MR LAXMI NARAYAN PADHI, PRESIDENT… The factual matrix of the complaint is that, The complainant being an Agriculturist having lands for the betterment of his farming had opted to purchase one Tractor and approached the O.P.No. 5, the local dealer for Tractors of INDO FARM brand, who on receipt of Rs.1,90,000/- from the Complainant on 31.07.2013 assured to provide one DI 3035 Model Tractor of Indo Farm brand and also to arrange finance for the tractor. In the office of the O.P.5 at Umerkote, the Complainant was directed to put signature on a bunch of papers termed as agreement for finance against the Tractor on dt.31.07.2013. The Complainant being illiterate,unable to understand the contents of the papers just signed where he was directed to and was asked to come after a fortnight. It is submitted that at the time of agreement, the O.P.s did not provide any agreeement papers, but got the Complainant signed in a budle of printed and dotted lined papers. He was only said that, he should pay a monthly instalment of around Rs.12,000/- till end of four years commencing from 01.09.2013. On dt. 23.08.2013 he was provided with a Tractor of DI 3035 Model bearing Registration No. OD-24-6562 with Chasis No.CNR30006039EP and Engine No. T243688D with registration Card and a Xeroxed copy of cover No. Sl.No. 413607 of New India Assurance Company Ltd. For Rs. 13,274/-. But the O.P.s never gave him a copy of the Agreement or account statement or the Insurance paper for the vehicle. They also kept one set of keys with them.
02. The Complainant further submits that, he has been regularly paid the instalment amount, Firstly on dt.01.09.2013 an amount of Rs.12,230/- to Dt.01.12.2014 an amount of Rs1,78,572/-. But each time the representatives O.P.1 collecting the installments demanded more and more excess than the actutal balance, each time threatening to repossess the vehicle. So was he unable to get the tractor to his farm land apprehending the musclemen of the O.P.s would seize the tractor. Yet on dt. 18.03.2015 with out any pre notice, the musclemen of the O.P. 1 came, and got the tractor with trolley forcibly away, despite the requests of the Complainant to meet the demands though illegal, all of which run in vein. And on dt. 25.06.2015 the complainant received a letter that his tractor is sold, and he is required to pay more Rs.2,16,000/-,hence complaining of deficiency and arbitrary action of the O.P.s the complainant has approached this forum to allow this complaint with cost and compensations of Rs.5,00,000/- inter alia others.
03. The complainant along with submitted sworn affidavit, insurance cover letter, Copy of registration certificate, some letters of O.P.s and account statement of loan above referred.
04 The OP.s entered their appearance on dt.14.03.16 to file their counter, contending that, complainant is not a consumer, as the relation between the complainant and OP.s are of a borrower and lender. As the loan agreement contains an arbitration clause, the disputes should have been referred to arbitrator at Chennai, the complainant executed the loan agreement on dt.31.07.13, agreeing to pay Rs.3,50,000/- with interest in 47 installments starting from 01.09.13 to 01.07.13, and that the complainant never wrote to them or approached ever for any documents. The complainant is a literate person and having availed a sum of Rs.3,50,000/- on 31.07.13, executed the loan agreement which is valued at Rs.5,31,274/- inclusive of insurance of Rs.13,274/- and interest of Rs.1,68,000/- payable in 47 monthly installments @ Rs.12221/- against first 10 installments, Rs.12,121/- next 10 Rs.12021/- next 10 installments Rs.11021/- next 16 installments and last installment being Rs.11034/-. The complainant paid the installments till 01.02.14, but thereafter did not pay. The OP.s delivered four reminder letters on dt.11.12.14, 11.01.15, 13.02.15 & 08.03.15 through RP but, when the complainant did not pay anything, they seized the vehicle and sold in auction and the same was intimated to the complainant vide their letter dt.19.06.15, and the complainant still need pay an amount of Rs.2,82,047/- against the loan amount. Hence they prayed for dismissal of the complaint.
05. The OP.s along with counter, submitted the loan agreement, copy of four letters as above. However, they refrained from filing any payment details against the loan amount, or any other paper of seizure or subsequent records.
Considering all the facts and submissions by the parties to the case, this forum has restricted its adjudication to the following issues:
1) Whether the complainant is a consumer as defined in the C.P.Act?
