Sri Shyamal Gupta, Member

Aggrieved with the decision of the Ld. District Forum, by which the complaint case has been allowed, this Appeal is preferred by Indusind Bank.

Brief facts of the complaint case are that the Complainant purchased one second hand truck for the exclusive purpose of maintenance of his livelihood by means of self-employment.  On account of the illness of his youngest brother, the Complainant could not run the said truck to earn his livelihood.  Suddenly on 25-11-2017, the OPs forcibly seized the subject vehicle.  Thereafter, the OP No. 2 by issuing a notice dated 16-12-2012, asked him to pay a sum of Rs. 10,63,050.12 within 10 days of receipt of said notice or else face the consequences of auctioning of the subject truck.  Therefore, the complaint case was filed.

The OPs, on the other hand, submitted that the Complainant defaulted in making payment of the instalments due.  Thus, to realize the due amount, the OPs sent a notice terminating the loan.  As there was no response from the side of the Complainant, the subject truck was repossessed.  After lapse of sufficient time, pre-sale notice dated 16-06-2012 was issued whereby it was made clear that if the Complainant failed to repay the due amount, they would be forced to take necessary steps to realize the due amount. 

Decision with reasons

On receipt of notice, the Respondent appeared through his Ld. Advocate once.  However, subsequently, none turned up on behalf of the Respondent.  Therefore, the matter was heard ex parte.

Undisputedly, the Respondent failed to repay the loan in accordance with the Hypothecation agreement executed between the parties for which the subject vehicle was repossessed by the Appellants.

It appears that the subject vehicle was reposed by the Appellants from the Respondent on 25-11-2012.  However, no such documentary proof is furnished from the side of the Appellants to establish that any prior intimation was given to the Respondent in this regard.

Again, I find that although by issuing a letter dated 16-12-2012, the Appellants called upon the Respondent to clear the total outstanding due amounting to Rs. 10,63,050.12 within a period of 10 days from the date of receipt of notice, nothing is forthcoming before me that the Respondent was duly apprised of the date, time and venue before putting the vehicle on auction.

In this regard, we may profitably append below the "The Code of Bank's Commitments to Customers" being formulated by the Governor, Reserve Bank of India on 01.07.2006,which would establish beyond all reasonable doubt as to how the Respondent was deprived of due privilege enshrined under the aforesaid Code.

"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."

A comparison of the aforesaid guideline vis-à-vis the steps taken by the Appellants are clear pointer of the fact that Regulatory directive was thrown to the windows by the Appellants.  This cannot be allowed.  On due consideration of the facts and circumstances of the case, therefore, we find no illegality with the order impugned and therefore, we are not inclined to interfere with the same in any manner whatsoever.

The Appeal, accordingly, fails.

Hence,

O R D E R E D

The Appeal stands dismissed ex parte against the Respondent.  The impugned order is hereby affirmed.  No costs.