Punjab

Faridkot

CC/15/11

Jatinder Singh - Complainant(s)

Versus

Sheikh Farid Automobile Ltd - Opp.Party(s)

A.K.Arora

08 Dec 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, FARIDKOT

 

Complaint No. :       11

Date of Institution:   19.01.2015

Date of Decision :    08.12.2015

Jatinder Singh aged about 26 years s/o Wazir Singh s/o Roop Singh, r/o House No. 165, Village Sedha Singh Wala, Tehsil Jaitu, District Faridkot.

...Complainant

Versus

1. Sheikh Farid Automobiles Ltd, Moga Road, Village Malwal, Ferozepur, Branch Office at Jaitu, Tehsil Jaitu, District Faridkot through Manager.

2. A U Financers (India) Ltd H-1/100, B Opposite Teleperformance, Near Galaxy Cinema, Mansarover, RIICO Area, Jaipur.

3. Billu Singh s/o Banta Singh r/o village Dariypur P S Datawas District Mansa (Punjab).....OPs

    

   Complaint under Section 12 of the

   Consumer Protection Act, 1986.

    

   Quorum:     Sh Ajit Aggarwal, President,

   Smt Parampal Kaur, Member,

   Sh P Singla, Member.

    

   Present:      Sh A K Arora, Ld Counsel for complainant,    

                     Sh Anil Chawla, Ld Counsel for OP-1,

                      Sh Manpreet Singh Brar, Ld Counsel for OP-2.

            OP-3 Exparte.

    (Ajit Aggarwal, President)

                                 Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 against Ops and for seeking directions to OPs to return the custody of vehicle and for further directing Ops to pay Rs 1,50,000/- as compensation for deficiency in service, for mental agony and harassment to complainant besides Rs 25,000/-as litigation expenses.

   2                                     Briefly stated, the case of the complainant is that complainant purchased a vehicle from OP-1 through loan amount of OP-2 and OP-1 hypothecated the said vehicle for sum of Rs 1,45,000/-on 7.10.2012 through a/c no. AU-130371 and complainant is regularly paying the instalments of the loan amount and has paid Rs 1,41,602/- out of loan amount and interest thereon. Complainant has also deposited Rs 6100/- and Rs 5000/-through Arminder Singh and Bara Singh on 15.04.2014 and some amount of loan is still pending, but OPs have added huge amount of interest on principal amount of Rs 1,45,000/-with intention to harm and harass the complainant. It is contended that at the time of sanctioning the loan by OP-2, Sukhchain Kaur and Naib Singh had stood guarantors of complainant and they also furnished indemnity bond and surety bond. Registration cover of the said vehicle was also taken into its custody by OP-2 and only temporary number was given to complainant. After paying huge amount of Rs 1,41,602/-, complainant demanded original RC and permanent registration number of vehicle from OPs, but OPs after issuing the permanent registration number and RC to complainant. In the month of December 2014, without giving any show cause notice, OPs forcibly snatched the said vehicle from the complainant. Without showing due amount, OPs sold the said vehicle in open auction fully explained in notice dt 30.12.2014. Amount of Rs 87,708/- is also shown due in said notice. It is alleged that no notice dt 27.11.2014 is served to complainant and vehicle was snatched from complainant in December, 2014. It is alleged that notice dt 30.12.2014 issued to complainant is totally wrong and illegal. It is contended that at the time of hypothecation of said vehicle, OPs had taken guarantee of two persons namely Sukhchain Kaur and Naib Singh alongwith their properly and if any amount was due towards complainant, then it was the duty of OPs to recover the said amount by sale proceeds of property given by guarantors and vehicle of complainant could not be sold, but without availing this remedy, OPs illegally snatched vehicle of complainant and sold it in open auction. Moreover, no name of purchaser is mentioned by OPs. Counsel for complainant contended that it is settled proposition of law that no vehicle can be snatched without availing the remedy of sale of property of guarantor. All this amounts to deficiency in service. It is further contended that complainant was plying the said vehicle for earning income and whole family of complainant was dependent upon the income of said vehicle, but due to snatching and sale of said vehicle, complainant and his family has suffered great harassment and financial loss. This act of Ops amounts to deficiency in service and trade mal practice on the part of OPs and has caused great harassment and mental agony to complainant for which he has prayed for compensation to the tune of Rs 1,50,000/- besides main relief. Hence, the complaint.

