Karnataka

Bidar

CC/61/2015

Md Javed S/o Md Haneef - Complainant(s)

Versus

Sri Ram Transport Finance Co Ltd Basavakalyan - Opp.Party(s)

P M DESHPANDE

28 Sep 2016

ORDER

::BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT BIDAR::

 

 

                                                                                                        C.C.No.61/2015.

 

                                                                                          Date of filing : 03/08/2015.

 

                                                                                         Date of disposal : 28/09/2016.

 

P R E S E N T:-              (1) Shri. Jagannath Prasad Udgata,

                                                                                         B.A., LL.B.

                                                                                                       President.

    

                                         (2) Shri. Shankrappa (Halipurgi),

                                                                      B.A.LL.B.

                                                                                  Member.

 

                                   

 

                                               

COMPLAINANT/S:   Md. Javed S/o Md. Haneef

   Age:Major, Occ: Self Empliyment,

                                      R/o Kallur road, Near water tank area,

              Wanjari town, Humnabad

   Dist: Bidar.

              

 

 

                                

     (By Sri. P.M.Deshpande., Advocate )

 

 

                                                      VERSUS

 

OPPONENT/S   :-       Shri Ram Transport Finance Co.Ltd.

  Branch at 2^nd floor, above Axis bank

  Biradar complex, tripurant road, B.K. Kalyan

 

     (By Sri. Basvaraj Udgire., Advocate)   

                           

 

 

 

::   J UD G M E N T  : :

 

 

 

By Shri. Jagannath Prasad Udgata, President.

 

              The complainant has filed this complaint u/s 12 of the C.P.Act, against the opponent, alleging unethical trade practice and deficiency of service as defined u/s 2(c) (i) and (iii) of the Act.  The sum total of the complainant in a nutshell is as here under.

 

2.         The complainant submits that, he had availed a loan of Rs.9,09,666/- to acquire an Ashok Leyland Tusker Super 2214-goods vehicle to ekeout his living on 05.03.2013 [The O.P. claims the loan amount as Rs.9,81,000/-and date of Sanction of the loan as 04.02.2013] and further that, the complainant had availed insurance loan amount of Rs.81,540/- as avered in Para3 of the version.  Surprisingly but in the same Para the O.P. accedes the loan amount to be Rs.9,09,666/-.  The calculations of opponent thereby is mind bungling perse.  The vehicle was registered as AP-12V-7107 subsequently.

 

3.         It is born out of record and both the parties are in agreement that, the borrowed amount was to be repaid in 60 E.M.I.S., along with 11.5% interest per annum.  The complainant however claims that, his signatures were obtained by the opponent on numerous blank unfilled forms, veeping him in dark about the contents of the forms.

 

4.         The complainant further avers that, in the first two years of availing the loan, he had altogether paid a sum of Rs.4,69,772/- to the opponent, which the opponent denies in para-1 of the versions, but concedes in para-3-cl.2 of the same versions.  This kind of  erratic submissions in the part of the opponent, leads us to infer that, the opponent is unceremoniously, unethically resorting to approbations and reprobation’s deplorably.

 

5.         As the averments of the complainant goes further, he had been paying E.M.I.S with slight latches due to upheavals of his business and as later as on 16.12.2014, he had remitted a sum of Rs.30,000/- towards E.M.I. to the opponents.  (Ex.P.15), as the last payment.

When the matter stood as such, the opponents by deputing their henchmen, on 02.03.2015, forcibly took possession of the vehicle near Mannackhalli from the Driver, without any prior notice or legal sanction.

 

6.         The vehicle is in illegal possession of the opponents from that date on wards and inspite of the legal notice served upon the opponents the vehicle is kept in the custody (illegal) of the opponent till date, causing financial loss of Rs.4,00,000/- to the complainant.  He therefore claims a business loss of Rs.4,00,000/- (altogether Rs.4,50,000/-) as compensatory relief and further to quash demand notice of the opponent date.04.04.2015.

 

7.         The opponent, after Court notice had put up appearance through its counsel of the choice and had submitted versions belatedly,  which as stated earlier is mighty erratic in nature.  However, as is revealed from the order sheet, on 16.07.2016, the  opponent had stated that, the parties are negotiating an amicable settlement and acting u/s 89 of the C.P.C. we were liberal in granting times.  Ultimately, on 17.09.2016, both the parties reported that, no settlement has taken place and we were constrained to post the case for orders taking into consideration the juxtaposed claims of the contestants.

 

8.         Both sides, have filed their respective arguments, citations supporting their respective defences and were heard in length.

