Order-15.
Date-02/06/2015.
Complainant Mr. Ashutosh Dutta by filing this complaint submitted that op no.1 is the non-banking financial institution who provides financial assistance in the mode of Loan to the intending and willing customers and are governed by the guidelines laid down by Reserve Bank of India and op no.2 is the Branch office of the op no.1 wherefrom the complainant was sanctioned the auto loan.
By filing an application for an auto loan from the op in order to purchase a TATA Pick Up Van 407 and after scrutiny the ops sanctioned loan to the complainant to purchase the said vehicle vide agreement being No. C00CH0102260011 dated 28.02.2011 and as per agreement and in terms of repayment schedule was handed over to the complainant and in terms of the repayment schedule started repaying the loan amount wherein the ops asked the complainant to pay Rs. 11,710/- started from 04.04.2011 and total installment 47 in nos. But the loan amount was sanctioned to the extent of Rs. 4 lakhs and complainant paid a sum of Rs. 2 lakhs in cash at the time of purchasing the vehicle.
In the meantime complainant paid 7 installments out of 47 installments to the ops and while paying each installment the complainant asked the ops to supply the copy of the agreement dated 28.02.2011 but op avoided to supply. Most interesting factor is that in the meantime without any prior intimation or notice in writing or by an order of any court of law the ops repossessed the said vehicle from the custody of the driver of the complainant forcefully with the help of musclemen on 04.07.2011. Subsequently on 06.07.2012 ops sent a notice for settlement to the complainant asking the complainant to settle the account by paying a sum of Rs. 4,42,500/- within ten days from the date of communication of the notice.
Complainant soon after receipt of the notice of settlement from the ops on several and repeated occasions approached the ops with the request to return the said vehicle, but ops did not take any step and as per advise of one of the representatives of the ops the complainant wrote a letter to the Senior Manager of the ops on 22.08.2012 enclosing a cheque of Rs. 30,000/-, but the ops refused to accept the same and op did not let out their helping hands towards the complainant and the complainant was compelled to send a notice through his Ld. Advocate on 16.11.2012 stating that complainant is willing to pay a sum of Rs. 3,00,000/- within one month in two installments.
Even after repossessing the said vehicle the representatives of the ops kept on demanding the dues from the complainant over telephone threatening and using filthy languages. But fact remains complainant requested the ops to return back the documents including the vehicle which are in the custody of the ops which ought to have released after repossession of the said vehicle, but same were not returned and finding no alternative to get back those documents complainant sent a notice on 18.07.2014 through his Ld. Advocate.
When it is heard by the complainant in the meantime the said vehicle was repossessed by the ops and there were failure of payment of 8 installments only i.e. a sum of Rs. 92,000/- but the ops demanded a sum of Rs. 4,42,500/- and the entire act is completely arbitrary and uncalled for, illegal and by that act they have practically caused for financial loss , mental pain and agony and loss of his daily income and further loss of huge amount. So, in the above circumstances, complainant has prayed for redressal.
On the other hand op nos. 1 & 2 by filing written statement submitted that no doubt a loan was sanctioned by executing one loan cum Hypothecation agreement dated 28.02.2011 bearing agreement No. COOCHO102260011 was executed loan amount has been disbursed and complainant got the vehicle bearing Regd. No. WB-73C/0335 and complainant was supposed to pay monthly EMI Rs. 11,710/- from April 2011 upto 47 installment.
But from very beginning the complainant became defaulter regarding payment of EMI and the complainant never paid the EMI amount at the rate Rs. 11,710/- within time rather from the complaint it revealed that complainant was very much reluctant to pay and clear the dues within time and became defaulter in making payment of 8 EMIs. But complainant deliberately failed to pay the EMI within in time and therefore to cover-up her fault cooked-up such story of non-delivery of copy of agreement whereas no such demand as ever been raised by the complainant.
But due to non-payment of dues within time the ops sent demand notice upon the complainant on 16.03.2012 with request to clear the outstanding dues. But inspite of that when the demand notice complainant did not pay the outstanding amount and clear the dues and outstanding was Rs. 4,42,500/-. But complainant did not respond. So, ultimately op repossessed the vehicle from the custody of the complainant on 04.07.2012 with due intimation to the complainant, guarantor and local police station and subsequently op issued pre-sale notice on 14.06.2013 to the complainant with the demand of outstanding amount of Rs. 5,22,357/- in order to obtain release of the vehicle. But complainant failed to pay and ultimately the vehicle has been sold out.
