Assam

Dibrugarh

CC/13/2015

SRI KHAGENDRA NATH GOGOI - Complainant(s)

Versus

STATE BANK OF INDIA, REPRESENTED BY ITS MANAGER. - Opp.Party(s)

SRI VIJAY PANDEY

22 Nov 2018

ORDER

The case of the complainant in brief is that Sri Prakash Ranjan Baruah, eldest son of the complainant being handicapped and suffering from various disease including Orthopaedics and Diabetic whom the Doctor advised regular check up, the complainant purchased a Maruti Alto 800 LXI BS IV with the financial assistance of OP and got it registered vide Registration No. AS-06-6293. The complainant entered into an agreement with the OP and settled to pay EMI of Rs.6019/- per month, which OP was regularly deducting from the account of the complainant. Lastly, on 10.12.14 the OP deducted Rs.6100/- and again Rs.6100/- from the account of the complainant being SBI Account No.30878710928 against the loan of the aforesaid vehicle. The complainant further deposited Rs.14,599/- on 03.01.15 from his daughter’s account No.7192250003049 of Assam Grami Vikash Bank, Sonari Branch. But, still then surprisingly on 03.01.15 while the handicapped son of the complainant was suffering from serious leg pain and was immediately referred to Dibrugarh by the Doctor of Sonari, on the way from Sonari to Dibrugarh suddenly, some unknown persons in four nos. forcefully restrained the vehicle near UCO Bank ATM, Sonari informing that they are the recovery agent of the OP and would take the possession of the vehicle. The complainant opposed the illegal act of those musclemen but they on gunpoint forcefully and illegally snatched the key of the vehicle from the driver. The complainant asked the musclemen to show their authority as being agent of OP, but they failed to show any authority. When the complainant raised hue and cry people gathered thereon, but meanwhile those musclemen fled away by taking the vehicle. The complainant immediately lodged a complaint before Officer-in-Charge, Sonari Police Station who registered a case being Sonari P.S. Case No.05/2015 U/s 379 IPC. The above vehicle was utmost necessary for the complainant as his son is a patient of Orthopaedic and lung disease for which the vehicle is required frequently for travelling to Dibrugarh for his treatment. As such, police after receiving the FIR recovered the vehicle from the OP and gave Zimma to the complainant. Besides, the court of SDJM (M), Charaideo vide order dated 27.01.15 allowed the ‘Zimma’ of the vehicle to the complainant. Those musclemen along with the vehicle forcefully taken away all the documents including cash of Rs.25,000/-. The complainant after the occurrence approached before the OP who admitted the fact that they hired some musclemen to take the possession of the vehicle. The complainant requested the OP to return his papers, documents alongwith cash money of Rs.25000/- which the OP flatly refused. The OP demanded Rs.50,000/- in exchange of releasing the vehicle otherwise they would sell the vehicle. The OP has taken the possession of the vehicle forcefully  and illegally with the help of some musclemen against the law and guidance of RBI as well as Supreme Court. For this illegal action of the OP the complainant had to suffer damage in terms of physical and mental torture as well as loss of money.  The act of the OP was out and out deficiency in service due to their illegal act for which the complainant and handicapped son had to suffer immense loss, torture, harassment and agony. Hence the complainant file this case claiming compensation of Rs.15,000/- alongwith cost of litigation.

 

