Punjab

Ludhiana

CC/20/40

Raj Kumar - Complainant(s)

Versus

M/s Cholamangalam Investment & Finance Co.Ltd - Opp.Party(s)

Gurcharan Singh adv

24 Aug 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:40 dated 28.01.2020.                                                 Date of decision: 24.08.2023.

 

Raj Kumar son of Sh. Tarsem Lal Verma, H. No.1204, Street No.10, Guru Arjan Dev Nagar, Near School, Ludhiana (Punjab).                                                                                                                           ..…Complainant

                                                Versus

1. M/s. Cholamandalam Investment and Finance Co. Ltd., Dara House, 2 N.S.G. Bose Road, Parrys, Chennai-600001.
2. M/s. Cholamandalam Investment and Finance Co. Ltd., S.C.O. No.10-11, 4^th Floor, Above D.C.B. Bank, Feroze Gandhi Market, Ludhiana-141001 (Punjab).
3. M/s. Kurukshetra Bank Parking Yard, Bus Stand Mathana, Ladwa Road, Mathana, District Kurukshetra (Haryana).                                                                                                                      …..Opposite parties 

Complaint Under section 12 of the Consumer Protection Act.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Gurchasran Singh, Advocate.

For OP1 and OP2          :         Sh. Sarabjit Singh, Advocate.

For OP3                         :         Exparte.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that the complainant purchased a Maruti Swift Desire Car-Model 2016, Colour White having registration No.PB10-FV-6988 from the authorized dealer of Maruti Company at Ludhiana. The vehicle was got insured from M/s. IFFCO-Tokio General Insurance Company Ltd., Ludhiana vide insurance policy No.9126356115 having validity from 11.02.2019 to 10.02.2020 (midnight). The complainant got financed the vehicle for Rs.5,80,000/- from opposite party No.1 and 2 at their Feroze Gandhi Market, Ludhiana office with 60 installments of Rs.13,496/- per month out of which the complainant paid 34 installments to opposite party No.2. According to the complainant, he paid the last installment of Rs.13,500/- on 19.12.2019 vide receipt No.B-10117455726 at Ludhiana office of the company who also issued a statement of account in respect of agreement No.XVFPLDA00001892841 from 14.01.2000 to 14.01.2020 on 14.01.2020 as per which 35^th installment of Rs.13,496/- was to be paid by the complainant.

                   The complainant further stated that the car was being plied by him through driver Sh. Santokh Raj son of Bachan Singh of Ludhiana as a taxi under a valid permit issued by Government of India under Motor Vehicles Act No.1317/Motor Cab/Ldh/2017 in his name having validity up to 05.03.2020. On 12.01.2020 when the said Maruti Desire was being driven  by Santokh Raj  along with passengers from Ludhiana to Delhi, some 10-12 goons stopped the car near Kurukshetra (Haryana) at about 10.25 AM and by evicting the driver and passengers from the car, took the car along with other articles of complainant and passengers with them on the pretext that they were appointed to seize the car by the opposite parties and they also issued an inventory and clerking sheet No.1006 dated 12.01.2020 of M/s. Kurukshetra Bank Parking Yard, Mathana Bus Stand, Kurukshetra and obtained signatures of driver Santokh Singh on the same. According to the complainant, this act on the part of the opposite parties is illegal, arbitrary and in violation of terms and conditions of agreement executed between the parties and as per law laid down by Apex Court the Banks cannot use force to recover loans from purchaser. Even the Hon’ble Supreme Court in 2012(1) CPC 140 (SC) further held that though hirer remains the owner of the vehicle till full amount is paid by the purchaser but it does not empower him to take forcible possession of the vehicle. The complainant further stated that act of taking forcible possession of car amounts to deficiency in service and unfair trade practice on the part of the hirer as defined under Section 2 of the Consumer Protection Act, 1986. The driver of the vehicle after reaching Ludhiana on 14.02.2020 filed a written complaint with SHO of Police Station Dhaba, Ludhiana through post. The complainant further stated that he has suffered harassment and loss by snatching the car forcibly by the opposite parties which amounts to deficiency ion service and unfair trade practice on their part for which they are liable to pay compensation to the complainant. In the end, the complainant prayed for issuing directions to the opposite parties to give possession of the Maruti Swift Dezire Car No.PB-10FV-6988 to the complainant and also to pay damages of Rs.1,50,000/- on account of mental agony and loss etc besides litigation expenses of Rs.15,000/-.

2.                Upon notice, none appeared on behalf of opposite party No.3 despite service and as such, opposite party No.3 was proceeded against exparte vide order dated 27.10.2020.

