Sri Utpal Kumar Bhattacharya, Member
Instant Appeal has been preferred by the Appellants u/s 15 of the C P Act,1986 challenging the judgment and order dated 17/03/2012 passed by the Ld. District Forum, Circuit Bench, Alipurduar, Jalpaiguri in Complaint Case No. CF/14/2011 allowing the complaint on contest with cost of Rs. 10,000/-against the Appellants but without cost against the Respondent Nos. 2 and 3 and dismissing as well the same against the Respondent No.3.
The Appellant Nos. 1 to 3 were directed to refund an amount of Rs.40,702/- along with interest @ 8% per annum on the said amount with effect from November, 2009 till full and final payment and a compensation of Rs.10,000/- for mental pain and agony caused to the Respondent No.1
The Appellants were directed to pay the entire decreetal amount jointly and severally to the Respondent No. 1 within 45 days from the date of passing the impugned judgment and order, failing which, as directed, the said Appellants would pay a sum of Rs. 100/- for each day’s delay to the State Consumer Welfare fund.
The facts, in brief, as made out in the complaint, were that the Respondent No.1, with a view to purchasing a motor bike valued at Rs. 33,876/-, made a down payment of Rs. 13,000/- to the Appellants. He, thereafter, received the residual balance amount from the said Appellants entering an Agreement with them. The Agreement outlined the mode of repayment of the said loan at an EMI of Rs. 1527/-for successive thirty months. The Respondent No 1, as alleged, paid 26 instalments as scheduled at para 6 of the complaint ensuring repayment of Rs.53,682/- including the amount of down payment of Rs. 13,000/- as mentioned hereinabove.
On 20/08/2011, the Appellants, to the utter surprise of the Respondent No. 1, forcefully repossessed the vehicle by their agents, the muscle men, without any order from the competent Court of law and without issuing any seizure list on the pretext that the Respondent No.1 was yet to pay remaining instalments, although the fact remained, the Respondent No.1 had duly paid all premiums.
The Appellants, since had no authority to repossess the vehicle forcibly taking laws in their hands and since such inaction on their part through engagement of musclemen had subjected the Respondent No.1, a person of repute, to utter humiliation, the Respondent No.1, being aggrieved, visited the office of the Appellant No.3 and demanded a total statement in respect of his loan Account.
The above demand, being not heeded to by the Appellant No. 3, the Respondent No.1 was left with no alternative but to file the complaint case which the impugned judgment and order was related to.
Heard Ld. Advocates appearing on behalf of both sides.
The Ld. Advocate for the Appellants referred to the running page No.38, being the seizure list of the subject motor bike and in his effort to establish that the Motor bike was lawfully seized, continued that the document itself was indicative of the fact that the bike was not forcefully repossessed rather the same was voluntarily surrendered by the Respondent No.1. In fact, as continued further, the bike was repossessed because of the Respondent No.1 becoming defaulter for a long period and as per provision laid down in (c) and (d) of clause 20 of the terms and conditions of the Agreement at running page-51. Therefore, as contended, the allegation of forceful repossession which the Respondent No.1 had raised in the complaint with an intention of deriving unlawful gain, should not be valued with slightest cognizance.
The Ld. Advocate referred to para 4 of the decision of the Hon’ble National Commission in Revision Petition No.3716 of 2011 reported in MANU/CF/0674/2012 [Kisan Vs. ICICI Bank Ltd. & Anr.] in this context.
The Ld. Advocate referred further to para 9 of the decision of the Hon’ble National Commission in Revision Petition No. 1552 of 2011 reported in MANU/CF/0646/2012 [Magma Fincorp Ltd. Vs Subhankar Singh] wherein the Hon’ble National Commission, referring to a similar observation of the Hon’ble Apex Court held, “………….as per Hire Purchase Agreement the financier was authorized to repossess the vehicle in case of default in repayment of loan instalments. Supreme Court of India in Managing Director Orix Auto Finance (India) Limited case (supra), has held that the financier can repossess the vehicle if the agreement permits the financier to take possession of the financed vehicle. There is nothing to show that the vehicle was repossessed forcibly. Mere fact that the possession was taken by the Respondent cannot be the ground to contend that the hirer is prejudiced”
The Ld. District Forum, as the Ld. Advocate continued to submit, passed the impugned judgment and order without application of mind and without appreciating the facts and circumstances of the case. He concluded with his prayer for allowing the Appeal setting aside the impugned judgment and order.