After registering the case, notice was  issued to  the OP to which he contested the case by filing written statement stating inter-alia that the case is not maintainable in law as well as in fact. He further stated that the complainant applied for a term loan of Rs.2,80,000/- and which the  OP sanctioned vide sanction letter dated  29.12.12 and the complainant agreed to comply for every covenant of the agreement and opened a term loan account in the name of the complainant being Account No.32737631238. The complainant availed and enjoyed the loan facility and purchased the vehicle. He also submitted copy of sale certificate but he failed to repay the EMI and liquidate the loan amount as per terms and condition in spite of repeated request vide letter dated 18.07.14, 03.11.14, 06.11.14, 06.12.14 and 05.01.15. The complainant in spite of receipt of these letters defaulted in payment of requisite rate of instalment for which, the OP sent a letter dated 26.07.14 addressing to the complainant and to the recovery agent M/s. D & A Associates, Guwahati for necessary action. Subsequently, as per above letter said approved recovery agent repossessed the said vehicle on 03.01.15 in terms of loan agreement. Thereafter, the son of the complainant Sri Palash Ranjan Baruah lodged an F.I.R. with the Sonari Police Station with request to take necessary action. Accordingly, Officer-in-Charge, Sonari Police Station  registered a case U/s 379 IPC and seized the vehicle from the possession of OP. Besides, OP moved a petition U/s 451 of the Cr.P.C. on 09.01.15 as well as complainant also moved a petition on 17.01.15 before SDJM (M) Charaideo, Sonari for custody of the vehicle in question. SDJM (M) Charaideo disposed the petitions vide order dated 27.01.15 allowing the Zimma of the vehicle to the complainant. The OP being dissatisfied with the above order preferred Revision Petition before the Sessions Judge at Sivasagar which is still pending. The OP further stated that to recover the loan amount he has filed a Title Suit being T.S. No.52 of 2015 against the complainant in the court of the Civil Judge, Dibrugarh on 31.07.15 for liquidate the loan amount with interest. The OP further stated that as per statement of account an amount of Rs.2,26,533.24 has become due and outstanding on the loan account of the complainant after being accrual of interest from time to time. As such, there is no illegality on the part of the OP for the recovery of the vehicle from the possession of the complainant and no error has been committed by the OP. As such, he prayed to dismiss the case.

 

In this case, complainant gave evidence by swearing affidavit and exhibited as many as 3 (three) documents in support of his case. On the other hand, the OP examined one witness namely Sri Ajoy Kumar Bhowmick, Manager of SBI and exhibited as many as 13 (thirteen) documents to rebut the case of the complainant.

 

DISCUSSION, DECISION AND REASONS THEREOF:

 

Upon going through the evidence, documentary evidence and the argument advanced by the parties it reveals that the complainant purchased one Maruti Alto 800 LXI BS IV with the financial assistance of Rs.2,80,000/- of OP vide sanction letter dated 29.12.12 accepting all the terms and conditions and unequivocally agreed to comply with each and every agreement. Accordingly,  a term loan account in the name of the complainant being Account No.32737631238 has been maintained by the OP and the OP settled Rs.6109/- per month as monthly instalment. It appears from Ext-M that the complainant from time to time deposited the EMI but not regularly. As such, the OP sent reminder requesting the complainant to deposit the EMI vide letter dated 18.07.14, 03.11.14, 06.11.14, 06.12.14 and 05.01.15 vide Ext- G,H,I,J,K respectively. The OP for the above failure of payment of the EMI by the complainant opted for an illegal method and used recovery agent while the son of the complainant namely Sri Palash Ranjan Baruah who, is a handicapped and suffering from various disease was proceeding to Dibrugarh for his medical treatment by the said vehicle purchased by the complainant from taking loan from the OP, restrained the vehicle near UCO Bank ATM, Sonari by four musclemen and recovered the vehicle from the possession of the son of the complainant forcibly along with key and other documents.  Hence, now the material question to be considered  whether the OP had legally or illegally recovered the vehicle from the possession of the complainant with the help of some musclemen ?

 

