.6140/- each  starting from 01.09.2005. The complainant paid the initial seed money of Rs.82000/- directly to the dealer while taking the delivery of the car in question. The complainant paid 24 out of 60 monthly installments to OPs and thereafter, he could not pay the remaining installments. According to the complainant, OP-Bank took forcible possession of the vehicle through recovery agents on 05.05.2008 while the same was driven by his cousin namely Sh.Sabir Ali on the Haridwar Saharanpur Road. The recovery agents also made his cousin to sign a printed form stated to be general information of asset receipt on the date of the repossession of the vehicle wherein it is mentioned that the car in question was received and parked at the Godown at Haridwar. The complainant made a complaint to this effect to the Chandigarh Police vide Public Window Receipt No.PW200802169 dated 09.05.08. According to the complainant, after repossession of the vehicle from his cousin, the OPs sent a notice of demand of payment/return of the vehicle dated 22.05.2008. According to the complainant thereafter and till date, he has been making earnest efforts to seek the possession of vehicle illegally repossessed by OPs but to no effect. The complainant also served a legal notice dated 25.10.2008 but no avail. According to the complainant, OPs violated the terms and conditions of the loan agreement which amounts to deficiency in service and unfair trade practice on the part of OPs.  In these circumstances, the present complaint was filed seeking the reliefs mentioned above.

3.        In the reply filed by OPs, the factum of availing the loan of Rs.3,00,000/- by the complainant for the purchase of the car in question has been admitted. It has further been admitted that the loan was to be repaid in 60 Equated Monthly Installments of Rs.6140 each  staring from 01.09.2005. According to OPs, the complainant was a chronic defaulter as he failed to adhere to the schedule of repayment mentioned in the agreement and did not pay the installments regularly and in time.  According to the OPs, several notices were sent to the complainant requiring him to clear the outstanding dues but to no effect and therefore, the entire loan amount was recalled by OPs vide notice dated 22.05.2008. According to OPs, the complainant has violated the express terms of the loan agreement, therefore, in terms of the agreement, OP was entitled to take repossession of the vehicle.  

          In these circumstances, according to OPs, the action of OPs of taking repossession of the vehicle of the car is not contrary to the agreement or contrary to the law as the complainant is a defaulter and has failed to repay the entire loan amount. So, the complainant deserves dismissal.

4.        We have heard the learned counsel for the parties and have gone through the entire record including documents, annexures, affidavits, replication etc. 

5.        It is admitted case of the parties that the complainant had borrowed a sum of Rs.3 lakhs from the OP-Bank for purchase of the car in question as per the terms of the loan agreement. The above said loan amount was to be repaid by the complainant in 60 equated monthly installments of Rs.6140/- each starting from 01.09.2005. The case of the complainant is that he had been paying the installments regularly whereas the case of OPs is that the loan amount was not being paid regularly on the due date and the complainant had defaulted in repayment of the loan. It is further the case of OP-Bank that as the complainant failed to pay the installment regularly as per the terms of the loan agreement, so the loan was recalled vide notice dated 22.05.2008 and the complainant was required to pay the full outstanding amount of the loan i.e. Rs.1,93,925/-. Despite it, the complainant did not repay the loan amount. So the car was repossessed for recovery of the outstanding loan amount.

6.        Learned counsel for OPs  drew our attention to various clauses of the loan agreement to show the rights of OPs for recovery of the loan amount. Clause (i) under the head “Rights and Remedies” of the Agreement read as under:-

“Without prejudice to ICICI Banks other rights, if the Borrower/s fails to pay any amount payable by the Borrower/s to 1CIC1 Bank under this agreement within 15 days of demand or of such amount becoming due and payable or if any event of default occurs or on account of the Borrower/s failure to perform his obligation under this Agreement, 1CIC1 Bank shall be entitled to forthwith take physical possession of the Vehicle(s) either by itself or through its agents, and sell or otherwise deal with the Vehicle(s) to enforce 1CIC1 Bank's security and recover the Borrower/s’s outstandings dues.”

7.        Relying upon this clause, it was argued vehemently by the learned counsel for OPs that OPs had right to take physical possession of the vehicle in case of non-payment of the loan amount. This argument of the learned counsel is contrary to the law laid down by the Hon’ble National Commission in the case titled as Citicorp Maruti Finance Ltd.  Vs. S.Vijayalaxmi, III(2007 CPJ-161(NC). The Hon’ble National Commission has held as under:-

“23. From the aforesaid law laid down by the Apex Court as well as the High Court of Delhi, it is clear that even though the hire-purchase agreement may give right to take possession of the vehicle, money lenders/financial institution/banks have no power to take possession by use of force and have to follow the statutory remedy which may be available under the law”

24. May be that the procedure of law is slow, but that is no excuse for use of force for repossessing the vehicle. If the contention of the petitioner that it can take possession of the vehicle by means of force is accepted the rule of jungle would prevail and “might” would be “right”.

8.        The above said view of the Hon’ble National Commission stands fortified by the ratio of case titled as Manager ICICI Bank Vs. Prakash Kaur and others, Manu/SC/0962/2007. So in view of the ratio of cases cited above, to our view, OP had no right to take away the car of the complainant for non-payment of the outstanding amount. Such an act of OP amounts to deficiency in service and unfair trade practice.

9.        It was argued by the learned counsel for the OPs that the possession of the car was delivered by Sh.Sabir Ali voluntarily. It is pertinent to mention here that as Sh.Sabir Ali was neither the owner of the vehicle in question, nor he had any authority to deliver the possession of the same to OPs for repayment of the loan. So the plea taken by the OPs that Sh.Saber Ali voluntarily handed over the possession of the vehicle in question has no force.

10.       Since, the vehicle in question was forcibly seized by the Bank from the cousin of the complainant namely Sh.Sabir Ali on 05.05.2008 when an amount of Rs.1,93,925/- was allegedly due as per recall notice dated 20.05.2008 against the complainant without following the rule of law by approaching the civil Court. Therefore, OP-Bank is not entitled to charge any interest from the complainant from the date of its repossession and the complainant is entitled to recover the car from the OP-Bank.

11.       In these circumstances, keeping in view the fact that there is deficiency in service on the part of OPs and for that deficiency in service the complainant has suffered mental agony and harassment. So the complainant is entitled to compensation of Rs.80,000/- on account of deficiency in service and unfair trade practice. In addition to this, the complainant is also entitled to sum of Rs.5,000/- as costs of litigation expenses. The complainant is also entitled for recovery of the vehicle from the OP-Bank after paying the due amount of Rs.1,93,925/- without payment of interest after the date of its repossession i.e. 05.05.2008.

12.       In view of the above findings, this complaint is allowed with directions to OPs to deliver back the possession of the vehicle in question to the complainant on payment of Rs.1,93,925/- being the outstanding dues without charging any interest on the said amount w.e.f. 05.05.2008 i.e. the date when the vehicle was forcibly re-possessed by OP-Bank. The OPs are also directed to pay to the complainant a sum of Rs.80,000/- as compensation on account of deficiency in service and unfair trade practice along with Rs.5,000/- as costs of litigation expenses.

13.       This order be complied with by OPs within one month from the date of receipt of its certified copy, failing which OPs shall be liable to pay interest @ 18% per annum on the amount of compensation (i.e. Rs.80,000/-) from the date of order till its realization besides costs of litigation.

14.       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

29.12.2009