   3                                          The Counsel for complainant was heard with regard to admission of the complaint and vide order dated 21.01.2015, complaint was admitted and notice was ordered to be issued to the opposite party.

4                                        On receipt of notice, OP-1 filed reply taking preliminary objections that complaint is bad for misjoinder of parties and OP-1 has been unnecessarily impleaded as party to invoke jurisdiction. However, on merits, OP-1 asserted that all the submissions and allegations made by complainant are incorrect, misleading and wrong and there is no deficiency in service on the part of answering OP-1. It is asserted that business of answering OP is of independent nature just to sale vehicles and it has nothing to do with OP-2. It is also averred that answering OP neither hypothecated the vehicle of complainant nor received any instalment of loan. It is further averred that complainant deposited Rs 5000/- on 14.09.2012, Rs 25,000/- on 22.09.2012 as advance for the purchase of vehicle and vehicle was sold to complainant by OP-1 for Rs 1,74,321/- and remaining amount of Rs 1,40,888/- was paid by OP-2 on behalf of complainant. Complainant deposited Rs 3435/- in cash thus, equalising the account and therefore, OP-1 has no concern with vehicle. It is also denied if answering OP sold the said vehicle to any other person as alleged by complainant. Allegations regarding hypothecation, taking of guarantee and snatching of vehicle are also denied. It is reiterated that there is no deficiency in service on the part of answering OP and all allegations levelled by complainant are denied being wrong and correct.

5                     OP-2 also filed reply taking legal objections that this Forum has no jurisdiction to hear and try the present complaint as dispute involved in this case is of commercial nature as complainant was using the said vehicle for commercial purpose. Answering OP has no branch office at Faridkot and thus, this Forum has no jurisdiction to try this case. Moreover, complainant has no locus standi to file this case and complainant has no cause of action to file the instant case as complainant has concealed the material facts from this Forum. It is averred that complaint involves complex question of law requiring elaborate evidence to prove the case, but this Forum has summary jurisdiction to adjudicate upon the consumer disputes. However, on merits, OPs have denied all the allegations levelled by complainant being wrong and incorrect and reiterated that there is no deficiency in service on the part of answering OPs. It is asserted that complainant purchased vehicle after taking loan from OP-2 and OP-1 is not working under supervision of OP-2 and both the OPs are different entities. It is denied that complainant is consumer of Ops. Vehicle was hypothecated by complainant in the name of OP-2 as loan was disbursed by answering OP. It is asserted that complainant was not depositing instalments from time to time, rather he was defaulter in repaying the amount of loan as per repayment schedule. Account of complainant became irregular and complainant failed to regularize his account despite repeated requests of OP-2. It is totally denied that complainant deposited Rs 6100/- and Rs 5000/-through Arminder Singh and Bara Singh. It is averred that complainant got registered the vehicle in his name and also got the same hypothecated in the name of OP-2 and original RC is not in possession of answering OP. It is further averred that despite repeated requests by answering OP, complainant was not depositing instalment of loan repayment regularly as per terms and conditions of Loan Agreement and then, OP-2 sent Demand Notice dt 10.12.2013 to complainant calling him to pay the instalments in time, but he did not come up and after long follow ups, OP-2 took possession of vehicle with consent of complainant as complainant breached the terms and conditions of OPs. It is further averred that answering OP gave pre and post intimation to Police before and after taking the custody of vehicle on 25.11.2014 at Bathinda Police Station. Inventory of items in vehicle was prepared and legal notice dt 1.12.2014 was sent to complainant, his co-applicant and guarantor intimating that due to default in repayment of loan amount, vehicle was taken into possession with consent of complainant and through this notice, called the parties to pay the loan amount within 7 days, but complainant did not come up for payment and after lapse of given time, OP-2 sold the said vehicle in open auction on 23.12.2014 and after selling the same, again sent notice to complainant, his co-applicant and guarantor that after selling the said vehicle and after adjusting the sale amount in loan account of complainant, an amount of Rs 87,702/- still remains due towards complainant and through this notice, he was given 7 days time to clear the dues, but complainant failed to do so and now he has filed present complaint on false story. It is reiterated that there is no deficiency in service on the part of answering OP. Allegations regarding fraud committed by OPs with complainant are totally denied being wrong, incorrect and baseless. All the other allegations and allegation with regard to relief sought too were refuted with a prayer that complaint deserves to be dismissed with special costs.

