Per :- Mr. Deshpande, President Place : BANDRA JUDGMENT The Opposite Party is a limited company and advances vehicle loans to the needy customers. The Complainant had borrowed a vehicle loan in sum of Rs.3,46,000/- from the Opposite Party – Finance Company; on 27/2/2005 and purchased a ‘Santro’ car, which was registered as MH-02-AK-8626. The Complainant fitted a music system in the car with two speakers, one boomer box and woofer, costing around Rs.70,000/-, at his own cost. [2] It is the case of the Complainant that the Opposite Party – Finance Company; induced the Complainant to borrow an additional soft loan in sum of Rs.1,44,000/-, as an incentive. Though the Complainant was not inclined to borrow the same, the Opposite Party – Finance Company; persuaded the Complainant, which prompted the Complainant to go for the additional loan in sum of Rs.1,44,000/-. It is the case of the Complainant that initial financial burden was already heavy and this additional loan spoilt his entire financial budget, which resulted into 03 defaults. [3] It is the case of the Complainant that on 18/6/2008, while the Complainant was at his clinic, attending the patients, private agents deputed by the Opposite Party – Finance Company; entered into his clinic and asked for the keys of the car. The Complainant was not willing, but the private agents deputed by the Opposite Party – Finance Company; abused the Complainant and threatened the Complainant and ultimately, the Complainant succumbed to the pressure of recovery agents and handed over keys of the car. Thus, according to the Complainant, the Opposite Party – Finance Company; has taken forcible possession of his car on 18/6/2008, without giving any prior notice to the Complainant. The Complainant was compelled to sign the acknowledgement prepared by the recovery agents. [4] The Complainant issued a legal notice, calling upon the Opposite Party – Finance Company; to return the car and to pay damages. In the meantime, the Complainant also approached police authorities and lodged a police complaint. When there was no response on the part of the Opposite Party – Finance Company; the Complainant filed present consumer complaint before this Forum, seeking direction, as against the Opposite Party – Finance Company; to deliver custody of his car as well as to pay compensation in sum of Rs.10,00,000/-. [5] Upon due service of notice of appearance issued by this Forum, the Opposite Party – Finance Company; appeared and contested the complaint by filing its written version of defence and took stand that there had been loan agreement signed by the Complainant and as per the terms stipulated in the loan agreement, the Complainant was supposed to make repayment of the loan dues in 60 Equated Monthly Installments (EMI) of Rs.7,211/- each. The vehicle, alongwith its accessories, was hypothecated with the Opposite Party – Finance Company; and this fact was recorded in the R.C. Book of the vehicle. The Complainant then, borrowed additional loan in sum of Rs.1,44,000/- from the Opposite Party – Finance Company. The Opposite Party – Finance Company; has denied to have induced the Complainant to borrow the top-up loan. [6] It is further case of the Opposite Party – Finance Company; that there had been consistent defaults on the part of the Complainant in repayment of loan due and from the month of Jan-2008 onwards, 23 cheques towards the repayment of original loan amount and 32 cheques towards the repayment of the top-up loan amount were dishonoured. The Complainant was informed about dishonoured cheques and a notice was issued on 17/1/2007, calling upon the Complainant to pay the outstanding loan dues. When the notice was not complied with, loan recall notice dtd.7/1/2008 was served upon the Complainant and on giving information to the concerned police station the process of repossession of the vehicle was completed. According to the Opposite Party – Finance Company; in fact, the Complainant voluntarily surrendered his car and signed the acknowledgement to that effect. The Opposite Party – Finance Company; has denied all the allegations in the complaint as regards use of force and violence in the incident dtd.18/6/2006, which allegedly occurred at the clinic of the Complainant. [7] The Complainant filed his rejoinder to the written version filed by the Opposite Party – Finance Company. The Complainant as well as the Opposite Party – Finance Company; filed their respective affidavits of evidence as well as copies of supporting documents. Both the parties also filed their respective written notes of arguments. [8] We have gone through the pleadings, affidavits and documents as well as written notes of arguments filed by the parties. [9] We take the points that arise for our consideration and record our findings there-against as below:- Sr. No. | Points for consideration | Findings | 1. | Whether the Complainant has proved that the Opposite Party – Finance Company; is guilty of deficiency in service on account of forcible repossession of the vehicle? | YES | 2. | To what relief the Complainant is entitled to? | Refund of cost of music system and allied parts. | 3. | What order? | The complaint is partly allowed. |
