Complainant/s:           Sri. Mahesh S/o Shivajirao Magadum,

                                            Age: 42 Years, Occ: Private Work.

                                            R/o Gayakwad Building, KSRTC, Depo,                                           Siddarameshwar Nagar, Tq & Dist:Gadag.                                                        

                                                (Rep. by Sri.P.K.Patil, Advocate)   

V/s

JUDGEMENT

JUDGEMENT DELIVERED BY SMT.YASHODA.B.PATIL, WOMAN MEMBER

The complainant has filed the complaint U/Sec.35 of the C.P. Act, 2019 for refund of Rs.11,25,049.75 with interest @ 18% p.a., and directed to return the sized vehicle, Rs.1,00,000/- towards mental agony and  Rs.20,000/- towards cost of litigation.

The brief facts of the complaint are as under:

         2.  The complainant is the customer of OPs. On 08.08.2008 complainant borrowed a loan of Rs.50,42,421/- as per loan agreement AHL-021023 and agreed to pay 8.35%  interest in 41 EMI’s of Rs.1,26,500/- and purchased  L & T Komatso PC-200 vehicle and regularly paid the installments. On 15.03.2011 he executed a re-loan agreement No.AHL-0042714 for a loan of Rs.26,46,205/- and agreed to pay an interest at 8.33% with an EMI of Rs.81,020/-.  Complainant paid the regular installments. Op No.3 abruptly seized the vehicle of the complainant which was brought for his livelihood, and sold it without prior notice, stating that, there is an outstanding loan due against the vehicle    Op No.3 has violated the of RBI rules and charged exorbitant rate of interest and has also shown unnecessary additional expenses. Ops have received an excess amount of Rs.11,25,049.75 from the complainant and even seized and sold the vehicle worth of Rs.50,42,421/- without following the due process of law required for seizure of vehicle from the complainant. On 03.05.2021 legal notice was issued to the Ops, they did not refund the additional amount nor replied thereby they have committed the deficiency of service. Hence, filed this complaint.

          3.       After admitting the complaint, notices are issued to the OPs.  OP No.1 to 3 appeared through their counsel and they have filed  the their written version.

          4.       The brief facts of written version filed by OPs are as under:

          OPs have denied the various allegations and admitted both the loans borrowed by the complainant.  Ops denied that, they have recovered additional amount installment of Rs.11,25,049.75 and violated the rules of RBI. Ops contend that, after obtaining the re-loan, complainant turned into a chronic defaulter, who has not paid the due installments promptly and delayed the installment payment which attracted the fine and the Ops have also imposed OD charges on the complainant.  In view of the deed of hypothecation Op No.3 has seized the said vehicle. Even after seizure, the complainant has not come forward to repay the said loan amount. Hence, considering the depreciating value sold the vehicle for a sum of  Rs.15,00,000/- and adjusted the said sale proceeds towards the outstanding due amount. Ops contended that, presently the complainant is under the liability to pay an amount Rs.25,36,486.24 and when the Op No.3 insisted  for the payment of the said loan, the complainant has filed this false case.  No cause of action arose and this commission has no jurisdiction to entertain the complaint as there is an arbitration clause and no deficiency of service is committed by Op. Hence, prays to dismiss the complaint. 

          5.       To prove the case, the complainant has filed affidavit evidence and was examined as PW-1 and got marked the documents as Ex.C-1 to Ex.C-75. Sannakalar Raju S/o Late Raju (PAH) Power of Attorney holder, for OP No.1 to 3, filed an affidavit evidence for Ops and was examined as RW-1 and got marked the documents as Ex.OP-1 to  Ex.OP-5.

6.       Counsel for complainant argued. No arguments were advanced by Ops.

          7.       The points for our consideration arose are as under:

          i)        Whether the complainant proves that, there is a                      deficiency of service committed by the  OPs?

          ii)       Whether the complainant proves that, he is                            entitled for the relief?

          iii)      What order?

          8.       Our findings on the above points are as under:   

                   Point No.1: In the affirmative.   

