Reserved
State Consumer Disputes Redressal Commission
U.P. Lucknow.
Appeal No.633 of 2014
1- M/s Magma Leasing Ltd. now Magma Fincorp
Ltd., 24, Park Street, Kolkata (West Bankgal)
Through Director.
2- M/s Magma Leasing Ltd. now Magma Fincorp
Ltd., 2nd Floor, YMCA Building, Rana Pratap
Marg, Lucknow now new address 5th Floor,
Halwasiya Commerce House, Habibullah Estate,
11, M.G. Marg, Hazratganj, Lucknow through
Manager. …Appellant.
Versus
Sri Jageshwar Prasad Yadav s/o Sri Ram Charan Yadav,
R/o Village, Murtaza Ali Nagar, Bijanli Sahaspur,
Mahandi, Likhimpur Kheri (U.P.) …Respondent.
Present:-
1- Hon’ble Sri Rajendra Singh, Presiding Member.
2- Hon’ble Sri Vikas Saxena, Member.
Sri R.K. Gupta, Advocate for the appellanta.
The respondent Sri Jageshwar Prasad Yadav himself.
Date 15.9.2022
JUDGMENT
Per Mr. Vikas Saxena, Member: This appeal has been filed against the judgment and order dated 18. 02. 2014 of the District Consumers Disputes Redressal Forum-I, Lucknow, passed in complaint no. 127 of 2009, Jageshwar Prasad versus Masseurs Magma Leasing Ltd.
The complainant submitted this complaint with the averments that he purchased a vehicle 'Martial Motors" costing Rs. 3, 96, 801/- and he took a loan of Rs. 2, 70, 000/- from the appellant/opposite party for the purchase of the car and rest of the amount Rs. 1, 26, 801/- was paid by the complainant himself. The opposite party on the basis of terms and conditions of the loan agreement were recovering the loan @ Rs. 11, 590/- per installment in 29 instalments, to
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be paid by the complainant. The complainant raised the grievance in the complaint that the Vehicle in question was seized by the opposite party with the help of hoodlums, without giving any notice to the complainant, on February 9, 2007. The complainant was thrashed and was thrown out from the vehicle at gunpoint. In the incident, he lost some articles of his jewelries and other valuable things. After seizing the Vehicle the opposite party gave a sale - notice to the complainant for selling the vehicle 'Martial Motor', terminating the agreement and also demanded full and final payment of the loan. It is contended by the complainant that the opposite party are registered with Reserve Bank of India and they should have followed the guidelines given in circular of The Reserve Bank of India in Circular Number RBI/206 - 07/138 number 80/03. 10. 042/2005 - 06 dated 28. 09. 2006. As per the complainant, the opposite party this regarded the guidelines of honourable Supreme Court which has held that recovering of loans or seizure of Vehicle could not be done by employing hoodlums and could be done only through legal means. The complainant has launched an FIR regarding his Vehicle number UP 31 K 4079. The complainant has also sent a legal notice to the opposite party and then instituted this complaint before the learned District Consumer Commission with the prayer to refund of amount Rs.6,00,000/- along with an interest @24% per annum from date 09. 02. 2007 till date of actual payment and other damages along with costs of the suit.
The appellant/opposite party admitted in their written statement that the complainant has taken a loan from them for
Rs. 2,70,000/- for purchasing the Vehicle in question 'Martial
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Motor' which was registered as U P 31 K 4079. The complainant was himself a big defaulter and had not paid many instalments within stipulated time you also used the Vehicle roughly and earned a lot of money from its commercial use, but did not pay the instalments of the loan taken from the opposite party/appellant. The loan taken by the complainant has to be paid in 29EM is each installment Rs. 11, 590/- but the complainant was never regular in making payment of these instalments. Hence, the opposite party company levied the late payment charges and therefore the total amount Rs. 57, 070. 00 failed due to words overdue instalments in February, 2007. Consequently, the Vehicle was repossessed by the authorized agents of the company as per conditions of the loan agreement. As against the repossession, the complainant filed a Writ Petition number 1910 (MB) of 2007 before honourable High Court of Allahabad at Lucknow bench which was dismissed by the honourable Court. Against the said judgment, the complainant also filed a SLP before the honourable Supreme Court which was again dismissed on date 11. 05. 2007. It is asserted by the opposite party/appellant that they have not committed any breach of any condition or term of the loan agreement. The re-possession of the Vehicle was as per the terms and conditions of the loan agreement and they have not committed any deficiency in service regarding the loan agreement.