REASONS FOR FINDINGS [10] After filing of the present consumer complaint and during pendency of present complaint, the Complainant filed an application dtd.6/8/2008 to the effect that he has withdrawn his prayer for delivery of the car. In the same application, there is a statement to the effect that the Opposite Party – Finance Company; may sell the car as per its plan and adjust the sales-proceeds thereof against the outstanding loan dues standing in the name of the Complainant. In the same application, the Complainant has mentioned that the Forum may consider his prayer for delivery of music system lying in the car. Therefore, the present consumer complaint has to be considered in the said context. [11] Now, there is no dispute between the parties to the complaint proceeding as regards the fact that the Complainant had initially borrowed from the Opposite Party – Finance Company; a loan in sum of Rs.3,46,000/- on 27/2/2005 and thereafter, he borrowed a top-up loan in sum of Rs.1,44,000/- on 19/9/2006. The Opposite Party – Finance Company; in paragraph No.(10)(g) of its written version of defence, has raised a contention to the effect that from the month of Jan-2007 onwards, there were defaults on the part of the Complainant in repayment of loan dues and altogether, 23 cheques towards the principal loan and 32 cheques issued towards top-up loan were dishonoured. Obviously, these cheques must be post-dated cheques. Additional loan was advanced to the Complainant in the month of Sept-2006 and it is not possible to conceive of a situation that within a period of six months i.e. from Sept-2006 up to Jan-2007, 23 + 32 cheques would bounce back. This shows that the version of the Opposite Party, in paragraph No.(10)(g) of its written version, is not correct. Be it noted in this context that the Opposite Party – Finance Company; has not annexed a copy of any of the loan account of the Complainant to show that the post-dated cheques issued by the Complainant had consistently bounced back and there had been default on the part of the Complainant to repay the outstanding loan dues. The Opposite Party – Finance Company; has not produced so called loan recall notice allegedly issued to the Complainant on 7/1/2008. There is no statement in the written version filed by the Opposite Party – Finance Company; that this loan recall notice dtd.7/1/2008 was actually served by the Opposite Party – Finance Company; to the Complainant. There is a statement in paragraph No.(10)(k) of the written version of defence filed by the Opposite Party – Finance Company; to the effect that on 18/6/2008, intimation was given to the concerned Charkop Police Station about the proposed repossession of the vehicle. There is no statement that a copy of the said notice or letter was served upon the Complainant. Thus, there is absolutely no material on the record to show that there had been consistent defaults in making repayment of the loan on the part of the Complainant and the legal notice was served upon the Complainant giving intimation that such drastic steps would be taken by the Opposite Party – Finance Company. [12] According to the Opposite Party – Finance Company; on 18/6/2008, when there was repossession of the car, the Complainant voluntarily surrendered the car and the Complainant signed an acknowledgement to that effect. The Complainant himself has produced on the record, alongwith list of documents, a photocopy of the inventory of the items in the car, which is at page (24) of the compilation of the list of documents, at Exhibit-4. Title of the document reads as – ‘Inventory of Items in the car’. That document does not show that the car in question was voluntarily surrendered by the Complainant. It is possible that when the threats or forced used by the musclemen engaged by the Opposite Party – Finance Company; had become unbearable, the Complainant, in order to stop the show, might have succumbed to the pressure and might have signed the inventory dtd.18/6/2008. It does not establish that pursuant to the demand notice or loan recall notice, the Complainant voluntarily surrendered and handed over