Heard learned counsel for both sides.
2. Here is an appeal filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.
3. The case of the complainant in nutshell is that the complainant has purchased Bolero SLX vehicle bearing Registration No. OD-09B-3789 having availed finance of Rs.6,33,000/- from OP Nos. 1 and 2. The loan was extended by OP Nos. 1 and 2 on condition to repay the same on instalment basis. It is alleged inter alia that OP Nos. 1 and 2 without any notice repossessed the vehicle and without any notice sold the same on auction on 18.8.2015. Complainant had made objection but OP Nos. 1 and 2 did not listen the same. So the complaint was filed.
4. OP Nos. 1 and 2 filed written version stating that the complainant had made agreement with OP Nos. 1 and 2 and as per agreement, they have repossessed the vehicle as the complainant did not pay the loan amount regularly. OP Nos. 1 and 2 stated to have served the notice for public auction and public auction was made. There is no any deficiency in service on their part.
5. After hearing both sides, learned District Forum passed the following order:-
“xxx xxx xxx
The OP 1 & 2 is directed to return the down payment i.e. Rs.1,78,000/- (Rupees one lakh seventy eight thousand) only to the petitioner along with Rs.1,00,000/- (Rupees one lakh) only towards professional loss, harassment & mental agony sustained, further to pay a penalty of Rs.50,000/- (Rupees fifty thousand) only in disregard of the direction made on dt. 20.09.2016 inclusive of cost within 40 days of this order, failing @9% interest per annum will accrue on the entire amount from the date of application till complete realization.
(ii) Further directed to issue NOC to the petitioner.
(iii) The OP 3 is directed to pay the petitioner a sum of Rs.3,000/- (Rupees three thousand) only in non-heeding to the call of the forum and omitting the notice in careless manner, within the above time frame, non-compliance of same will attract @Rs.20/- penalty per day till realization.”
6. Learned counsel for the appellants submitted that the learned District Forum has committed error in law by passing the impugned order without going through the written version with proper perspectives. According to him as per the hypothecation agreement, they have repossessed the vehicle when the complainant did not pay the loan amount having default on payment of the same. He also submitted that notice has been served at every stage but the complainant did not participate. According to him there is agreement for repossession of vehicle in case of default and the same process was followed. Learned District Forum has failed to appreciate such agreement and as such come to a wrong conclusion. So, he submitted to set aside the impugned order by allowing the appeal.
7. Learned counsel for the respondent submitted that the agreement was not signed by the concerned appellants but however as per the agreement notice should have been served before seizure of the vehicle. In the instant case, no notice was served by OP Nos. 1 and 2 upon the complainant prior to seizure. Thus, the seizure was illegal. He further submitted that before selling of the vehicle no notice was served on the complainant. Therefore, there is clear violation of agreement and as such repossession of the vehicle is illegal and the sale is also illegal. Learned District Forum has passed the right order and he supports the same.
8. Considered the submission of learned counsel for the parties and perused the DFR including the impugned order.
9. It is admitted fact that the vehicle of the complainant was financed by OP Nos. 1 and 2. It is also admitted fact that complainant was in default in payment of the instalments. But the agreement as quoted clearly shows that before repossession notice should be issued to the complainant and the DFR does not disclose about issue of notice prior to seizure and thus, the provision of the agreement has been violated by OP Nos. 1 and 2. It is settled in law that if due process of law has not been followed as per the agreement, then the seizure is illegal. If the seizure is illegal, all the process of sale is treated to be illegal. In the instant case, the vehicle was repossessed but no notice of sale has been served on the complainant.
10. Be that as it may, when repossession is illegal, the sale of vehicle is also illegal. Therefore, we confirm the finding of the learned District Forum about the deficiency in service on the part of OP Nos. 1 and 2. Learned counsel for the appellants only drew our attention to the operative portion of the impugned order where the order has been passed to refund the down payment. When the vehicle has been financed and it was purchased in favour of the complainant, the deposit of down payment is mandatory. In the instant case u/s 14 of the Act deficiency can be removed but not by returning the down payment but by returning the vehicle concerned. Therefore, the order to return down payment of Rs.1,78,000/- cannot be sustained in law. It is proved that the procedure has not been followed in repossessing the vehicle and handing over the same. For that OP Nos. 1 and 2 are directed to remove the deficiency in service on payment of compensation of Rs.1,00,000/- as ordered by the learned District Forum. Hence, the impugned order is modified by directing OP Nos. 1 and 2 to pay compensation of Rs.1,00,000/- towards loss and harassment but the order of learned District Forum directing OPs 1 and 2 to pay penalty of Rs.50,000/- being beyond the purview of the Act is set aside. We direct NOC be issued forthwith. Rest portion of the impugned order remains unaltered.
11. The appeal is allowed in part. No cost.
DFR be sent back forthwith.
Supply free copy of this order to the respective parties or the copy of this order be downloaded from Confonet or Website of this Commission to treat same as copy supplied from this Commission.
