IN THE CONSUMER DISPUTES REDRESSAL FORUM, KOTTAYAM
Dated this the 28th day of February, 2023
Present: Sri.Manulal.V.S, President
Smt.Bindhu.R, Member
Sri.K.M. Anto, Member
CC No. 137/2019 (Filed on 13.08.2019)
Complainant : Mathew Mathew, S/o Mathew
Vellamthadathil House
Puthuveli P.O,
Veliyannoor Village
Meenachil Taluk
Kottayam District
(By Adv.Bobby John K.A)
Vs
Opposite parties : 1. Sreeram City Union Finance Ltd
Geetha Commercial Complex
Near Axis Bank
Nagampadom, Kottayam -1
Rptd by its Branch Manager
2. Sreeram City Union Finance Ltd
No-39/3500, Manikath Cross Road
Ravipuram, Cochin 682016,
Rptd by its Zonal Manager.
(By Adv.Shyni Gopi)
O R D E R
Sri.Manulal.V.S, President
The complaint is filed under section 12 of the Consumer Protection Act against the opposite parties.
Brief of the complaint:- The complainant was the registered owner of a Star Model Motor Cycle of TVS company bearing registration No. KL-35-3862. The same was purchased by availing finance assistance from opposite parties. The original registration certificate and one key were retained by the first opposite party. Unfortunately due to some financial crisis, the complainant failed to repay the amount punctually. When the repayment was defaulted the opposite parties repossessed the vehicle from the complainant on 24-03-2013 by serving an inventory report to the complainant. The opposite parties requested the complainant to subscribe his signature in the inventory report. The opposite parties before selling the vehicle issued a pre-sale notice on 03-04-2013. It is stated in the said notice that vehicle would be sold by the opposite parties if the complainant did not pay the outstanding dues in the loan account within 7 days.The vehicle was sold by the opposite parties in auction. The bid amount and other details of auction were not intimated by the opposite parties to the complainant. The opposite parties failed to transfer the ownership of the vehicle to the person who bid the vehicle in auction.
On 10-10-2015 when one Mohanan was riding the vehicle through the Pannimattom –Paruthumpara road, the said vehicle hit one Reji and he died due to the accident. The legal heirs of the diseased field claim for compensation before the Hon’ble MACT Kottayam as OP (MV) No 259 of 2016. In the said claim the complainant was arrayed as first opposite party and the said Mohanan as the second opposite party. The ownership of the vehicle was not changed by the opposite parties even after two years from the repossession of the vehicle from the complainant.
The Motor Accident Claims Tribunal Kottayam passed an award allowing the petitioners therein to realize an amount of Rs.8,34,400/- with 9% interest from 24-02-2016 till 31-12-2016 and thereafter 7% interest per annum till realization from the complainant and the said Mohanan. The claimants in the claim petition, after passing of the award had filed an execution petition No. 36/2019 against the complainant for an amount of Rs.10,65,745/- with 7% future interest.
According to the complainant by the sale conducted by the opposite parties without effecting the transfer of ownership, the opposite parties committed unfair trade practice and deficiency in service. The complainant has suffered so much loss and mental agony and that is to be compensated. It is averred in the complaint that the opposite parties are liable to pay Rs.10,65,745/- with 7% future interest from 02-01-2019 till realization and Rs.25,000/- which is the amount remitted by the complainant before the MACT Kottayam to the complainant. It is therefore humbly prayed that Hon'ble Forum may be pleased to pass an order directing the opposite parties to pay Rs.10,65,745/- interest from 02-01-2019 till realization and Rs.25,000/- to the complainant to pay Rs.1,00,000/- towards compensation for deficiency in service and mental agony suffered by the complainant and to pay Rs.75,000/- as cost of this litigation.
Notices were served to opposite parties and they entered appearance and filed version.