3.                Upon notice, opposite party No.1 and 2 appeared and filed joint written statement and by taking preliminary objections/submissions, assailed the complaint on the ground of maintainability of the complaint, the complainant has not come to the Commission with clean hands; suppression of material facts; the complaint being time barred; lack of jurisdiction etc. Opposite party No.1 and 2 stated that the complainant approached their Ludhiana branch and applied for finance for purchase of Swift Dezire, upon which Rs.5,80,000/- were financed which were to be repaid in 60 monthly installments of Rs.13,496/- each as per terms and conditions of loan agreement No.XVFPLDA00001892841. The complainant after accepting the terms, signed the loan agreement and thus was bound for repayment as per schedule. The complainant purchased the Swift Dezire car No.PB-10-FV-6988, which as per loan agreement was hypothecated in their favour by way of collateral security to secure the repayment of loan amount and interest including other incidental charges and a charge was created over the vehicle by hypothecating the same as security for repayment of loan. However, the complainant failed to repay the loan amount and interest and defaulted in timely repayment of monthly installment. Accordingly, final call letter dated 25.09.2019 was issued to complainant to pay Rs.3,50,922/- or surrender the vehicle within 7 days failing which the opposite party shall constraint to enforce its right to take possession of the vehicle as per agreement. As the complainant failed to pay the outstanding amount, the opposite parties repossessed the vehicle on 12.01.2020. Intimation was given to Police Sadar, Pipli Kurukshetra before and after repossession of the vehicle. Presale notice dated 17.01.2020 was given to complainant calling upon him to pay Rs.3,37,278/- within 10 days otherwise they will sell the vehicle as conferred by the agreement. The opposite parties further stated that the complainant failed to pay the outstanding amount so as per the terms and conditions of agreement they sold the vehicle on 29.01.2020 to Ranjit Kumar Malik S/o. Mohan Lal for Rs.3,25,000/- which was duly credited in the loan account of the complainant. After adjusting the sale value, the complainant is still in arrears of Rs.16,341/- till 14.12.2020. The complainant has concealed the said facts intentionally and has filed false, vexatious and frivolous complaint without any cause.

                   On merits, opposite party No.1 and 2 reiterated the crux of averments made in the preliminary objections. Opposite party No.1 and 2 have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

4.                The complainant filed replication to the written statement of the opposite party reiterating the facts mentioned in the complaint and controverting those made in the written statement.

5.                In support of his claim, the complainant tendered his affidavits Ex. CW1/A and Ex. CW2 in which he reiterated the allegations and the claim of compensation as stated in the complaint as well as affidavit Ex. CW3 of Sh.Santokh Raj son of Sh. Bachan Singh. The complainant also tendered documents Ex. C1 is the copy of registration certificate No.PB10-FV-6988, Ex. C2 is the copy of insurance policy, Ex. C3 is the copy of loan account statement of the complainant, Ex. C4 is the copy of route permit of the vehicle, Ex. C5 is the copy of complaint given to SHO, P.S. Dhaba, Ludhiana, Ex. C7 is the copy of postal receipt, Ex. C8 is the certificate issued by Sanjay Motors, Ex. C9 is the certificate issued by Vicky Car Bazaar, Ex. C10 is the certificate issued by Alliance Automobiles Pvt. Ltd. and closed the evidence.

6.                On the other hand, counsel for opposite party No.1 and 2 tendered affidavit Ex. RA of Sh. Sukhwinder Singh, Attorney holder of the opposite parties along with documents Ex. R1 is the copy of power of attorney, Ex. R2 is the copy of final call letter dated 25.09.2019, Ex. R3 and Ex. R4 are the copies of intimation given to Police Station Sadar, Pipli, Kurukshetra, Ex. R5 is the copy of inventory of the vehicle, Ex. R6 is the copy of vehicle inspection report, Ex. R7 is the copy of bill No.847 issued by Shyamji Associates, Ex. R8 is the copy of pre-sale letter dated 17.01.2020, Ex. R9 is the copy of quotation for purchase of vehicle dated 28.01.2020, Ex. R10 is the copy of sale acceptance letter dated 29.01.2020, Ex. R11 is the copy of letter of indemnity dated 29.01.2020, Ex. R12 is the copy of account statement till 14.12.2020, Ex. R13 is the copy of loan account statement of the complainant, Ex. R14 is the copy of loan agreement and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties.