                   Point No.2: In the partly affirmative.  

                   Point No.3: As per final order.

          REASONS

          9.       Point No.1 & 2:- The points are taken together to avoid the repetition of facts.

          10.     On careful perusal of the materials placed before us, PW-1 has filed affidavit in-lieu of his chief examination and reiterated the contents of the complaint.  PW-1 has stated that, On 08.08.2008 complainant borrowed a loan of Rs.50,42,421/- as per loan agreement AHL-021023 and agreed to pay 8.35%  interest in 41 EMI’s of Rs.1,26,500/- and purchased  L & T Komatso PC-200 vehicle and regularly paid the installments. On 15.03.2011 he executed a re-loan agreement No.AHL-0042714 for a loan of Rs.26,46,205/- and agreed to pay an interest at 8.33% with an EMI of Rs.81,020/-. Complainant paid the regular installments. Op No.3 abruptly seized the vehicle of the complainant which was brought for his livelihood, and sold it without prior notice, stating that, there is an outstanding loan due against the vehicle    Op No.3 has violated the of RBI rules and charged exorbitant rate of interest and has also shown unnecessary additional expenses. Ops have received an excess amount of Rs.11,25,049.75 from the complainant and even seized and sold the vehicle worth of Rs.50,42,421/- without following the due process of law required for seizer of vehicles from complainant on 03.05.2021 legal notice was issued to the Ops, they did not refund the additional amount nor replied thereby they have committed the deficiency of service.

          11. Per contra, RW-1 has filed affidavit and reiterated the contents of the written version filed by OP-3. RW-1 has stated that, Ops denied that, they have recovered additional amount installment of Rs.11,25,049.75 and violated the rules of RBI. Ops contend that, after obtaining the re-loan, complainant turned into a chronic defaulter, who has not paid the due installments promptly and delayed the installment payment which attracted the fine and the Ops have also imposed OD charges on the complainant.  In view of the deed of hypothecation Op No.3 has seized the said vehicle. Even after seizure, the complainant has not come forward to repay the said loan amount. Hence, considering the depreciating value sold the vehicle for a sum of  Rs.15,00,000/- and adjusted the said sale proceeds towards the outstanding due amount. Ops contended that, presently the complainant is under the liability to pay an amount Rs.25,36,486.24 and when the Op No.3 insisted  for the payment of the said loan, the complainant has filed this false case.  No cause of action arose and this commission has no jurisdiction to entertain the complaint as there is an arbitration clause and no deficiency of service is committed by Op.

          12.   At the very outset, parties are not disputing that, the complainant borrowed a loan of Rs.50,42,421/-, and purchased the vehicle and a re-loan of Rs.26,46,205/- and also seizure of the vehicle and therefore sale by Op No.3. Parties have produced statements of both loans. When complainant borrowed a re-loan, it is deemed that, previous loan of Rs.50,42,421/- has been fully discharged and whatever remaining outstanding due amount is merged with re-loan is Rs.26,46,205/- dtd:15.3.2021. Now after re-loan dtd:15.03.2011, how much amount has been paid by the complainant is to be looked into. According to the complainant he  paid the excess amount of Rs.11,25,049.75.  On the contrary, Ops denied having recovered additional amount from the complainant, but contend that, the complainant himself is still entitled to pay due of Rs.25,36,486.24.

