Per :- Mr. Deshpande, President Place : BANDRA JUDGMENT The Opposite Party is a bank, engaged in the banking business. The Complainant purchased a motor car, model – ‘Corsa 1.4 G.S.J.’ on 30/9/2003 and it was registered with Road Transport Authority (RTA), Thane; under Registration No.MH-04-BS-4707. The Complainant had borrowed a loan from the Opposite Party – Bank; of an amount in sum of Rs.3,00,000/- for the purpose of purchase of the said car. Entry regarding hypothecation of the car was taken in the R. C. Book. The Complainant decided to foreclose the loan account and on 20/10/2005, the Complainant made payment to the Opposite Party – Bank; by exercising the option of pre-payment of the loan, as per the terms of the loan agreement. On the same day, the Opposite Party – Bank; issued a letter to Road Transport Authority (RTA) to inform that the loan was discharged and the Opposite Party – Bank; also signed Form No.35 to be sent to RTO and the copy of the letter dtd.20/10/2005 and a copy of Form No.35 were handed over to the Complainant. [2] It is further case of the Complainant that he decided to dispose of his car and entrusted the same to one Mr. Ibrahim from Nasik, who was known to the Complainant. At the instance of Mr. Ibrahim, the Complainant signed blank forms to facilitate sale/ transfer etc. which were brought by Mr. Ibrahim. Mr. Ibrahim made token payment in cash and issued two post-dated cheques, which were subsequently bounced. [3] It is further case of the Complainant that he was not in possession of the car and the post-dated cheques issued by Mr. Ibrahim had already bounced back. The Complainant came to know that the car was in possession of one Mr. Gurucharan Khera from Nasik and when being contacted, Mr. Khera informed the Complainant that Mr. Ibrahim had sold the car to him. Mr. Gurucharan Khera indicated his willingness to purchase the car. Since the Complainant had no original RTO Registration Certificate, he went to the office of RTO, Thane; and learnt that the entry as regards hypothecation of the car with the Opposite Party – Bank; still existed. The Complainant then, approached the Opposite Party – Bank; for issuance of ‘No Objection Certificate’ to remove the entry as regards hypothecation, but the Opposite Party – Bank; refused to issue ‘No Objection Certificate’ on the ground that the car was refinanced to one Mr. Leslie Fernandez, as its borrower. The Complainant then, filed a complaint with the police station at Nasik against Mr. Ibrahim and Mr. Gurucharan Khera and the car was seized. The Complainant then, filed an application before the Metropolitan Magistrate, Mumbai; and on the strength of the order passed by the Metropolitan Magistrate, Mumbai; secured custody of the car. [4] It is the case of the Complainant that the Opposite Party – Bank; should not have refinanced the car in favour of Mr. Leslie Fernandez, since the entry in the name of the Complainant, as regards hypothecation of the car in the R. C. Book still existed and over-looking that entry, finance was sanctioned by the Opposite Party – Bank; in favour of Mr. Leslie Fernandez. The Complainant further alleges that the Opposite Party – Bank; did not take proper steps despite assurance given to the Complainant that the Opposite Party – Bank; would send Form No.35 and ‘No Objection Certificate’ to RTA to delete the entry as regards hypothecation of the vehicle with the Opposite Party – Bank. It is also alleged by the Complainant that the Opposite Party – Bank; was not justified in refusing to issue fresh No Objection Certificate in favour of the Complainant to delete the hypothecation entry. Making allegations of deficiency in service on the part of the Opposite Party – Bank; the Complainant has filed present consumer complaint, as against the Opposite Party – Bank; to issue certificate in Form No.35 of the Motor Vehicles Act, 1988; and issue ‘No Objection Certificate’ so as to enable the Complainant to delete the entry of hypothecation in the R. C. Book and for payment of compensation in sum of Rs.10,00,000/-. [5] Pursuant to the notice of appearance issued by this Forum, the Opposite Party – Bank; appeared and contested the complaint by filing its written version of defence and admitted the fact that the Complainant had foreclosed the loan account, by making pre-payment. The Opposite Party – Bank; further explained that all the documents, including Form No.35 and ‘No Objection Certificate’ to RTA was prepared and handed over to the Complainant for being submitted to RTA. However, the Complainant did not produce the same before RTA and the entry as regards hypothecation of the vehicle continued to exist. Period of that ‘No Objection Certificate’ was for only three months