 

9.         Considering the respective rival stands and further considering the submissions of the parties of attempting for an amicable settlement, coupled with case laws submitted rendered by higher foras, we have to act under the principle of exdebito justitae, basing on the documents submitted by the contesting parties as detailed at the end of this order and also their respective averments.

 

10.       The stands of the opponents in their written versions, corroborated with evidence affidavit and written argument are as follows:

1. That, the amount ofloan was Rs.9,09,666/- was granted on 04.04.2013, ( not on 05.03.2013 as claimed by the complainant) to be paid back 60 E.M.I.S, from the date of loan and the necessary documents were executed at Basavakalyan.  The claim of payment of Rs.4,69,772/- on two years is false (Sic-in Para 3 of the versions the opponent admits the payment).
2. That, the allegation of seizing the vehicle on 02.03.2015, and taking away the key of the vehicle is false.
3. That, the complainant of inspite of reminder notices did not pay the E.M.I.S as per stipulation and hence the vehicle was repossessed on 10.02.2015.
4. That, the opponent had issued a notice on 04.04.2015, to clear the outstanding loan amount of Rs.9,81,000/- (no proof of delivery of notice).
5. That, the  vehicle was repossessed on 10.02.2015, due to non payment of monthly instalments.  (worth while to note, the last payment ofRs.30,000/- was made on 16.12.2014 vide Ex.P.15).
6. That, the financier continues to be the owner of the vehicle till liquidation and repossession by even  repressal means is not a theft.
7. That, the complainant was irregular in paying E.M.I.S. and hence repossession is proper.
8. The allegations of the complainant claiming loss of livelihood is false, so also his claim and damages and litigation charges.
9. That, there has been no deficiency in service.
10. That, the complainant has acquired the vehicle for commercial purpose and not a consumer, within the ambit of section 2(1) (d) of the C.P.Act.
11. That, the complainant was liable to pay principal amount of Rs. 9,09,777/- together with interest of Rs.5,23,561/- in 60 monthly interest calculated @ 11.5% p.a. plus a sum of Rs. 81,540/-of insurance amount as a loan.
12. That as per clause 5(a) & 6 (b) of the agreement the opponents were entitled to repossess the vehicle.
13. That, thereby the seizure with proper inventory on 10-02-2015 is legal and proper.  ( Sic- no Court or police intervention was ever obtained).
14. That, the borrower and his guarantor had not responded to presale notice dt. 04-04-2015.
15. That, the legal notice of the comoplainant dt. 20-04-2015 was suitably dealt with by reply notice dt.02-05-2015.
16. That, the relationship of the parties are debtor and creditor and consumer Court has no power to adjudicate the case and there has been no element of deficiency of service
17. That, the agreement had contained a clause of arbitration and hence  the complainant is not maintainable.
18. That, the complainant is not due, false and frivolous and hence liable to be dismissed with a compensatory cost of Rs.25,000/-

11.      The contesting parties have submitted catena of judgements of higher courts justifying their respective stands as noted below:

 

Complainant side:-

1. 2014(4) CPR 724 (NC).

M/S Sundaram Finance Ltd. V/S Sri Anilkumar.

Ratio:-No musclemen can be allowed to interfere with peace of society and vehicle cannot be repossessed without intervention of Court State Commission has upheld finding of District Forum and returned its concurrent finding while dismissing appeal of petitioners.

 

2. 1(2011) CPJ-146 (H.P. State Commission)

Cholomandalam Investment and Finance Co.Ltd.

Kamal Singh V/s Cholomandalam Investment and Finance Co.Ltd and anr.

1. Seizure of vehicle by OP illegal, act of unfair trade practice.
2. Jurisdiction-Complainant purchased vehicle for self employment-No commercial purpose Complainant is a consumer.
3. Order of Fora below modified- Compensation enhanced.

 

3. 11(2010) C.P.J.159 (Kerala State Commission)

Kotak Mahindra Bank Ltd. V/s Michael

Consumer Protection Act, 1986-  Sections 2(1) (g) and 14 (d)- banking and Financial Services- illegal seizure of vehicle- Vehicle offered as security for loan forcefully taken by Ops- Deficiency in services alleged- Compliant fallowed O.Ps directed to refund a sum of Rs.1,49,440- Compensation and costs awarded- Hence appeal contention, as  per terms and conditions, Op had right to re-possess the vehicle rejected. Vehicle in absolute possession of complainant.  OP never in possession of vehicle  Only if one had the possession of vehicle then the same can be repossessed Complainant defaulted in only one instalment Forcible possession of vehicle a high handed action.   Demand by O.Ps. for recovery charge or repossessing charge unjustified Deficiency in services proved Order upheld.