6                                     Notice containing copy of complaint was issued to OP-3 through RC on 3.08.2015, but neither RC received back undelivered nor anybody appeared on behalf of OP-3 either in person or through counsel and on expiry of statutory period, vide order dt 18.09.2015, OP-3 was proceeded against exparte.

7                                           Parties were given proper opportunities to prove their respective case. The complainant tendered in evidence his affidavit Ex.C-1, affidavit of Sheera Singh as Ex C-30, affidavit of Sukhchain Kaur as Ex C-31, affidavit of Naib Singh as Ex C-32 and documents Ex C-2 to C-29 and Ex C-33 to 35 and then, closed the evidence.

8                                                  In order to rebut the evidence of complainant, ld counsel for OP-1 tendered in evidence affidavit of Hari Om Chauhan as Ex OP-1/1 and then, closed the same on behalf of OP-1. OP-2 tendered in evidence affidavit of Amandeep Saini as Ex OP-2/1 and documents Ex OP-2/2 to 23 and then, closed the same on behalf of OP-2.

   9                             Ld Counsel for complainant argued that the complainant purchased a vehicle from OP-1 after availing finance from OP-2 on 25.09.2012. OP-1 and 2 were working together. OPs had hypothecated the above said vehicle of complainant. Complainant was regularly making payment of instalments of loan of vehicle to OPs against duly issued receipts. Copies of the receipts are Ex C-2 to 21. Complainant had already paid about 1,41,000/-out of loan amount and interest to OPs and some amount of loan and interest is yet due. OPs added a huge amount of interest on the loan amount of Rs 1,45,000/-with the intention to harm the complainant. At the time of sanction of loan by OP-2 Sukhchain Kaur and Naib Singh were stood guarantors of complainant and they filed indemnity bond and surety bond for repayment of loan to OP-2. The registration certificate was also taken by OPs. The complainant demanded original RC and other documents from OPs, but they did not issue these documents to him. In the month of December, 2014, OP-2 forcibly and illegally snatched the vehicle from him without giving any prior notice regarding payment of loan and they never issued any statement of account of loan and sold the vehicle in open auction as informed by them vide notice dt 30.12.2014. Copies of the notice is ExC-22. In this notice, it is alleged that auction of the above said vehicle was made on 23.12.2014 and they further demanded amount of Rs 87,708/-, which is allegedly due towards the complainant after adjusting the auction amount of the vehicle which is totally illegal. Complainant had already deposited about entire loan amount to OPs. They have not mentioned the auction price of the vehicle. In this notice, they alleged that they had earlier issued notice dt 27.11.2014 to complainant but he did not receive any notice. They are only creating false evidence and this notice has no value in the eyes of law. At the time of taking loan, OPs took guarantee of two persons alongwith their property and if any amount was due towards the loan amount, then, it is the duty of OPs to recover the said amount by selling property of guarantors and not by selling the vehicle of complainant. Without availing this remedy, OPs forcibly snatched the vehicle of complainant and sold it in auction. It is the settled proposition of law that no vehicle can be snatched without  availing the remedy of sale of property of guarantor, so auction by OPs is illegal in the eyes of law and complainant is entitled to recover the above said vehicle. The complainant was earning his livelihood by plying this vehicle and                                           whole of his family was dependent upon the income of this vehicle. Due to snatching and sale of above vehicle by OPs, there is no source of income of complainant and complainant and his family are suffering much harassment and financial crisis. Complainant requested Ops many times to return his vehicle but they lingered on the matter on one pretext or the other and now, with malafide intention OPs have started demanding more amount from complainant. OPs have no right to snatch the vehicle of complainant. they have to recover the loan amount if any due under due process of law. By this act of OPs, his reputation and status has been lowered in the eyes of friends and relatives. All these acts of OPs amount to deficiency in service and trade mal practice on their part. Ld counsel for complainant has prayed for seeking directions to OPs to return the custody of vehicle and for further directing Ops to pay compensation for deficiency in service, for mental agony and harassment to complainant besides litigation expenses.