and on expiry of a period of three months, that ‘No Objection Certificate’ stood expired. The Opposite Party – Bank; expressed ignorance about the transaction between the Complainant, on one hand and Mr. Ibrahim, on the other as well as transaction between the Complainant, on one hand and Mr. Gurucharan Khera, on the other. As regards refinance on the same vehicle, the Opposite Party – Bank; has explained that one Mr. Leslie Fernandez, approached the Opposite Party – Bank; for borrowing a loan, with the documents of title regarding vehicle, which was sanctioned by the Opposite Party – Bank. However, subsequently, Mr. Leslie Fernandez committed default in making repayment of the loan dues. Since the Complainant had foreclosed the loan and ‘No Objection Certificate’ as well as Form No.35 was handed over to the Complainant, the Opposite Party – Bank; had no reason to bother about earlier entry of the hypothecation. Since Mr. Leslie Fernandez had produced the R. C. Book as well as the transfer form bearing the signature of the Complainant, officers of the Opposite Party – Bank; were induced to believe that transaction between the Complainant, on one hand and Mr. Leslie Fernandez on the other, was fair and bonafide. [6] According to the Opposite Party – Bank; on the basis of some documents, which were brought by Mr. Leslie Fernandez, loan was sanctioned in favour of Mr. Leslie Fernandez and said Mr. Leslie Fernandez committed default in repayment of the loan and the security of the Opposite Party – Bank; had came into danger. Since the loan was not repaid was Mr. Leslie Fernandez, the Opposite Party – Bank; refused to issue ‘No Objection Certificate’ in favour of the Complainant in respect of the same vehicle. Thus, the Opposite Party – Bank; had denied allegations of deficiency in service on its part. [7] The Complainant filed his rejoinder to the written version of defence, as filed by the Opposite Party – Bank; and reiterated that even legally it was an obligation on the part of the Opposite Party – Bank; to approach the RTA to delete the entry of hypothecation on foreclosure of the loan account by the Complainant. The Complainant maintained that the Opposite Party – Bank; having failed to take those required steps, it was guilty of deficiency in service. [8] Parties to the complaint proceeding have filed their respective affidavits of evidence and documents as well as written notes of arguments. [9] We have heard the learned advocate representing the parties to the complaint proceeding. [10] We have gone through the pleadings, affidavits and documents as well as written notes of arguments filed by the parties. [11] We take the points that arise for our consideration and record our findings there-against as below:- Sr. No. | Points for consideration | Findings | 1. | Whether the Complainant has proved that the Opposite Party – Bank; is guilty of deficiency in service in not issuing ‘No Objection Certificate’ in favour of the Complainant? | NO | 2. | Whether the Complainant is entitled to seek any direction, as against the Opposite Party – Bank? | NO | 3. | What order? | The complaint stands dismissed. |
REASONS FOR FINDINGS [12] The Complainant claims himself to be a practicing advocate before the Hon’ble Bombay High Court and subordinate courts. It is an admitted fact that the Complainant had borrowed a loan from the Opposite Party – Bank; for purchasing a car and in the month of Oct-2005, the Complainant foreclosed the loan, by making pre-payment. There is also no dispute between the parties to the complaint proceeding as regards the fact that the Opposite Party – Bank; had prepared a ‘No Objection Certificate’ to inform the Road Transport Authority (RTA) about foreclosure of the loan by the Complainant, as also, prepared Form No.35 to terminate the agreement of hypothecation. At page (49) of the compilation of the complaint, there is a copy of ‘No Objection Certificate’, issued on the letterhead of the Opposite Party – Bank; addressed to RTA, Thane; bearing date 20/10/2005, by which, the Opposite Party – Bank; had informed the RTA, Thane; that the loan agreement was terminated and a request was made to remove the entry as regards hypothecation from the registration certificate of the said vehicle. At page (50) of the compilation, there is a copy of Form No.35, bearing signature of an officer of the Opposite Party – Bank. Thus, there is no dispute about the fact that the Opposite Party – Bank; had prepared these documents on foreclosure of the loan account by the Complainant. However, according to the Complainant, as alleged in paragraph (11), page (09) of the complaint, the Opposite Party – Bank; had assured the Complainant that as per procedure, the Opposite