The Ld. Advocate appearing on behalf of the Respondent No.1, per contra, submitted that the Ld. District Forum, in the impugned judgment and order at para 5, inner page 3, had detailed about the payments made by the Respondent No.1.
The said order at page 4, para 6, revealed that an amount of Rs.40,702/-was realized altogether towards repayment from the Respondent No.1 by the Appellants.
The Ld. Advocate drew the notice of the Bench to the 2nd. and 3rd. paras of the impugned order at page 5 to convince the Bench how an amount of Rs.40,702/- was realized from the Respondent No.1 against a loan of 35,335/-as per Agreement and how illegally the bike was taken away from the rightful possession of the Respondent No.1.
The Ld. Advocate, with his above submission, prayed for the Appeal to be dismissed affirming the impugned judgment and order.
Perused the papers on record.
It appeared that the case record was devoid of any document corroborating the fact that the complainant had made any down payment amounting to Rs.13,000/-as scheduled under para-6 of the complaint.
The Agreement at running page-53, Annexure-C, revealed that an amount of Rs. 34,385/- only was advanced as loan to the Respondent No.1 by the Appellants. We did not find any record indicative of any financial charges to the tune of Rs.9,475/- to be paid by the Respondent No.1 to the Appellants as claimed by the Appellants at para 4(b) of the Appeal.
The facts narrated above left for us no reason to take cognizance of the claims of down payment by the Respondent No.1 or the financial charges by the Appellants.
Since both sides acknowledged the fact that the repayment against the loan was supposed to be made at an EMI of Rs. 1527/- in successive 30 months, we are inclined to analyze the issue from that angle. The recoverable amount, therefore, comes to Rs. 45,810 (1527x30). The Respondent No.1 paid only an amount of Rs.40,682/- out of the said recoverable amount as it revealed from the statement scheduled at para 6 of the complaint excluding Rs.13,000/- which was shown as down payment and which we had already denied to accept for reasons narrated above.
Further, as it revealed from the statement of recovery furnished by the Bank, some of the cheques submitted by the Respondent No.1 towards recovery of the loan got bounced because of insufficient balance in the subject Account. We, therefore, had no reason to disbelieve the fact that the Respondent No. 1 did not make full repayment of loan.
We perused the papers on record which revealed that no notice was served upon the Respondent No. 1 reminding him about the non-payment of due instalments and cautioning him about the repossessing of the vehicle in case of continuation of such failure in repayment. We did not find any paper which may corroborate the claim about surrendering voluntarily the motor bike by the Respondent No.1. The record only unveiled the fact that the Appellants, before repossessing the vehicle, sent an intimation of such repossession to the Cooch Behar Police Station which could be interpreted as an advance step of ensuring the contemplated repossession without any resistance from any corner.
The impugned judgment and order revealed that the Appellants had sold off the subject bike for recovering their dues. Peculiarly enough, the Appellants, at para 4(d) in their Appeal, while claiming that the Respondent No.1 was defaulter of 4 EMIs, had expressed, as a special gesture, his readiness to issue the NOC and to return the bike to the Respondent No.1 waiving 100% the other charges subject to collection from the Respondent No.1 Rs.9844/-towards EMI.
Appellants’ activities for disposal of the subject bike during pendency of the Appeal lacked any kind of tenability since the same was prima facie contradictory to his aforesaid commitment.