10                                                      In reply to the arguments of complainant, OP-1 argued that they are unnecessarily impleaded as party to this complaint only to create jurisdiction of this Forum. they have no concern with loan advanced by OP-2 to complainant or taking custody of vehicle of complainant and sale of vehicle by OP-2. They have nothing to do with the working of OP-2. OP-1 and 2 are different entities and have independent business. Op-1 deals in sale of vehicles and they have nothing to do with the finance business of OP-2. Complainant purchased said vehicle from OP-1 and for it he deposited Rs 5000/- and Rs 25,000/- on 14.09.2012 and 22.09.2014 respectively as advance against receipts Ex C-2 and 3. Price of the vehicle was Rs 1,74,321/- and remaining amount of vehicle was paid by OP-2 on behalf of complainant by advancing loan to him. OP-1 issued bill and other necessary documents regarding it and after the sale of vehicle they have no concern with the vehicle and they never got hypothecated the said vehicle in their favour, they have no concern with the loan amount. They never received any loan instalment from complainant. they have no knowledge of repayment of loan by complainant to OP-2 and taking possession of vehicle by OP-2 from complainant. OP-1 never sold the vehicle of complainant to anybody. There is no deficiency in service and trade mal practice on the part of OP-1. OP-1 is unnecessarily dragged into this litigation. Complaint against them may be dismissed.