Thereafter ops preceded Arbitration proceeding as per loan agreement and appointed Sri Pulin Behari Das, Advocate as Ld. Sole Arbitrator and the Ld. Arbitrator sent notice to the complainant on 17.12.2014. So, the present complaint is not maintainable and there is no laches on the part of the op and the entire complaint is not maintainable in the eye of law for which same should be dismissed.
Decision with reasons
On entering into the complaint and written version and also considering the argument as advanced by the Ld. Lawyers of both the parties and further considering the copies of agreement and the act as done by the ops, rather it is admitted by the ops that loan was sanctioned to the extent of Rs. 4 lakhs to the complainant by the ops and ops in this regard secured a hypothecation agreement on 28.02.2011 bearing agreement No. COOCHO102260011 and complainant got the vehicle bearing Regd. No. WB-73C/0335. Admitted fact is that there after complainant paid 7 EMIs and defaulted to pay 8 EMIs. But it is evident that complainant sent a cheque of Rs. 30,000/- that was refused. Thereafter complainant sent a letter through his Lawyer stating that he shall have to pay Rs. 3 lakhs by two installments that was not entertained and admitted position is that on 04.07.2012 that is within one year and 5 months the vehicle was re-possessed. But admitted position is that it is an agreement of hypothecation. Then question is that under what legal provision the vehicle was repossessed by the ops.
In this regard practically Ld. Lawyer of the op failed to give any satisfactory explanation. At the same time ops’ Ld. Lawyer failed to show that they have got such legal power from the court or competent authority for repossessing the same. No civil proceedings has been started against the complainant as per agreement for hypothecation of loan amount. But it is found that as per RBI circular dated 24.04.2009 on repossession, clarifying the manner in which vehicles financed by non-banking finance companies were to be recovered, and in order to ensure transparency, the terms and conditions of the contract/loan agreement should also contain provisions regarding notice period before taking possession and in the said lifeline circular of RBI guideline had been duly embodied in respect of hire purchase agreement. But in a judgement in CA No. 9711/2011 (Citicorp. Maruti Finance Ltd. – Vs – Vijayalaxmi) Hon’ble Supreme Court by passing judgement along with other application ordered that in case of goods subject to hire purchase agreement the recovery process referred to in the agreements also contemplates such recovery to be effected in due process of law and not by use of force and it is also observed that till such time as the ownership is not transferred to the purchaser, the hirer normally continues to be owner of the goods, but that does not entitle him on the strength of the agreement to take back possession of the vehicle by use of force and the guidelines which had been laid down by the RBI as well as the op bank itself, in fact, support and make a virtue of such conduct and if any action is taken for recover in violation of such guidelines or the principles as laid down by this Court, such an action cannot but be struck down.
In the present case the vehicle had been seized by muscle power, the same was also sold without auction and third party rights have accrued over the vehicle. So, it is well proved that op did not sell adopting any legal procedure. Sale was made without any order of the court or of any authority who is authorized to pass such order. But it is proved that it was forcible repossessing and sold without adopting any procedure of auction as laid down in respect of agreement of hypothecation. When everything has already been completed then we are convinced to hold that everything has been done by the op forcibly and without completing the procedure as laid down and as per guide lines of the RBI and for which the entire act is no doubt arbitrary in nature and no doubt negligent and deficient in manner.
But fact remains that after selling out of the said vehicle, op initiated arbitration proceedings. Complainant did not receive any information. But now we have gathered that one Pulin Behari Das is the Arbitrator but in this regard it is to be mentioned that Pulin Behari Das is a common Arbitrator of all the non-banking financial institution and his reputation as Arbitrator is also known to Hon’ble High Court also that he is the most dishonest arbitrator in West Bengal and op tried to show that arbitration proceedings started. But legal possession is that complainant filed this complaint on 18.12.2014 regarding illegal possession for non-payment of the balance amount of EMI violating the guideline of the RBI and for adopting musclemen power to repossess even after existence of hypothecation agreement and truth is that possession was taken arbitrary sale was made prior to arbitration proceedings and when the vehicle has been forcibly repossessed and sold away by adopting illegal procedure, in that case consumer has his legal right to come before this Forum in the first instance and he practically challenged such act of the op and arbitration is started after forcible repossessing the vehicle and selling out of the vehicle without adopting any legal procedure.
