Haryana

Panchkula

CC/279/2017

AMIT KUMAR. - Complainant(s)

Versus

MAHINDRA & MAHINDRA FINANCIAL SERVICE LTD. - Opp.Party(s)

ANIRUDH KUSH

30 Nov 2018

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,  PANCHKULA.

                                                    

Consumer Complaint No	:	279 of 2017
Date of Institution	:	11.12.2017
Date of Decision	:	30.11.2018

Amit Kumar, age 30 years son of Sh. Jaipal, resident of House No.25, Rajput Mohalla, Village Shahpur, Tehsil Raipur Rani, District Panchkula, Haryana.   

                                                                           ….Complainant

Versus

1. Mahindra & Mahindra Financial Service Limited, C/o Sudershan Tower, Above Bank of ICICI Bank, 2^nd Floor, Cross Road No.1, Ambala Cantt., Haryana, through its Manager.

 

2. Mahindra & Mahindra Financial Service Limited, Gateway Building, Apollo Bunder, Mumbai, Maharashtra, through its Managing Director.

….Opposite Parties

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

Before:              Mr.Satpal, President.

Mr.Jagmohan Singh, Member.

Ms. Ruby Sharma, Member.

For the Parties:   Mr. Anirudh Kush, Advocate for complainant. 

                        Mr. H.P.S.Kochhar, Advocate for OPs.

ORDER

(Satpal, President)

1.     The brief facts of the present complaint as alleged in the complaint are that the complainant purchased a second hand tractor, Make Sonalika 750, bearing registration No.HR-03-M-5076 and got refinanced the same for an amount of Rs.1,50,000/- from the Ops vide Loan Agreement No. 3960626, dated 18.11.2015 and the loan was to be repaid in six monthly installments of Rs. 37,000/- per month.  The said tractor was also got insured from Cholamandlam MS General Insurance Company Limited vide Policy Cover Note No.9706742 and the insurance company assessed the IDV of tractor as Rs.2,85,000/-. Due to heavy rain in the region, whole crops of the complainant got damaged because of which complainant could not pay the installment in time and hence paid Rs. 57,000/- only. On 21.07.2017, the Ops served a demand notice, which was received by the complainant on 10.08.2017. Thereafter, the complainant approached the office of OP No.1 and requested for 10 days time to deposit the demanded money and the Ops allowed the time, but when the complainant reached in the office of OP No.1 to deposit the demanded money, the official of OP No.1 refused to accept the same and asked to deposit all the outstanding balance amount of loan. The complainant even also shown the legal notice vide which Rs.74,000/- were demanded from the complainant. But the OP No.1 did not pay any heed and threatened the complainant that Ops would snatch the tractor from the possession of the complainant. So, the complainant requested for more time to deposit the balance amount. The complainant was shocked and surprised when on 27.08.2017, the official of the OP No.1 namely Mr. Vikas Rana, Recovery Officer and Mr. Naresh Kumar, ACM forcibly snatched the tractor from  Hukam Chand (relative of the complainant) from Village Ratta Tibbi, District Panchkula, who  had taken the tractor for his personal work from the complainant. Despite the repeated request both the officials namely Mr. Vikas Rana, Recovery Officer and Mr.  Naresh Kumar, ACM did not issue any receipt regarding snatching of the tractor of the complainant. Then complainant along with his relative approached the office of OP No.1 and asked the reason of snatching the tractor forcibly from the possession of his relative, but OP No.1 did not give any reply and also misbehaved with the complainant. Under the apprehension that the tractor may be sold by the Ops, the complainant moved an application dated 6.10.2017 to the SDM Panchkula not to transfer the ownership of the tractor. A complaint was also moved to the police. Thereafter, on 02.11.2017, police called the officials of Ops in the police station and a compromise was affected vide which the complainant had to pay Rs.1,82,000/- cash to the Ops and there upon the would have to hand over the tractor to the complainant. Thereafter, the complainant approached the office of Ops along with said amount, but Ops did not assure the complainant about handing over the tractor and did not disclose where the tractor was parked and on 23.11.2017, the complainant again visited the office of OP No.1 where an employee told that they have sold the tractor of the complainant; this act and conduct of the Ops amount to deficiency in service on their part; hence, this complaint.