11                                            Ld Counsel for OP-2 argued that complainant purchased the vehicle for commercial purpose and as such, he does not come under the definition of consumer under Consumer Protection Act. This Forum has no jurisdiction to try this complaint as op-2 has no Branch Office within the jurisdiction of this Forum. complainant  has no locus standi to file the present complaint and he is estopped from his own act and conduct to file the present complaint. Real facts of the case are that complainant purchased the vehicle in dispute after taking loan from OP-2 to the tune of Rs 1,45,000/-. Loan agreement was duly executed between parties and copy of the same is Ex OP-2/2. OP-2 had no concern with the working of OP-1 and both are different entities. Vehicle was hypothecated by complainant in favour of OP-2. The complainant never paid the instalments of loan amount in time. He defaulted in payment of instalments from the very beginning. As per loan agreement, he had to repay the loan amount in 36 monthly instalments i.e 24 instalments of Rs 6026/-each and 12 instalments of Rs 5651/-each. He never paid these instalments in time as per repayment schedule. It is wrong that complainant paid Rs 1,41,602/-to them as repayment of loan. He never deposited Rs 6100/- and Rs 5000/- through Arminder Singh and Bara Singh. Complainant paid only Rs 84,450/-to OPs against duly issued receipts. It is wrong that original RC and other documents of the vehicle were in the possession of OP-2. All the documents were in possession of complainant and he himself got the vehicle hypothecated in favour of OP-2. As complainant defaulted in repayment of loan, OP-2 requested complainant to regularise the loan. They also sent registered notice dt 10.12.2013 informing him that he is not paying instalments in time and to regularise his loan. Copy of the notice is Ex Op-2/3. Despite notice, complainant did not pay the instalment in time and did not regularise his loan account and breached the terms and conditions of loan agreement. As per terms and conditions of the loan agreement, Op-2 has legal right to take possession of vehicle and to sell the vehicle for recovery of their loan, if borrower did not repay loan in time. So, as per terms and conditions of the loan agreement, the OP-2 took possession of vehicle from complainant on 25.11.2014 with his consent. OP-2 duly gave pre and post possession intimation to local Police at Bathinda. Copy of pre and post possession intimation letters are Ex OP-2/5 and OP-2/6. They prepared inventory of the items in the vehicle. After taking the possession of vehicle, OP-2 duly issued notice through registered post to complainant and co-applicants/guarantors Suckhchain Kaur and Naib Singh. Notice dt 27.11.2014 and postal receipts are Ex Op-2/7 to 12 vide which, they informed that due to default in repayment of loan of vehicle, the vehicle was taken into possession and they demanded to settle the account and repay the loan amount, which remained due towards complainant, but complainant or his guarantors did not come up and after a lapse of given time, OP-2 sold the said vehicle in open auction on 23.12.2014. Copies of auction proceedings are Ex OP-2/20 to 22. The loan agreement in favour of successful bidder is OP-2/23. After the auction of vehicle and after adjusting the loan amount in the loan account of complainant, still an amount of Rs 87,708/- is pending towards complainant as loan amount and OP-2 duly issued notice to complainant and guarantors informing them regarding it and demanded the remaining amount of Rs 87,708/-from them. The copies of the same are already produced by complainant as Ex C-22, 27 and 28. It is wrong that before taking possession of vehicle and selling it, OPs have to sell the property of guarantors for recovering the outstanding dues. OP-2 was having first charge over the vehicle in question until and unless the entire loan amount is repaid by the borrower and since he failed to repay the same and violated the terms and conditions of agreement and so, they rightly took possession of vehicle. It is the set principal that for recovery of loan amount first of all creditor has right to recover it through hypothecated articles produced as security for loan and from the property of complainant and if it is not satisfied then,  he can recover it from the  guarantors by selling their property. It is wrong that prior to recover the loan amount from complainant and his property, the creditor should recover it from the property of guarantor. As the said vehicle was hypothecated with OPs as security of their loan, they have first charge over it. They rightly and legally took possession of vehicle as per terms and conditions of loan agreement. In his support, he has placed reliance upon citation Sushil Kumar Deo Vs BCL Financial services Ltd and another 2006 (3) Consumer Law Today 331, wherein our Hon’ble National Commission observed that Consumer Protection Act, 1986, Section 2(1)(g)-Vehicle Finance –Hire Purchase Agreement -  Non-payment of due instalment – Re-Possession of vehicle as per the terms of the agreement – It does not amount to deficiency in service. He has also quoted reliance on case cited as Anup Sarmah Vs Bhola Nath Sharma & Ors 2013(1) Civil Court Cases 160 (S.C.). In this case, our Hon’ble Apex Court has observed that Hire Purchase Agreement – Non payment of instalments – Forcible taking possession by financier - No criminal offence made out – Held, in an agreement of hire purchase, the purchaser remains merely a trustee/bailee

on behalf of the financier/financial institution and ownership remains with the latter – In case the vehicle is seized by the financier, no criminal action can be taken against him as he is repossessing the goods owned by him. He further placed reliance on case sited as 2004 (2) CLT 604 titled as K A Murugesan Vs Jaurilal Bafna and another (Tamil Nadu), wherein our Tamil Nadu State Consumer Disputes Redressal Commission, Chennai observed that Consumer Protection Act, 1986, Section 2 (1) (e) – Loan – Hire purchase agreement –Instalments no paid as per agreement despite notice – Vehicle repossessed and sold in auction -  Held that if the act of the OP in re-possessing the lorry is illegal or if the sale of the vehicle by the OP acting under the provisions of hire purchase is also alleged to be illegal, the remedy of the complainant s to seek the assistance of a Civil Court – There is no deficiency in service. He further argued that there is no deficiency in service and trade mal practice on the part of OP-2 and they have rightly taken the possession of vehicle in question and sold it in auction for recovering the loan amount and prayed for dismissal of present complaint.

