BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD
FA NO.1238 OF 2013 AGAINST CC NO.240 OF 2011
ON THE FILE OF DISTRICT FORUM-III, HYDERABAD
Between:
HDFC Bank Limited,
Rep. by its Manager, 5-4-94 to 97,
4th Floor, Lala-I, Landmark,
Mahatma Gandhi Road,
Ranigunj, Secunderabad.
…Appellant/Opposite party
And
Md.Azher Ali S/o Mohd. Abdul Rasheed,
Aged 35 years, Business,
R/o 8-1-363/72, Aditya Nagar Colony,
Tolichowki, Hyderabad,
Rep. by Mohd. Ali (younger brother/
beneficiary) S/o Mohd. Abdul Rasheed,
aged 22 years, Occ: Unemployed,
R/o 8-1-363/72, Aditya Nagar Colony,
Tolichowki, Hyderabad.
…Respondent/Complainant
Counsel for the Appellant : M/s Lotus Law Associates
Counsel for the Respondent : Sri Nisaruddin Ahmed Jeddy
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
and
Sri Patil Vithal Rao … Member
Monday, the Second day of January
Two thousand Seventeen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
1) This is an appeal filed by the Opposite party aggrieved by the orders dated 30.07.2013 of the District Forum-III, Hyderabad made in C.C.No.240 of 2011 in directing the Opposite party to pay the Complainant a sum of Rs.25,000/- towards compensation for the mental agony and harassment caused along with costs of Rs.2,000/- granting time of 30 days.
2) For the sake of convenience, the parties are referred to as arrayed in the complaint.
3) The case of the Complainant, in brief, is that the complainant obtained auto loan of Rs.2,00,000/- from the Opposite party for purchase of Maruti Omni Car from Varun Motors, situated at Toli Chowki, Hyderabad which was assigned with registration mark AP-13R-1285. The loan amount was repayable with interest @ 13.25% p.a. over a period of 36 months at the rate of Rs.6,578/-. The complainant paid 13 instalments amounting to Rs.85,514/- from November 2009 to November 2010. As things stood thus, the Opposite party caused a notice dated 07.03.2011 demanding a sum of Rs.22,442/- towards defaulted instalments and other charges granting time of 7 days, which was received by the Complainant’s brother on 12.03.2011 and the period would expire on 19.03.2011 and without waiting for the stipulated period, the Opposite party sent its musclemen and goons on 08.03.2011 in the garb of Recovery Agents, who raided the house of the complainant and forcibly took possession of Maruti Car forcing the brother of complainant to sign surrender letter dated 08.03.2011.
4) After seizure of the vehicle by the musclemen, Opposite party sent yet another letter to the residential address, which was received on 09.03.2011 informing that their agents took possession of the car and further directed the Complainant to pay a sum of Rs.1,69,589/- towards foreclosure. This amount includes the principal amount of Rs.1,18,693-49 and the rest of charges are hidden costs and hidden charges, which amount to unfair trade practice and deficiency of service. However, complainant sent a reply notice dated 16.3.2011 expressing his willingness to pay the amount covered by notice dated 07.03.2011, accordingly asked the Opposite party to come and collect the monthly instalments and return the seized car in good condition.
5) Instead of complying with the request of the Complainant, Opposite party got sent another rejoinder notice dated 05.04.2011 refusing to return the car and threatening to auction the vehicle. Hence the complaint with a prayer to direct the Opposite party to immediately give back Maruti Omni Car bearing registration mark AP-13R-1285 to the rightful owner without any damage and loss OR to refund the full amount so collected from the complainant i.e., Rs.85,514/- with interest @ 18% p.a.; to set aside the foreclosure demand notice dated 08.03.2011; to pay compensation of Rs.3,00,000/- for causing harassment, mental agony, suffering, etc., and also to award costs.
