PER  MRS. NEENA SANDHU, MEMBER

1.         This is an appeal filed by appellant/OP against the order, dated 19.9.2008 passed by District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as District Forum only) in complaint case No.1091 of 2007 vide which, it allowed the complaint and directed the OP Bank to refund a sum of Rs.46,792/- to the complainant alongwith interest @24% p.a. from 1.10.2007 till realization besides Rs.4 lacs (Rupees Four Lacs only) as compensation along with costs of litigation to the tune of Rs.10,000/-, within 30 days, failing which, the OP would be liable to pay penal interest on the compensation of Rs.4 lacs @12% p.a. from the date of order, till its actual realization and shall also be sentenced to imprisonment and fine under Section 27 of the Consumer Protection Act, 1986.

2.         Briefly stated, the facts of the case, are that the complainant (now respondent) purchased a Tata Indica DLS E II for Rs.3,49,66.04 from Hind Motors India Limited vide bill No.70 dated 20.7.2006. The said car was later on registered as Taxi No.CH-02-1975. The complainant paid a sum of Rs.92,000/- towards margin money and rest of the amount was financed by the OP (now appellant), by raising a loan of Rs.2,64,000/-, which was to be repaid in 48 monthly installments of Rs.6700/- each. It was stated that the OP collected  48 postdated cheques towards installments.  It was further stated that three installments were received by the OP, in advance, but none of the installments was adjusted by the OP, in the statement of account.  The complainant spent an amount of Rs.15,234/- for insurance of the car from The Oriental Insurance Company Limited and also spent Rs.10,000/- on CD changer music system, Rs.4,000/- towards seat covers, Rs.500/- on special horn, Rs.500/- on perfume/fire extinguisher etc. and a sum of Rs.3,000/- for getting authorization for permits, in various states. It was further stated that he was paying the EMI’s regularly by way of cash and sometimes through cheques right from the beginning, without any default. Therefore, he had paid a total amount of Rs. 1,20,545/- against the loan amount of Rs.2,64,000/- till September, 2007. It was further stated that there was problem in encashment of postdated cheques, so it was agreed to between the parties that the OP would send their boy/agent to collect the installments, but surprisingly, the collection boy/agent failed to turn up, as per commitments.  It was further stated that he requested the OP several times to collect the installments and supply the statement of account, but to no effect.  On 27/28.9.2007, the car of the complainant was forcefully snatched by the OP, from Sector 44, Chandigarh, through their gunda elements. The complainant had not received any prior notice of the said possession. Even no receipt was issued by the OP, while taking the forceful possession of the vehicle. The complainant was ready to clear the loan amount of the OP, but it was not ready to receive the same. It was further stated that the abovesaid acts of the OP, amounted to deficiency, in service. Hence, the complaint was filed.

3.         Reply was filed by the OP, wherein, it was stated that the complainant applied for loan, after taking the delivery of vehicle.  It was denied that 48 postdated cheques were provided to the bank and the complainant had promised to pay the installments through electronic clearing system directly from his bank.  It was further stated that  only Rs.33,725/- (5 EMIs of Rs.6700/-) had been paid to the OP and in August, 2007, 11 installments were due of which only 5 had been paid. It was further stated that the complainant was a chronic defaulter and, as such, no relief could be given to him. It was denied that the complainant paid Rs.1,20,545/-  or that the bank had agreed to send any person for collections.  It  was further denied that the OP took forcible possession of the vehicle. Rather the complainant, who failed to clear his dues, himself surrendered his vehicle, to the OP. It was further stated that the OP issued the notice to the complainant, and also requested him to clear his dues and take back the possession of the vehicle, but he expressed his inability to pay any amount. It was further stated that the vehicle was being used for commercial purpose. Then the OP was compelled to sell the vehicle through legal process and the amount, so received, was duly credited to the loan account of the complainant. All other allegations, leveled by the complainant, in the complaint, were denied. It was further stated that there was no deficiency, in service, on the part of OP.

4.         The parties led evidence, in support of their case.

5.         The learned District Forum, allowed the complaint, in the manner, referred to, in the opening para of the order.   

6.            Aggrieved by the order, passed by the learned District Forum, the appellant/OP, has filed the instant appeal. 

7.         We have heard Sh.Sandeep Suri, Advocate for the appellant/OP, Sh.Devinder Kumar, Advocate, proxy for Sh.P.K.Kukreja, Advocate for respondent/complainant, and have perused the record, carefully.