It is contended by the opposite parties that the complaint is not maintainable before this Commission. In the version, opposite parties stated that it is admitted fact by the complainant that he had availed a vehicle loan for purchasing Motor Cycle bearing registration No. KL-35-3862 by undertaking to repay the loan amount with interest in monthly installments. The complainant committed default in repaying the EMIs. As a result vehicle was surrendered by the complainant. The complainant failed to pay the full amount as claimed in the pre-sale notice and thus the vehicle was sold by the opposite party in auction and the complainant failed to repay the balance amount till date which is a gross violation of the loan cum hypothecation agreement entered between the complainant and the opposite parties. As per Section 50 of the Motor Vehicles Act, it is the owner who is to take steps for transfer of ownership after the sale of vehicle.
There occurred an accident and due to the said accident one Reji died and legal heirs of the diseased filed an OP (MV) no. 269 of 2016 before Motor Accident Claims Tribunal Kottayam. The complainant had filed an application for impleading opposite parties as third respondent in the said claim. The complainant purposefully suppressed the finding of the tribunal that this opposite parties are not liable to compensate the claim. It is settled law that the registered owner who is to comply the transfer of ownership of vehicles. There is no deficiency in service and unfair trade practice on the part of the opposite parties.
Complainant filed proof affidavit and Ext.A1 to A5 documents were marked.
Sadananda kumar who is the Legal Officer of the first opposite party filed proof affidavit. No documentary evidence from the side of the opposite parties.
On considering the complaint, version, documents and evidences, the commission raised the following points for consideration:-
1. Whether complaint is maintainable or not?
2. Whether there is any deficiency of service or unfair trade practice from the part of opposite parties?
3. Relief and cost.
Point No.1:- The complaint was resisted by the opposite parties that opposite parties were arrayed as respondents in OP (MV) No.259/2016 and the complaint is hit by resjudicata. On perusal of Exhibit A3 which is the copy of Judgment in OP (MV) No. 259 of 2016 we can see that the said petition is filed by the legal heirs of the diseased Reji under section 166 of the Motor Vehicle Act 1988 for the compensation. It is proved by Exhibit A3 that the opposite parties herein arrayed as this respondent therein and the complainant herein arrayed as first respondent therein. There is no dispute on the fact that the Hon’ble Motor Vehicle Claims Tribunal has exonerated the opposite parties herein from the liability to pay compensation to the petitioners in OP (MV) 259 of 2016.
But this complaint is filed by the complainant against the opposite parties alleging deficiency in service and unfair trade practice from the part of the opposite parties. This issue is not adjudicated by the Hon’ble Motor Vehicle Claims Tribunal while disposing OP(MV) 259 of 2016. Therefore we are of the opinion that the contention of the opposite parties that the complaint is hit by Resjudicata is not sustainable and the complaint is maintainable before this commission.
Point number 2 and 3
Specific case of the complainant is that the opposite parties repossessed the vehicle from the complainant on 24-03-2013 by serving an inventory report to the complainant and sold the vehicle to another person without effecting the change of ownership in R.C. Book and the opposite parties are liable to compensate the damages caused to the complainant during the said vehicle used by the auction purchaser.
As per Ext.A1 which is the inventory report of the asset /vehicle dated 24-03-2013 proves that the opposite parties took the possession of the vehicle and the opposite parties has acknowledged also. In the version opposite parties admitted that the complainant failed to pay the full amount as claimed in the pre-sale notice and thus the vehicle was sold by the opposite party in auction and the complainant failed to repay the balance amount. If it is handed over to somebody there should be an agreement and some proceedings are also to be followed. In this case nothing is produced by the opposite party to show the transfer or sale of the vehicle.
In Mahindra And Mahindra Financial ... vs The State Of Uttar Pradesh decided on 22 February, 2022 Hon’ble Supreme Court has held as under “As per Section 2(h) of the Act, 1997 read with Section 2(30) of the Act, 1988, even a person in possession of the vehicle under the hire-purchase agreement or an agreement of sell or an agreement of hypothecation can also be said to be the “owner”. Therefore, a financier like the appellant, who is in possession of the transport vehicle in question owing to non-payment of the loan amount is an “owner” under the relevant provisions of the Act, 1997 and Act, 1988.
