Madhya Pradesh

StateCommission

A/16/698

KOTAK MAHINDRA BANK - Complainant(s)

Versus

MAHENDRA - Opp.Party(s)

SH.AMIT TIWARI

30 May 2023

ORDER

M. P. STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,                         

                             PLOT NO.76, ARERA HILLS, BHOPAL

 

                                      FIRST APPEAL NO. 698 OF 2016

(Arising out of order dated 18.05.2016 passed in C.C.No.481/2015 by District Commission, Gwalior)

 

KOTAK MAHINDRA BANK LTD.

THROUGH ITS MANAGER,

CITY CENTRE, GWALIOR (M.P.)                                                                   … APPELLANT.

 

Versus

 

MAHENDRA SINGH PARIHAR

S/O SHRI AJMER SINGH PARIHAR,

R/O VILLAGE-CHANDPURA,

POLICE STATION-BIJOLI,

DISTRICT-GWALIOR (M.P.)                                                                          …. RESPONDENT.  

                     

BEFORE :

 

            HON’BLE SHRI A. K. TIWARI                : PRESIDING MEMBER

            HON’BLE DR. SRIKANT PANDEY        :          MEMBER

           

         

COUNSEL FOR PARTIES :

                Shri Amit Tiwari, learned counsel for the appellant.

           None for the respondent.

 

O R D E R

(Passed On 30.05.2023)

                                The following order of the Commission was delivered by A. K. Tiwari, Presiding Member: 

           

                   This appeal by the opposite party/appellant is directed against the order dated 18.05.2016 passed by the District Consumer Disputes Redressal Commission, Gwalior (for short ‘District Commission’) in C.C.No.481/2015 whereby the complaint filed by the complainant/respondent has been allowed.

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2.                Facts of the case in brief as stated by the complainant are that, he had purchased Sonalika tractor for the purposes of agriculture after availing finance in the sum of Rs.3,08,931/- on 12.05.2014 from the opposite party-Kotak Mahindra Bank Ltd (hereinafter referred to as ‘bank’). The loan was to be repaid in 60 EMIs. Registration number of the said tractor is MP-07 AB-0229. It is submitted that till 31.05.2015 he had deposited Rs.83,100/- with the bank towards loan. It is alleged that on 16.08.2015 when he was going to deposit Rs.70,000/- towards loan repayment, the employees of the bank with the help of muscle power forcefully took possession of the tractor. The employees of the opposite party bank had also taken Rs.70,000/- from him of which no receipt was given. He made a complaint to the police in this regard. The complainant served legal notice on 25.08.2015 which was also not replied. The complainant is ready to pay the defaulted instalments even then the bank has not returned the tractor due to which he is unable to earn his livelihood. The complainant therefore alleging deficiency in service on part of the bank filed a complaint seeking direction to be given to the bank to return the tractor and to pay Rs.10,000/- towards mental and physical pain and Rs.8,000/- towards cost.

3.                The opposite party bank resisted the complaint stating that the complainant had obtained loan for Rs.3,81,132/- from the bank on 12.05.2014 which was to be repaid in 60 EMIs starting from 15.06.2014 till

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05.12.2018. The loan account number was TFI2624052. As per loan agreement the complainant had undertaken to comply and abide the terms and conditions of the agreement. The complainant was defaulter in payment of due instalments to the bank and therefore on 01.08.2015 he was informed telephonically and in writing by the bank officials to deposit the overdue amount but he did not take any action, Thereafter the bank with the help of police took possession of the subject tractor on 17.08.2015 of which notice was given to the complainant. Reply to the letter dated 25.08.2015 of the complainant was answered on 11.09.2015. On 25.08.2015 post possession letter was issued to the complainant and he was asked to pay the remaining amount but when the complainant failed to deposit the same, the bank sold the tractor for recovery of the balanced financed amount.   The proceeding against the opposite party-bank is totally vexatious, oppressive, frivolous and scandalous and is entirely abuse of process. It is therefore prayed that the complaint be dismissed with costs.

4.                The District Commission holding the opposite party-bank deficient in service allowed the complaint and directed the bank to pay Rs.1,00,000/- towards compensation to the complainant within one month. Rs.1500/- towards costs is also awarded.  It is further directed that if the amount is not paid within one month, the aforesaid amount shall carry interest @ 8% p.a.