The learned district Commission after giving opportunity of hearing to both the parties partially allowed the complaint and directed the opposite parties to pay jointly and severely to refund the amount Rs.2,28,090.00 along with
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an interest @9% per annum from the date of filing of the complaint till the final payment. The learned District Commission also directed to pay a compensation of Rs. 20, 000/- and costs of litigation. Being aggrieved from the judgment and order of the District Commission the opposite party preferred this appeal. The main contentions taken in the memorandum of the appeal are these:-
That the complainant was never regular in payment of his installments for the car loan taken by him and for most of the months he defaulted in payments, and amount of Rs. 57, 070/- fell due to words overdue of the installments in the month of February, 2007. Due to default of the remains of the installments, the appellant company repossessed the Vehicle peacefully on date 09. 02. 2007 as per the terms and conditions of the loan agreement because despite depleted requests and reminders the payments of installments were not made. After repossession of the Vehicle a sale notice dated 17. 02. 2007 was served upon the complainant but the complainant failed to respond to the said notice and finally the Vehicle was sold by the appellant company on date 28. 02. 2007 four and amount of Rs. 1, 40, 000/-. The impugned judgment of the District Consumer Commission is wholly arbitrary, the legal and nullity and is against the merits of the case. The learned District Commission has wrongly held that in the notice dated 17. 02. 2007 the amount due shown Rs. 1, 36, 795. 94/- was wrongly shown, because this amount was inclusive of further installments along with termination charges, delay payment charges and other expenses. The learned District Forum failed to appreciate that the complaint was not maintainable before the Consumer Forum because
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the Vehicle was purchased for a commercial purpose and not for earning their livelihood of the complainant because the complainant has admitted that he is a practicing lawyer at High Court, Lucknow bench. As per the appellant the complainant being advocate cannot do by Pitt were like lying the Vehicle or using the Vehicle for private added colleges. It is contended by the appellant that the impugned judgment and order is based on conjectures and surmises and therefore liable to be set aside.
We have heard the learned counsel for the appellant Mr. R.K.Gupta, Advocate and the complainant/respondent Shri Jagdishwar Prasad Gupta personally. Our findings on the appeal are as following: -
The District Consumer Redressed Commission in this case has partially decreed the complaint on the ground that the forcible possession of a Vehicle is not legally allowed by the Financer/hire purchaser. In this particular case both the parties have not denied that the complainant has taken a Vehicle loan, the fact is not denied by the complainant. It is alleged by the appellant opposite party that the complainant regularly defaulted in payments of instalments of the loan regularly and therefore they are repossessed the Vehicle being hire – purchaser of the same. The main grievance raised by the complainant/respondent is that the appellant did not followed the legal and regular procedure for taking possession of the Vehicle, for this reason the entire transaction of repossession is invalid. By taking this forcible possession of the Vehicle they committed deficiency in service as a service provider. On these reasons the complainant has submitted the main complaint and sought
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reliefs given in the complaint. On the other hand, the appellant has raised the contention that being the hire purchaser of the Vehicle he had the right to obtain the Vehicle when the complainant/hire purchaser defaulted in payments of instalments. On these assertions raised by both the parties the following point emerges in this appeal: –
Being the hire- seller of the Vehicle the opposite party/appellant has a right to obtain the possession of the same in any manner, or the action of the appellant in taking the possession of the Vehicle in question without any prior notice to the complainant is invalid?
On this point the judgment of honourable NCDRC in MAGMA FINCORP LIMITED (FORMERLY MAGMA LEASING FINANCE LTD.) versus ASHOK KUMAR GUPTA reported in III (2010) CPJ 384 (NC) provides the guidelines. In the judgment of honourable NCDRC has held that banks and financial institutions which are usually loan provider under hire purchase agreements should take the possession of hide Vehicle in accordance with the procedure which is legal. The forcible possession of the Vehicle with the aid of muscle power is deplorable and cannot be accepted in any court of law a tribunal. Relying upon the another previous decision of Honourable NCDRC in Citicorp Maruti Finance Ltd. v. S. Vijayalaxmi, III (2007) CPJ 161 it was held that banks and financial agencies should resort to procedure recognized by law to take possession of vehicles where borrower may have committed default in payment yet, instead of taking resort to arm tactics full legal requirements of Reserve Bank of India guidelines should be complied with and final chance or opportunity should be given to petitioner
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in agreement for repayment of loan.