2) Is this forum rested of the jurisdiction as claimed by the OP as per Sec 11(2)?
3) Is the seizure of the vehicle by the OP & selling it away unscrupulously without the knowledge of the complainant amounts to deficiency in service concurred by the C.P.Act?
4) Is a clause of arbitration or continued proceeding thereof similar to the present litigation bars this forum to entertain the complaint on the principle of res judicata ?
5) Whether the complainant entitles for any compensation as against the Ops and if yes to what extent?
06. The learned counsel for the complainant submitted that the Ops is an N.B.F.C company, selling loans for a valuable consideration i.e. interest. The Ops are providing services of financing their identified prospectus, now at present the complainant.
07. Sec. 2(d) (ii) defines a consumer means any person who hires of any services for a consideration…..
Sec.2 (O) of the act defines ‘service’ means service of any description which is made available to potential uses and includes, but not limited to the provisions of facilities in connection with banking, financing, insurance, transport, procuring……
Sec.2(1)(g) defines deficiency of service means any fault, imperfections, shortcomings or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force…….
08. Here in the section the word ‘in pursuance of a contract leaves no ambiguity to the question that any service, the parties bound to perform under a contract, may be that contract private or public, implicit or explicit, but arising out of a contract, which the plea of the learned counsel for the OP that the jurisdiction of the consumer court in the matter of deficiency in service on the part of the Ops is not ousted in view of the existence of a private contract/agreement.
09. Undoubtedly the OPs are NBFC Company availing of financing services to their customers and the present complainant availing that service for a valuable consideration i.e. interest on such advance; hence the Complainant is a consumer under the Act.
10. Moreover, the agreement executed between the parties, in the present case is, a loan agreement with hypothecation of vehicles. And in the present case, as the agreement is a loan agreement, and the vehicle in question, is bought out of the loan advance hypothecated to the OPs and as admitted by both the parties is registered in the name of the complainant, undoubtedly the Complainant is the lawful owner of the Tractor in question.
11. As the present dispute is all arises of an agreement we are to consider some important aspects of a valid agreement. In our country, except so far as specifically provided for and covered by any other legislation, the matter relating to all agreements constituting substratum of a valid contract are subjected to Indian Contract Act 1872.
12. In addition to four basic ingredients as laid down in Sec.10 of the I.C.A absence of lawfulness and enforceability are pertinent in the context of investigation of the questions under consideration.
13. Unlike in the fact, law of contract has in recent times is assuming a new and wide dimensions. The financers practicing concluding contracts in non standardized forms. Such contract contains a large number of terms and conditions which restrict and often excludes the liability of the banks/ financiers under the contract. In the ordinary way, the customer has no time to read them, and if read them, he would probably not understand them. If he did understand and object to any of them, he would generally be told that he could take or leave.An individual with acute need of the finance can hardly bargain, his only function is to accept the offer, whether he likes its terms or not.
14. The Individual therefore deserves to be protected against the possibilities of exploitation inherent in such contracts. The courts shall evolve/ has evolved certain modes to protect the affected party i.e. invoking the doctrine of fundamental breach or by finding that the terms are unreasonable or that there was misrepresentation about them.
15. And considering the essence of Sec.23, reproducing all of them is apprehended of lengthening the conclusion. We hold that every agreement made for or about any matter or thing which is either forbidden by status or would defeat the provisions of any lay, or the court regards it as opposed to public policy, is unlawful and ipso fact void.
16. It is admitted that, the complainant was availed finance of Rs.3,50,000/- along with insurance amount of Rs.13,274/- agreeing to pay with interest of Rs.1,68,000/- in 47 installments starting from 01.09.13 and a loan agreement bearing no. OR- BUUK- 00079 was executed between parties, on dt.31.07.13. It is also not rebutted that, the cost of the tractor head was Rs.5,32,950/- and trolley cost was Rs.1,61,500/-, total cost of tractor amounting to Rs.6,94,450/- against which the OP has financed Rs.3,50,000/- and the rest of Rs.3,40,450/- was financed by the complainant itself.
17. The complainant submits that, though he was paying regularly the OP.s are demanding each time some excess amount to satisfy their oblique motive by harassing and frustrating him. He referred us to the four letters the OP.s wrote as in para 3 above and to the account statement depicting the repayment of complainant, issued by OP.s.