Party – Bank; would forward the same to the RTA. This is strongly denied by the Opposite Party – Bank; and in the written version as filed, while dealing with the allegations in paragraph (11) of the complaint, the Opposite Party – Bank; has taken stand that as per procedure, Form No.35 had to be submitted by the Complainant, as the registered owner of the vehicle, to the RTA, which the Complainant failed to do. It is alleged by the Opposite Party – Bank; that the Complainant was trying to palm off the blame on this Opposite Party – Bank; for his own wrong doings. [13] The Complainant, while reiterating the contentions as regards failure on the part of the Opposite Party – Bank; to approach the RTA to delete this entry, has raised a contention, in his affidavit of rejoinder, to the effect that it was the responsibility of the Opposite Party – Bank; to get cancelled, the entry as regards loan and hypothecation of the vehicle. The Complainant himself, in his affidavit of rejoinder, has reproduced Rule-61 of the Motor Vehicles Rules; which is extracted here-in-below:- “Termination of the Hire Purchase Agreements etc. (1) An application for making an entry of termination of the agreement of hire purchase, lease or hypothecation referred to in sub-section (3) of Section 51 shall be made in Form 35 duly signed by the registered owner of the vehicle and the financer and shall be accompanied by the certificate of registration and the appropriate fee as specified in Rule 81.” [14] Close reading of this provision shows that Form No.35, duly signed, by the registered owner of the vehicle and the financer, is required to be submitted or tendered alongwith the application for making an entry of termination of the agreement of hypothecation. Now, the entry as regards the loan and hypothecation of the vehicle was entered into the registration certificate of the vehicle, owned by the Complainant. Needless it to say that the application contemplated by Rule-61(1) of the Motor Vehicles Rules; is to be submitted by the registered owner of the vehicle. This is so, because Form No.35 is to be submitted with a copy of certificate of registration. Rule-61(1) of the Motor Vehicles Rules also shows that the applicant has to deposit appropriate fees, as specified in Rule-81 thereof. All the requirements contained in Rule-61(1) of the Motor Vehicles Rules read with the object of provision show that it is the responsibility of the registered owner of the vehicle to move the RTA for cancellation of hypothecation entry. [15] In the written notes of arguments, the Opposite Party – Bank; has elaborated this and at page (11), paragraph (04) thereof, has canvassed that Form No.35 and ‘No Objection Certificate’ was handed over to the Complainant, as per the standard procedure and practice of the financial institutions and the Complainant was supposed to approach the RTA with those documents. The Complainant admits that he had came into possession of those documents and this is further seen from the fact that in the complaint itself, the Complainant admits that he had handed over those documents to Mr. Ibrahim, while he struck a deal with Mr. Ibrahim to sell the car. Therefore, the contention of the Complainant that the Opposite Party – Bank; had undertaken the responsibility to approach the RTA to transmit the ‘No Objection Certificate’ and Form No.35, has not been substantiated. It does not appear from the record that any such assurance was ever extended to the Complainant by any officer of the Opposite Party – Bank. [16] It is further grievance of the Complainant that despite entry as regards loan advanced to him and vehicle being hypothecated with the Opposite Party – Bank; being existing on the R. C. Book, the Opposite Party – Bank; advanced loan to Mr. Leslie Fernandez and thereby acted detrimental to the interest of the Complainant. From the averments in the complaint, it is seen that the Complainant, on foreclosure of the loan, approached Mr. Ibrahim from Nasik, who assured the Complainant of sale of car and Mr. Ibrahim issued two post-dated cheques in favour of the Complainant and the Complainant, in turn, handed over original documents and signed blank form to facilitate sale and transfer of vehicle etc. Those two post-dated cheques issued by Mr. Ibrahim came to be bounced. According to the Complainant, he realized that Mr. Ibrahim played fraud and committed mischief. Then, according to the Complainant, while he had gone to Nasik, one Mr. Gurucharan Khera approach him and informed that Mr. Ibrahim had agreed to sell the car to Mr. Khera and Mr. Khera indicated his willingness to buy the said car from the Complainant on the agreed price. Thereupon, the Complainant approached RTA, Thane; to