It is further held that a financier of a motor vehicle/transport vehicle in respect of which a hire-purchase or lease or hypothecation agreement has been entered, is liable to tax from the date of taking possession of the said vehicle under the said agreement. “
Hon’ble Supreme Court in M/S Magma Fin corp Ltd. (Formerly ... vs Rajesh Kumar Tiwari decided on 1 October, 2020 held that “87. The question raised by the Financier in this appeal, that is, whether the Financier is the real owner of the vehicle, which is the subject of a Hire Purchase Agreement, has to be answered in the affirmative in view of the law enunciated by this Court in Haranjit Singh Chadha (supra), K.L. Johar & Co. (supra) and Anup Sarmah (supra). The Financier being the owner of the vehicle which is the subject of a Hire Purchase Agreement, there can be no impediment to the Financier taking possession of the vehicle when the hirer does not make payment of instalments/hire charges in terms of the Hire Purchase Agreement. However, such repossession cannot be taken by recourse to physical violence, assault and/or criminal intimidation. Nor can such possession be taken by engaging gangsters, goons and musclemen as so called Recovery Agents”
In the light of above discussed decisions we are of the opinion that the oppositeparties should have got the vehicle transferred in its name before putting it in auction.
In Tata Capital Financial Services ... vs Sachin Lohan & Anr decided on 26 May, 2017 Hon’ble National Commission has held that “5. The next question which arises for consideration is as to whether there was any defect in the title of the petitioner company at the time the vehicle was sold to the complainant. Admittedly, the vehicle was not registered in the name of the petitioner company at the time it was sold to the complainant. The vehicle admittedly was registered in the name of one Mr. Suresh Kumar. The petitioner company, in my view, should either have got the vehicle transferred in its name before putting it in auction or it should have at least provided the sale letter and other documents from the person on whose name the vehicle was registered, to the complainant, in order to enable him to get the vehicle transferred in his name. Since admittedly, neither the vehicle was registered in the name of the petitioner company nor it provided the sale letter from the registered owner of the vehicle, there was an obvious defect in the title of the vehicle. As a result, the complainant could not get the vehicle transferred in his name. He could not have used the vehicle without getting it first registered in his name. Therefore, he is entitled for the amount paid by him, along with adequate compensation in the form of interest ”.
In Surendra Kumar Bhilawe Versus The New India Assurance Company Limited (2020 SCC Online SC 523) Hon’ble Supreme Court held that the National Commission ignored various factual findings of the lower forums such as: Even after the purported sale agreement, the Appellant continued to pay instalments to ICICI Bank. ICICI Bank had neither released the truck from hypothecation nor had it granted no-objection for the sale. Even though, three years had passed since the purported sale agreement, the appellant paid the premium and took the policy in his own name. No steps were taken by the buyer to transfer the registration of the said truck. Furthermore, even after 3 years of purported sale agreement, the permit for operating the truck was still in the name of the appellant. In the present matter, there is no material evidence relying upon which, the National Commission could have reversed the decision.
The Hon’ble Supreme Court opined that sections 19 and 20 of the Sale of Goods Act, 1930 which deals with the stage when property in movable goods passes to the buyer is of no assistance to the respondent. The property is transferred to buyer when the parties to the contract intend it to be transferred provided that such property is capable of being transferred. If there is an impediment to transfer such as ‘No Objection’ from the ICICI Bank in the present matter, there could be no question of transfer till the time such impediment is removed. Further, such transfer should also comply with statutory requirements for transfer of motor vehicle under Motor Vehicle Act, 1988 (“MV Act”) and the rules framed thereunder. Otherwise, such transfer would be void under section 10 read with section 23 and 24 of the Indian Contract Act, 1872”.