6) Opposite party filed counter contending that at the request of Complainant, they sanctioned the loan to the tune of Rs.2,00,000/- for purchase of Maruti Omni car, under loan proposal No.15741267 and the Complainant agreed to pay the EMIs @ Rs.6,578/- over a period of 36 months. Complainant was irregular in making payment of loan instalments and 8 of his cheques were bounced and complainant fell due for an amount of Rs.22,442/- as on 07.03.2011 and Rs.30,037/- as on 25.04.2011. The Opposite party issued a notice dated 07.03.2011 demanding the complainant to pay a sum of Rs.22,442/- towards defaulted instalments within 7 days. As the complainant did not respond, as such, it had no other alternative except to initiate foreclosure proceedings on 08.03.2011.
7) The Opposite party followed due process for recovery of the vehicle by issuing a recovery letter along with foreclosure letter dated 08.03.2011. The OP gave an authorization letter to VSR Credit control which is a repossession agency and also addressed letter to SHO, Golconda PS intimating the pre-repossession by the bank and obtained signature of the person on surrender letter with consent. Having no other alternative, to protect the depositors money, it resorted to seizure of vehicle, which had arisen purely due to non payment of EMIs regularly.
8) The Opposite party initiated proceedings as per the terms and conditions of the loan agreement which was executed by the complainant. The Opposite party has not committed any illegal act as alleged and hence question of deficiency of service does not arise. Hence prayed to dismiss the complaint with exemplary costs.
9) During the course of enquiry before the District Forum, in order to prove his case, the Complainant got filed the evidence affidavit of his brother Mohd.Ali and the documents Ex.A1 to A11 and the Opposite party got filed the evidence affidavit of one Mr.A.Raja, Legal Manager and the documents Ex.B1 to B3.
10) The District Forum after considering the material available on record, allowed the complaint bearing CC No.240/2011 by orders dated 30.07.2011, as stated, in paragraph No.1, supra.
11) Aggrieved by the said orders, the Appellant/Opposite party preferred this appeal contending that the forum below (a) failed to appreciate the question of facts in proper perspective to bring the complaint under the ambit of consumer dispute; (b) failed to appreciate that the complaint is not maintainable without General Power of Attorney in favour of the representative, which is mandatory; (c) failed to appreciate that the brother cannot be a beneficiary as per the Act; (d) failed to understand that the Respondent was a chronic defaulter. Hence, prayed to allow the appeal and set aside the orders of the forum below.
12) The point that arises for consideration is whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner? To what relief ?
13) It is not in dispute that the Appellant sanctioned loan amount of Rs.2,00,000/- to the Respondent for purchase of Maruti Omni Car, which is repayable in equated monthly instalments of Rs.6,578/- over a period of 36 months. It is also not in dispute that the Appellant got issued a notice dated 07.03.2011 granting time of 7 days for payment of the outstanding amount therein and again took repossession of the vehicle on 08.03.2011 from the custody of Mohd. Ali, the brother of Respondent.
14) From the perusal of documents, it is clear that under Ex.A1 dated 07.03.2011, the Appellant raised the demand for Rs.22,442/- towards the outstanding dues in respect of loan account No.15741267 and accordingly called upon the Respondent to pay the same within 7 days and on failure, they would repossess the hypothecated vehicle as per the terms and conditions of the loan agreement. Again under Ex.A3 surrender letter dated 08.03.2011 the Appellant repossessed the vehicle from the custody of Mohd. Ali, brother of the Respondent. Further, under Ex.A4 notice dated 08.03.2011, the Appellant had informed the Respondent that in the event he wishes to obtain release of the vehicle, an amount of Rs.1,69,586/- must be cleared in full on or before 14th March 2011. The tone and tenor of this demand itself speaks volumes as to the procedure being adopted by the Appellant in recovering its dues without recourse to law that too in an intimidating manner. This act of repossession is committed without waiting for the stipulated time of (7) days granted under Ex.A1, which would amount to sheer negligence and unfair practice of trade.