obtain No Objection Certificate and from that entry as regards hypothecation of the vehicle was not deleted. In the meantime, the Complainant filed a complaint before the Metropolitan Magistrate as against Mr. Ibrahim. According to the Complainant, when he found that entry as regards hypothecation was not deleted from the R. C. Book, he approached the Opposite Party – Bank; with a request to issue fresh ‘No Objection Certificate’ and the Opposite Party – Bank; declined to issue fresh ‘No Objection Certificate’ on the ground that vehicle was refinanced and loan was advanced to Mr. Leslie Fernandez on the same vehicle. Thus, the Complainant’s grievance is that the entry as regards hypothecation, though existing, the Opposite Party – Bank; advanced finance to Mr. Leslie Fernandez, overlooking that entry and thus, the Opposite Party – Bank; was guilty of deficiency in service. In the written version of defence, the Opposite Party – Bank; has denied these allegations. In its written notes of arguments, the Opposite Party – Bank; has extensively dealt with this aspect and has explained that when the Complainant approached the Opposite Party – Bank; on 17/5/2007, the Complainant was told that ‘No Objection Certificate’ cannot be issued to the Complainant, as the vehicle was refinanced to Mr. Leslie Fernandez. According to the Opposite Party – Bank; this act of facilitating and refinancing was aided and abetted by the act of gross negligence on the part of the Complainant himself, who against consideration (Cheques) handed over all the papers to his agent, by name – Mr. Ibrahim; as well as possession of the car. According to the Opposite Party – Bank; by handing over the vehicle and papers to Mr. Ibrahim, the Complainant led the Opposite Party – Bank; to believe that the person who approached the Opposite Party – Bank; for a loan viz. Mr. Leslie Fernandez; was a bonafide purchaser. According to the Opposite Party – Bank; thus, Mr. Leslie Fernandez had approached the Opposite Party – Bank; with the original documents and a form bearing the signature of the Complainant and the Opposite Party – Bank; had not reason to raise any suspicion about the request made by Mr. Leslie Fernandez for finance for purchase of the vehicle. Since the vehicle in question was already hypothecated with the Opposite Party – Bank; the Opposite Party – Bank; was relieved from making fresh investigation and fresh paper work. Moreover, the Opposite Party – Bank; knew that the Complainant had already foreclosed the loan account and ‘No Objection Certificate’ was handed over to the Complainant together with Form No.35 and the Opposite Party – Bank; was under an impression that the Complainant had relieved himself from any liability. Moreover, Mr. Leslie Fernandez was armed with the required documents. Therefore, we do no find any lapse or irregularity on the part of the Opposite Party – Bank; in advancing finance on the same vehicle to Mr. Leslie Fernandez. Had Mr. Leslie Fernandez approached any other bank for finance on the same vehicle then, certainly such another bank would have raised an objection and would have insisted upon Mr. Leslie Fernandez to get delete the entry of hypothecation from the R. C. Book. Since the vehicle was formerly financed by the Opposite Party – Bank; and Mr. Leslie Fernandez was in possession of necessary documents, the Opposite Party – Bank; had no reason to raise any doubt about the transaction sought to be completed by Mr. Leslie Fernandez. According to the Complainant himself, he had handed over original papers to Mr. Ibrahim and Mr. Leslie Fernandez must have come into possession of those papers from Mr. Ibrahim. Therefore, Mr. Leslie Fernandez coming into possession of required papers and forms bearing signatures of the Complainant was not unusual. Therefore, we do not find any negligence on the part of the Opposite Party – Bank; in giving finance to Mr. Leslie Fernandez on the same car. [17] The Complainant has claimed that for the first time, in the month of June-2007, when he approached the RTA, Thane; he came to know that the endorsement in favour of the Opposite Party – Bank; with regard to hypothecation/loan agreement was still existing. The Complainant had foreclosed the loan in the month of Oct-2005 and had collected a copy of ‘No Objection Certificate’ and Form No.35 from the Opposite Party – Bank; on or before 20/10/2005. Thus, the Complainant wants this Forum to believe that for a period of about twenty months, he was not aware of the fact that the entry as regards loan/hypothecation was not removed from the R. C. Book. During the period of twenty months, lot of transactions took place and the Complainant had dealt with number of persons. He had