Facts of the case, before the honourable NCDRC where similar to the present case, these are that the respondent/complainant in the case before honourable NCDRC, entered into a Hire Purchase Agreement with the petitioners for the financing of a truck for a sum of Rs. 11,95,000. As per the terms of the agreement, he was liable to pay the hire charges in 46 monthly instalments at the rate of Rs. 34,650 (perhaps the first advance installment) and the rest at the rate of Rs. 33,660 each. Alleging failure on part of the respondent/complainant to pay the installments regularly, the truck in question was taken possession of on the 18th of March, 2008. It was subsequently sold out.
Alleging forceful and illegal possession of the truck, the respondent/complainant approached the District Forum seeking a direction to the petitioners to return his truck, failing which to compensate him for the loss of his income and other investments made in the construction of a body on the chassis. The complaint was contested by the petitioners/opposite party. On consideration of the evidence before it, the District Forum allowed the complaint in terms of its award. The order of the District Forum thereafter was challenged by the petitioners before the State Commission, who vide the impugned order dismissed their appeal and found that the order passed by the District Forum was fully justified. It is in this background that the petitioners - M/s. Magma Fincorp Limited feeling aggrieved have filed this revision petition. The honourable NCDRC also rectified the judgments passed by the District Consumer Redressal Commission and the State Commission and dismissed the
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appeal of the financer/higher seller.
Another judgment passed by honourable Supreme Court gives the guidelines in this case which is worth mentioning in this particular case. In the judgment M/S Magma Fincorp Ltd. Vs. Rajesh Kumar Tewari (Civil appeal no. 5622 of 2019) reported in 10(SCC) Page 399 honourable Supreme Court held that the financer that is the higher seller of a Vehicle may be the real owner of the same but in case of default in instalments of loan amount, the financer can take possession of the Vehicle but this action can be taken with a prior notice to the consumer and without any such prior notice the forceful possession is illegal and cannot be permitted in law.
The aforesaid judgments of honourable NCDRC and honourable apex court gave suitable guidelines to us in this case before us. From the evidence submitted by both the parties and even from the averments of them it is discernible that the complainant has alleged forcible dispossession of the Vehicle in question by the appellant and the appellant has not denied categorically this fact in their written statement in the proceeding of complaint as well as in the memorandum of appeal. This also appears that the appellants has not given any notice to the complainant before taking possession of the Vehicle in question because in both the above said pleadings of the appeal and it has stressed upon the fact that it has given the notice of resale of the Vehicle but no mention in the pleadings of the appellant was found that of any notice before taking possession of the vehicle in question was given. Therefore, it is quite clear that the appellant has not given any
prior notice to the complainant before taking possession of the Vehicle in question and afforded him an opportunity to
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repay the loan. The aforesaid judgments of honourable NCDRC and honourable apex court give the guidelines than such forcible possession of the Vehicle without any prior notice is not justifiable in eye of law. Following the guidelines of the honourable Courts, we are of the opinion that the District Consumer Redressal Commission has rightly awarded the sum in the impugned judgment. The complainant/respondent deserves to be compensated by the damages as the District Consumer Redressal Commission has awarded in the impugned judgment. This appellate bench does not find any irregularity, fault or illegality in the judgment, we do not find any reason or ground to interfere in the impugned judgment. The appeal deserves to be dismissed.
ORDER
This appeal is dismissed. The impugned judgment dated is confirmed. Both the parties shall be their own costs in the appeal.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Vikas Saxena) (Rajendra Singh)
Member Presiding Member
Judgment dated/typed signed by us and pronounced in the open court.
Consign to record.
(Vikas Saxena) (Rajendra Singh)
Member Presiding Member
Jafri, PA II
Court 3/tbv