 

4. 11(2009) CPJ 368(NC)

Tata Motors Ltd.V/s Indrasen Choubey and ors.

Consumer protection Act, 1986- Section 21(b) Banking and Financial Services. Vehicle financed Instalments defaulted Vehicle seized Auctioned without intimation to complainant Complaint dismissed by Forum Order set aside in appeal Op directed to pay awarded amount Hence revision illegal, unjust method resorted by bank for forcible repossession vehicle proved Order of lower Fora upheld. [Paras 8,10]

 

5. 2015 (2) CPR 584 (NC).

M/S Magma Fincorp Ltd. V/s Tikeswar Barik.

Consumer Protection Act, 1986 Section 15,17,19, and 21 Financial services Vehicle Loan Repossession of vehicle for default in payment of instalments Vehicle was neither sur rendered by complainant to petitioner company nor was it repossessed with his consent no order from a competent court of law was obtained before repossessing vehicle vehicle was in use and goods were loaded on it when it came to be seized by agency appointed by petitioner company for such purposes Seizure of vehicle in such manner was absolutely illegal and unjustified if vehicle is seized in such a manner it is bound to cause tremendous harassment and  mental agony to owner  of vehicle besides damaging his reputation Grant of appropriate compensation on account of such gross deficiency of service would by imminently justified.  No material has been placed on record by petitioner company to show that sale was duly - advertised in newspapers before vehicle was sold.  Considering gross deficiency in service on part of petitioner company, award of compensation to extent of Rs.3,20,000/- cannot be said to be unjustified or unreasonable ground for interference with order of Forum on merits is made out Revision petition dismissed

Result: Revision Petition dismissed.

 

Per contra, the opponent has submitted and relied upon the following ratios of higher forums as derailed below in their written arguments at page-2

1995 (3) CPR-93 (Karnataka State Commission)

1. Where relation between complainant and opposite party is that of barrower and creditor, complaint cannot be said to be a consumer in respect of loan transaction and cannot maintain complaint before consumer Forum.

II 1993 (1) CPR 392, Orissa Forum.

2. When the complainant purchased the truck for transport business thin purchase of vehicle being for commercial purpose, complainant is not a consumer.
3. That the OP financial institution has got right to seize the financed lorry/HP lorry in case of the barrower fail to pay the EMI as per agreement and even can sale the same which has been decided from time by the Hon’ble nation Commission.

 

1. 2011 (3) CPR 113 (NC).

Seizure of vehicle under agreement of default in payment of  instalment cannot be considered as deficiency in service.

 

2. 2012 CPR 213 (NC).

Bank can repossess vehicle in case of default in repayment of loan.

 

3. 2012 (4) CPR (NC).

Financer can repossess vehicle for default in repayment of loan account.

 

4. 2013 (1) CPR 351 (NC).

Financer can repossess vehicle in case of default in repayment of loan account.

 

5. 2013 (1) CPR 558 (NC).

Vehicle can be can repossessed and sold in case of default in repayment of loan amount.

 

6. 2013 (2) CPR 637 (NC).

Finance can repossess vehicle in case of default in repayment of loan account.

 

 

7. 2013 (3) CPR-164 (NC).

“Commercial user cannot maintain consumer Complaint”.

 

         12.          After a thread bare analysis of the contentions of the parties, and after scrutinising the catena of citations produced by them, a number of tricky questions arise before us and the primus-enter- pares to be answered, by us being considered as the preliminary point.

 

1.   As noted by us is point No.(x) of the summary of the written versions of the opponents, it has been vehemently claimed that, the complainant had acquired the truck under reference for commercial purpose and hence it is not a consumer under the opponents, thereby precluded to invoke the benevolent protection of the C.P.Act. 1986.

               

13.      Giving our anxious considerations to this preliminary point and analyising Sections 2(1) (d)  and (ii)with explanation, we delve into the provisions of the Act defining consumer in section 2(1)(d)(i) and (ii)of the Act, read together with the explanation provided at the end of the subsections.

1. Short title, extent, commencement and application.

(d).      “consumer”means any person who-

(i).       busy any goods fora consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

ii.         [Hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of ] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the  approval of the first-mentione person [but does not include a person wo avails of such services for any commercial purpose];

[Explanation:  For the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood, by means of self- employment;]

 

14.       In the instant case, the complainant has been vociferous that, he had acquired the captioned truck for the self employment.  In the lengthy, often

repeated, labyrinthine contentions of the opponents there is no single rebuttal denying the self employment aspect of the complainant save a preposterous claim that, the complainant was doing transport business.  What else for he would purchase a truck ?  To park it in front of his house and sleep under it?