2.     Upon notice, the OPs No.1 and 2 have appeared and filed the written statement taking the preliminary objections that the present complaint is not maintainable on the ground of territorial jurisdiction as none of the Ops are residing or having their offices at Panchkula; the loan agreement was also executed and delivered at Ambala; hence, no cause of action has arisen in the territorial jurisdiction of this Forum; the complainant has not come to this Forum with clean hands; the case is bad for mis-joinder and non-joinder of necessary parties.  It is further mentioned that the said tractor was actually voluntarily surrendered on 01.08.2017 by the father of the complainant to the authorized person of Ops due to defaulting on the scheduled repayment of the said loan cum hypothecation agreement and had no objection in selling the surrendered vehicle by Ops for realization of the dues and till the circumstances of disposal amount falling short of the dues and shall be responsible for the said shortfall amount to clear the dues towards the borrower and that the borrower has read and understood the facts and affirmed that Ops have all the rights to sell the vehicle without any prejudice to other right under the subject contract. The complainant admittedly in a mutual compromise dated 02.11.2017 between the parties  (on which date of 02.11.2017 and the signatures of Amit Kumar complainant seems to have been forged and interpolated as the original copy of the agreement between the parties which is in the possession of the Ops does not contain the dated i.e. 02.11.2017 and signature of the complainant, which shows that the said original document does not have the date on the top and also the signatures of Amit Kumar at the bottom. In this compromise between Jaipal and the Area Manager, Mahindra & Mahindra Financial Services Ltd. of Ambala, Haryana it was agreed that complainant or his father shall pay a sum of Rs. 1 Lakh and 82 thousand to Area Manager of Ops and apart from it a sum of Rs. 16 thousand would be paid separately which the Area Manager of the company shall return in the bank account of complainant within 30 days and the said tractor would be returned to the  complainant and if complainant and his father failed to pay the amount in the stipulated time then complainant shall not give any application. But the complainant or his father did not turn up to pay the amount as compromised. Thereafter, the Ops have sold the said tractor in profit of Rs.15,870/- which is returnable to the complainant by the Ops. It is further stated that the complainant is not a consumer of the Ops. It is further stated that the complainant and guarantor did not pay the installment on the basis of excuse of huge loss due to rains etc. and it was only on 21.07.2017 that the demand notice was sent by the Ops. It is further stated that the complainant never visited the office of the Ops. The complainant did not adhere to the terms and conditions of the loan agreement and thereafter of the compromise; thus, there is no deficiency in service on the part of the OPs and as such, the complaint of the complainant is liable to be dismissed with costs. 

3.     The ld. counsel for the complainant has tendered affidavits as Annexure CA & CB along with documents Annexure C-1 to C-4 in evidence and closed the evidence by making a separate statement. On the other hand, the ld. counsel for the OPs No.1 & 2 tendered affidavit Annexure RA along with documents Annexure R-1 to R-6 in evidence and closed the evidence on behalf of OPs.  

4.     During the course of arguments  the ld. counsel for the Ops tendered the copy of letter dated 11.10.2017 reflecting the sale proceed of the tractor in question, which we have taken on record as Mark-A in the interest of justice and for proper adjudication of the controversy involved in the present complaint.

5.     We have heard the learned counsels for both the parties and gone through the record minutely and carefully. The ld. counsel for the Ops submitted the written arguments on 28.11.2018 reiterating the version as contained in the written statement and affidavit Annexure RA.

6.     During arguments the ld. counsel for the complainant reiterated  the facts and version as contained in the complaint, affidavit Annexure CA and CB and documents Annexures C-1 to C-4 and prayed for acceptance of the complaint by directing the Ops to pay the compensation to the complainant as prayed for in the complaint. 