6.                Opposite party No.1 and 2 being the Investment and Finance company, advanced a loan of Rs.5,80,000/- to the complainant for the purchase of Swift Dezire car, which was payable in 60 equated monthly installments of Rs.13,496/-  each. Thereafter, the complainant became the owner of the vehicle bearing registration No.PB10-FV-6988 Ex. C1 which was got insured from M/s. IFFCO-Tokio General Insurance Company Limited vide insurance policy Ex. C2. In order to secure the loan amount, a loan agreement Ex. R14 was executed between the complainant and opposite party No.1 and 2. For the purpose of adjudication of the matter in controversy, clause 11(a) (i) up to sub Clause 11 (iv) are reproduced as under:-

“11.  REPOSSESSION, TERMINATION AND COMPANY'S OTHER RIGHTS

(a)     On the occurrence of any of the aforesaid Events of Defaults  contained in Article 10, the rights of the Borrower over the Asset shall stand determined void ipso facto without any notice and the Borrower shall be bound to deliver forthwith the Asset to the Company in the same condition in which it was originally received by him with all accessories/modifications done by Borrower whatsoever (in the case of vehicle), ordinary wear and tear excepted. Failure or refusal of the Borrower to surrender the Asset shall constitute unlawful retention for which the Company shal be entitled to initiate criminal action, without prejudice to other rights/ legal remedies available to the Company

i)       Notice: In case of any default in repayment including an occurrence of any of the aforesaid Events of Default and/or failure to surrender the Asset as mentioned herein above, the Company shall cause a 7 day notice to be issued to the Borrower at his address as registered with the Company. The notice shall be deemed to be served on the Borrower within 24 hours of posting the notice by the Company even if the notice so served returns unserved for whatever reason and the confirmation from any authorized officer of the Company for having posted the notice to the Borrower shall be final and binding in this regard.

ii)      Repossession: In case the Borrower fails to make payment of the dues or surrender the asset to the Company and/or rectify the breach of the terms of the contract in compliance with the notice mentioned above, to the satisfaction of the Company, without prejudice to its other rights available under the Agreement, the Company may be entitled to take possession of the Asset (referred to as repossession") and for the said purpose, enter any place or places where the Asset may then be or is likely to be, remove or take possession of the same. The Borrower agrees and undertakes not to prevent or obstruct the Company from exercising a night of possession of the Asset in the event of default by the Borrower.

          It shall be the sole responsibility of the Borrower to remove any goods (perishable, non-perishable) available in the Asset at the time of its repossession by the Company and the Borrower shall make his/their own arrangements to transfer such goods from the said Asset to and transport it back at his own cost and expenses and the Company shall not be liable to the Borrower for any damage, depreciation value, loss in transit etc. or for any damages arising on account of non-delivery of the same to anyone during or after such repossession.

          The Company shall not be responsible for any loss or destruction and damage to the hypothecated Asset, whether by theft, fire, rain, flood, earthquake, lightening, accident or other case whatsoever to the repossessed Asset, notwithstanding anything to the contrary contained in Section 151 of the Indian Contract Act.

iii)     Post Repossession: Upon taking possession of the vehicle, as a final chance to rectify the default, a 7 days notice shall be caused upon by the Company to the Borrower to repay the termination price (which includes the charges and expenses incurred for taking possession of the vehicle including the legal expenses). The notice shall be deemed to be served on the Borrower within 24 hours of posting the notice by the Company even if the notice so served returns unserved for whatever reason and the confirmation from any authorized officer of the Company for having posted the notice to the Borrower shall be final and binding in this regard.

iv)      Waiver of notice: The said notice (before and after taking possession of the Asset) mentioned here in above can be waived at the discretion of the Company, in case the Company is of opinion that such action is likely to jeopardize the Asset or the interest of the Company.”

7.                Admittedly, the vehicle was repossessed by certain persons claiming themselves to be the agents of opposite party No.1 and 2 on 12.01.2020 in the area of Kurukshetra, Haryana. The vehicle was taken to M/s. Kurukshetra Bank Parking Yard and the documents were prepared.

8.                The point of determination arose before this Commission whether the act of repossession is legal and valid?

9.                According to opposite party No.1 and 2, the complainant defaulted in the repayment of loan and accordingly on 25.09.2019 a final call letter Ex. R2 was issued to the complainant calling upon him to pay a sum of Rs.3,50,922/- within 7 days failing which the opposite parties will be constrained to enforce the rights available under the agreement including taking the possession of the vehicle. It was further contended that the complainant did not respond to the said letter and the vehicle was repossessed on 12.01.2020 and Post-Seizure Inventory Ex. R5 was also prepared. Further a pre-sale 7 days notice dated 17.01.2020 Ex. R8 was issued to the complainant and finally after inviting the quotations, the vehicle was sold on 29.01.2020 for a sum of Rs.3,25,000/-. The amount of sale was adjusted towards the outstanding dues and account statement Ex. R12 reflects the amount of Rs.16,341/-  payable as on 14.12.2020.