          13. Ex.C-1 notice, Ex.C-2 Postal acknowledgment, Ex.C-3 Postal envelope, are not disputed, Ex.C-4 to Ex.C-15 Balance sheet,  ledger account & cash book detail issued by S.K.Bakale, Advocate it reveals the loans (Liability) from 01.04.2008 to 31.03.2018, towards OD Account Rs.9,02,988.75 and Srei Equipments Finance Ltd., Rs.2,22,061/-, the said balance sheet is submitted  by Pvt. Advocate.  It is not a public document the contents mentioned in the balance sheet are not helpful to show, how much amount is paid and what is the outstanding balance.  So, balance sheet is not helpful to prove the case of the complainant. Ex.C-16 Invoice is also not disputed, Ex.C-17 and Ex.C-18 are no due certificate issued by Ops reveal that, Ops have received the loan amount disbursed under loan agreement No.25116 dtd:15.03.2011 Hypo Loan of Rs.25,46,205/-  against 1 no of  L & T Komatsu Dyd. Excavator (PC200-6). So, as per Ex.C-17 & Ex.C-18 re-loan borrowed by complainant is also discharged,  Ex.C-19 is statement pertaining to previous loan, Ex.C-20 service report, Ex.C-21 relieving certificate is also not disputed, Ex.C-22 Challan, Ex.C-23 endorsement issued by Commercial Tax Dept. Ex.C-24 Vehicle cover note, Ex.C-25 Telegram, Ex.C-26 to
Ex.C-63 money receipts are not disputed, Ex.C-64 pay order application, Ex.C-65 bank receipt, Ex.C-66 D.D. receipts, Ex.C-67 receipt, Ex.C-68 to Ex.C-75 pass books and cheque books are not in dispute.
 Ex.Op-1 Power of attorney, Ex.Op-2 agreement, Ex.Op-3 & Ex.OP-4 letter issued by Op No.3 and Ex.OP-5 statement of re-loan are also not in dispute. Let us see what was the amount paid by complainant and whether any amount is outstanding or not?. 

14. As per statement Ex.Op-5 on 15.03.2011 loan of Rs.26,46,205/- is disbursed. Thereafter, the complainant paid the installments from   28.03.2011 till 05.07.2013 towards re-loan the sum total in all is Rs.21,50,800/- as per receipts produced by the complainant.

15. As per the contention of the Ops in their written version the outstanding balance amount shown in Rs.25,36,486.24. Whereas, Ex.C-17 & Ex.C-18 the NOC issued by Op No.3 on 12.06.2018 shows the entire loan has been paid by the complainant. However, again the Ops contending in their written version that, complainant is due to pay an outstanding sum of Rs.25,36,486.24 cannot be believed and accepted. Ops are falsely claiming the amount mentioned above against their own document Ex.C-17 and Ex.C-18 NOC’s, when perused are contradictory. Even the Ops have not taken any action for recovery, against the complainant for remaining alleged due amount till date.  After issuing NOC Ex.C-17 and Ex.C-18 OPs contending that, still the complainant is due to payment and outstanding a sum of Rs.25,36,486.24 is deserved to be rejected.

16. Ops have not produced any document to show the date of seizure of the vehicle and the date of selling the vehicle for Rs.15,00,000/-.  Simply, they stated in the written version that, vehicle is sold for Rs.15,00,000/-. Even, the said Rs.15,00,000/- is also not credited to the loan account and not shown in Ex.OP-5 statement.  Complainant stated that, no notice was issued prior to seizure and also sale of the vehicle and have sold the vehicle for a very meager amount. Ex.OP-3 is a reminder issued to complainant on 11.03.2014 reveals that, a final letter of termination dtd:28.02.2014 had been issued and terminal dues of Rs.16,30,531/- should be paid within a period of  seven days. If, failed to pay the due amount within a period as seven days the asset will be put to sale as is where is basis. But after going through the Ex.OP-5, it transpires that the vehicle was re-possessed on 01.02.2014 and transferred on 23.02.2014 much prior to giving the reminder letter dtd:11.03.2014.   Of course, Op produced the copy of prior notice Ex.OP-3 & Ex.Op-4 and fixed seven days for payment.  But no document is produced to show that, notice was duly issued or served to complainant, either prior to seizure of vehicle or sale of the vehicle. Op No.3 has not pleaded the date of seizure of the vehicle or date of sale of the vehicle. So, Ops have not followed the due process of law regarding seizure and sale of vehicle in accordance with procedure.  The seizure of vehicle and selling of the vehicle amounts to forcible sale. It is not the case of the Ops that, the notice was duly served to the complainant prior to seizure or sale of the vehicle or complainant voluntarily handed over the repossession of the vehicle to the Op No.3.

