Madhya Pradesh

StateCommission

A/08/73

SHRI RAM TRANSPORT FINANCE CO. LTD. AND OTHER'S - Complainant(s)

Versus

MOHD. ISRAR ANSARI AND ONE ANOTHER - Opp.Party(s)

SH. VIJAY TIWARI

05 Aug 2022

ORDER

M. P. STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,                         

                             PLOT NO.76, ARERA HILLS, BHOPAL

 

                                      FIRST APPEAL NO. 73 OF 2008

(Arising out of order dated 14.12.2007 passed in C.C.No.25/2006 by District Commission, Rewa)

 

1. SHRIRAM TRANSPORT FINANCE CO. LTD,

    THROUGH MANAGER ANOOP KHARE,

    BELOW MAHARAJA HOTEL,

    JHIRIYA, REWA (M.P.)

2. MANAGER, SHRIRAM TRANSPORT FINANCE

    COMPANY LIMITED, 101-105, SHIV CHAMBERS,

    B-WING, SECTOR-11, C.B.D. TELAPUR,

    NAVI MUMBAI-400 614.

3. SHRIRAM TRANSPORT FINANCE

    COMPANY LIMITED, ‘MANGLAM’

    FIRST FLOOR, SHASTRI BRIDGE ROAD,

    NAPIER TOWN, JABALPUR (MP).                                                       … APPELLANTS.

 

                        Versus

 

1. MOHAMMAD ISRAR ANSARI,

    S/O SHRI ABDUL SATTAR,

    R/O BABA KATRA, TEHSIL-HUZUR,

    DISTRICT-REWA (MP)

2. MANAGER, CITICORP FINANCE INDIA LTD.

    210, MAT HARRITAGE, 6/2 SOUTH TUKOGANJ,

    INDORE-452 001 (M.P.)                                                                      …. RESPONDENTS.   

                     

BEFORE :

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

            HON’BLE DR. SRIKANT PANDEY        :          MEMBER

                     

COUNSEL FOR PARTIES :

                Shri Vijay Tiwari, learned counsel for the appellants.

           Shri Sushil Goswami, learned counsel for the respondent no.1.

           None for the respondent no.2.

 O R D E R

(Passed On 05.08.2022)

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

                   This is an appeal by the opposite party no.1 to 3/appellants against the order dated 14.12.2007 passed by the District Consumer

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Disputes Redressal Forum, Rewa (for short ‘District Commission) in C.C.No.25/2006 whereby the complaint filed by the complainant/respondent no.1 has been allowed.

2.                The brief facts of the case as stated by the complainant/respondent no.1 (hereinafter referred to as respondent no.1) are that he after getting finance for a sum of Rs.2,79,719/- from the opposite party no.1 to 3/appellants (hereinafter referred to as ‘appellants’) purchased a second hand truck bearing registration no. MP-19 D-1933 for his business purpose. The loan amount i.e. Rs.2,79,719/- was to be repaid in 8 EMI of Rs.23,426/- and 12 EMI of Rs.15,176/-. It is alleged that till August-2003, he paid the instalments regularly and thereafter he did not pay the instalments continuously from January-2004 to May-2004. He alleges that the appellants without any notice seized the truck from his driver on 30.05.2004. On contacting the appellants he was informed that some instalments were due and therefore the truck was seized.  The respondent no.1 therefore filed a complaint before the District Commission alleging deficiency in service on part of the appellants seeking relief that his truck be directed to be delivered to him, refund of the amount deposited by him with 18% interest, Rs.5,00,000/- towards compensation, Rs. 2,00,000/- for loss in business. 

3.                The opposite party no.4/respondent no.2 remained ex-parte before the District Commission. The appellants resisted the complaint

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stating the truck in question was purchased for commercial purpose and the respondent no.1 therefore is not a consumer. The respondent no.1 was defaulter in making payment of instalments of loan. Notices were also sent to him to deposit the instalments but he failed to pay the same. Therefore, on 30.05.2004 the vehicle was taken into custody and subsequently even before sale, notice was given but the dues were not paid, therefore, the vehicle was sold and the amount was adjusted towards his loan account. Still there is dues against him. It is therefore prayed that the complaint be dismissed.

4.                The District Commission holding the appellants and respondent no.2 deficient in service allowed the complaint directing them jointly or severally pay to the respondent no.1, Rs.5,00,000/- towards cost of the truck with 9% interest, compensation Rs.10,000/- and costs Rs.500/-.  It has been further directed that the appellants and respondent no.2 are not entitled to recover dues, if any, against the respondent no.1.

5.                Heard learned counsel for the appellants and respondent no.1 as none appeared for the respondent no.2. Perused the record.