7.     On the other hand, the ld. counsel for the Ops while controverting the version of the complainant reiterated the facts and version as contained in the written statement, affidavit Annexure RA along with documents Annexure R-1 to R-6 and the written arguments and contended that tractor in question was himself surrendered by the father of the complainant, who was co-borrower, at the office of Ops in Ambala, when the complainant and his father failed to make the payments of due installments with the Ops as per the terms and conditions of the loan-cum-hypothecation agreement. The ld. counsel contended that the complainant just to create the jurisdiction of this Forum has wrongly stated that the tractor in question was snatched by the Ops in the Village Ratta Tibbi, District Panchkula. The ld. counsel invited the attention of this Forum towards the letter of surrender Annexure R-3 in support of the fact that tractor was voluntarily surrendered by the complainants stating that he had no objection in selling his surrendered vehicle by Mahindra and Mahindra services for realization of his dues. The ld. counsel further contended that the Ops had given the prior intimation to the SHO, P.S. Sadar Ambala vide letter Annexure R-2 for taking custody of the tractor in question from the complainant. It was contended that if the tractor had been snatched in the area of District Panchkula then the complainant would have made a complaint to the Police in this regard, but no complaint of the alleged forcible taking of the tractor was ever made in District Panchkula by the complainant. Continuing the arguments the ld. counsel asserted that the complainant failed to abide by the terms and conditions of the compromise deed Annexure R-5 and that the complaint is liable to be dismissed on the ground of non-joinder of necessary parties i.e. co-borrower Sh. Jaipal and the guarantor Sh. Hukam Chand. It was further stated that the Ops were authorized to take the possession of the vehicle and dispose of the same by virtue of the Clause No. 14 of the  Loan Agreement Annexure R-4. The ld. counsel further stated that as per details contained in Annexure R-6, an amount of Rs.15,870/- has been found payable by the Ops to the complainant after selling of the vehicle. Concluding the arguments, the ld. counsel placed reliance upon the letter dated 11.10.2017 (Mark-A), which contains the details about the sale of the tractor showing that an amount of Rs.15870/- has been found payable by the Ops to the complainant after selling of the vehicle. Concluding the arguments, the ld. counsel prayed for dismissal of the complaint.

8.     After hearing the ld. counsel for both the parties and perusing the relevant record available on the file we have found that tractor in question was financed by the Ops for an amount of Rs.1,50,000/- payable in six installments in a period of 36 months. It is further transpired that loan agreement Annexure R-4 containing detailed terms and conditions along with Scheduled-1 was executed between the parties on 18.11.2015. It is also not disputed that the complainant failed to make the payments of due installments as per the terms and conditions of the agreement Annexure R-4 accompanied by Scheduled-1. As per version of the complainant, the financed tractor in question was snatched illegally by the muscle men of the Ops from the possession of Sh. Hukam Chand, relative of the complainant, in the area of Village Ratta Tibbi, District Panchkula, which falls under the jurisdiction of this Forum. The complainant has disputed the modus-operandi adopted by the Ops while seizing and selling the vehicle in question. On the other hand, the Ops while denying the contention of the complainant has stated that the tractor was himself surrendered voluntarily by the complainant at the office of Ops at Ambala and thus, the Ops have disputed the territorial jurisdiction of this Forum. In this regard, the Ops have placed reliance upon surrender letter dated 01.08.2017 Annexure R-3 and intimation letter dated 01.08.2017 Annexure R-2 written to the SHO, P.S.Sadar, Ambala.

9.     We have perused both the Annexures i.e. surrender letter dated 01.08.2017 Annexure R-3 and intimation letter dated 01.08.2017 Annexure R-2 written by the Ops to the SHO, P.S.Sadar, Ambala. From the perusal of surrender letter Annexure R-3, it has been found that the name of the Officials of Ops and place to whom and where the said tractor was surrendered as alleged by the Ops is lying blank. The relevant part of the surrender letter Annexure R-3 is reproduced as under:-

“Letter of surrender of the asset by the borrower

To,

The Manager,

Mahindra & Mahindra Financial Services Ltd.

New Delhi.

Dear Sir.

I hereby voluntarily surrender the above said asset/vehicle to Mr.________Who is the authorized…… agent for Mahindra & Mahindra Financial Services Ltd.

Xxxxxxx

Borrower’s Signature                 Amit Kumar S/o Jai Pal

                                                Village Shahpur, Raipur Rani, Distt. Panchkula.

                                                Borrower’s Name & Address”

 

        Further, from the perusal of intimation letter Annexure R-2 written to SHO, P.S.Sadar, Ambala by Ops, the plea of surrender of the tractor by the complainant himself has been found negated and false. The relevant part of the said intimation letter is reproduced as under:-

“Date:1.8.17

To

The SHO

P.S Sadar

Ditt.Ambala

 

Sub:- Pre-Intimation for taking custody of Vehicle No.HR03H5076 from out Customer Amit Kumar.

 

Dear Sir,

Xxxxxxxxxx

The said customer had defaulted in the payment of the installments and despite repeated reminders and persistent follow up has failed and neglected to clear the overdue amount. We have therefore been constrained to take custody of the said vehicle of above said agreement.

Xxxxxxxxxx

Thanking you,

For Mahindra & Mahindra Financial Services Ltd.

Authorized Signatory.”