So, subsequent proceedings of arbitration is unscrupulously started by renowned Pulin Behari Das as Arbitrator when the plain language u/s C.P. Act 1986 makes it clear that remedy available in addition to and not in derogation of provision of any other law for the time being force and the provision of Section 3 has to be taken object and purpose of the act and in this regard Hon’ble Supreme Court already decided the same and so for starting such subsequent arbitrary proceedings the present complaint is not barred and on the contrary the complaint is filed by the complainant is maintainable in the eye of law and in this regard a ruling reported in 2013 (4) CPR 345 SC is applicable and we have relied upon that to come to a conclusion that this Consumer Forum cannot deny the relief as prayed for.
At the same time Hon’ble Supreme Court by its verdict reported in 2000 CTJ 321 SC has confirmed the existence of arbitration clause in the agreement will not a bar and entertainment of a complaint by a consumer relatable to deficiency of service (Ref: SKY Park Courier – Vs – Tala Chemical Ltd.) and moreover the Hon’ble Supreme Court by its judgement passed in Civil Appeal No. 9711/2011 observed that the harass and abusing by some muscle men of bank and non-banking institution for repossessing the vehicle is common procedure to throw the consumers/customer on the street.
Moreover in this case after considering the entire materials, we are convinced to hold that no doubt by applying musclemen force the vehicle was repossessed and it was sold without legal process. There is no document to prove by the op that it was sold by adopting legal procedure of auction as laid down by RBI guideline or in the T.P. Act and truth is that everything was done arbirtrarily and no doubt op has suppressed everything even about the sale amount etc. and that arbitrator Pulin Behari Das stated proceeding but we are not interested about arbitration proceeding in view of the fact that before arbitration proceedings all illegal act has been done by the op for which complainant has suffered much and when the vehicle had already been sold then there is no question of realization of any further amount from the complainant and there is no question of starting any arbitration proceedings when the vehicle had been sold by the op at their own choice. Then the loan amount which has been granted for 47 months installments, complainant paid 7 installments and balance amount is realised by selling the said vehicle. Though that sale is no doubt illegal, uncalled for and without any legal procedure. So, op cannot claim any sort of money against the loan amount from the complainant and practically for the ops’ act, complainant is not further liable for payment of any amount and complainant’s liability is completely discharged when op took illegal action for repossessing the vehicle illegally and for selling the same without adopting any legal procedure and by that act, the entire loan amount has been satisfied and then there is no scope on the part of the op to harass the complainant by any means and there is no scope for illegal claim of any amount from the complainant in respect of hypothecation of loan amount being No. COOCH10226011 dated 28.02.2011 which is finally settled and there is no dues of the complainant in respect of that agreement and that agreement is treated as cancelled on full satisfaction.
But fact remains that complainant has suffered much for taking illegal path by not adopting the RBI guidelines by not securing any decree from any court or order of any court for repossessing the vehicle and selling the same without adopting legal path and by that act no doubt complainant has been harassed and he has lost huge amount because he also paid of Rs. 2,00,000/- also for purchasing that vehicle to the op in cash other than loan amount.
In the above circumstances, considering the negligent and deficient manner of service and deceitful manner of trade on the part of op, complainant suffered mental pain, agony and financial loss for which this complaint succeeds.
Hence, it is
ORDERED
That the complaint be and the same is allowed on contest with cost of Rs. 5,000/- against ops and it is also decided and ordered that loan cum hypothecation agreement being No. COOCH10226011 dated 28.02.2011 is finally settled for illegal repossessing the vehicle and selling the same vehicle by the op and op is not entitled to get any amount from the complainant in respect of the agreement or loan account and entire loan account is treated as fully satisfied and op is not entitled to get any further amount from the complainant.
For harassing the complainant and for causing mental pain and agony, op shall have to pay Rs. 10,000/- to the complainant along with litigation cost within one month from the date of this order failing which penal damages at the rate Rs. 5,000/- per month shall be assessed till full satisfaction of the decree and if it is collected it shall be deposited to this Forum.
Even if op fails to comply the order of this Forum, in that case, op shall be prosecuted u/s 27 of C.P. Act 1986 and for which further penalty and fine shall be imposed.