12                                            We have heard the ld counsel for parties and have carefully gone through and perused the evidence and documents placed on record.

13                                     The contention of the complainant is that he purchased a vehicle from OP-1 by availing finance from OP-2 and for security of loan his vehicle was hypothecated with OP-2. OP-2 also took guarantee of two persons. He was regularly paying instalments of loan and in default of some amount, OP-2 took forcible possession of vehicle without intimation and without issuance of any notice to him and sold it in open auction. They should recover the loan amount from the property of guarantors first and not by selling the vehicle of complainant and this act of OPs amounts to deficiency in service.

14                              To controvert the arguments of ld counsel for complainant, ld counsel for OP-2 argued that the vehicle in question was purchased by complainant after availing loan from them and same was hypothecated with them as security of loan. They have first charge over the vehicle and as per terms and conditions of the loan agreement, they have every right to take possession of the vehicle and to sell it for repayment of their loan amount. The complainant did not pay the instalment of the loan in time and defaulted in repayment of loan. They issued notice and also made verbal requests to him to repay the loan in time, but complainant did not regularise his laon amount and therefore, they rightly took possession of vehicle and sold it as per law and there is no deficiency in service and trade mal practice on their part. Ld counsel for complainant has put reliance on the case 2011 (3) Apex Court Judgments 679 (S.C) titled as City Corp. Maruti Finance Ltd Vs S. Vijayalaxmi Hire purchase agreement –Default in payment of instalment/default in honouring commitments–Recovery of vehicle–Held, even in case of mortgaged goods subject to Hire Purchase Agreements, recovery process has to be in accordance with law and not by use of force. LD counsel for complainant argued that OPs did not follow the proper procedure and law for taking possession of the vehicle and sold for recovery of their loan. OP-2 argued that they duly followed all the procedure as laid down by law for taking possession of hypothecated vehicle and complied with all the terms and conditions.

15                                     We have carefully gone through the file and evidence produced by the parties. The contention of complainant that prior to take possession of sale of vehicle, which was hypothecated with OPs in security of loan, OP-2 should recover the loan amount from the guarantors by selling their property has no force. The creditor has first charge over the property hypothecated with them and further to recover the loan amount from borrower and if their loan is not fully satisfied, then they can recover it from guarantors. 2^nd contention of the complainant is that the OP-2 had no right to take possession of vehicle and to sell it and they have not issued any prior notice to him and OP-2 did not follow the proper procedure under law for taking possession and selling of the vehicle. OP-2 produced copy of loan agreement vide which they have right to take possession and sell the vehicle hypothecated with them for recovery of their loan amount. OP-2 issued prior notice to complainant requesting him to repay the loan amount in time. They also gave pre and post possession intimation to Local Police, Bathinda as per law and issued notice after taking possession to complainant and guarantors requesting them to repay the outstanding loan otherwise, vehicle would be sold in auction, but complainant did not make any effort to settle the loan and therefore, in these circumstances, it is clear that OP-2 followed proper procedure as per law before taking possession of the vehicle and before its auction.

16                                                          We are fully convinced with the arguments and case law produced by ld counsel for OP-2. Complainant has failed to prove his case and therefore, complaint in hand is hereby dismissed. However, in peculiar circumstances of the case, parties are left to bear their own costs. Copy of order be supplied free of cost to both the parties. File be consigned to record room.

 Announced in open Forum:

  Dated:08.12.2015                             

Member                  Member             President               (Parampal Kaur)           (P Singla)            (Ajit Aggarwal)