BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION:HYDERABAD.
F.A.No.1471/2007 AGAINST C.C.No.545/2006, DISTRICT CONSUMER FORUM-II, HYDERABAD.
Between:
K.Nagasai Prasad,
S/o.Ramachandra Rao,
32 years, No.129-A, Block V,
Janapriya Flats, Brundavan Colony,
Saroornagar, Hyderabad-500 035. Appellant/
Complainant
And
1. M/s Vijayalakshmi Motors, Yamaha
Motor Cycle Dealer, Malakpet Main
Road, Hyderabad-500 036, (A.P.)
2. M/s.ICICI Bank, Saifabad Branch,
opposite A.P.Legislative Assembly,
Hyderabad-500 004 (A.P.) ..Respondents/
Opp.parties.
For the Appellant: Party in person.
Counsel for the Respondents:R1-served.
R2-Mr.Lokesh Reddy
QUORUM: THE HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT.
AND
SMT.M.SHREESHA, MEMBER.
FRIDAY, THE TWENTY THIRD DAY OF JANUARY,
TWO THOUSAND NINE.
Oral Order:(Per Smt.M.Shreesha, Hon’ble Member)
***
Aggrieved by the order in C.C.No.545/2006 on the file of District Forum-II, Hyderabad, the complainant preferred this appeal.
The brief facts as set out in the complaint are that the complainant purchased Yamaha Fazer motor cycle on instalment basis with the finance of ICICI bank in the month of April, 2005 for Rs.72,000/- to be paid in 36 monthly instalments and took delivery of the same from opposite party No.1 dealer. The complainant submitted that he paid instalments up to 12/2005 and the vehicle started giving trouble even during guarantee period and the opposite parties did not comply with his request to arrange anew vehicle. The complainant submitted that the vehicle gave trouble in November, 2005 for want of one part Clutch Bell from company’s Delhi office and again gave trouble in Jan. 2006 and hence he handed over the vehicle to opposite party No.1 on 13-1-2006 under acknowledgement for want of part from Delhi and the vehicle was not repaired till 23-2-2006. The complainant submitted that ICICI bank provided finance and also collected two months instalment in advance to be adjusted at the time of termination of contract period. The complainant submitted that while he was waiting supply of new vehicle in place of old one, the collection staff of ICICI Bank misbehaved for non payment of intalments for 1/06 and 2/06 and he complained the same to the high officials under acknowledgement. Even before the motor cycle could be repaired, the officials of the bank visited him 23-2-2006 and also called opposite party No.1 dealer and asked them not to repair the vehicle as they are going to seize the vehicle and gave time upto 3-3-2006 to enable the company to provide another vehicle. The complainant submitted that the agent granted some time but removed the vehicle prior to 1-3-2006 duly getting the said additional fittings fixed. The complainant submitted that the registration of the vehicle with the RTA had to be done within one year and that he did not register the vehicle as it was a defective vehicle. The complainant submitted that he paid Rs.25,000/- on the vehicle inspite of the fact that he was provided with a defective vehicle without availability of parts in Hyderabad and inspite of continuous requests, the opposite parties failed to provide a new vehicle in place of the old one. The complainant submitted that opposite party No.2 had sent their agents to his shop and mis-behaved with him at his shop resulting in permanent closure of the shop. Hence the complaint for a direction to the opposite parties to supply new motor cycle in place of old one and for compensation of Rs.2 lakhs for the unwarranted misbehavior and high handedness of the bank agent on 23-2-2006 resulting in permanent loss of his livelihood.
Opposite party No. remained absent and was set exparte.
Opposite party No.2 filed counter and submitted that the complainant had taken a loan of 35,000/- on 2-5-2005 for purchase of Yamaha Fazer Motor Cycle and agreed to pay the loan in 36 monthly instalments @ Rs.1,214/- per month commencing from July, 2005 to May, 2008. Opposite party No.2 submitted that the complainant has not registered the vehicle with R.T.A. even after lapse of 6 months and has also not paid the instalments for the period from December, 2005, January & February, 2006 and committed default in payment of the instalments as agreed. They submitted that they are not concerned whether the vehicle is defective or not and that they are only concerned with regard to repayment of the loan amount. They submitted that the complainant stopped payment of the instalments without informing them that the vehicle is giving technical problems due to manufacturing defects. Opposite party No.2 further submitted that they approached the complainant for payment of due instalments in the month of January, 2005 and the complainant informed that the vehicle was handed over to opposite party No.1 and he would not pay the amount unless he receives the vehicle. Opposite party No.2 submitted that he informed the complainant as per the agreement, the complainant has to pay the instalments regularly even if the vehicle is not in the hands of the borrower but the complainant did not pay the instalments and hence they got issued a notice on 7-2-2006 to the complainant to pay the due amount. Inspite of the above notice, the complainant neither responded nor paid the instalment due amount and therefore, they were constrained to re-possess the vehicle. Opposite party No.2 submitted that since the complainant committed default in payment of three instalments consecutively, they were constrained to possess the vehicle on 25-2-2006 and submit that there is no deficiency in service on their part. Opposite party further submitted that there was no other alternative, , they sold the vehicle on 31-3-2006 for an amount of Rs.14,000/- and the sale proceeds were credited to the loan account. After crediting the sale proceeds still the complainant is liable to pay an amount of Rs.19,980/- and submitted that they are taking legal steps against the complainant for recovery of the amount and prayed for dismissal of the complaint.
Based on the evidence adduced i.e. Exs.A1 to A6 and B1 to B8 and the pleadings put forward, the District Forum dismissed the complaint.
Aggrieved by the said order, the complainant preferred this appeal.