10.              The contentions on the part of opposite party No.1 and 2 looks fanciful but when examined in context to the matter in controversy, these are devoid of any merit. Opposite party No.1 and 2 were required to prove on record that the alleged final call letter, resale notice and other notices which are being relied upon by them were either delivered to the complainant personally or these were served to him either by post or through courier. For these, the opposite parties were required to produce any postal/courier receipt so to meet out the requirements of the law but no such postal or courier receipt was ever produced on record. There is no dispatch number of the office of the company to show that these were actually dispatched from their office. Even the presumption of deemed notice cannot be drawn as there is no compliance of terms and conditions as envisaged in the agreement. Further opposite party No.1 and 2 were required to prove that the person who took the possession of the vehicle in the area of Kurukshetra was duly authorized on the part of the company to take action against the complainant. No such authorization was also produced by the opposite parties. In these circumstances, it cannot be said that the action of opposite party No.1 and 2 was in accordance with the terms and conditions of loan agreement. So the act and conduct of opposite party No.1 and 2 amounts to deficiency in service and adoption of unfair trade practice on their part.

                   In ICICI Bank Vs Prakash Kaur & Ors. 2007(2) SCC (711), the Hon’ble Supreme Court of India deprecated the practice of hiring recovery agents, who were musclemen to take possession of the vehicles in cases, where the borrower might have committed default in payment of installments. In this regard, the Hon’ble Supreme Court held as under:-

“16.  Before we part with this matter, we wish to make it clear that we do not appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents, who are musclemen, is deprecated and needs to be discouraged. The Bank should resort to procedure recognized by law to take possession of the vehicles in cases where the borrower may have committed default in payment of the installments instead of taking resort to strong-arm tactics.”

Reference can be aso made to Citicorp Maruti Finance Ltd. Vs S. Vijaylaxmi 2012(I) SCC (1). Also in M/s. Magma Fincorp Ltd. Vs Rajesh Kumar Tiwari in 2021(2) Apex Court Judgments 37 (SC) whereby the Hon’ble Supreme Court of India has made the following observations:-

“90.  In a case where the requirement to serve notice before repossession implicit in the hire purchase agreement, non service of proper notice would tantamount to deficiency in service for breach of the hire purchase agreement giving rise to a claim in damages. The Complainant consumer would be entitled to compensatory damages, based on an assessment of the loss caused to the complainant by reason of the omission to give notice. Where there is no evidence of any loss to the hirer by reason of omission to give notice, nominal damage may be awarded.

96.     The appeal is accordingly allowed. The Financier shall, however, pay a composite sum of Rs.15,000/- to the complainant towards damages for ‘deficiency’ in service and costs for omission to give the Complainant a proper notice before taking repossession of the vehicle.”

11.     Perusal of record shows that the vehicle in question has been sold to third party namely Ranjit Kumar Malik son of Mohan Lal and a long time has already been elapsed and as such, the vehicle cannot be restored to the complainant. However, the auction money has been credited to the loan account of the complainant and no further interest stated to have been charged but at the same time, the complainant who was using the vehicle for earning his livelihood has also been deprived of usage and earning of the vehicle. As such, in our opinion, it will be just and appropriate if the opposite parties are burdened with a composite compensation of Rs.50,000/- payable to the complainant.

12.              As a result of above discussion, the complaint is partly allowed with an order that the opposite parties shall jointly and severally pay a composite compensation of Rs.50,000/- to the complainant within 30 days from the date of receipt of copy of order, failing which the complainant shall be held entitled to interest @8% per annum on the awarded amount from the date of order till its actual payment. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

13.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)          (Jaswinder Singh)                     (Sanjeev Batra)

Member                         Member                                       President         

Announced in Open Commission.

Dated:24.08.2023.

Gobind Ram.

Raj Kumar Vs Cholamandalam Investment and Finance           CC/20/40

Present:       Sh. Gurcharan Singh, Advocate for the complainant.

                   Sh. Sarabjit Singh, Advocate for OP1 and OP2.

                   OP3 exparte.

 

                   Arguments heard. Vide separate detailed order of today, the complaint is partly allowed with an order that the opposite parties shall jointly and severally pay a composite compensation of Rs.50,000/- to the complainant within 30 days from the date of receipt of copy of order, failing which the complainant shall be held entitled to interest @8% per annum on the awarded amount from the date of order till its actual payment. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

 

(Monika Bhagat)          (Jaswinder Singh)             (Sanjeev Batra)

Member                         Member                              President        

 

Announced in Open Commission.

Dated:24.08.2023.

Gobind Ram.