1.      This Revision Petition has been filed under Section ­­­21(b) of the Consumer Protection Act, 1986 (the “Act”) against order dated 27.04.2016 of the Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla (‘State Commission’) in FA Nos. 216 and 242 of 2015, wherein the Appeal filed by the Complainant was partly allowed and the same by the Petitioner/OP was dismissed, upholding the District Consumer Disputes Redressal Forum, Shimla (“District Forum”) order in CC No.192 of 2009 dated 04.09.2015, with modification.

2.      For convenience, the parties are referred to as in the original Complaint before the District Forum. Sh. Neeraj is referred to as the Complainant/Respondent and Shri Ram Transport Finance Co. Ltd. is referred to as the Petitioner/OPs.

3.      Brief facts of the case, as per the Complainant, are that he purchased a vehicle with Registration No. HP-09A-1024 in 2003, which was initially financed by Mahindra & Mahindra. He regularly paid the instalments due until September 2007. During this time, Satinder, an agent of OP-1 approached him with a proposal for refinancing the vehicle at a reasonable interest rate. The refinance loan was to be repaid within 18 months, according to the agent. At that time, the Complainant owed Rs.1,60,000 to the previous financer. Attracted by the proposal, he refinanced the vehicle with OP-1 and completed all formalities, but he was not given any documents. On 25.10.2008, his vehicle, which was parked in the parking lot of Sh. Lalit Kumar in Prem Nagar, Kotkhai, was taken by the OPs without his consent. He filed a police report, but he was pressurised into a compromise by authorities. Later, on 04.11.2008, he visited the office of OP-1 with cash, as per the compromise, to retrieve his vehicle. However, he noticed that parts of the vehicle were replaced, and when he requested the original parts, the OP refused. Subsequently, he served a legal notice to OP demanding return of the vehicle in its original condition, but no action was taken. As a result, the complainant filed a complaint seeking the return of the vehicle in its original condition or in alternative payment of Rs.5,25,000 along with punitive compensation of Rs.2,00,000.

4.      In their joint reply, OPs raised preliminary objections regarding the maintainability of the complaint and the jurisdiction of the forum to hear the case. On merits, they admitted that a loan agreement was executed between the parties, but they denied informing the complainant that the loan was repayable in 18 months. OPs confirmed that a loan of Rs.1,60,000 was sanctioned and disbursed to the complainant, repayable in 31 instalments with an interest rate of 12.28%. However, he defaulted on several payments. OP denied forcibly taking possession of the vehicle on 25.10.2008, and they also refuted claim that the complainant was pressured by the police. They denied replacing any vehicle parts, stating that an inventory was prepared at the time of the complainant’s surrender of the vehicle, and it was signed by him. On 03.11.2008, the OP issued a legal notice to the complainant demanding the outstanding dues of Rs.2,18,944, but he failed to comply. Consequently, the vehicle was sold for Rs.1,70,000 on 27.10.2008. After the sale, he was asked to pay the balance of Rs.83,008, which he did not pay.

5.      The District Forum in its Order dated 06.10.2010, partly allowed the complaint with the following order:

“14. As the opposite party has already sold the vehicle in question to some third person long back during the year 2008 and the purchaser must have used it after purchasing the same. In view of this it does not appear practicable and appropriate to direct the opposite party to restore the possession of the vehicle to the complainant. The vehicle was purchase by the complainant for Rs.5,25,000/- during the year 2003 and the opposite party had taken possession of the same in the year 2008. The opposite party claims that before sale of this vehicle it was assessed at Rs.1,25,000/- by its surveyor, but neither the affidavit of the surveyor nor his assessment report has been tendered in evidence to show the basis of the assessment. Moreover, this assessment was made behind the back of the complainant. At the time when the vehicle was possessed by the opposite party it was 5 years old and by applying the depreciation of 50% on its purchase value the value of the vehicle comes to be Rs.2,62,500/-. Therefore, the market value of the vehicle is assessed at Rs.2,50,000/-. At the time when the possession of the vehicle was taken away by the opposite party a sum of Rs.2,18,944/- was outstanding against the complainant. Therefore, after deducting this amount the opposite party is liable to pay a sum of Rs.43,556/- to the complainant as value of the vehicle.

15. As a sequel to our above discussion, this complaint is allowed and the OP is directed to pay a sum of Rs. 43,556/- along with interest at the rate of 9% per annum from the date of filing this complaint up till payment within 45 days from the date of this order to the complainant. The opposite party shall also pay a sum of Rs.10,000/- as punitive compensation to the complainant along with a sum of Rs.5,000/- as litigation cost.”