approached Mr. Ibrahim, had transaction with him and had collected two post-dated cheques, which subsequently bounded back and the car was delivered in possession of Mr. Ibrahim. Then, the Complainant had filed a complaint against Mr. Ibrahim before the Metropolitan Magistrate. Then, the Complainant had transaction with Mr. Gurucharan Khera from Nasik, to whom also, the Complainant agreed to sell the vehicle and collected post-dated cheques, which also came to be bounced back and ultimately, the Complainant got the custody of the vehicle under the orders from the Metropolitan Magistrate, Mumbai; passed on 12/6/2007. In this scenario, it becomes difficult to comprehend that the Complainant would not have come to know or realize that the entry as regards hypothecation was not deleted from the R. C. Book. [18] The Complainant filed a F. I. R. at M. R. A. Marg Police Station, Mumbai; against Mr. Ibrahim, Mr. Gurucharan Khera, his son - Mr. Rajesh Khera and one Mr. Khardekar from Nasik, with the allegations that they cheated the Complainant and prepared false documents with regard to transfer of vehicle. A copy of the FIR with translation in English is produced on the record at pages (52) to (63) of the compilation of the complaint. Reading of the FIR shows that while entering into a transaction with Mr. Ibrahim, the Complainant had collected three post-dated cheques and out of those three cheques, one cheque was realized and remaining two cheques bounced back. The transaction was for an amount in sum of Rs.2,57,000/-. Reading of the FIR further shows that through Mr. Khardekar from Nasik, the Complainant came into contact with Mr. Gurucharan Khera and his son, by name – Mr. Rajesh Khera. The Complainant agreed to sell that car to Mr. Khera for an amount in sum of Rs.2,00,000/- and collected from him, three post-dated cheques, besides cash amount in sum of Rs.50,000/-. Those cheques also bounced back. Surprisingly, the Complainant allowed the custody of the car with Mr. Khera. There also, the Complainant signed required blank form. We have referred to this FIR and contents thereof extensively to point out that in this FIR lodged on 24/1/2007, the Complainant did not utter a single work as against the Opposite Party – Bank; or Mr. Leslie Fernandez. Only after getting the custody of the car, under the orders passed on 12/6/2007 by the Metropolitan Magistrate, the Complainant realized that there was deficiency in service on the part of the Opposite Party – Bank. Obviously, the Complainant had decided to sell the car to a third party after the transaction with Mr. Ibrahim as well as Mr. Khera was frustrated. Entry in the R. C. Book about the hypothecation was proving to be an impediment and to overcome that hurdle, the Complainant sought fresh ‘No Objection Certificate’ from the Opposite Party – Bank. In the meantime, the Opposite Party – Bank; had advanced finance to Mr. Leslie Fernandez on the same vehicle. Had those transactions been materialized and the two cheques issued by Mr. Ibrahim being realized or three cheques issued by Mr. Khera been encashed, the Complainant would not have made any allegations against the Opposite Party – Bank. Only after those transactions got frustrated, the Complainant came out with allegations of deficiency in service against the Opposite Party – Bank. At the same time, the Opposite Party – Bank; has lost security because the Complainant had foreclosed the loan and Mr. Leslie Fernandez had committed huge defaults and the vehicle, which was financed, had came into custody of the Complainant on the basis of orders passed by the Metropolitan Magistrate. The Opposite Party – Bank; cannot proceed against the said vehicle pending those criminal proceedings. It would be adding salt to the injury sustained by the Opposite Party – Bank; to hold the Opposite Party – Bank; guilty of deficiency in service, particularly on the basis of these allegations made by the Complainant, which was an outcome of the transactions, which the Complainant sought to complete with other persons were frustrated. [19] In the background of these facts, we find that the Complainant has failed to prove allegations of deficiency in service on the part of the Opposite Party – Bank; on either of the count. Needless it to say that any of the observations in the foregoing judgment & order shall have no effect on the parallel proceeding before any other Forum or Court. With this, we proceed to pass the order as below:- ORDER The complaint stands dismissed. No order as to costs. Parties shall be informed accordingly, by sending certified copies of this order.
| | [HONABLE MRS. Mrs.DEEPA BIDNURKAR] Member[HONABLE MR. Mr. J. L. Deshpande] PRESIDENT[HONABLE MR. MR.V.G.JOSHI] Member | |