his car to the Opposite Party – Finance Company. [13] All these facts do establish that without invoking any particular clause in the agreement to initiate legal action, as against the Complainant and without resorting to any legal action, the Opposite Party – Finance Company; forcibly took away the car from the custody of the Complainant. In this regard, the Opposite Party – Finance Company; has relied upon certain clauses in the loan agreement. However, a copy of loan agreement is not produced on the record. Assuming that such term or stipulation appears in the loan agreement, it does not confer a right on the Opposite Party – Finance Company; to resort to use of force or violence for taking repossession of the car. In this context, reference can be usefully had to decision of the Hon’ble National Consumer Disputes Redressal Commission in Citicorp Maruti Finance Ltd. Vs. S. Vijayalaxmi ~ 2007-(3)-CPR-191. In that case, the borrower/original Complainant therein had purchased a vehicle – ‘Maruti Omni’ on taking loan for sum of Rs.1,83,396/- from the finance company, who was a petitioner before the Hon’ble National Commission. There had been default on the part of the borrower. The borrower requested the financer – the petitioner therein; for one time settlement. There were negotiations, but one time settlement could not materialize. Thereafter, the petitioner/finance company therein, through its agent repossessed the vehicle. The borrower/original Complainant therein was evicted from the vehicle. A police complaint was lodged regarding that incident. The borrower/original Complainant therein approached the officer of the finance company therein, but there was no proper response. In the meantime, the finance company sold the vehicle. The borrower/original Complainant therein thereafter filed a complaint before the Consumer Forum. On trial, the Consumer Forum allowed the complaint and directed the finance company therein to pay compensation in sum of Rs.1,50,000/- together with interest thereon @ 9% p.a. besides punitive damages of Rs.50,000/-. Being aggrieved by such order being passed by the Consumer Forum, the finance company therein preferred an appeal before the Hon’ble National Commission. The finance company tried to justify its action. However, the Hon’ble National Commission turned down all the contentions of the finance company therein and confirmed the award with certain modifications. In the process, the Hon’ble National Commission, in paragraphs No.(27) & (28) of its decision, observed as follows:- “….even though the hire-purchase agreement may give right to take possession of the vehicle, money lenders/financial institutions/banks have no power to take possession by use of force and have to follow the remedy which may be available under the law. 28. May be that the procedure of law is slow, but that is no excuse for use of force for repossessing the vehicle. If the contention of the petitioner that it can take possession of the vehicle by means of force is accepted the rule of jungle would prevail and might would be right.” [14] In the above-referred decision, the Hon’ble National Commission, in paragraph No.(21)(b) of its judgment, relied upon the decision of the Hon’ble Supreme Court in ICICI Bank Vs. Prakash Kaur & Ors. ~ (2007)-2-SCC-711; and quoted the Hon’ble Supreme Court’s observations in the said judgment, which are material in the context of issue in the present case. Those observations are as follows:- “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 vehicle in cases where the borrower may have committed default in payment of installments instead of taking resort to strong-arm tactics.” [15] In paragraph No.(22) of the reported judgment, the Hon’ble National Commission extracted certain observations from the said decision of the Supreme Court, which are reproduced below:- “In conclusion, we say that we are governed by the rule of law in the country. The recovery of loans or seizure of vehicle could be done only through legal means. The banks cannot employ goondas to take possession by force.” [16] Above-referred observations of the Hon’ble National Commission as well as the Hon’ble Supreme Court, establish that practice of resorting to violence & forcible repossession of vehicle has been strongly deprecated by the Apex Court and the National Commission. No doubt, there had been an agreement between the parties in which, a clause has been incorporated to confer an authority on the Opposite Party – Finance Company; to repossess the vehicle in the event of default, but before resorting to such action, the Opposite Party – Finance Company; was supposed to initiate legal action to secure legal orders from the competent court/forum. This is highlighted by the observations contained in paragraph No.