6.      Dissatisfied with the District forum order, the Complainant filed FA No. 242 of 2015 and the OPs filed FA No.216 of 2015. The State Commission vide order dated 27.04.2016 dismissed FA No.216/ 2015 and partly allowed the FA No. 242/2015 and modified the District Forum order as follows:-

“9. We have heard learned counsel for the parties and gone through the record.

10. There is no evidence on record showing that the complainant had offered to pay the money due to opposite party No.1, after the vehicle had been repossessed, but he found that the original parts of the vehicle had been replaced with duplicate parts, by opposite party No.1, except his own self-serving affidavit. Also, opposite party No.1 has not adduced any evidence, except the self-serving affidavit of one of its functionaries, in support of the plea that loan amount was to be returned in thirty-one instalments and not eighteen instalments, as pleaded by the complainant. Opposite party No.1, for the reasons, best known to it, has withheld the agreement that was executed between the parties. Complainant's plea is that copy of agreement was never made available to him.

11. In the absence of agreement, executed between the parties, we proceed to work out the amount of money, payable by the complainant as on the date of sale of vehicle, i.e. 27.11.2008, on the basis of some of the admitted facts, which are like this. Amount of loan was ₹1.60 lacs. This amount was paid to the complainant on 11.09.2007. Rate of interest, agreed between the parties, was 12.28%, to be compounded monthly.

12. According to the opposite party No.1, penal interest at the rate of 3%, per month, was to be charged on the amounts of instalments, which remained unpaid, after due date. According to it, no instalment except a sum of ₹5,000, paid on 11.09.2007, had been paid by the complainant. Complainant does not deny that he had paid only a sum of ₹5,000/-.

13. Now, if the amount of interest at the rate of 12.28%, compounded monthly, is worked out and added to the principal amount of ₹1.60 lacs, from the date of advancement of loan, to the date of sale of the vehicle (vehicle was sold in November 2008), the total liability of the complainant comes to ₹1,82,642.57 or say ₹1.82,643/-.

14. The agreement having been withheld by opposite party No.1, we reject the opposite party No.1's claim for penal interest, which according to it was agreed to be 3%, per month, for delayed payment of instalments. However, we hold that opposite party No.1 is entitled to penal interest on the delayed payment of instalments, at the same rate, at which the interest was agreed to be paid, i.e. 12.28%, per annum. Interest on the entire amount of ₹1.60 lacs, comes to ₹22,642/-. Penal interest on the unpaid instalments, at the rate of 12.28%, per annum, comes to around 2,000/-, Thus, the total liability of the complainant, on account of principal amount, plus Interest, plus penal interest as on the date of sale of the vehicle, works out at ₹1,84,643/-.

15. Vehicle was purchased by the complainant for ₹5.25 lacs, in the year 2003. As per rates of depreciation followed by Insurance companies for the purpose of insuring the vehicles, a vehicle aged between 5 to 10 years, suffers deprecation of 40%. That means, the value of vehicle, in question, had depreciated by 40%, when it was sold by opposite party No.1 in November, 2008. Value of the vehicle thus works out at ₹3.15lacs.

16. Learned counsel appearing for opposite party No.1 submits that valuation of the vehicle had been got done from a Surveyor, at the time of its auction and he assessed the value at ₹1.25 lacs. Report of valuer has been placed on record by opposite party No.1. Valuation was got done by opposite party No.1 behind the back of complainant. The very fact that the vehicle, according to opposite party No.1 itself, fetched a price of ₹1.70lacs, shows that the valuation was on the lower side. Opposite party No.1 having not associated the complainant in the valuation process of the vehicle and having also not given him one month advance notice of sale, in accordance with the provision of Rule 6 of Security Interest (Enforcement) Rules 2002, and also having sold the vehicle without publication of notice in two newspapers, can legitimately be presumed to have deliberately vehicle and to have falsely claimed that the vehicle fetched a price of ₹1.70 lacs only. So we assume the value of the vehicle to be its original value. i.e. ₹5.25 lacs, less 40% on account of depreciation, is equal to ₹3.15 lacs.

17. Amount due to opposite party No.1 on account of principal, interest and penal interest, has been worked out at ₹1,84,643/-, hereinabove. After adjustment of this amount against the price of vehicle, i.e. ₹3.15, a sum of ₹1,30,357/-, becomes payable by opposite party No.1 to the complainant.

18. In view of the above stated position, we partly allow the appeal filed by the complainant, i.e. F.A. No.242/2015 and direct that instead of paying ₹43,556/-, opposite party No.1 shall pay to the complainant a sum of ₹1,30,357/-, with interest at the rate of 9%, per annum, from the date of filing of complaint, i.e. 03.06.2009, to the date of payment of the aforesaid amount of money and shall also pay compensation and litigation cost, as awarded by the learned District Forum. Appeal filed by opposite party No.1, i.e. F.A. No. 216/2015, is dismissed.