8.       The learned Counsel for the appellant/OP contended that the Forum erred in placing reliance on the statement of Sh.Amarjit Singh, who appeared as a witness, on behalf of the complainant, as his evidence was contradictory. He further contended that the District Forum failed to consider notice dated 15.5.2007, posted on 16.5.2007, wherein the complainant was asked to clear the dues, but he failed to do so. He further submitted that possession of the vehicle was possessed by the OP on 28.8.2007 and the police was intimated in this regard on the same date. It was further contended that the OP intimated the complainant vide notice dated 8.9.2007 that after making the payment of Rs.2,77,051/-, he could take back the possession of the vehicle from the bank. It was further contended that the learned District Forum failed to consider that the vehicle was being used for commercial purpose as a taxi. It was further contended that the learned District Forum failed to consider that the complainant was duly informed regarding the default in making payment of installments. He further submitted that since the complainant failed to clear the dues, though sufficient time was given to him, the vehicle was sold on 5.12.2007. He further submitted that the District Forum erred in accepting the complaint.

9.         The learned Counsel for the respondent/complainant, contended that the complainant purchased Tata Indica DLS E II car for Rs.3,49,66.04 paise on 20.7.2006, by raising a loan of Rs.2,64,000/-, which was to be repaid in 48 installments of Rs.6700/- each month. He further submitted that the OP had taken 48 postdated cheques from the complainant. It was further contended that OP took 3 installments in advance, but the same were not adjusted in the statement of account.  It was further contended that due to some problem in encashment of postdated cheques, it was agreed to between the parties that the OP would send its boy to collect the installments. It was further contended that the complainant paid 18 installments upto September, 2007 i.e. Rs.1,20,545/- and he could not pay the remaining 24 installments, as the collection boy failed to turn up. He further submitted that the complainant requested the OP several times to collect the installments & supply the statement of account, but to no avail. He further submitted that on 27/28.9.2007, without giving any prior notice to the complainant, the OP took the vehicle forcibly from his custody. It was further contended that the complainant was ready to clear the loan amount of the OP, but it was not ready to receive the same. It was further contended that the order passed by the learned District Forum is well reasoned.

10.       The appellant/OP has assailed the impugned order passed by the learned District Forum on the following grounds:-

i.                    That the complainant is not a consumer because the vehicle owned by him was being used by him for commercial purpose. 

ii.                  The vehicle in question was surrendered by the complainant himself and not repossessed by a forcibly.

11.       The vehicle, in question, is registered as a taxi. While taking the loan from the OP, for the abovesaid vehicle, in the form (at page 47 of the District Forum file) filled by the complainant,  he stated that he was working as an Accountant in the Chandigarh Cooperative Bank Limited, Sector 22, Chandigarh and his gross annual salary was Rs.1,94,464/-. This fact was, however, intentionally and deliberately concealed by him, in the complaint, as also in his affidavit filed by way of evidence. It was, thus, established from the record that complainant was earning his livelihood by way of salary, which he was getting from the aforesaid bank, as an Accountant. The vehicle was, thus, being driven and used for commercial purposes, as a taxi to generate profit, and not for earning his livelihood. The complainant, thus, does not fall within the definition of consumer, as envisaged by Section 2(1)(d)(i) of Consumer Protection Act, 1986. Since, the complainant has not been held to be a consumer, the complaint filed by him is not maintainable, and, is liable to be dismissed, on this score alone.

12.       The next question, that falls for determination, is, as to whether, the OP was entitled to repossess the vehicle, in default of payment of installments of loan, as per the schedule of payment or not. Admittedly, the loan of Rs.2,64,000/- obtained by the complainant, was to be repaid in 48 equal monthly installments of Rs.6800/- each. In para No.6 of the complaint, the complainant admitted that till September, 2007, he had only paid Rs.1,20,545/-. In para No.7 of the complaint, it was also admitted by the complainant that by September, 2007, he had only paid 18 monthly installments, against 24 monthly installments, which were payable by that date. It means that as per the admission of the complainant, he made default in making payment of 6 monthly installments by September, 2007. Clause 2(iii) of the unattested deed of hypothecation, duly signed by the complainant, at pages 71 to 78 of the District Forum file reads as under.

“(iii)      In the event of any breach or default by the Borrower in the performance of its obligations hereunder or any of the terms, covenants, obligations and conditions stipulated in the Loan Terms and/or the other Transaction Documents or in the event of the charge on the Assets having become enforceable for any reason whatsoever, the Bank or their nominees or authorized persons shall, in  case such breach or default is not remedied by the Borrower to the satisfaction of the Bank, without any notice and without assigning any reason and at the risk and expense of the Borrower and if necessary as attorney for and in the name of the Borrower, be entitled (without prejudice to any other rights and remedies) exercise such rights and remedies, including (but not limited to) : (i) to enter into and upon the premises of the Borrower and/or any other person who then has possession of the Assets, (ii) to seize, recover, collect, withdraw, receive the Assets and/or any income, profits and benefits thereof without interruption or hindrance by the Borrower and/or by any person(s), (iii) to remove, and/or sell by public auction or by private contract, dispatch or consign for realization or otherwise dispose of or deal with all or any part of the Assets and enforce, realize, settle, compromise and deal with any rights or claims relating thereto without being bound to exercise any of these powers or be liable for any losses in the exercise or non-exercise thereof, (iv) to be freed and discharged and well and sufficiently saved and kept harmless and indemnified of, from and against all former and other estates, titles, claims, demands, charges and encumbrances, whatsoever, or to direct the Borrower and/or other concerned person to sell, assign or otherwise liquidate, any or all of the Assets, (v) to claim the proceeds of any such sale or liquidation, (vi) to retain all amounts and/or other proceeds received or receivable by the Bank in respect of the Assets and use them, in whole or part, towards repayment/payment of all amounts in respect of the facilities, (vii) to direct the Borrower and/or other concerned person in writing to deliver the Assets to the Bank on a date and time indicated by the Bank, in which event the Borrower shall, at its own expense :

