Per Mrs.Usha S. Thakare, Hon’ble Presiding Judicial Member
Being aggrieved by the order dated 01/07/2009 passed in consumer complaint No.11/2009 by Learned District Forum, Sindhudurg, original opponent No.1-Shriram Transport Finance Company Ltd. has preferred the present appeal.
2. By the order under challenge, Learned District Forum was pleased to partly allow the complaint filed by respondent No.1/complainant-Mr.Sandeep Sudhakar Patkar. The present appellant/opponent No.1 was restrained by the District Forum to take possession of vehicle bearing No.MH-11 M 3215 from possession of the complainant. Appellant/ opponent No.1 was further directed not to charge interest or fine on the amount due towards complainant. Appellant/opponent No.1 was further directed to pay amount of `5,000/- to the complainant towards mental pain and agony and amount of `1,000/- towards cost of litigation. It was held that opponent No.1 adopted unfair trade practice and fine of `10,000/- was imposed which was directed to be deposited with the Legal Aid Fund of the District Forum. Opponent No.1 was further directed not to follow the unfair trade practice in future. However, complaint was dismissed as against opponent No.2.
3. The facts giving rise to the present appeal in short are as under :-
Appellant/opponent No.1 is a non-banking finance company incorporated under the Companies Act, 1956. The company is carrying on business for providing finance for purchase of vehicles as per guidelines of Reserve Bank of India. The respondent No.1/complainant had taken a loan of `3 Lakhs on 28/11/2007 for purchasing Truck bearing No.MH-11 M 3215. As per agreement, loan was to be repaid by the complainant till 01/10/2011. Respondent No.1/complainant repaid some amount of loan by installments. However, due to financial difficulties and slack in his business, it was difficult for him to repay the remaining installments of loan. In spite of intimation given to opponent No.1/Finance Company on 21/01/2009 notice was issued to the complainant. Said notice was handed over to wife of the complainant behind his back. The complainant personally went to opponent No.1 and assured to pay amount towards loan in the month of February 2009. However, on 31/01/2009 Mr.Prakash Ketre and Mr.Santosh Jadhav (Opponent No.2) came to the complainant on behalf of opponent No.1 and tried to take away the truck from possession of the complainant. They talked with the complainant in insulting words. The complainant was abused by Mr.Prakash Ketre and Mr.Santosh Jadhav. They had threatened the complainant and said that they would take away the alleged truck. The complainant had then filed a report at Police Station at Kankavali. Thereafter, officers of opponent No.1 and opponent No.2 had threatened the complainant by making phone calls and told that the truck would be sold. The complainant is using said truck and it is the only source of his livelihood. Complainant and his family would suffer hardship if said truck is seized by the opponents. Therefore, the complainant had filed complaint and requested that Finance Company i.e. opponent No.1 may be restrained to seize the truck from possession of the complainant. They be directed to charge the interest on loan as per law, installments be claimed as per law, time may be given to deposit loan installments and blank cheques obtained from the complainant may be returned to him.
4. Appellant/opponent No.1 resisted the claim by filing written version. It is submitted that opponent No.1 did not repay the installments of loan. Opponent No.1 had denied all adverse allegations. It is submitted that the complainant did not pay installments of loan regularly. He failed to repay the loan. On 21/01/2009 notice was issued and complainant was directed to deposit arrears of loan. It was informed that if due loan amount was not deposited till 28/01/2009 the vehicle would be seized. In spite of notice, complainant failed to deposit loan amount. Therefore, authorised Officers of opponent No.1 went to seize vehicle on 31/01/2009. The complainant abused the authorised Officers of opponent No.1 and filed false report against them and therefore, truck could not be seized. The complainant had taken loan from opponent No.1 and executed Hypothecation agreement. Truck was mortgaged with opponent No.1. Complainant was supposed to repay the loan amount since 28/11/2007 till 01/10/2011 by EMI of `9,670/-. However, complainant committed default in payment of installments. Legal notice was issued to the complainant and it was informed that his vehicle would be seized. No illegal act was committed by opponent No.1. It is further submitted that as per written agreement, column No.15, it was agreed to refer the matter to the Arbitrator and the dispute should be resolved by arbitration. Therefore, District Forum has no jurisdiction to decide the complaint. Complaint is liable to be dismissed with costs.
5. Opponent No.2 failed to file written version. Hence, complaint was decided without written version of opponent No.2.
6. Complainant had filed his affidavit. In support of his submission he had filed receipts of payment and notice issued by opponent No.1 to him. The questions put up by opponents were replied by filing affidavit. Officers of opponent No.1 led their evidence by filing affidavit. Opponent No.1 had placed reliance on agreement and affidavit executed by the complainant while obtaining the loan. After considering the evidence and documents on record, Learned District Forum was pleased to partly allow the complaint.
7. We have heard Mr.Mangesh Patel, Learned Advocate for the appellant/opponent No.1. Respondent No.1/complainant failed to appear in this appeal. Hence, no one argued on behalf of respondent No.1/complainant in the present appeal.