19. This order be placed on record of F.A. No.216/2015 and its authenticated copy on the record of F.A. No.242/ 2015.

7.      Being aggrieved by the Impugned order dated 27.04.2016 of the State Commission, the Petitioner/OP filed the instant Revision Petition bearing No.2295-2296 of 2016.

8.      In his arguments, learned counsel for Petitioner/OP reiterated the grounds of the Revision Petition and asserted that the petitioner is a Non-Banking finance company and governed by RBI guidelines for Fair Practice Code for recovery and of SARFAESI Act is not applicable upon them. The vehicle was repossessed by following the duly prescribed procedure and was sold at highest price and the loan was adjusted. As per terms & conditions of the Hire Purchase Agreement there is no deficiency in service on their part. He relied upon ICICI Bank Ltd. vs. Arvind Kumar Gupta, 2016 (1) CPR 505.

9.      The Respondent/Complainant did not appear on the past seven occasions i.e. 08.10.2018, 31.07.2019, 13.04.2021, 07.12.2021, 05.01.2023, 24.03.2023 and 26.05.2023 and thus, he was placed ex-parte.

10.    I have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the parties.

11.    The main issues to be determined are the legality of the action of OP in confiscating the said vehicle and the liability of the parties with respect to the loan agreement and dispute in question.

12.    It is a matter of record that the Complainant purchased vehicle Registration No. HP-09A-1024 in 2003, which was initially financed by Mahindra & Mahindra and he paid the instalments till September 2007. During this time, an agent of OP-1 approached him with a proposal for refinancing the vehicle at a reasonable interest rate to be repaid within 18 months. At that time, he owed Rs.1,60,000 to the previous financer. Attracted by the proposal, he refinanced the vehicle with OP-1 and completed all formalities. However, no loan documents were given to him. On 25.10.2008, his vehicle, which was parked in Prem Nagar, Kotkhai, was taken away by OP-1 without his consent. While he filed a police complaint, he was put under pressure to compromise. Later, as per terms of compromise, he visited the office of OP-1 on 04.11.2008 with cash to retrieve his vehicle. However, he noticed some vehicle parts were replaced. When he requested for original parts, the OP refused. Subsequently, the complainant served a legal notice to them demanding the return of the vehicle in its original condition, but no action was taken.

13.    It is admitted position that Rs.1,60,000 loan was disbursed by the OP-1 to the Complainant with liability to pay interest as per the terms of contract. While OP-1 asserted that the loan along with interest was repayable in 31 months, the Complainant contended that is was repayable in 18 months. OP-1 contended that the Complainant defaulted several payments and denied taking forcible possession of the vehicle on 25.10.2008. The OP-1 refuted claims that the Complainant was pressured for compromise and that the vehicle parts were replaced. OP-1 asserted that an inventory was prepared at the time of the Complainant surrendering the vehicle, and it was signed by him as well. OP-1 reiterated that on 03.11.2008 they issued a legal notice to the Complainant for payment of outstanding amount of Rs.2,18,944, but he failed to comply. Consequently, the vehicle was sold for Rs.1,70,000 on 27.11.2008 and the complainant was asked to pay the balance of Rs.83,008/-, which he did not pay.

14.    It is seen from the record that there was a settlement between the parties on 27.10.2008 with respect to vehicle repossession wherein it was specifically recorded that as on date when the vehicle was confiscated on 25.10.2008, it was loaded with 25 packages of apples worth about Rs.2000. This amount was agreed to be paid by Mr. Sardari Lal, Branch Manager of Shri Ram Finance Company. (OP-1). Therefore, evidently, this is not a case of voluntary surrender of vehicle as claimed by OP in communication dated 25.10.2008 and it was a seizure/recovery. Further, it is also revealed from the records that a notice dated 03.11.2008 was issued with respect to default in payment of the loan installments and the vehicle was sold in auction on 27.11.2008, in the Complainant’s absence. It is noticeable from the receipt affixed on the copy of the notice dated 03.11.2008 (Annexure P-12) that it was in fact forwarded by the OP company to the Complainant by Registered Post only on 19.11.2008 and a planned auction was held by OP with limited notice to the Complainant on 27.11.2008, in the absence of the Complainant. Thus, evidently, while the Complainant defaulted certain installments of payments due, the OP failed to comply with the legal processes and liabilities with respect to the loan agreement, recovery and auction of the vehicle.

15.    With due regard to the entire facts and circumstances of the case deliberated above, including the failure on the Complainant’s part and non-compliance of requisite procedures by OPs, I find no reason to interfere with the detailed and well-reasoned order of the learned State Commission dated 27.04.2016. Both the Revision Petition Nos. 2295-2296 of 2016 are, therefore, dismissed.

16.    There shall be no order as to costs. All other pending Applications, if any, stand disposed of.