(a)              deliver/forthwith cause to the same to be delivered to the Bank;

(b)              provide/cause to be provided such guards and maintenance services as shall be necessary to protect the same.

Notwithstanding any pending suit  or other proceeding, the Borrower undertakes to give immediate possession of the Assets and all records/documents in relation thereto to the nominees or authorized persons of the Bank, on demand, and to transfer and to deliver to the Bank all relative bills, contracts, securities and documents and the Borrower hereby agrees to accept the Bank’s account of sales and realizations as sufficient proof of amounts realized and relative expenses and to pay on demand any shortfall thereby shown. Provided, however, that the Bank shall not in any way be liable or responsible for any loss, damage or depreciation that the relevant Assets may suffer or sustain on any account whatsoever whilst the same are in possession of the Bank or by reason of exercise or non-exercise of rights and remedies available to the Bank as aforesaid.”

Since, the complainant was a defaulter, as indicated above, notice dated 15.5.2007, was sent to him, which is at page 37 of the District Forum file, whereby, he was asked either to pay the amount due within 7 days or to return the vehicle. However, the complainant failed to pay the amount due. Thereafter, an intimation was given to the SHO, Police Station, Sector 34, vide letter dated 28.8.2007 by the OP that it wished to take possession of the vehicle.   Another intimation dated 28.8.2007, was sent to the SHO, Police Station, Sector 34, as is evident from the stamp of the Police Station, affixed thereon that the OP had taken possession of the vehicle. Thereafter a pre-sale notice at page 88 of the District Forum file was given to the complainant, that a sum of Rs.2,77,051/- was due against him. He was further asked to pay the aforesaid amount, and take back the vehicle within 7 days, otherwise, the same shall be sold. The complainant, however, failed to respond to this notice. Accordingly, the vehicle was sold for Rs.1,28,000/- to M/s Garg Car Palace, as is evident from payment receipt at page 86 of the District Forum file. Due intimation regarding the sale of the vehicle was sent to the complainant vide notice dated 28.12.2007 at page 89 of the District Forum file. The possession of the vehicle was taken by the OP, and the same was sold by it, in terms of Clause 2(iii) of the hypothecation deed, extracted above. The affidavits of the complainant and one Amarjit Singh, that the OP took forcible possession, through goonda elements, besides being contradictory to each other, in material particulars, are also belied by the documentary evidence produced by the OP, which has been discussed above. The District Forum was, thus, completely wrong, in coming to the conclusion that the possession of the vehicle was taken forcibly by the OP, through its muscle men. The findings of the District Forum, in this regard, being erroneous, are reversed.

13.       In Managing Director Orix Auto Finance (India) Ltd. Vs. Shri Jagmender Singh & Anr. II (2007) CPJ 45 (S.C.) relied upon, by the Counsel for the appellant, the principle of law laid down, was to the effect that the financer could repossess the vehicle, if the agreement authorizes it to take possession of the same (vehicle). Similar principle of law was laid down in Suenra Kumar Agarwal Vs. Telco Finance Ltd. & Anr. 1(2010) CPJ 163 (NC) , Gurdial Singh Vs. ICICI Bank Ltd. (Revision Petition No. 1158 of 2005 decided on 13.11.2006 by the National Commission), and Parameswari Vs. Tata Finance Ltd. & others (2010) II CPJ 45 (NC), relied upon by the Counsel for the appellant. It has been held in the foregoing paragraph that the possession of the vehicle, in this case, was taken by the appellant, in accordance with the terms and conditions of clause 2(iii) of the Hypothecation deed, duly executed by the complainant, in favour of the former, after due intimation. The possession was not taken forcibly. There was, therefore, no illegality, in the action of the appellant. The principle of law, laid down, in the aforesaid cases, is fully applicable to the facts of the instant case. The submission of the Counsel for the respondent, being devoid of merit is rejected.  

14.       In view of the foregoing discussion, we have come to the conclusion that the complainant is not a consumer as per Section 2(1)(d)(i), because he was using the abovesaid vehicle, as taxi, for commercial purposes ; the OP rightly re-possessed the vehicle, in terms of the hypothecation agreement ; and there was no deficiency, in service, on the part of the OP.

15.       For the reasons recorded above, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

16.       The parties are left to bear their own costs.

17.            Copies of this order be sent to the parties, free of charge. 

Pronounced.                                                                    

4^th August, 2011.