18. We referred to account statement admitted as Ext-A-3 vis a vis the demand letters of OP.s on different dates. Till date 15.09.14, the complainant has paid Rs.1,41,372/- as against payable sum of Rs.1,58,573/- as per schedule of repayment agreed, leaving a balance of only Rs.17,201/- but the letter dt.15.09.14 of OP Ext A-4 Rs.60,042/-. Similarly demand letter of OP.s dt.11.12.14 is made for Rs.64,689/- against an actual balance of installment of Rs.16,364/- only. Similarly the demand letter dt.11.01.15 of OP, demanding Rs.76,810/- against actual balance of Rs.28,485/- only. The OP.s in this respect failed to appraise us how they arrived at the amounts, less they produced any account of repayment.
19. The OP.s submitted in their counter that, for the nonpayment of installments, they wrote reminders to complainant to repay, but complainant never paid then after. The first letter referred being on dt.15.09.14. But on reference to repayment scheduled dt.01.11.15 issued by OP.s submitted us by complainant shows that, on dt.01.09.14, the complainant has paid Rs.12,500/- against the loan amount 15 days before the demand letter, and again on dt.14.10.14 an amount of Rs.12,200/- has been paid by complainant. Again the complainant has paid Rs.12,500/- on dt.17.11.14 and again Rs.12,500/- on dt. 06.12.14, just five days before the second reminder of the OP.s.
20. Hence, the contention of the OP.s that complainant did not pay the installments, is all false and deliberate and made to misguide this forum.
21. The Complainant argued that, the O.P. being an N.BF.C. should have been guided by the rulings and directives of the R.B.I., and R.B.I in its different circulars has strictly instructed the N.B.F.C.s including the present O.P. to adhere to a fair practice Code, while dealing with their customers, urging for loan advances. He has filed copies of such circulars one among them is of recent date of 2nd,july,2012, where in the O.P. should have adhered to a fair practice code of availing all such information and conditions to be stipulated in the agreement, special conditions prejudicial to the interest of the customer, should be intimated prior to sanctioning of the loan and let sufficient time to the get the customer well go through the content of it to consent to agree with the conditions, only after which agreement should have been executed. Signing of agreement without going through the conditions stipulated therein, is void & hit by sec.23 of the Contract Act. And in the present case the O.P. has deliberately deprived the complainant from going through the conditions of the agreement he signed so also he is not intimated of the rate of interest, consequence of delayed payment, but on repeated requests through letters and personal phones, the O.P.s never bothered to deliver copy of the agreement or statement of accounts hence all through the period the Complainant is kept in dark of the contents of the agreement and the account statement, subsiding the rulings and directives of the R.B.I., hence amount to deficiency in service on the part of the O.P. in the whole transaction.
22. The Complainant contends that the very seizure of the vehicle is illegal. Though there is expressed; provision in the agreement as to forcible seizure, laws have been enacted and procedures have been contemplated therein for such seizure. The foremost sine qua non of such procedure is, issuance of notice, prior to such seizure, and so after the seizure procedures laid down in sec 4 of the Security Interest Enforcement Rules,2002 and so the valuation of asset, sale of it, issue of certificate of sale in Seec.5,6 and 7 respectively, and neither of the procedures followed by the O.P.s while enforcing the seizure of the vehicle and neither of the procedures are reflected in the agreement.
23. The learned counsel for the Complainant brought to the notice of this Forum, the judgments given by Hon’ble Andhra Pradesh Consumer Disputes Redressal Commission in Sk. Habibbunisa Vs.Shriram Transport Finance Company, where in after having a detailed discussions on Judgements of Hon’ble Apex Court in Sundaram Finance Ltd.Vs.Styate of Kerala 7 Others(AIR-1966-SC-1178), Orix Auto Finance(India)Ltd Vs.Jagmindar Singh & Anr(II-2007-CP0J-45-SC), ICICI Bank Vs. Prakash Kaur & Others(2007-2-SCC-711) where it has held that Shriram Transport Company adopting force for repossession of vehicle and subsequently selling it is all illegal.