 

15.       This factor alone bring the complainant in the ambits of the explanation provide at the end of section 2(1)(d)(i)and (ii) of the Act, and hence unhesitantly, we hold that, the complainant is a consumer, entitled to maintain this complaint.

 

16.       To quantify our reasoning we further analyse the provisions defined is section 2(1)(0) of the Act, which spells out as here under.

 

“Service” Means  service of any description which is made available to potential [ users and  includes, but not limited to, the provision of] facilities i connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, [housing construction], entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal  service;

 

17.       It is worthwhile to mention here that, the opponents are indulged into the business of finance and thereby resorting to jugglery of words, they cannot unshackle themselves from the ambits of the C.P.Act, 1986.

 

18.      Justifying our conclusions still further, we sit to analyse the contents of the loan agreement (copy) provided and marked as Ex-R-2 in the case.  Clause 16 (Notice/ Communication) which is extracted under neath wholly reads as follows:

 

Notice/ Communication:

1. Any Notice to be given by Shriram to the borrower, shall be effective and deemed to have been duly and sufficiently served on the  borrower, there days after the same have been delivered to the post office couriers properly addressed to the Borrower at the address given in the end of this agreement and if delivered to have been duly served as date of delivery.
2. A certificate by an officer of Shriram that the notice was posted or served, as the case maybe, shall be, final conclusive and binding on the Borrower.
3. Unless otherwise advised in writing by Shriram to the borrower, any notice to be giver by the Borrower to Shriram shall be effective and deemed to have been duly and  sufficiently served on Shriram if delivered at its branch address herein stated.

 

19.       The conditions of the opponents mentioned supra is quite mind bungling, one sided, unjustly favourable to the opponents and whimisical perse.  The basic tenents of the Indian Contract Act would never endorse such an  one sided component of the contract ( Section 18,19,24,25,27,28 of contract Act refered to) further, the documents exhibited by the opponents claiming service of notices to the complainant or his guarantor vide Ex.R7 to R11 have never reached the addressees.  Even the signature of Abdul Sayeed (guarantor on Ex-R9 appears to be a complete fake)

 

20.       We further put our considerations to another document captioned as schedule III attached to forming part of the loan cum Hypothecation agreement, herein refered to as Ex.R-4.  This document interalia reveals that, the  opponents stipulate to collect additional interest payable by way of liquidated damages @ 3% P.M.  We wonder, which law, regulation, authority or provisions of the R.B.I. or its N.B.F.C. division endorses collection of such exorbitant interest of does the ministry of finance, Govt. of India ever approves such collection of inflated interest. 

 

21.       We further would not be justified by failing to analyse the contents of section 2(1)(r) of the Act, which reads as follows:-

“unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice practice including any of the following practices, namely,

 

1.       The practice of making any statement, whether orally or in writing or by visible representation.

1. Falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
2. Falsely represents that the services are of a particular standard, quality or grade;
3. Falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
4. Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
5. Represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier dies not have;
6. Makes a false or misleading representation  concerning the need for, or the usefulness of, any goods or services;
7. Gives to the public any warranty or guarantee of the performance efficacy or length of life of a product or of any foods that is not based on an adequate or proper test thereof;

(Emphasis on clause vi)

 

22.       As discussed above, herein the opponents, in the garb of doing fair business, have resorted to unfair methods and unfair trade practice, by illegally seizing the vehicle, without any notice or giving any opportunity to pay the nominal defaulted amount of the borrower and thereby have deprieved him of his livelihood.  A valuable asset (Truck) is now in their illegal possession without relent or remorse.  They had even tried to mislead the court submitting on 16.07.2016 about a settlement and buying time of  had gone back unceremoniously.

 

SURMISING THE DISCUSSIONS ABOVE, WE REITERATE THAT, THE COMPLAINANT IS A CONSUMER, VICTIMESED BY THE SHYLOCK LIKE ACTIONS OF THE OPPONENTS, AND THE OPPONENTS ARE SURVICE PROIDERS ROSORTING TO UNETHICAL AND UNFAIR TRADE PRACTICE.

 

23.       The second question which looms large before us is that, from out of the catena of decisions quoted by the parties and extracted in this order, on which  ratio we would place reliance? We are appaled that, the highest authorities of the hierchy have expressed my riad opinions, divergent from each other, in many ways.  We have to, therefore only rely on the latest Judgement of the National Commission, Submitted by the complainant in 2014 (4) CPR 724 Sundaram Finance Ltd. V/S Atulkumar, in which.  The Hon’ble National Commission has been pleased to hold that:-

 

            “No muscleman can be allowed to interfere with peace of society and vehicle cannot be repossessed without intervention of Court”.