Therefore to effect the changes in the R.C. book with respect to the name of the owner, the no objection certificate from the opposite parties is highly necessary. The opposite parties have not produced any document to prove that they have issued no objection certificate and sale letter in accordance with the provisions of Motor Vehicle Act to the auction purchaser to effect the change in the ownership of the vehicle in the name of the auction purchaser.
Though it is submitted in the version and as well as in the proof affidavit that they sold the vehicle in auction, the opposite parties did not produce the documents regarding the auction sale and the details of the person who purchased the vehicle from the opposite party in auction. Despite the order of this Commission in IA 65 of 2020 the opposite parties did not produce the documents related to the finance agreement, repossession and auction sale of the said vehicle.
It is proved by Exhibit A3 judgment of the Motor Accident Claims Tribunal Kottayam that the vehicle bearing Reg No. KL 35-3862 while ridden by one Mohanan on 10-10-2015 hit on one Reji K.N. and the said Reji succumbed to the injuries sustained to him. The compliant herein was the first respondent in OP(MV) 259 of 2016 as the registered owner of the vehicle bearing Reg.No. KL 35-3862. One Mohanan, S/o Karunakaran, Thamarappallikarottu house is the second respondent in the said OP (MV) as driver of the said vehicle. As discussed earlier the vehicle was repossessed by the opposite parties on 24-03-2013. Here it seems that the vehicle was used by one said Mohanan without an authenticated document and while so the said vehicle involved in accident as a result one person died.
The unauthorized use of a surrendered vehicle without changing the RC from the earlier owner and putting all the consequential damage and burden of paying compensation under a motor accident claim which is occurred after the surrender of the vehicle on the shoulder of earlier owner is a clear case of unfair trade practice and deficiency of service. The opposite parties can very well return back the vehicle to the complainant if he clears the dues and if it is not cleared the opposite party can sell the vehicle with proper procedure and after sale if any loss, it can be realized from the complainant.
Vide Exhibit A3 judgment the Motor Accident Claims Tribunal Kottayam has directed the complainant herein and the said Mohanan to deposit Rs.8,34,400/- with interest @ 9% per annum from 24-02-2016 till 31-12-2016 and thereafter 7% interest per annum till realization. It is proved by Exhibit A4 that the legal heirs of the diseased had filed an execution petition to realize Rs.10,65,745/- from the complainant herein and the said Moahanan. Exhibit A5 proves that the complainant had deposited Rs.25,125/- before the Motor Accident Claims Tribunal.
So we found that an unauthorized use of a surrendered vehicle is a clear case of unfair trade practice and deficiency of service from the side of opposite parties and they are responsible for all the losses and damages consequent to that. Hence the point No.2 is found accordingly.
Point No.3:- Since the point No.2 is found against the opposite parties they are liable to bear all the liabilities arising out of using of the vehicle after the date of surrender. In the facts and circumstances of the case, we are of the opinion that allowing a compensation of 10 lakhs will meet the ends of justice.
Hence we allow this complaint and direct the opposite parties to pay Rs.10 Lakhs to the complainant with interest @ 9% per annum from 03-08-2019 ie the date on which this complaint is filed till realization. No additional compensation will be payable to the complainant and the parties shall bear their respective costs.
Pronounced in the open Commission on this the 28th day of February, 2023.
Sri.Manulal.V.S, President sd/-
Smt.Bindhu.R. Member sd/-
Sri. K.M. Anto, Member sd/-
Appendix
Exhibits marked from the side of complainant.
A1- Inventory report issued by Sriram City Union Finance Ltd dated 24.03.2013.
A2- Pre-sale notice issued by Sriram City Union Finance Ltd dated 03.04.2013.
A3- Copy of the order of Hon’ble Motor Accidents Claims Tribunal Kottayam dated 24.07.2018.
A4- Copy of order of the Hon’ble Motor Accidents Claims Tribunal Kottayam dated 02.04.2019.
A5- Receipt of State Bank of India dated 26.07.2019.
By order
sd/-
Assistant Registrar