15) The counsel for the Appellant would contend that initially they made a demand under Ex.B1 dated 17.02.2011 granting time of (7) days and on failure to comply with the demand, they resorted to repossession under Ex.A4. Ex.B1 notice was caused on the Respondent on 19.02.2011. A perusal of Ex.B3 loan account of the Respondent for the period from 15.04.2009 to 25.04.2011 would go to show that on 07.06.2010, 06.07.2010, 07.09.2010, 08.11.2010, 07.12.2010, 06.01.2011, 07.03.2011 and on 06.04.2011 the Respondent committed default of loan instalments.
16) The Respondent would contend that after giving ample time, the vehicle was repossessed. To vouchsafe their contention, they relied on Ex.B1 demand notice dated 17.02.2011 and the same is posted on 19.02.2011. However, we may state that under Ex.A1 demand notice in clear terms the Appellant granted time of (7) days and without waiting for the time granted, repossessed the vehicle under Ex.A3.
17) The burden lies on the Appellant bank to prove that the repossession of the vehicle was effected in accordance with law by following due procedure. The documents Ex.B1 and B3 do not establish any such act. It is also the claim of the Respondent that it intimated about the repossession of the vehicle, but no such document is filed.
18) We may state that the Hon'ble Supreme Court in the judgment reported as “ICICI Bank vs. Prakash Kaur & Ors”
“Now the bank is the aggressor and the public is the victim. The first step to recovery of the money due is through the so called Recovery Collection Agents. A very dignified term used for paid recovery agents who are individuals and independent contractors hired by the Banks to trace the defaulters and to both physically, mentally and emotionally torture and force them into submitting their dues.
A man's self respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernized version of Shylock's pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner."
Hon’ble National Commission, New Delhi in the matter of “Citicorp Maruti Finance Ltd., vs. S.Vijayalaxmi, reported in 2007 CTJ 1145 (CP) : (2007) CPJ 161 (NC), it was held as under :
"1. When a vehicle is purchased by a person (consumer) by borrowing money from the money lender/financier/banker, the consumer is the owner of the vehicle and not the money lender/financier/banker, unless the ownership is transferred.
2. In a democratic country having well established independent judiciary and having various laws it is impermissible for the money lender/financier/banker to take possession of the vehicle for which loan is advanced, by use of force.
3. Legal or judicial process may be slow but it is no excuse for employing musclemen to repossess the vehicle for which loan is given. Such type of 'instant justice' cannot be permitted in a civilized society where there is effective rule of law. Otherwise, it would result in anarchy that too when the borrower retorts and uses the force.”
19) We may need to say 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 a rule of law in the country. The recovery of loans or seizure of vehicles could be done only through legal means.
20) It is imperative to state that during the pendency of proceedings before the forum below, the Respondent paid the outstanding arrears of the loan instalments in pursuance of orders in IA No.84/2011 dated 26.05.2011 and the possession of the vehicle was redelivered to the Respondent. For that matter, having found fault with the Appellant, the forum below passed orders granting compensation of Rs.25,000/-, which the Appellant is aggrieved. As stated supra, from the perusal of Ex.B3 statement, it is clear that the Respondent too was a chronic defaulter. The Respondent is also equally responsible for his own acts in not paying the instalments on time and thereby contributed for the illegal seizure. Hence, in these circumstances, we feel it just and proper to reduce the compensation amount from Rs.25,000/- to Rs.10,000/-.
21) In the above facts and circumstances, we modify the order of the forum below and accordingly answer the point framed for consideration in paragraph No.12, supra.
22) In the result, we allow the appeal in part and modify the orders dated 30.07.2013 of the District Consumer Forum-III, Hyderabad made in CC No.240/2011 and reduce the compensation amount from Rs.25,000/- to Rs.10,000/- and confirm the rest of the order but in the circumstances, no costs. Time for compliance : 4 weeks.
PRESIDENT MEMBER
Dated : 02.01.2017
