This appeal is directed against the final order delivered by the Ld. D.C.D.R.F, Uttar Dinajpur dated 30/08/2018 in reference to CC/1/2018. The fact of the case in nutshell is that the respondent K. Datta filed a consumer complaint before the Ld. Forum to the score that she had taken a loan for purchasing a vehicle to earn her livelihood and the husband was the driver in occupation who used to drive the said vehicle for transportation of goods. The purchase value of the vehicle was Rs. 4,62,685/- while the appellant bank has financed Rs. 3,50,000/- by a loan agreement where it was settled that the entire loan process along with interest will be completed by paying EMI regularly. The further case of the complainant is that she used to pay the EMI of the said loan in a regular manner and she has paid up to Rs. 5,34,000/- towards the said sanctioning loan but in spite of that the financial company has applied the force seized the vehicle on 18/11/2017 the complainant tried to lodge a FIR against the appellant company but the police authority has persuaded her to take any criminal legal action. Ultimately, she sent a written complaint to the SP, Uttar Dinajpur on 11/12/2017. She also urged the financer to return back the vehicle so that the complainant could earn her livelihood by using the vehicle for transport business. But the insurance company has intentionally grabbed the vehicle in their possession and for that reason she registered the consumer complaint with a prayer to get refund of Rs. 5,34,785/- along with compensation and litigation cost. The OP financial company after receiving the notice of consumer complaint has contested the case by filing the W.V and contended that the complainant / respondent was the chronic defaulter of the loan. Several opportunities were provided to her to regularize the loan account but she fails to repay the loan amount regularly. As a result, a huge due was accumulated in the loan account and as per the terms and conditions of the loan agreement the vehicle was captivated on 30/11/2015 and subsequently released after recovery of defaulted EMI. The vehicle was seized again on 17/12/2017 for default of EMI and sold out the same in an auction at Rs. 90,000/- while the other due amount was payable by the respondent / complainant was Rs. 82,000/-. Ld. Forum after recording the evidences and after hearing both sides came to a conclusion that there was no clause in agreement which empowered the appellant company to get repossession of the vehicle and for that reason, the seizure of the vehicle by the OP was unauthorized in law. So, the OP/appellant was asked to pay Rs. 4,22,947/- along with Rs. 20,000/- as compensation and Rs. 10,000/- as litigation cost.
Being aggrieved with this order this appeal follows on the ground that the observation of Ld. Forum was baseless and contrary to law. The appeal was admitted in due course and the notice of memo of appeal was sent to respondent/complainant K. Datta who has contested the case through Ld. Advocate. Accordingly, the appeal was heard in presence of the Ld. Advocate of both sides.
D E C I S I O N W I T H R E A S O N S
Admittedly, the complainant/respondent has purchased a truck by paying Rs. 4,12,685/- as consideration price after obtaining financial help by way of loan from the appellant bank to the tune of Rs. 3,50,000/- by virtue of a loan agreement. Now the question is whether the bank had any authority to recapture the vehicle if in the event of default in making payment of EMI on the part of the borrower. Ld. Forum has observed that as per clause 14 of the loan agreement in the event of default there was no empowerment to the bank to recapture or repossessed the subject matter of loan in question while during the course of hearing the appeal Ld. Advocate of the appellant pointed out the clause 15.3 and 15.4 of the loan agreement where in the event of default the lender has every right to take possession of the asset for which the loan was sanctioned. After going through the agreement very carefully particularly clause 15 where it was categorically stipulated that in the event of the default on the part of the borrower, he shall be bound to return the asset to the lender and he shall not prevent or obstruct the lender from taking possession of the asset. So, the question is very much clear that the appellant bank had every right to take possession of the vehicle in the event of failure of making payment of EMI loan amount. Here in this particular case, the complainant has paid Rs. 5,34,875/- till the recovery of the vehicle by the bank from the possession of the complainant. Ld. Advocate of the appellant at the time of argument mentioned that actually towards the said loan along with an interest the complainant/borrower has so far paid Rs. 4,66,230/- and the rest amount which he has paid as contended actually for the penalties which was imposed upon her for not paying the EMI in due time.