 

          The ratio of 2015(2) CPR-584NC- M/S Magma Fincorp Ltd. V/S Tikeswar Barik, relied  upon complainant also endorses the earlier quoted judgement.  Respectfully agreeing with the far fetching judgement of the Hon’ble National Commission, we hold that, the seizure of the vehicle without reasonable notice or opportunity to pay the defaulted payment was blatantly illegal, and the service providers/ opponents have resorted to criminal means to make an undue gain.

 

24.       Basing on the detail analysis described above, we resort to consider the following points.

 

1. Is the complainant a consumer and the opponents service providers?
2. Were the opponents justified to seize the vehicle without any proper notice?
3. What orders?

 

25.           Our answers to the points stated above are as follows:-

               a. In the affirmative

               b. In the negative owing to the origin and genesis of the
                   case and we pass final order, as follows:-

        

::ORDER::

The complaint is allowed in part.

1. The opponents having taken possession of the vehicle albeit illegally and still in possession of the same are directed to pay back the sum of Rs.4,69,772/- to the complainant along with 12% interest p.a. from the date of alleged possession i.e 10.02.2015 till date of realisation.
2. The opponents are further directed to pay damages at a sum of Rs.30,000/- and litigation expenses @ Rs.10,000/- to the complainant.
3. A penalty of Rs.5,00,000/- is imposed on the opponents acting u/s 14(hb) of the C.P.Act 1986 as many gullible persons might have been the victions of machinations of the opponents though yet undisclosed.  The payment to be made to the account of the consumers legal aid fund of this forum.
4. A time of four weeks is granted to comply the orders at points (i) (ii) and (iii) of this order.
5. As far the claim of business loss of Rs.4,00,000/-, The Hon’ble National Commission in 2009 CTJ 535 and Hon’ble Apex court in 2008 CTJ-561(S.C) have mandated that for recovery of loss, complainant has to approach a civil court.  He would at libery to do so if advised.
6.  Office is directed to provide free copies to both sides.

 

(Typed to our dictation then corrected, signed by us and then pronounced in the open Forum on this 28^th day of September-2016)

 

          Sd/-                                                                          Sd/-

Sri. Shankrappa H.                                             Sri. Jagannath Prasad                                   

  Member.                                                                President.                              

           

 

 Documents relied upon by the  complainant

 

1. Ex.P1- Payment receipt             date: 02.02.2013.
2. Ex.P2- Payment receipt             date: 12.04.2013.
3. Ex.P3- Payment receipt             date: 10.07.2013.
4. Ex.P4- Payment receipt             date: 31.12.2013.
5. Ex.P5- Payment receipt             date: 14.12.2013.
6. Ex.P6- Payment receipt             date: 31.01.2014.
7. Ex.P7- Payment receipt             date: 26.02.2014.
8. Ex.P8- Payment receipt             date: 18.03.2014.
9. Ex.P9- Payment receipt             date: 20.05.2014.
10. Ex.P10- Payment receipt           date: 16.06.2014.
11. Ex.P11- Payment receipt           date: 16.07.2014.
12. Ex.P12- Payment receipt           date: 30.08.2014.
13. Ex.P13- Payment receipt           date: 30.09.2014.
14. Ex.P14- Payment receipt           date: 13.11.2014.
15. Ex.P15- Payment receipt           date: 16.12.2014.
16. Ex.P16- Payment receipt           date: 04.04.2015.
17. Account statement with endorsement of vehicle seizure Date: 10.02.2015 at Zaheerabad.

 

 Documents produced by the Opponent

1. Ex.R1-      Copy of instrument of power of attorney.
2. Ex.R2-      Copy loan cum hypothecation agreement.
3. Ex.R3-      Schedule 11- Description of hypothecated asset.
4. Ex.R4-      Schedule III attached and forming part of the loan and hypothecation agreement.
5. Ex.R5-      Final data sheet.
6. Ex.R6-      Summary of loans of vehicle No. AP 12V-7187.
7. Ex.R7-      Alleged repossession notice date: 05.10.2013 (Not served).
8. Ex.R8-      Undelivered postal cover.
9. Ex.R9-      Postal acknowledgement with obscured signature of receipant.
10. Ex.R10-    Purported resale notice date: 26.02.2015.
11. Ex.R11-    Unserved postal cover with endorsement of insufficient address.

 

            Sd/-                                                                             Sd/-

Sri. Shankrappa H.                                             Sri. Jagannath Prasad                                   

         Member.                                                                President.                                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                 

Sb.