BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION:HYDERABAD.
FA.No.1387/2006 against C.C.No.161/2005, District Forum, NELLORE
Between:
S.A.K.Jeelani, S/o.Imam Saheb
Asthan-E0Rahamatia, aged 60 years,
A.S.Peta Village, A.S.Peta Mandal,
Nellore District. .Appellant/
Complainant
And
M/s.Sriram Investments Ltd.,
Rep. by its Branch Manager,
Nellore Branch, G.P.A.Holder,
G.Chandrasekhar. Respondent/
Opp.party
Counsel for the Appellant:: M/s.A.Rama Rao.
Counsel for the Respondent: M/s.B.Vijaysen Reddy
QUORUM:THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
SMT.M.SHREESHA, MEMBER.
AND
SRI K.SATYANAND, MEMBER.
MONDAY, THE FIFTEENTH DAY OF JUNE,
TWO THOUSAND NINE
ORAL ORDER: (Per Hon’ble Sri K.Satyanand, Hon'ble Member.)
***
Aggrieved by the majority order that went against him, the complainant filed this appeal.
The facts that led to filing this appeal are briefly as follows:
The complainant purchased a tractor raising his own funds as also funds borrowed from the opposite party. The opposite party quantified the debt at Rs.3,14,150/- inclusive of the actual amount lent, the advance for insurance and finance charges. The opposite party stipulated that the said amount had to be repaid by way of 36 monthly instalments. The complainant repaid to the opposite party a total amount of Rs.68,057 and he was yet to pay an amount of Rs.2,45,193/- by 15-9-2005. He could not make any payments with effect from 1-8-2003 to 8-12-2003 as he was not having any earnings due to off-season. Thereupon the opposite party had taken away the tractor on 8-12-2003 in the absence of the complainant and informed the said fact telegraphically on 10-12-2003. The opposite party also informed in a letter dated 8-12-2003 that an amount of Rs.75,066/- was due as on date and informed to pay the said amount within 15 days from the date of receipt of notice failing which appropriate action would be taken as per the terms of the Hire Purchase Agreement. It was the case of the complainant that the said vehicle was disposed of in a public auction for Rs.96,000/- and on the top of it, the opposite party demanded the complainant to pay the balance amount of Rs.1,69,272/- with interest at the rate of 24% p.a. The grievance of the complainant was that there was no notice or communication before the seizure as also before the sale of the vehicle though he happened to be a joint owner of the vehicle along with the opposite party and the same was sold by a throw away price of Rs.96,000/-. Hence the complainant preferred this complaint seeking a direction to the opposite party to refund an amount of Rs.52,307/- along with interest taking into consideration the value of the vehicle and the amount due to the opposite party on the date of taking away the vehicle i.e. tractor.
This complaint was resisted by the opposite party by filing a version particularly contending that the complainant became a defaulter leaving no other option to the opposite party except to take possession of the vehicle as the opposite party happened to be the real owner of the vehicle under hire purchase. The said fact was also informed to the complainant by way of telegram about taking possession of the vehicle on 8-12-2003. The opposite party claimed to have informed through a letter dated 8-12-2003 to pay arrears of amount within 15 days from the date of receipt of the said notice. On 16-9-2003 and 17-11-2003 it claimed to have also issued demand letters to the complainant to pay the arrears of hire instalments but the complainant did not heed those letters. According to the opposite party, an amount of Rs.96,000/- which in the auction sale was the highest market price, was adjusted to the account of the complainant. It was alleged that the complainant had never come forward to pay the amount after receipt of the notice. It was further contended that the hirer and guarantors do not come within the description of ‘consumer’ and therefore questioned the maintainability of the complaint.
In support of his case, the complainant filed his own affidavit and relied upon Exs.A1 to A21. On the other hand, opposite party relied upon only documents marked as Exs.B1 and B2.