During the course of the argument Ld. Advocate of the respondent in his written argument also admitted the fact that up to 31/10/2017 the respondent has paid upto Rs. 4,66,230/-. He argued that the appellant by appointing muscle men Saikat Das and Sudipto Bhattacharya and some anti-socials, have deliberately snatched away the vehicle from the possession of the complainant and Rs. 40,000/- also was snatched from his husband on 18/11/2017 which amount has not been included in the payment slips. This argument does not cut much ice as because no cogent or supportive evidences is there to hold that the bank authority has snatched the vehicle by applying the force on 18/11/2017. No criminal case also could be registered over the said allegations. It is also established beyond any doubt that after getting possession of the vehicle the appellant company promptly sold out the vehicle at the price of Rs. 90,000/- though it could not be substantiated by showing any document that by auction sell the bank could realize only Rs. 90,000/- for the said vehicle. It is fact that financial institutions has every legal right to recapture the asset from the borrower if the borrower fails to make payment of the loan amount and in every developing countries the financial institutions are well empowered to do the same in order to realize their money they have lend towards the borrower while in our country the hon’ble higher judicial forums do not encourage or to allow the financial institutions to capture the loan assets by using the force, But they can get repossession of the asset as per terms of agreement. Here in this particular case a woman has secured a loan to earn her livelihood by purchasing a truck to be run by her husband as a driver and she used to pay the EMI in most cases regularly. But sometimes she was unable to pay the EMI in due time and bank without any hesitation recaptured the vehicle and with a short span of time of recapturing has sold out the same in auction in a hurried manner which could not be accepted in view of the economic status of the borrower. This high handedness attitude on the part of the lender is not at all appreciable. Ld. Advocate of the appellant in support of his contentions and WNA referred some judicial decisions as follows: -
- CA no. 9057 of 1996 (SC)
- CS Chaddha Vs. S. Mehra dated 31/08/2001 (SC)
- CA no. 1070 of 2006 (SC)
- SLP no. 89 of 2007 (SC)
After going through the judicial decisions referred above, the Commission finds that in the aggregate of judgments it is well settled that in the case of higher purchase agreement the lender can retake possession of the loan asset in case of failure on the part of the borrower to pay the loan amount in due time and in such cases, the financer or lender cannot be subjected to face criminal liabilities. In this particular case, it is fact that the borrower has failed to make payment of EMI in due time and she was defaulted to the tune of Rs. 39,100/- as per demand notice of the appellant bank dated 27/11/2017 and for that reason, they have forcefully taken possession of the vehicle and sold out the same in quick disposal which appears to be very high handedness on the part of the lender and Consumer Protection Act, in such cases always comes to rescue the poor borrower. Therefore, the order of Ld. Forum does not appear to be unconvincing one. But the calculation of the compensation is not appropriate one in the present position of the case and for that reason it is not desirable to ask the appellant company to pay back Rs. 4,22,947/- along with compensation Rs. 20,000/- and litigation cost of Rs. 10,000/-. In this case the financer has already realized Rs. 4,66,000/- where the principle loan amount was sanctioned to the tune of Rs. 3,50,000/-. Beside that the finance company has already realized nearabout Rs. 1,00,000/- as penalties imposed due to not making payment of EMI in due time. So, in this particular case, it would be better if the appellant company are asked to refund Rs. 2,00,000/- as lump sum to the complainant / respondent as she has suffered a lot in this event.
Hence it is,
O R D E R E D
That the appeal be and the same is partly allowed on contest without any cost. The order of Ld. Forum dated 30/08/2018 in CC/1/2018 is modified to the extent that the appellant/op be asked to pay Rs. 2,00,000/- to the complainant/respondent instead of Rs. 4,52,947/- as awarded by the Ld. Forum. And such amount shall have to be paid within 45 days by the appellant company since the date of receiving the copy of this order of appeal. In case of default 8 per cent per annum as interest will be carried on over the awarded money of Rs. 2,00,000/-.
Let a copy of this order be supplied to the parties free of cost and the same to be communicated to the Ld. Concerned Forum through e-mail.