 

        From above, we find that the recitals contained in the intimation letter to Police Annexure R-2 to the effect “We have therefore been constrained to take custody of the said vehicle of above said agreement”  is contradictory to the plea taken by Ops regarding surrender of the vehicle vide surrender letter Annexure R-3 and thus, it is evident that the tractor in question was not surrendered by the complainant voluntarily as alleged; rather it was taken into custody with use of force by the muscle men of Ops from the possession of the relative of the complainant in the area of Village Ratta Tibbi, District Panchkula. It is a matter of common knowledge that the financers of the vehicle while advancing the loan in respect of a vehicle obtain the signatures of the loanee in advance on certain papers including the surrender letter etc. and surrender letter Annexure R-3 is result of such practice adopted by the Ops. Moreover, the execution of compromise deed Annexure C-4 leaves no doubt of any kind in any manner with us with regard to the territorial jurisdiction of this Forum as the said compromise Annexure C-4 was arrived in Police Station, Raipur Rani. Further, it has been transpired that the complainant vide letter Annexure C-3 had requested the SDM, Panchkula not to transfer the ownership of said vehicle without intimation to the complainant. From the above narrated facts we are of the considered view that the tractor in question was snatched forcibly by the muscle men of the Ops with use of force from the possession of relative of the complainant in the area of the Village Ratta Tibbi, District Panchkula. Thus, this Forum has the jurisdiction to entertain and try the present complaint.

10.    Now, the question arises as to whether the Ops have adopted the legal procedure while seizing and selling the vehicle in question. Regarding seizure of the vehicle we have found as stated above that the possession of the tractor in question was taken by the Ops without adopting the legal procedure as contemplated under law. As per condition No.8 of the loan agreement Annexure R-4 the Ops, in the eventuality of default of payment by the borrower, were at liberty either to terminate the agreement after issuing the notice to the borrower or exercise any other right or remedy which may be available to the them under the applicable law. Admittedly, the loan agreement was not terminated. Hence, the act of Ops while taking of the possession of the vehicle in question forcibly cannot be said to be justified and legal. Further, Clause 14 of the Loan Agreement Annexure R-4 does not empower the Ops to take possession of the financed vehicle by violating the settled legal procedure vide various judicial pronouncements. Further, the ld. counsel for the Ops has placed reliance upon Mark-A to prove that the vehicle was sold as per legal procedure. We have gone through the contents of Mark-A and find that the relevant column of about the date when first notice and second notice were sent are lying blank. From a further perusal of Mark-A we do not come across about any such fact proving that notice of public auction was ever got published by the Ops in two leading newspapers circulating in the region. In fact, it is not the case of the Ops that the tractor in question was sold in public auction after making adequate publication in the newspaper circulating in the region. We are clueless as to whom the vehicle in question had been sold by the Ops and we are further clueless as to how many persons participated in the public auction of the vehicle if any held by the Ops. We are of the considered view that the complainant has been prevented from participating in the auction proceeding if any held by the Ops in connection with the sale of the vehicle. As per the settled proposition of law the complainant had every right to participate in the auction proceedings. Therefore, we have no hesitation to hold that the OPs have not adopted the legal procedure while seizing and selling the vehicle in question. We have perused the law laid down by the Hon’ble National Commission in the case titled as Kotak Mahindra Bank Vs. Baldev Singh reported in 2017(3) CLT P.472 NC, which is reproduced as under:-

          “Repossession and sale of vehicle by bank without any notice- Held-As the procedure has not been followed as laid down by law and Reserve Bank of India, the deficiency on the part of the petitioner-bank is proved”.

        Further we have also perused the law laid down by the Hon’ble National Commission in case titled as Someshwar Lal Choudhary vs. Shagun Finance Investment (P) Ltd. reported in 2017 (2) CLT P.256 wherein it has been held as follows:- “Finance-Repossession of vehicle-Vehicle was repossessed by the Finance Company for default of installments-Held-That repossession and sale of the vehicle without notice to the complainant was absolutely illegal as per se amounted to deficiency in service and unfair trade practice on the part of the Finance Company”.

          Further, we may rely upon the law laid down by Hon’ble Telangana State Consumer Disputes Redressal Commission, Hyderabad in the case titled as HDFC Bank Limited Vs. Md. Azher Ali.& others, reported in 2017(1)CLT, Page 355 wherein it has been held as follows:-

        “Consumer Protection Act, 1986, Section 2(1)(g)- Finance-Repossession of vehicle- Held-That while the fraudulent defaulters can be dealt with by taking the police help for such action, it is only when law is taken into hands of the so-called recovery agents, who are appointed on contract basis, the issue gets aggravated-At last, we say that we are governed by the rule of law in the country-The recovery of loans or seizure of vehicles could  be done only through legal means.