On a consideration of the evidence adduced on either side, the majority members of the District Forum dismissed the complaint stating that the opposite party complied with the terms of the hire purchase agreement and the complainant admitted having received the notice preceding the seizure. The majority order however did not give a categorical finding about any notice to the complainant before selling the vehicle, inspite of that it observed that there was no deficiency in service and accordingly dismissed the complaint. The minority order written by Sri C.P.Suresh on the other hand gave a finding especially in regard to the notice holding that there was no proof to show that the opposite party had given any notice to the complainant before selling the vehicle. The minority order also pointed out several infirmities in the process resorted to by the financier/opposite party and heavily relied upon several judgements laying emphasis on the inviolable requirement of financier issuing notice before seizure as also before selling away the vehicle and consequences that would entail such omission to the disadvantage of the financier and the advantage of the hirer.
Aggrieved by the majority order which naturally prevails over the minority order, the complainant preferred this appeal contending inter alia that the effective order of the District Forum was wrong and that the law was misapplied and the District Forum erred in accepting in evidence a notice dated 15-7-2004 purported to have been issued under certificate of posting almost practically at the fag end of the enquiry and marking them as Exs.B1 and B2.
Heard the counsel for the appellant
The points that arise for consideration are whether the seizure and sale of the vehicle by the opposite party is valid and binding on the appellant/complainant.
2. Whether there are any good grounds to interfere with the majority order of the District Forum?
3. To what result?
1. Before discussing the tenability or otherwise of the procedure adopted by the opposite party that culminated in a distress sale of the vehicle in question by the opposite party, it is necessary to properly identify the nature of transaction in question. In this regard, the certificate of registration of the vehicle in question throws any amount of light on the nature of ownership of the vehicle as also on the status of the complainant and the opposite party vis-à-vis the vehicle in question. The said document is marked as one of the four pages of Ex.A21. The certificate of registration clearly showed the complainant as the owner and the opposite party as the financier in whose favour the hire purchase agreement was obtaining. This document clearly shows that the complainant and the financier were not co-owners or joint owners of the vehicle in question. So the opposite party was obviously given to exercise its rights, which it had no doubt got only within the confines, as per the hire purchase agreement and the law that grew from out of the hire purchase litigations. The learned counsel for the complainant therefore rightly relied upon a recent decision of the National Consumer Disputes Redressal Commission, New Delhi in a case reported in III (2007) COJ 161 (NC) in CITICORP. MARUTI FINANCE LTD., v. S.VIJAYALAXMI wherein the Hon’ble National Consumer Disputes Redressal Commission followed a number of Supreme court judgements as also cited with approval as many judgements of other Commissions and thrashed out the entire gamut of the rights of a hirer and purchaser. In the said decision, the Hon’ble Commission analyzed the nature of these cases obviously generated through facts variously in the earliest part of the judgement itself in the following terms:
“Hire Purchase Agreement :
A. 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.
B. 1. A hire-purchase agreement is a normal one under which owner hires goods to another party called the hirer and further agrees that the hirer shall have an option to purchase the chattel when he has paid a certain sum, or when the hire-rental payments have reached the hire-purchase price stipulated in the agreement.
2. As against this, when a person desires to purchase
vehicle/goods and not having sufficient money on hand, borrows
the amount needed from a money lender/financier/banker and
pays it over to the vender of the vehicle, the transaction between
the consumer and the money lender will unquestionably be a loan
transaction. In such a case the vehicle purchased by the
consumer is registered in the name of the consumer and remains
at all material times so registered in his name. The consumer
remains qua the world at large the owner and remains in possession
of the vehicle. By an agreement the vehicle can be given as
security for the loan advanced. In such a case, the right to seize
the vehicle is merely a licence to ensure compliance with the
terms of the so called hire purchase agreement (Re. AIR 1966 SC
1178).
C. 1. It is to be stated that many financiers/banks are in
race for giving loan for purchase of vehicles or various articles.