8. It is urged on behalf of the appellant that the order passed by Learned District Forum is illegal and incorrect. It is against the facts and merit of the case. Learned District Forum committed error while appreciating the agreement of hypothecation in its proper perspective. Learned District Forum failed to consider that the loan was granted to the borrower/respondent No.1 on his request and for his welfare. The complainant/respondent No.1 undertook to repay the amount with interest by installments. Complainant had committed breach of terms and conditions of the agreement. He was well aware that on failure to pay loan amount as per agreement, hypothecated vehicle is being confiscated or attached. The appellant/Finance Company issued notice to the complainant/respondent No.1. On non-fulfillment of said notice, opponent No.1/appellant had right to take possession of hypothecated assets. Authorised Officers of the Finance Company/appellant had gone to take possession of the vehicle, but due to insult of those officers and abusive language of the complainant, they did not seize the truck and came back. Learned Counsel for the appellant requests to set aside the illegal order passed by Learned District Forum to avoid injustice by allowing the present appeal.
9. Admittedly, the appellant/Shriram Transport Finance Company is a finance company registered under the Companies Act. Complainant/respondent No.1 has taken a loan of `3 Lakhs to purchase a truck bearing No.MH-11 M 3215. Written agreement was executed between the complainant and the Finance Company/appellant. The appellant had challenged the jurisdiction of the District Forum in view of arbitration clause mentioned in the agreement. In view of Section 3 of the Consumer Protection Act, 1986, Consumer Forum has jurisdiction to settle the dispute between the parties. Learned District Forum has rightly held that the District Forum has jurisdiction to try the complaint.
10. The complainant/respondent No.1 had taken loan of `3 Lakhs from the present appellant on 28/11/2007. Complainant/respondent No.1 was duty bound to repay the loan amount by monthly equated installments. The complainant/respondent No.1 repaid the amount of `10,000/- on 28/12/2007, amount of `10,000/- on 29/02/2008, amount of `5,000/- on 08/05/2008, amount of `5,000/- on 07/06/2008, amount of `10,000/- on 03/07/2008, amount of `25,000/- on 22/11/2008, amount of `5,000/- on 24/11/2008, amount of `9,600/- on 31/12/2008, amount of `10,000/- on 03/02/2009 and amount of `15,000/- on 03/02/2009. Due to financial difficulties he could not pay the remaining amount as per the agreement well within time.
11. Appellant had issued notice to respondent No.1 on 21/01/2009. Notice might be received by wife of respondent No.1, but notice was well within knowledge of respondent No.1. It is an admitted fact that two officers of Finance Company/appellant went to seize the truck of the complainant, but truck could not be seized. The complainant/respondent No.1 on affidavit submitted on oath that Mr.Prakash Ketre and Mr.Santosh Jadhav tried to remove the truck forcefully. He was abused and insulted by them. The complainant/respondent No.1 had filed report against them in the Police Station.
12. It is true that the Finance Company had charge over hypothecated truck against the loan granted to complainant/respondent No.1. Respondent No.1 had purchased the truck for his own use for earning his livelihood by taking loan from the Finance Company/appellant. Appellant has to act as per guidelines of Reserve Bank of India on fair practices code. In the matter of recovery of loan, Finance Company should not have resorted to undue harassment i.e. persistently bothering borrower all over the use of muscle power for recovery of loan, etc. The Finance Company should resort to a procedure recognized by law to take possession of vehicle where the borrower might have committed a default in payment of installments. Practice of hiring Recovery Agents who are muscle-men is deprecated and need to be discarded.
13. Learned District Forum by placing reliance on the ruling of the Hon’ble Apex Court in the case of ICICI Bank V/s. Shantidevi Sharma & Ors., (2008) CTJ 677 (SC)(CP) and placing reliance on ruling laid down by the Hon’ble National Commission in the case of Citicorp Maruti Finance Co. Ltd. V/s. S. Vijayalaxmi, (2007) CTJ 1145 (CP)(NCDRC), rightly held that the appellant/Finance Company had followed unfair trade practice. The appellant should have recovered loan amount by following due process of law.
14. Learned Counsel for the appellant has drawn our attention to the operative part of the order passed by District Forum and urged that certain conditions were imposed on complainant/respondent No.1 while passing the order by the District Forum. Those conditions were not fulfilled by the complainant/respondent No.1. His conduct shows that he is not entitled for any equitable relief.
15. By order dated 01/07/2009 Learned District Forum had directed the complainant/respondent No.1 to pay arrears of loan to the appellant in four installments and to repay the remaining amount by paying regular monthly installments. Now huge amount is due towards complainant/respondent No.1. Admittedly, the truck in question is hypothecated to the Finance Company. The Finance Company/appellant has charge over said truck. Appellant/Finance Company can recover total due amount from the borrower of the loan through process of law. The Finance Company is responsible for actions of its agents. It is the duty of the Finance Company to ensure that its agents engaged for recovery of dues should strictly adhere to the guidelines of Reserve Bank of India. In case of ICICI Bank V/s. Shantidevi Sharma & Ors., Supra, Hon’ble Apex Court observed in Para 14 as under :-
“We deem it appropriate to remind the banks and other financial institutions that we live in a civilized country and are governed by the rule of law.”
16. The Financial Institutions like appellant would not suppose to take law in hand. We are of the view that the order passed by Learned District Forum is just, legal and correct. The appellant can recover the due amount by due process of law without taking law in hand. The order passed by Learned District Forum requires no interference. Hence, we pass the following order :-
-: ORDER :-
1. Appeal stands dismissed.
2. Parties to bear their own costs.
3. Copies of the order be furnished to the parties.
Pronounced
Dated 9th October 2013.
