Per Shri Dhanraj Khamatkar, Hon’ble Member This appeal takes an exception to an order dated 07/10/2009 passed by District Consumer Forum, Central Mumbai in consumer complaint No.04/2005. The facts of the case in brief can be summerised as under :- The org. complainant has purchased a secondhand car Maruti Esteem VX bearing RTO No.KA-02-N-8256. The purchase price of the car was financed by respondent No.2/org. O.P.No.2. Loan amount was `2,72,000/- and there was hypothecation agreement dated 10/05/2003. Loan was to be paid in 36 Equal Monthly Installments (EMI) @ `9,498/- installment per month commencing from 01/06/2003. The org. complaint paid one installment in cash and handed over 35 postdated cheques of which 25 cheques of HSBC Bank at Bangalore and 10 cheques of Bank of Muscat at Bangalore. On 24/11/2004 Officer of org. O.P.No.1/appellant No.1 approached the complainant and handed over the letter dated 24/11/2004 recalling the entire balance loan and directing to pay the same within 7 days, failing which possession of car will be taken. Letter dated 27/11/2004 alleged bouncing of 6 cheques i.e. September 2003, October 2003, April & May 2004 and October & November 2004. The complainant contended that only 4 cheques were dishonoured and requested O.P.No.2 to reconcile the account. On 24/11/2004 appellants had taken possession of the vehicle. By that letter informed the complainant that on account of default of payment committed by the complainant, he was required to foreclose the account within 7 days and asked him to pay `2,21,671.29 and hence, the appellants sold the vehicle. Hence, the complainant had filed consumer complaint praying :- “(a) It may be declared that the Letters dated 24/11/2004 and 27/11/2004 issued by Opposite Party No.1 and 2 respectively are invalid, illegal, and bad-in-law and the same be set aside. (b) The Opposite Party No.1 and 2, their agents and servants be permanently restrained by order of injunction from selling, transferring or creating third party rights in the Car No.KA-02-N-8256 (Esteem VX, Model 1999). (c) The Opposite parties be ordered and directed to hand over back the said Car No.KA-02-N-8256 (Esteem VX, Model 1999) forthwith without claiming interest, penalty, pre-closure charges etc. (cc) Alternatively O.P.No.2 be directed to return the purchase price paid for car i.e. `1,73,000/- with interest @ 21% p.a. with effect from 02/05/2003 till payment / realization. (d) The Opposite Party be ordered and directed to reduce the rate of interest as per RBI directions and to revise the EMI taking into consideration the current rate of interest at 8% instead of 16.5% from the date of agreement till payment. (e) The Opposite Party be ordered and directed to pay compensation of `1 lakh to complainant for mental injury, loss of reputation and harassment. (f) The Opposite Party be ordered and directed to pay `25,000/- towards costs of litigations. (g) Pending hearing and final disposal of this complaint, the Opposite Party No.1 and 2, their agents and servants be restrained by order of this Hon’ble court from selling, transferring or creating third party interests in the Car No.KA-02-N-8256 (Esteem VX, Model 1999) (h) Pending hearing and final disposal of the complaint, the Opposite Parties be directed to reduce EMI rates taking into consideration rate of interest at 8% instead of 16.5% from the date of agreement till payment as per RBI guidelines. (i) Pending hearing and final disposal of complaint, the Opposite Parties be directed to handover back the Car to complainant and the Opposite Parties be directed to accept payment of four defaulted cheque payments. (j) Costs of this suit be provided in favour of the complainant. (k) Such other orders or relief be granted as this Hon’ble Court deems fit and proper.” Forum below after hearing both the parties has passed the order dated 07/10/2009 allowing the complaint partially directed the appellants to pay compensation of `50,000/- to the complainant and cost of `5,000/- of complaint within period of two months of the order. Aggrieved by this order, present appeal is preferred by org. O.Ps. On behalf of appellants, Learned Counsel Mr.C.M. Jadhav Proxy for M/s.Mahesh Menon & Co. and Advocate Mr.R.B. Jaiswal on behalf of respondent argued the case. Admittedly, org. complainant/respondent had purchased the vehicle by taking a loan of `2,72,000/- from the appellants and hypothecation agreement has been executed on 10/05/2003. On 24/11/2004 appellant had issued a notice under clause 12 of the hypothecation agreement directing the complainant that, “in spite of repeated reminder, you have failed to conform to the terms of the loan agreement and therefore, your entire loan is recalled herewith and pursuant to the rights vested with Standard Chartered Bank your vehicle is hereby taken possession of.” Letter is acknowledged by the org. complainant/respondent. Appellant further by letter dated 27/11/2004 had informed the org. complainant/respondent to foreclose the loan account within 7 days from receipt of the letter and directed him to pay an amount of `2,21,671.29. However, complainant could not comply and hence, appellants have sold the vehicle for consideration of `1,81,000/-. Forum below had not observed any deficiency for this act of the appellants. However, as per hypothecation agreement Condition No.8, “the Bank will be entitled to sell or give on hire or deal with the vehicle by public or private auction or private treaty, without being liable for any loss and to apply the net proceeds firstly towards satisfaction of costs incurred in respect of repossession and such hire, sale or dealing, secondly towards satisfaction of the balance of the interest and other sums payable by the Borrower to the Bank and thirdly towards the principal amount of the loan outstanding. The Bank shall be entitled (but shall not be bound) to apply any other amount of the Borrower with the Bank in or towards payment of such deficiency. Nothing contained in this clause shall oblige the bank to sell, hire or deal with the vehicle and the bank shall be entitled to proceed against the Borrower independently of such or any other security. The Borrower shall accept the Bank’s accounts in respect of such sale, hire or dealing as conclusive. The Bank shall be entitled to take repossession of the vehicle, irrespective of whether the loan has been recalled, whenever in the opinion of the Bank there is apprehension of any money not being paid of the Bank’s security being jeopardized”. Perusal of the record shows that appellants have not auctioned the vehicle as laid down in the hypothecation agreement. The appellants had not informed the org. complainant/respondent regarding auction of the vehicle. For foreclosing loan account, appellant has given a time of only 7 days. Time given for foreclosing loan account is not just and fair. Again, out of loan amount of `2,72,000/-, complainant/respondent has paid an amount of `1,90,245/-. Appellants had not informed the respondent/complainant about bouncing of the cheques. The procedure adopted by the appellants in selling the vehicle is not correct. Appellants had auctioned the vehicle by not following due process of law. Learned Counsel for the appellants had contended that vehicle is sold in public auction. However, it is not mentioned in the written version, affidavit or written arguments. They have not produced any paper to prove that vehicle is sold in public auction. The appellants have not produced any record of public auction. The complainant was also not informed about the date, time and place of public auction. Taking into consideration all the facts, we come to the conclusion that while selling the vehicle, appellants failed to follow due process of law. Considering all the facts of the case, Learned Forum below has passed the order and we do not find any infirmity in the order passed by the Forum below. We hold accordingly and pass the following order :- -: ORDER :- 1. Appeal stands dismissed. 2. No order as to costs. 3. Copies of the order be furnished to the parties. | 