6.                Learned counsel for the appellants argued that from the complaint as also his affidavit it is an admitted fact that the complainant/respondent no.1 had financed the truck from appellants for commercial purpose. He further argued that an amount of Rs.3,50,000/- +

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interest Rs.89,690/- total Rs.4,39,690/- was the agreement value under the Hire Purchase Agreement out of which the respondent no.1 had paid Rs.1,18,750/- and Rs.3,21,140/- was the overdue against him. He also did not pay the penalty interest, overdue charges, parking charges and repossession charges. The District Commission has erroneously passed the impugned order without considering the complaint, affidavits and documents which is liable to be set-aside. It is argued that the appellants repeatedly issued notices to respondent no.1 but he failed to pay the due instalments. The District Commission has erred in not considering this aspect. The complainant was not entitled to get any relief from the District Commission. He further argued that under a hire purchase agreement the financer is the owner of the vehicle and in case of default in payment of instalments he has every right to repossess the vehicle financed, the District Commission has also not considered this aspect. He placed reliance on the decision of the Hon’ble Supreme Court in Suryapal Singh Vs Siddha Vinayak Motors & Anr III (2012) CPJ 4 (SC), decision of the National Commission in Surendra Kumar Agrawal Vs Telco Finance Limited & Anr II (2010) CPJ 163 (NC), Revision Petition No. 3882/2011 (Shriram Transport Finance Co.Ltd & Ors Vs S. Mahadevaiah) decided on 08 October 2012 and decisions of this Commission in First Appeal No. 1742/2010 (M/S India Bulls Financial Services Limited Vs Ramswaroop

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Ojha) decided on 08.08.2012 & First Appeal No. 634/2012 (Shyam Narayan Tripathi Vs India Bulls Financial Services Ltd) decided on 27.08.2013.

7.                Learned counsel for the respondent no.1 argued that only few instalments were due at the time of seizure of the truck, no notice had been given prior to the seizure, it amounted to highhandedness on part of the financer. He argued that due notice was not given either before seizure or after seizure before sale. The District Commission has rightly considered all the aspects and passed a well-reasoned order. It is therefore prayed that the appeal be dismissed.

8.                We have perused the complaint, reply, affidavits and documents filed by the parties. The respondent no.1 had filed affidavits of his witnesses and the documents marked as P-1 to P-58. The appellants had filed documents D-1 & D-2. From the document D-1, i.e. hypothecation agreement it is clear that in case of default in payments, the financer has right to repossession or storage or resale of hypothecated vehicle.

9.                The appellants have raised preliminary objection that the respondent no.1 is not a consumer as the vehicle had been purchased for commercial purpose.  The respondent no.1 in his complaint and affidavit has stated that for the business purpose he had purchased the truck in question. Neither in his complaint nor in his affidavit there is averment that

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he had purchased the said truck for earning his livelihood by means of self-employment. It is also an admitted fact that the truck was seized from his driver. Evidently, the truck was not being driven by him and he had employed other persons to ply it.  Therefore, there is no question of self-employment and in our view the respondent no.1 is not a ‘consumer’ as defined under Section 2(1)(d) of the Consumer Protection Act, 1986.

10.              Even on merits also, it is an admitted fact that the respondent no.1 failed to deposit certain instalments as a result of which the appellants possessed the vehicle and even after notice when dues were not paid they sold the same. The appellants had sent notices dated 25.04.2004, 15.05.2004 and 18.06.2004 before seizure and after seizure of the vehicle. In such circumstances, we do not find any fault on part of the appellants in seizing the truck, selling it and appropriating the sale price towards the outstanding dues against the respondent no.1. In such a situation, the appellants cannot be held for deficiency in service.

11.              The law in case of repossession of the vehicle by the financer under Hire Purchase Agreement for default in payments is well settled. Hon’ble Supreme Court in Suryapal Singh (supra) and recently in M/S Magma Fincorp Ltd. Vs Rajesh Kumar Tiwari II (2021) SLT 366 has held that “Under hire purchase agreement, it is the financer who is the owner

 

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of the vehicle and the person who takes loan retains the vehicle only as bailee/trustee. Taking possession of vehicle on ground of non-payment of instalment is legal right of the financer.”

12.              The point involved in this matter is squarely covered and concluded in favour of the appellants and against the respondent no.1 by the aforesaid judgments of the Apex Court.

13.              In view of the above discussion, we find that the District Commission has committed grave error while allowing the complaint against the law settled on the point.

14.              In the result, following the law laid down by the Apex Court we allow this appeal and set-aside the order passed by the District Commission and consequently dismiss the complaint with no order as to costs. However, the respondent no.1 is free to take recourse of such other remedy as may be available to him in law.

           

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

            Presiding Member                             Member