        We may further, rely upon the law laid down by Hon’ble Consumer Disputes Redressal Commission, New Delhi in the case titled as L & T Finance Ltd. & anr. Vs. Rampada Maity, reported in 2016(2)CLT, Page 343 wherein it has been held as follows:-

“Loan cum Hypothecation Agreement- Vehicle cannot be repossessed before termination of the loan agreement.

 (i)    Consumer Protection Act, 1986, Section 2(1)(g)-Repossession of vehicle-Vehicle finance-Loan cum Hypothecation Agreement- Vehicle repossessed before termination of the loan agreement-Held-The rights which are available to financer, under a Hire Purchase Agreement were not available to the petitioner company-In the event of default, the petitioner could terminate the loan agreement and recover the arrears due upto the date of termination and future installments for the unexpired period, besides repossessing and selling the asset financed by it-The aforesaid rights did not become available to the financer before terminating the loan agreement.

(ii)    Consumer Protection Act, 1986, Section 2(1)(g)-Repossession of vehicle-Vehicle finance-Loan cum Hypothecation Agreement-No notice been sent to the complainant, before repossessing the vehicle, that if he does not pay the outstanding amount, the vehicle would be repossessed by the petitioner-Before selling the vehicle repossessed from the complainant, the petitioner company did not convey the date on which the said vehicle was proposed to be sold by it to the complainant-No public notice has been given by the petitioner in the newspaper before selling the vehicle repossessed-Held-Therefore, it cannot be said that the vehicle was sold, following a fair and transparent process-This was the act of deficiency on the part of the petitioner in rendering service to the complainant.”

          From the above narrated facts as also the legal proposition  it is crystal clear that the complainant was prevented from participating in the sale process of the vehicle in question solely because of the deficient services of the OPs. Therefore, we find no force in the plea of the Ops that complaint is liable to be dismissed on the ground of non-joinder of necessary parties. Hence, we have no hesitation to conclude that the OPs had been negligent and deficient while seizing and selling the vehicle in question; hence, the complainant is entitled to relief.

11.    Regarding relief, it may be mentioned here that the prayer of the complainant about the handing over of the vehicle in question to him has become in-fructuous in view of the fact that the vehicle has already been sold by the OPs. However, in view of the aforesaid facts and circumstances of the case and in the interest of justice, equity and fair play it would meet the ends of justice if the complainant is compensated with a lump sum compensation on account of loss caused to the complainant due to illegal seizing and selling of the aforesaid vehicle of the complainant by OPs. As per admitted facts the complainant had deposited an amount of Rs.57,000/- out of finance amount of Rs.1,50,000/- with the Ops prior to seizure of the vehicle and thus, a balance amount of Rs.93,000/- as principal amount of loan was payable by the complainant. However, the loan agreement Annexure R-4 is silent about the rate of interest at which said tractor was financed. Hence, if we take the rate of interest as 9% per annum then the balance amount payable by the complainant becomes Rs.93,000+ Rs.23,625/-= Rs.1,16,625/-. Further, we have no documents on record indicating the sale price of the vehicle. However, we have the Insurance Policy Annexure C-1 on record vide which the IDV of the vehicle was assessed as Rs. 2,85,000/- on 16.11.2015. The complainant had used the vehicle for a period of about 01 year and 09 months and if we assess value of the vehicle by applying the method of depreciation @ 10% per annum for a period of two years then the value comes to Rs.2,30,850/-. Thus, the complainant is entitled to the amount of Rs.1,14,225 i.e. Rs. 2,30,850/- as assessed value of the tractor minus Rs.1,16,625/- payable by the complainant to the Ops= Rs.1,14,225/-.       

12.    As a sequel of above discussion, we allow the complaint of the complainant by directing the Ops to pay Rs.1,14,225/- as compensation on account of financial loss caused to the complainant. The Ops are further directed to pay sum of Rs.10,000/- on account of mental agony and harassment and further to pay Rs.3,100/- as cost of litigation charges.

13.    The OPs shall comply with the order within a period of 30 days from the date of communication of copy of this order failing which the complainant shall be at liberty to approach this Forum for initiation of proceedings under Section 25 and 27 of CP Act, against the OPs. A copy of this order shall be forwarded, free of cost, to the parties to the complaint and file be consigned to record room after due compliance.

Announced

30.11.2018         RUBY SHARMA      JAGMOHAN SINGH       SATPAL

                          MEMBER               MEMBER               PRESIDENT

 

Note: Each and every page of this order has been duly signed by me.

 

                                         SATPAL

                                         PRESIDENT