17.  Relying on their own document Ex.Op-5, it reveals that, the vehicle was repossessed on 01.02.2014 and payout and asset transfer was done on 23.02.2014 and the balance outstanding as on that date reveals is Rs.14,04,311.42. As per their own contention in the written version stating that, the vehicle is sold out for a sum of Rs.15,00,000/- and adjusted the same amount towards loan account due. On perusing Ex.Op-5 dtd:23.02.2014, the loan amount deducted is Rs.4,64,672.98 and Rs.7,37,327.90 a total sum of Rs.12,02,2000.88 only is adjusted towards his loan. The vehicle as per the written version it is sold for Rs.15,00,000/-.  Therefore, the sale proceeds of vehicle Rs.15,00,000/- (-) Rs.14,04,311.42 the outstanding loan due the balance comes to Rs.95,688.58. This being the excess amount due with the Ops which the complainant is rightfully entitled Rs.95,689/- with interest @ 10% p.a. since 23.02.2014 till realization.

The learned counsel for complainant is relying on a decision 2012 SAR (Civil) 57 in  Citicorp, Maruti Finance Ltd., V/s S. Vijayalaxmi, wherein Hon’ble Supreme Court held, as under:-

A) Consumer Protection Act, 1986- Secs. 2 and 14- Hire purchase agreements-Recovery process has to be in accordance with law- being owner of the goods-Not entitled to take back possession of the vehicle by use of force-Hire purchase agreement- Enable the respondent to the benefit of hire-purchase in respect of a car-Respondent had failed to repay the hire charges-Appellant took possession of the financed vehicle from the residence of the respondent – The vehicle was also sold and party rights have accrued over the car-Consumer complaint-dismissed  Forum directed the appellant to pay a sum of Rs.1,50,000/- Sate Commission directed payment of a further sum of Rs.50,000/- on account of purchase damages-Revision-Dismissed by National Commission setting aside defective damages-Hence, this appeal – Appellant has paid the amount directed-held : no relief can be granted to the appellant.

B) Hire – purchase- Hire-purchase Agreement-Recover process had be in accordance with law and the recovery process referred to in the  agreement also contemplates such recovery to be effected in due process of law and not be use of force. Hirer continues to be the owner of the goods that, does not entitled him on the strength of the agreement to take possession of the vehicle of use of course.

          Facts circumstances and ratio of the above decision is aptly applicable to case on hand.

Further, in Manager, ICICI Bank Ltd, V/s Prakash Kaur & Ors. On 26.02.2007, the Hon’ble Supreme Court of India, held as under:-

1) Regarding the role of recovery agents, use of abusive language, due process of law RBI guidelines. Now the bank is the aggressor and the public is the victim. The first step to recovery of the money due is through the so called. RECOVERY COLLECTING AGENTS. Young and old members of the family threatened on streets, institutions and also at home at godforsaken hours by these agents who have the full support of their contractor bank. Many times even notice is not given to them. They seize the vehicles even in public places deliberately to cause embarrassment. We say that,  we are governed by role of the law in the country. The recovery of loans or seizure of the vehicles could be done only through legal means. Then banks cannot employ goondas  to take possession of force.

Facts circumstances and ratio of the above decision is aptly applicable to case on hand.

Further, in Manager, Indusland Bank Ltd. V/s Abani Kanta Das & Anr,. On 11.01.2021, the Hon’ble NCDRC, New Delhi held as under:-

“The petitioners could not place any evidence as to any notice having been given to the complainant for seizure of the vehicle nor any notice of auction of the vehicle. No evidence has been produced to show that vehicle was handed over voluntarily.  Due notice had to be given for seizure of the vehicle and following the established procedure the vehicle could be seized and later auctioned”.

Facts circumstances and ratio of the above decision is aptly applicable to case on hand.