After giving loan and taking interest in advance, the polite
behaviour changes because of the documents which are signed on
the dotted lines by the borrower. On occasions, borrower suffers
harassment, torture, or abuses at the hands of the musclemen of
the money lender. Such a behaviour is required to be prohibited
and the process of repossession is required to be streamlined so as
to fit in cultural civilized society. Let the rule of law prevail and
not that of jungle where might is right.
2. In such cases, even the Police does not register the FIR or
help the aggrieved consumer. In the present case, nothing has
been done by the Police for years despite the complaint. In any
case, taking of pound of flesh is required to be discouraged.
In the present case as in the case cited above, the deal was between the hirer and the purchaser and therefore the compliance with the procedure commanded by the above stated leading decision will have to be tested and it therefore falls for consideration whether the financier had followed the said procedure or not in the instant case? In this enquiry what figures prominently is the factum of issue of notice before the seizure and the factum of issue of notice before the sale, as the decision laid emphasis on these two requirements more than anything else. It is categorically laid down at the fag end of para 19 as follows:
“(ii) Even before repossession another written notice must be
sent to the hirers and only thereafter the vehicles be
repossessed”.
There is absolutely no evidence to show that the financier had given such a notice to the complainant. It is rather curious to note that the majority order made an observation as if such a receipt of notice was admitted by the complainant but actually what was admitted by the complainant was not a seizure notice as such but some notice long prior thereto reminding him of the instalments and arrears etc. That would not be sufficient compliance of the requirements of law. Likewise, the Hon’ble National Commission also emphasized the same point in para 27 wherein also it stated as follows:
“………..The motor vehicle purchased by the customer is
registered in the name of the customer and remains at all
material times so registered in his name…………….. Their
(financier’s) right to seize the vehicle is merely a licence
to ensure compliance with the terms of the hire purchase
agreement”.
Word in Italics supplied.
Now coming to the ultimate sale of the seized vehicle, the requirement of law is even more stringent in that the financier invoking the hire purchase agreement has to give notice to the owner of the vehicle before actual sale. This requirement is manifest in para 42 in the following words:
“This would mean that before repossession no registered
notice is given; before sale also no notice is given and in a
high handed manner the vehicle was sold without following
the procedure allegedly required to be followed”.
This would mean that before repossession, no registered notice is given, before sale also no notice is given and in a high handed manner the vehicle was sold without following the procedure allegedly required to be followed. The present case equally suffers from the vice of non issue of a presale notice as Exs.B1 and B2 are the most tenuous piece of evidence that could be relied upon for the purpose of holding that there was such a notice issued at all to the complainant. If Exs.B1 and B2 are eschewed from consideration, as they rightly deserve such a treatment, it remains that no notice was ever given before effecting the final sale of the vehicle which confirmably stood in the name of the complainant as a owner. Thus the action of the opposite parties in selling somebody’s vehicle without due process of law cannot but be characterized as utterly untenable in law and therefore makes the height of deficiency ins service. This takes us to the question of deciding the fate of the majority order as the majority order proceeded to dispense justice on the premises suggestive of taking these two requirements of law very lightly. In these circumstances, we are firmly of the opinion that the majority order is not sustainable. On the other hand, the minority order deserves to be upheld.
In the result the appeal is allowed and consequently the complaint is allowed in part directing the opposite party to pay to the complainant an amount of Rs.52,307/- with interest at the rate of 6% p.a. from the date of seizure i.e. 8-12-2003 till the date of realization together with costs in a sum of Rs.3,000/- as such a dispensation is in conformity with the law laid down by the National Commission in the self same order adverted to supra in the following words:
“ or
(b) if sold, the damages/compensation is the only relief
which can be granted to the complainant”.
The opposite party is directed to comply with the above directions within six weeks of the date of receipt of this order.
PRESIDENT
MEMBER.
MEMBER
Dated 15-6.2009