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5.                Heard learned counsel for the parties. Perused the record.

6.                Learned counsel for the opposite party/appellant-bank argued that the District Commission has erred in concluding that the repossession of the tractor is illegal. The complainant has signed and executed the agreement at the time of taking loan and after acceptance of terms and conditions of the loan agreement, the complainant enjoyed the loan facility. The complainant and the bank are bound to follow the terms and conditions of the agreement and as per the agreement the bank has a right to repossess the financed vehicle, if the complainant had not paid regular instalments and committed default in making payment, therefore the impugned order is bad in the eyes of law and is liable to be set-aside. He argued that the District Commission erred in directing the bank to pay a sum of Rs.1,00,000/- as compensation and Rs.1,500/- as costs without considering the fact there was no deficiency in service on part of the bank. The impugned order is therefore patently perverse, illegal, biased and not sustainable in the eyes of law. The District Commission had not applied the judicial mind while passing the impugned order. It is therefore prayed that in the peculiar facts and circumstances of the case, this appeal may kindly be allowed.

 

 

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7.                The complainant has filed his affidavit and documents C-1 to C-10 in support of his claim.  The opposite party-bank has filed affidavit of Tilak Yadav and documents R-1 to R-11 in support of their contentions.

8.                After hearing learned counsel for the parties and on perusal of record we find that it is an admitted position that the complainant had obtained loan from the bank to purchase a tractor which was to be repaid in 60 instalments and he did not pay the instalments regularly and became defaulter. There was still overdue in his loan account. It is also admitted that since there was overdue, the bank repossessed the tractor on 17.08.2015.

R-5 and R-6 are the intimation given to the police station by the bank regarding repossession of the subject tractor. The bank vide letter dated 25.08.2015 gave a post possession notice to the complainant to deposit the balance overdue amount.  In the said letter, it has been specifically mentioned that “You are once again called upon to settle the accounts by making payment of the amount of Rs.4,38,582/- within 7 days from the date of this letter, failing which please take notice that we shall be constrained to sell the above vehicle and appropriate the sale proceeds to your account at your costs and expenses.”

9.                Thus it is an admitted fact that since the complainant was unable to pay the financed amount, the bank took possession of the vehicle and served a post repossession notice to deposit the balance amount.  After

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getting the post repossession notice dated 25.08.2015, when the complainant failed to deposit the amount, the bank availed the law process and sold the vehicle for Rs.2,55,000/- to one Mr. Mohd. Avesh on 03.10.2015 by sale agreement (R-11). It is submitted by the bank that still there is dues of Rs.1,83,582/- against the complainant.  Thus from the record, we find that the bank has given proper notice to the complainant to deposit the balance overdue amount and if he failed to do so, the bank shall be constrained to sell the vehicle.  There is nothing on record to show that what efforts were taken by the complainant regarding settlement of loan account even after repossession of the tractor for a period of two months i.e. from repossession till its sale.

10.              Thus, we failed to understand how the District Commission came to the conclusion that before repossession and after repossession, and before selling the vehicle, proper procedure was not followed by the bank and the complainant was not given proper opportunity to clear the dues.

11.              Even otherwise, on this issue, law is well settled. Hon’ble Supreme Court in M/S Magma Fincorp Ltd. Vs Rajesh Kumar Tiwari II (2021) SLT 366 has held that ‘Repossession of a vehicle under hire, in accordance with terms and conditions of a hire purchase agreement, upon default in payment of hire instalments and refusal to release the same on

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mere assurance of the complainant to clear outstanding arrears of hire instalments and may future instalments in time, does not constitute ‘deficiency in service’.’ Same view has been taken by the National Commission in Harishbhai Shamjibhai & Ors Vs Dr. D. C. Gohil I (2015) CPJ 231 (NC).

12.              In view of the aforesaid discussion, when the subject vehicle had already been repossessed by the financer for default in payment by the complainant, and sold the same, the repossession of vehicle by the financer for default in payment of instalments by the complainant does not constitute deficiency in service as defined under the Consumer Protection Act, 1986.

13.              In view of the aforesaid discussion, the impugned order passed by the District Commission cannot be sustained. It is hereby set-aside.

14.              In the result, the appeal is allowed. No order as to costs.

 

                       (A. K. Tiwari)                (Dr. Srikant Pandey)

                 Presiding Member                    Member