24. The Hon’ble National Commission following the above decision in Citicorp Maruti Fiance Ltd, Vs Vijay Laxmi reported in III 2007 CPJ 161 NC opined: that even though the hire purchase agreement may give right to take possession of the vehicle, money lender/financial institution/banks have no power to take possession by use of force and have to follow the statutory remedy which may be available under the law may be that the procedure of law is slow. But that is no excuse for use of force for repossessing the vehicle. If the contention of the complainant, that it can take possession of the vehicle by means of force is accepted. The rule of jungle would prevail and might be right”.
25. Deciding a case on Enforcement of Security Interest Rules 2002 under Securitization Act,the Hon’ble High Court of Odisha observed in Krushna Chandra Sahu Vs bank of India reported in OLR 2008(1) that the authority can not ignore the statutory provisions treating them merely a declaration piece in the statutes rather they require strict adherence. If a statute provides for a thing to be done, in a particular manner, then it has to be done in that manner and in no other manner and following other course is not permissible.
26. Hence illegally seizing of the vehicle through musclemen of the OP from the lawful ownership of the complainant this attracts the penal provisions as laid down in the Indian penal code against the Ops.
27. The learned counsel for the complainant confined his submissions as to the illegal seizure he contends that as the very seizure is illegal, as it was made without giving any prior notice as contemplates in the securitization Act and also no notice prior to sale of the vehicle or notification all rules of security enforcement rules as contemplated under sec 3 to 11 of the rules prescribed, quoting all of them is thus discarded being inconvenient, has been overridden by the OP with high handedness and arbitrary overact, in defiance with other laws, thus depriving the complainant to avail a legal remedy in deference of his constitutional rights to live with dignity, his livelihood hence the complainant to entitled for compensation for such illegal seizure, the deferred cost of the vehicle, inter alia compensation for all such mental agony & financial loss & perusal of entire record did not come up with any pre repossession notice, less any information of preservation of the seized vehicle or the procedure of auctioning the vehicle or the person to whom it was sold.
28. Hence, all the proceeding taken by the OP in its high handedness to the inconvenience of the complainant, defraying his rights and remedies under the laws is un constitutional and if hardly tenable under the laws of the land and not valid and inconsideration of all the facts above, this forum is of the opinion that the complainant is to be adequately compensated as against the O.P.s.
29. From the whole transactions, it can be hold beyond doubt that, that the very intention of the OP.s is dealing with the complainant was malicious, motivated by unusual enrichment at the cost of life and livelihood of the complainant. The vehicle was seized on dt.18.03.15, without any prior intimation or at the time of no inventory was prepared. Before auction, no notice was given to complainant, nor any public invitation has been made. The tractor of 1 and ½ year old, costing nearly Rs.7,00,000/- is sold at a throw away price of Rs.2,00,000/- which is not acceptable to any common man’s prudence, leave alone if made on any rational basis, the demands of further balance of Rs.2,16,654/- is still hypothetical, and in view of this forum is still not maintainable.
30. The OP.s being a NBFC guided by RBI guidelines, issued from time to tie, and statutes like security enforcement Act and rules have been there under, the OP.s has violated all these statutes rules and RBI guidelines in dealing with the complainant, hence being arbitrary in their action, malafide and deficient in providing fair service to complainant, is bound to compensate the financial loss and mental and physical torture they have inflicted on the complainant. In the present case, when the vehicle was repossessed by use of force, and thereafter sold without informing the complainant, in our view, it would be unjust to direct the consumer to pay the balance amount, at this juncture we are only concerned to the fact to consider that the illegal seizure and sale away of the vehicle, costing to the livelihood and his rights to the possession and interest of the vehicle and infliction of injury for his social, financial and moral status, be compensated reasonably and adequately.
Hence the complaint allowed against all the OP.s.
ORDER
i. The further demand of OP.s against the complainant in respect of the agreement No. OR- BUUK- 00079 in the file of OP.s to an amount of Rs.2,16,654/- is hereby quashed.
ii. The OP.s shall pay a compensation of Rs.5,00,000/- (Rupees five lakh) in addition to a cost of Rs.10,000/- (Ten thousand) to the complainant.
iii. All the above directions shall be complied with in 30 days of this order, failing which, the total sum will bear 12% interest per annum till its realization. Pronounced on 16th day of Dec' 2016.
Sd/- Sd/-
MEMBER PRESIDENT, DCDRF,
NABARANGPUR.
Date of Preparation:
