Delhi

New Delhi

CC/799/2013

Sher Singh - Complainant(s)

Versus

M/S. Kotak Mahindra Bank Ltd - Opp.Party(s)

19 May 2015

ORDER

CONSUMER DISPUTES REDRESSAL FORUM-VI

(DISTT. NEW DELHI), ‘M’ BLOCK, 1^STFLOOR,

VIKAS BHAWAN, I.P.ESTATE,

NEW DELHI-110002.

 

Case No.CC/799/13                                                                                                                                                                                Dated:

In the matter of:

SH.SHER SINGH

S/O SHRI SUMER SINGH,

R/O VILLAGE JHARSAINTLY,

TEHSIL BALLABGARH,

DISTRICT FARIDABAD (HARYANA)

               

 ……..COMPLAINANT

 

VERSUS

 

KOTAK MAHINDRA BANK LTD.

UGF-1-11, UGF, AMBADEEP-14,

K.G MARG, NEW DELHI-110001.

 

 ………. OPPOSITE PARTY

 

ORDER 

President: C.K Chaturvedi

The complainant alleges deficiency on the part of OP Bank in forcibly repossessing the truck bearing No.HR-38 S 0508 from the driver of the complainant, when the truck was going to deliver some goods to a trader in UP. The bank had financed the loan of Rs.16,55,000/- on 4.7.12, and under the agreement executed, bank had a right to repossess the vehicle, if financial discipline was violated by complainant.

It is alleged by complainant that he had paid installment regularly for few months, as shown by bank statement on record, but during month of Oct., Nov., he could not deposit full installment and sought time and bank thereafter accepted the installment on 23.11.12, but on 25.11.12 while the truck was in UP (Haidargarh), bank with the help of musclemen forcibly possessed the truck, after informing the local police of Haidargarh.  It on the same day issued a notice of sale of truck and sold the truck in March.  IN the meantime, complainant went to bank to recover the truck, but nothing happened.  Therefore, this complainant stating that bank falsely stating the vehicle was still in its name, though some Shri Parveen Singh was driving it.  Complainant also filed a civil suit for restoring sale of truck to some other person, by insured but it was dismissed on prima facie view of the matter by Civil Judge, Rohini.

We have considered the matter summarily in the light of admitted position of facts, that truck has been sold in 3/13, after sending notice of sale to complainant on 25.11.12, and heard the complainant for both the parties.

 The relevant question for consideration is whether the OP bank, despite having a right as owner of truck as financier has acted according to due process in re-possessing the vehicle.  Admittedly, the complainant was in default by not tending full installments, and bank had the right to repossess the same.  The complainant borrower lives in Faridabad, but the vehicle is chased in UP and possessed while in transit, and thereafter informing local SHO.  It is nothing placed on record that any notice to complainant was ever given before re-possessing the vehicle, from him in Faridabad, or opportunity to him to arrange money to avoid that.  The fact of seizing of vehicle in UP, itself speaks and OP has failed to explain it.  The law is well settled by Supreme Court that even in case of loan default the owner of loan or bank has to resort to civil process and not to use force to possess the vehicle. The Hon’ble Supreme Court in case titled Manager, ICICI Bank ltd. Vs. Prakash kaur 2007 (1) JCC (Supreme Court) 681 mentioned that:

“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 vehicles in cases where the borrower may have committed default in payment of the installments instead of taking resort to strong arm tactics.”

Also see citations Citicorp. Maruti Finance Ltd. Vs. S.Vijayalaxmi 2012 (1) JCC (Supreme Court) 613, ICICI Bank Vs. Shanti Devi Sharma & Ors. 2008(3) JCC (SC) 1572, and CitiCorp. Maruti Finance Ltd. Vs. S.Vijaylaxmi III (2007) CPJ 161. To this extent, we find OP guilty of deficiency.  The complainant has gone to the extent or filing civil suit for restoring sale, which shows that bank was not ready to give time to settle the loan, on as he filed suit in 12/12.

The bank has failed to appreciate that vehicle are financed on EMI basis to improve economy of the country, so that, persons carry out trade and other activities, which contribute to economy’s drive, by easing repayment even to poor persons, who earn living by transport business.  All this is towards beneficial role of bank is stabilizing economy.  In this broad objective banks are supported to be sympathetic to borrowers, to the extent of giving the more time to settle, by charging interest etc., possessing a vehicle and putting this to sale to throw the trader on road dependent on business, is to harm economy and to create unemployment.

Department of banking in Govt. of India should issue clear and mandatory guidelines to Banks so that repossession is done mechanically and loan availer are not pushed out of economy to ruins.

In this case bank has sold the vehicle in 3/13. There is nothing placed on record from side of bank to show it  any efforts were made or opportunity was given to complainant to call upon him to abide by financial discipline and get the truck released.  The bank has further hit the complainant by selling a fully furnished truck of the complainant for just Rs.12 lakhs and created liability of Rs.5 lakhs on complainant by putting to death his source of business and repaying capacity.

In the light of above discussion, we hold OP guilty of violating Supreme Court guidelines on the subject, and violating rule of law and thereby also taking away his source of business  to make repayment of loan, and creating unemployment and make country’s economy suffer. In order to awake bank for its social responsibility we award compensation of Rs.10 lakhs on the bank for breach of law laid down by Hon’ble Supreme Court.

We also award Rs. 50,000/- towards litigation expenses.

The order shall be complied with within 30 days of the receipt of the copy of the order; otherwise action can be taken under Section 25 / 27 of the Consumer Protection Act.

File be consigned to record room.

Copy of the order be sent to the parties free of cost.

Copy of the order be also sent to Secretary, Department of Banking, Ministry of Finance, to consider issuing guidelines in such matters, in the interest of Consumer Protection.

 

        Pronounced in open Court on 19.05.2015.

 

 (C.K.CHATURVEDI)

PRESIDENT

 

 

(S.R. CHAUDHARY)         (RITU GARODIA)

MEMBER                          MEMBER