In this context, we may refer to “ The code of Bank’s commitment to customers” issued by the Governor, Reserve Bank of India) on 01/07/2006, outlining therein the procedure for recovery of loan to be followed by the Bank and which the Ld. State Commission, Punjab had cited while delivering judgment and order in First Appeal No. 742 of 2008. The procedure for the recovery of loan to be followed by the Bank as per the said code is reproduced below:-
"3. Giving notice to borrowers:-
While written communications, telephonic reminders or visits by the bank's representatives to your place or residence will be used as loan follow up measures, the bank will not initiate any legal or other recovery measures including repossession of the security without giving due notice in writing. Minimum 60 days time will be given to you to pay the debt failing which the bank will proceed to take possession of the asset. The notice shall be given by Registered Post with Acknowledgement Due. However, where the Bank has reasons to believe that you are avoiding acknowledgement, it will follow all such procedures as required under law for recovery / repossession of security.
4. Repossession of Security:-
Repossession of security is aimed at recovery of dues and not to deprive you of the property. The recovery process through repossession of security will involve repossession, valuation of security and realization of security through appropriate means. All these would be carried out in a fair and transparent manner. Repossession will be done only after issuing the notice as detailed above. Due process of law will be followed while taking repossession of the property. The bank will take all reasonable care for ensuring the safety and security of the property after taking custody, in the ordinary course of the business.
5. Valuation and sale of Property:-
Valuation and sale of property repossessed by the bank will be carried out as per law and in a fair and transparent manner. Before effecting sale (save and except in case of moveable property subject to speedy or natural decay or expenses for custody exceeds its value), you shall be given 30 days' notice for the intended sale. If sale is to be effected either by inviting tenders from the public or by holding public auction, copy of public notice shall also be sent to you. The bank will have right to recovery from you the balance due if any, after sale of property. Excess amount if any, obtained on sale of property will be returned to you after meeting all the related expenses provided the bank is not having any other claims against you.
6. Opportunity for the borrower to take back the security: As indicated earlier in the policy document, the bank will resort to repossession of security only for purpose of realization of its dues as the last resort and not with intention of depriving you of the property. Accordingly the bank will be willing to consider handing over possession of property to you any time after repossession and before concluding sale transaction of the property, provided the bank dues are cleared in full. If satisfied with the genuineness of your inability to pay the loan instalments as per the schedule which resulted in the repossession of security, the bank may consider handing over the property after receiving the instalments in arrears. However, this would be subject to the bank being convinced of the arrangement made by you to ensure timely repayment of remaining instalments in future. In such cases possession of asset will be returned to you/person concerned immediately maximum within 10 days, on payment of defaulted amount and/or execution of supplementary agreement/consent and confirmation of guarantors as the case may be."
The case record did not bear any mark towards observing the above steps by the Appellant Nos. 1 to 3 before repossessing the subject vehicle. It is needless to mention that the decision in favour of the right to repossess the property by financier as the Hon’ble National Commission was pleased to observe in [Magma Fincorp Ltd. Vs Subhankar Singh] (supra) would have been applicable had the steps as enunciated by the Reserve Bank of India been duly observed by the financier on the instant occasion.
Such being the circumstances, we are of considered view that the lapse committed by the Appellants 1 to 3 outweighed the same on the part of the Respondent No.1. We did not find any involvement of Respondent Nos 2 and 3 on the instant issue and feel that those Respondents were to be exonerated. We, however, at the same time, are convinced not to allow the Respondent any cost and compensation as an exemplary measure against his willful lapses and feel that the order needed to be modified accordingly.
Hence,
ordered
that the Appeal be and the same is allowed in part on contest without cost. The Appellant Nos. 1 to 3 are directed to refund jointly and severally the Respondent an amount of Rs.40,682/- within the period of 45 days from the date of the instant order, failing which, simple interest @ 9 % per annum shall accrue to the aforesaid amount from the date of default till the said amount is fully realized. The Respondent Nos 2 and 3 stand exonerated from the charges in absence of any definite proof towards their involvement with the instant issue. The impugned judgment and order stands modified accordingly.