          18. For the above, the complainant has proved that OP No.1 to 3 have committed deficiency of service and he is entitled for the relief a sum of Rs. Rs.95,689/- and the complainant is entitled for an interest @10% p. a. from the date of sale of vehicle dtd:23.02.2014 till realization.  Complainant has suffered mental agony, due to sale of vehicle without prior notice and Ops have failed to refund the excess amount of Rs.95,689/- Therefore, complainant is entitled for a sum of Rs.50,000/- towards mental agony and Rs.25,000/- towards cost of the litigation.  Accordingly, we answer Point No.1 in the affirmative and point No. 2 in the partly affirmative.    

          19.    POINT NO. 3: In the result, we pass the following:

//O R D E R//

              The complaint filed U/Sec.35 of the Consumer Protection Act, 2019, is partly allowed against Op No.1 to 3.

Complainant is entitled a sum of
Rs.95,689/- with interest at 10 % p.a. from the date of sale of vehicle dtd:23.02.2014 till realization.  

Further, the complainant is entitled for Rs.50,000/- towards mental agony and Rs.25,000/- towards cost of litigation.

OP No.1 to 3 are directed to pay the entire claim amount to the complainant within two months from the date of this order.

Office is directed to send the copies of this order to the parties free of cost.

           (Dictated to the Stenographer, directly on computer, corrected and then pronounced by us in the Open Court on this 21^st day of December-2022)

 (Shri Raju N. Metri)    (Shri. D.Y . Basapur)   (Smt.Yashoda Bhaskar. Patil)                    MEMBER              PRESIDENT               WOMAN MEMBER

-: ANNEXURE :-

EVIDENCE ON BEHALF OF COMPLAINANT/S:

PW-1: Sri. Mahesh S/o Shivajirao Magadum,

DOCUMENTS ON BEHALF OF COMPLAINANT/S

Ex.C-1: Legal notice.

Ex.C-2:Postal acknowledgment.

Ex.C-3: Returned envelope cover.

Ex.C-4 to 13: Balance sheets

Ex.C-14: Copy of Srei Equipment Finance Ltd. Ledger Account.

Ex.C-15: Copy of Cash book.

Ex.C-16:Invoice. hn

Ex.C-17 & 18: Srei without prejudice.

Ex.C-19:Statement of account for the period 03.08.2008 to 26.05.2010

Ex.C-20: Komatsu service report.

Ex.C-21: Relieving certificate.

Ex.C-22 :Form -152 See Rule 50 (1) (a) Challan.

Ex.C-23 :Commercial Taxes Report and release order.

Ex.C-24 : Insurance policy.

Ex.C-25 : Telegram

Ex.C-26 to 63: Srei  BNP Paribas, Srei Equipment Finance Pvt. Ltd.,

                      money receipts.

Ex.C-64 : Andhra bank receipt.

Ex.C-65 : ICICI Bank receipt.

Ex.C-66 : Copy of D.D. No.260955 dtd:08.09.2008.

Ex.C-67 : Srei Equipment Finance Ltd,  Cash Money receipt.

Ex.C-68 to 70 : S.B. A/C Pass books.

Ex.C-71  : SBI bank cheque book record slips

Ex.C-72 :  SBI bank cheque book record slips and cheques No.198184

                to  198200.

Ex.C-73 : SBI bank cheque book record slips and cheques No.377640

               to  377680.

Ex.C-74 : ING Vysaya Bank cheque book record slips.

Ex.C-75 :ING Vysaya Bank, cheque book record slips and cheques    

              No.079648 & 079650.

EVIDENCE ON BEHALF OF OPs:

RW-1:Sannakalar Raju S/o Late Raju

DOCUMENTS ON BEHALF OF OPs:

Ex.OP-1:Copy of power of attorney.

Ex.OP-2 :Copy of agreement.

Ex.OP-3: Reminder notice to complainant dtd:11.03.2014.

Ex.Op-4: Copy of Srei BNP Paribas notice dtd:28.02.2014.

Ex.Op-5: Copy of Srei statement of account of complainant.

(Shri Raju N. Metri)    (Shri. D.Y . Basapur)   (Smt.Yashoda Bhaskar. Patil)

       MEMBER                  PRESIDENT            WOMAN MEMBER