(22) of the Hon’ble Supreme Court’s decision in ICICI Bank Vs. Prakash Kaur & Ors. ~ (2007)-2-SCC-711. In the background of these facts, we hold that the Opposite Party – Finance Company; arbitrarily and forcibly took repossession of the vehicle on 18/6/2008. Thus, the entire exercise was arbitrarily conducted and thus, ‘deficiency in service’ is patent. Therefore, we hold the Opposite Party – Finance Company; guilty of deficiency in service. [17] Coming to the question of grant of relief to the Complainant, it is seen that the Complainant has abandoned the relief of direction to the Opposite Party – Finance Company; to hand-over custody of the car to the Complainant. In the written version of defence as well as in the written notes of arguments, the Opposite Party – Finance Company; has conveniently maintained silence regarding disposal of the car. It is not known as to whether the car has been auctioned or sold by the Opposite Party – Finance Company; and if ‘Yes’, the amount of the sale proceeds? There is also no statement that particular amount has been adjusted towards outstanding loan dues of the Complainant. In any case, the Complainant himself has left it to the discretion of the Opposite Party – Finance Company; to sell the car and appropriate the sale-proceeds towards his loan dues. [18] However, the Complainant persisted with the relief of recovery of compensation towards music system & accessories thereof. In the complaint as filed, the Complainant has alleged that cost of the accessories was worth an amount in sum of Rs.70,000/-. However, in the list of accessories with the car, the Complainant has given list of music system alongwith cost and it shows that total cost thereof was amount in sum of Rs.60,648/-. The Opposite Party – Finance Company; in its written version of defence as well as in the written notes of arguments took stand that these articles were returned to the Complainant at the time of repossession of the car, but there is no statement in the copy of inventory, which is at page (24) of the compilation, about return of these articles of the Complainant. Therefore, an inference will have to be drawn that the Opposite Party – Finance Company; took custody of these articles alongwith the car. Naturally, therefore, the Opposite Party – Finance Company; will have to pay the price of these articles to the Complainant, which the Complainant has quoted as an amount in sum of Rs.60,648/-. [19] The Complainant has also sought compensation in sum of Rs.10,00,000/- towards inconvenience, hardship & mental harassment on account of high-handed and illegal act on the part of the Opposite Party – Finance Company. However, instead of awarding compensation, we deem it proper to re-compensate the Complainant by giving a direction to the Opposite Party – Finance Company; not to recover any outstanding amount, if any, towards the loan dues, from the Complainant, even after the car has been auctioned. In addition to that, the Opposite Party – Finance Company; has been burdened with the liability to pay cost of music system and accessories worth an amount in sum of Rs.60,648/- to the Complainant. In view of nature of the facts of the case and the extent of deficiency in service and high-handedness on the part of the Opposite Party – Finance Company; we find that directions, which we propose to give to the Opposite Party – Finance Company; would meet the ends of justice. With this, we proceed to pass the order as below:- ORDER The complaint is partly allowed. The Opposite Party is hereby directed to pay an amount in sum of Rs.60,648/- to the Complainant. The Opposite Party shall also pay to the Complainant, costs in sum of Rs.5,000/-. The Opposite Party is hereby directed to comply with the foregoing order within a period of six weeks from the date of receipt of this order failing which, the Opposite Party shall also be liable to pay to the Complainant, interest @ 9% p.a., on the amount of Rs.60,648/- as from the date of expiry of stipulated period of six weeks till realization of the entire amount by the Complainant. In addition to that the Opposite Party shall not be entitled to recover any amount from the Complainant towards unpaid or outstanding amount in its books of accounts regarding these loan accounts. Rest of the claims of the Complainant stands rejected. Parties shall be informed accordingly, by sending certified copies of this order.
| | [HONABLE MRS. Mrs.DEEPA BIDNURKAR] Member[HONABLE MR. Mr. J. L. Deshpande] PRESIDENT[HONABLE MR. MR.V.G.JOSHI] Member | |
