Delhi

StateCommission

A/405/2015

KOTAK MAHINDRA BANK LTD. - Complainant(s)

Versus

SH. SHER SINGH - Opp.Party(s)

10 Jan 2019

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments : 10.01.2019

Date of Decision : 18.01.2019

First Appeal No.405/2015

In the matter of:

 

            Kotak Mahindra Bank Ltd.,

            UGF-1-11, UGF, Amandeep-14,

            K.G. Marg, New Delhi-110001.       

 

            Also at:-

            6 Vaishali Enclave,

            Near Gulab Sweets,

            Pitamapura,

            Delhi-110088.                                                                                     ………Appellant

                  

 

Versus

 

 

Shri Sher Singh,

S/o. Shri Summer Singh,

R/o. Village Jharsaintly,

Tehsil Ballabhgarh,

District Faridabad (Haryana)….Respondent

 

CORAM

Hon’ble Sh. O. P. Gupta, Member (Judicial)

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                      Yes/No

2.      To be referred to the reporter or not?                                                                                                           Yes/No

Shri O.P. Gupta, Member (Judicial)

JUDGEMENT

 

1. OP has preferred a present appeal against order dated 19.05.15 passed by District Forum (New Delhi) allowing CC No.799/13.
2. Facts giving rise to the complaint by respondent herein are that appellant forcibly repossessed his truck no.38 S 0508 from his driver when the truck was going to deliver  some goods to a trader in UP. He had taken a loan of Rs.16,55,000/- on 04.07.12. He had paid installments regularly for few months but during the month of October, November he could not deposit full instalments and sought time. Thereafter the appellant accepted instalments on 23.11.12, but on 25.11.12 while the truck was in Haidergarh, UP the bank with the help of  musclemen forcibly repossessed the truck. On the same day the bank issued notice of sale of truck and sold the truck in March. In the meantime he went to recover the truck but to no use. He filed a civil suit for directing the bank to issue correct statement of account, receive actual due amount of monthly instalments and deliver back the truck to him. The said suit was registered as no.694/12 and was dismissed by Ms. Shaifali, Civil Judge, North, Rohini vide order dated 29.04.13 on the ground that suit had become infructous as bank has already sold the truck.
3. The District Forum proceeded to answer the question whether bank  despite having a right as owner of truck as financer has acted according to due process in re-possessing the vehicle. It answered the same in negative by holding that complainant was living in Faridabad, vehicle was in UP and possessed while in transit. No document was placed on record to show that any notice was given to the complainant before repossessing the vehicle or opportunity to arrange money to avoid repossession. In doing so it placed reliance on decision of Hon’ble Supreme Court in Manager, ICICI Bank Ltd. vs. Prakash Kaur 2007 (1) JCC 681 in which practice of hiring recovery agents who are musclemen was deprecated. Similar view was taken by Hon’ble Supreme Court in City Corp. Maruti Finance Ltd. vs. S. Vijaylaxmi 2012 (1) JCC 613 and ICICI Bank vs. Shanti Devi Sharma 2008 (3) JCC 1572. Reliance was also placed on City Corp. Maruti Finance Ltd. vs. S. Vijaylaxmi III (2007) CPJ 161.
4. The District Forum observed that vehicles 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. This is towards beneficial role of bank in stabilising economy. The banks should be sympathetic to borrowers by giving then more time to settle, by charging  interest etc. Possessing a vehicle and putting same to sale and throwing the trader on road is to harm economy and to create unemployment.
5. The District Forum found that the appellant has not placed on record any documents to show that any efforts were made or opportunity was given to the complainant to call upon him to abide by financial discipline and get the truck released. The bank  sold fully furnished truck for just Rs.12 lakhs and created liability of Rs.5 lakhs on the complainant. Hence the bank was guilty of violating guidelines of the Hon’ble Supreme Court. It awarded  Rs.10  lakhs as compensation and Rs.50,000/- towards litigation.
6. In appeal the grievance of the appellant is that loan was to be repaid in 47 monthly equal instalments of Rs.45,600/- each. The complainant failed to adhere to financial discipline. The complainant was unable to pay the loan and on his instructions, the driver of the vehicle  peacefully and voluntarily surrendered the said vehicle to the appellant. The appellant informed concerned police station vide intimation which is Annexure R-6 to written statement. Still notice dated 26.11.12 was sent after obtaining verification report that vehicle was sold on 05.03.13 to Shri Pravin Kumar Singh for Rs.12 lakhs which was adjusted from loan amount. The complainant gave report to Supdt. of Police, District Barabanki, U.P. after more than 9 months.
7. I have gone through the material on record and heard the arguments. The act of the appellant bank in selling the new vehicle for just Rs.12 lakhs  speaks of haste on the part of the appellant and sale at a under valued price. The bank had given a loan of Rs.16,55,000/- in July, 2012 itself i.e. hardly  7-8 months before the sale. No notice before repossession was given.
8. Besides the judgements referred to by District Forum in impugned order, in M/s. Capital Traders Ltd. vs. Sanjay Dutt (2009) 3 CPR 2005 National Commission held that high handed mess for repossessing vehicle amounts to deficiency in service.
9. In City Corp. Maruti Finance Ltd. referred to by the District Forum, it has come that counsel for Finance Industries Development Council gave a statement before the Hon’ble Supreme Court that Reserve Bank of India have formulated operational guidelines for adopting by all banks in July, 2009. The said guidelines were detailed and extensive and intended to cover all the shortcomings in the earlier guidelines in order to ensure that no force was used in the process of effecting recovery of dues.  The Hon’ble Supreme Court observed that we live in a civilised society and are governed by rule of law. Despite that the appellant acted according to its whim
10. From the material on record I do not find any ground to interfere with the conclusion of the District Forum that there was deficiency on the part of appellant. However, as regards quantum of compensation it may be observed that complainant himself sought compensation of Rs.5,40,000/- towards loss of earning and Rs.3 lakhs towards harassment , mental pain and agony with litigation. But the District Forum granted Rs.10 lakhs as compensation and Rs.50,000/- towards cost of litigation. This is more than what was prayed by the complainant. The same can not be sustained.
11. I deem it proper to award Rs.5 lakhs only as compensation and Rs.50,000/- as cost of litigation. Accordingly the order is modified to the extent that appellant is directed to pay Rs.5 lakhs as compensation and Rs.50,000/- as cost of litigation.
12. Copy of the order be sent to both the parties free of cost.
13. One copy of the order sent to District Forum for information.
14. File be consigned to record room.

 

 

 

(O.P. GUPTA)                                                     

MEMBER (JUDICIAL)