We observe from the material on record that the complainant had purchased a two wheeler from opposite party No.1 dealer taking finance of Rs.35,000/- from opposite party No.2 bank on 2-5-2005 and agreed to pay the loan amount along with interest in 36 monthly instalments of 1,214/- per month commencing from July 2005 and ending in May, 2008. Accordingly the complainant had taken delivery of the vehicle but did not register the vehicle with the R.T.A. even after lapse of six months. The complainant did not pay the monthly instalments for the period of December, 2005, January, and February, 2006 when opposite party No.2 approached the complainant with respect to payment of instalments in January, 2006, they were informed that the vehicle was handed over to opposite party No.1 dealer and the complainant cannot pay the amounts till he receives the vehicle. On 7-2-2006, opposite party No.2 had issued a notice calling upon the complainant to pay the instalments within three days from the date of receipt of notice. It is the case of opposite party No.2 that inspite of receipt of the notice, the complainant neither responded nor paid the instalments due and therefore they were constrained to possess the vehicle from opposite party N.1 where the vehicle was left by the complainant. It is the case of the complainant that he has paid 8 instalments to opposite party No.2 bank i.e. Rs.9,712/- along with Rs.15,000/- down payment. It is the further case of the complainant that the vehicle went off road for 10 days in November, 2005 and subsequently on 13-1-2005 for 13 days for major repairs and therefore he could not pay these amounts and opposite party No.2 had illegally seized the vehicle from opposite party No.1 dealer. We observe from the record that Ex.B3, notice, got issued by opposite party No.2 dated 7-2-2006 reads as follows:
Dear Sir/madam,
Reg: Overdue outstanding amount of Rs.1214/-.
This refers to the loan cum hypothecation agreement no.LTHYD00003779757 entered into with us for the purchase of Two Wheeler vehicle.
Despite repeated reminders we find that you have failed and neglected to make the EMI payment in time resulting in an amount of Rs.1214/- as outstanding in your account.
As per the terms and conditions of the above agreement, regular payment of Equated Monthly instalments is the essence of the agreement. Please note that non payment of monthly instalments results in breach of the terms and conditions of the agreement and will be viewed seriously.
We therefore call upon you to make the payment of Rs.1214/- by Pay Order/Demand Draft in favour of ICICI Bank Limited payable at Hyderabad within 3 days from the date of receipt of this letter, failing which we would be constrained to take appropriate legal recourse available to us under the agreement.
Note: Please ignore if you have already paid.
It could be observed from the above no where had the opposite party bank mentioned that they would possess the vehicle from the complainant/dealer, if the amounts were not paid. Moreover the outstanding amount stated in this letter is only 1214, which is the instalment to be paid per month. No where in this notice, was it clearly stated that the complainant had failed to pay three instalments or that he has violated a particular clause of the agreement or that his vehicle would be possessed, if he has not paid that amount. Without issuance of proper notice and giving an opportunity to the complainant, opposite party No.2 ought not to have repossessed the vehicle or sold it.
It is an admitted fact that opposite party No.2 bank has sold away the vehicle for an amount of Rs.14,000/- and the sale proceeds were credited to the loan account and the complainant was called to pay the Rs.19,980/-.
It is also the case of the complainant that there was a manufacturing defect in the vehicle because of which it was off road since November, 2005 and in January, 2006 for a period of 40 days and the vehicle was lying with the dealer i.e. opposite party No.1. Opposite party No.1 remained exparte before the District Forum and in the absence of any documentary evidence that there is manufacturing defect in the vehicle, opposite party No.1 cannot be made liable to compensate for any manufacturing defect. However, we observe from the record that there was no proper notice issued to the complainant prior to the seizure of the vehicle and we rely on the judgement of the NATIONAL CONSUMER DISPUTESREDRESSAL COMMISSION, in III (2007) CPJ 161 (NC) in Citicorp Maruti Finance Ltd. v. s. Vijayalaxmi in Revision Petition No. 737 of 2005—Decided on 27.7.2007 wherein it was held that
Forceful seizure of vehicle and Practice of hiring musclemen as recovery agents deprecated, needs to be discouraged. Recovery of loans or seizure of vehicle permitted only through legal means. Banks cannot employ goondas to take possession by force. As per Hire Purchase Agreement as there is default in payment of loan, Vehicle was seized forcefully before expiry of time and No notice given before repossession Procedure prescribed for repossession not followed. Therefore it is unjust to direct consumer to pay outstanding balance amount when vehicle repossessed by force and sold without prior notice and OP liable to pay market value of vehicle with interest @ 9%.
Based on the aforementioned judgement, we hold that opposite party No.2 bank has possessed the vehicle without giving any prior notice and therefore has committed an act of deficiency in service. The vehicle has already been sold by them to third party and they are still demanding an amount of Rs.19,980/- to be paid by the complainant. Therefore, we are of the considered view that the act of opposite party No.2 in demanding additional amount from the complainant after sale of the vehicle without issuing any notice to him and to reiterate giving him an opportunity to pay the instalments prior to the seizure specially when the vehicle was admittedly with opposite party No.1 for repairs, amounts to deficiency of service for which act, they are liable to compensate the complainant with an amount of Rs.25,000/- together with costs of Rs.5,000/-. We also further direct opposite party No.2 not to demand payment of any further amounts from the complainant keeping in view that the vehicle was seized and sold without giving him a proper opportunity to pay the instalments due.
In the result this appeal is allowed in part against opposite party No.2 directing opposite party No.2 not to demand any further amount as the vehicle is already sold and to pay compensation of Rs.25,000/- to the complainant together with costs of Rs.5,000/- to be paid in four weeks, failing which the amount awarded would attract interest at 9% p.a. Appeal against opposite party No.1 is dismissed without costs.
PRESIDENT. LADY MEMBER.
Dated 23-1-2009