On perusal of the evidence on record and the documents it appears that on 03.01.15 the Maruti vehicle whiling coming from Sonari to Dibrugarh for the treatment of the son of the complainant, the OP by using some musclemen repossessed the vehicle  without any prior intimation to the complainant. Thus, it appears that the OP has forcefully taken away the vehicle of the complainant without giving any reasonable opportunity. It is admitted fact that the complainant was defaulter and the OP has right to repossess the vehicle as per agreement but before that they must follow the procedure and rule of law. Whereas, in the present case the action taken by the OP is clearly impermissible and amount to take law in his own land. The OP though explained that they sent letter to recovery agent M/s D & A Associates, Guwahati  on 26.07.14 and copy of the said letter was also sent to the complainant. The said  letter was marked as Ext-L whereas, the said letter is not available with the record as because the OP has not produced the said letter. As such, OP failed to prove that any notice prior to recovery of the vehicle was sent to the complainant. The OP denied that the vehicle was taken in possession by applying force and illegally. According to them they have possessed the vehicle by complying with all essential formalities. Admittedly the  OP has right to repossess the vehicle as the complainant failed to make the instalment and liquidated the loan,  but the OP must follow the procedure of law before repossession. The OP cannot repossess the vehicle forcefully at their whims while a patient i.e. son of the complainant was carried to Dibrugarh for his treatment. From the evidence of the complainant it appears that some unknown four persons forcibly restrained the  vehicle near ATM of the UCO Bank, Sonari and informed to the son of the complainant that they would take possession of the vehicle. The son of the complainant though protested the said four persons forcibly and illegally snatched the key of the vehicle and dropped the passenger from the vehicle and fled away taking the vehicle. From the above act of the OP it emerge clear that complainant was dispossessed by force by the OP by using some recovery agent which is not permissible and amount to taking law in his own hand. The OP has also admitted the above fact that he recovered the vehicle with recovery agent.

 

Hon’ble Supreme Court in a landmark judgment  ICICI Bank Ltd Vs. Prakash Kaur and others reported in 2007 SCC 711 stated that the practice adopted by the bank of taking forceful possession of  the vehicle  by hiring recovery agent as below.

 

“ 16. Before we part with this matter , we wish to  make it clear that we do not appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents, who are musclemen, is deprecated and needs to be discouraged. The Bank should resort to procedure recognized by the law to take possession of the vehicles in cases where the borrower may have committed default in payment of the instalments instead of taking resort to strong arm tactics.”

 

In the above cited case it has also been held as below-

 

 “Now the bank is the aggressor and the public is the victim. The first step to recover the money due is through the so-called recovery/ collection agents. A very dignified term used for paid recovery agents who are individual and independent contractors hired by the banks both to trace the defaulters and to physically, mentally and emotionally torture and force them into submitting their dues.

A man’s self-respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernized version of Shylock’s pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner.”

 

       Learned counsel for the OP submitted that complainant has executed an irrevocable power of attorney in favour of the OP along with a loan cum hypothecation agreement and as per clause No.4 of Power of Attorney  the complainant specifically empowered the OP  to take possession of finance asset i.e. the vehicle in case of any default as per terms of loan agreement and to retain or to delay or otherwise deal with the vehicle as the OP deem fit in the circumstances. Further, as per clause- 5 of the Power of Attorney the complainant specifically authorised the OP to transfer, sale or dispose of the  asset and to sign and execute all contract, declaration and instrument and necessary  form as may be necessary or expedient for giving effect to the transfer , sale or any other disposal. Admittedly, OP is empowered to take possession of the vehicle as per terms of loan agreement. But Bank should resort to the procedure recognised by the law to take possession of the vehicle in case where borrower has committed default in payment of EMI. The judgment cited above it appears clear that it is not permitted to take possession of the vehicle for which loan is advanced by the use of force. Legal or judicial process may be slow but it is not excuse for employing musclemen to repossess the vehicle for which loan is given. Such type of ‘instant justice’ cannot be permitted in a civilised society where there is effective rule of law. By an agreement the vehicle can be given as security for the loan advanced and the right to seize the vehicle is merely a licence to ensure compliance  with the terms of the so-called hire purchase agreement. It is admitted that the complainant is defaulter of EMI and there is having various laws for recovery of money or to repossess the vehicle but not permitted to take instant justice by using musclemen to repossess the vehicle. The action taken by the OP was illegal, arbitrary and criminal in nature which required to be compensated and by punitive damages besides refunding market value of the vehicle with interest.

 

“In this context, reference may be made to the judgment of Honb’le National Commission  reported as “Citicorp Maruti Finance Ltd. v. S.Vijayalaxmi” 2007 CTJ 1145 (CP)=III (2007) CPJ 161 (NC) in which it has been held as below :

1. When a vehicle is purchased by a person (consumer) by borrowing money from the money lender/financier/banker, the consumer is the owner of the vehicle and not the money lender/financier/banker, unless the ownership is transferred.

 

2. In a democratic country having well established independent judiciary and having various laws it is impressible for the money lender/financier/banker to take possession of the vehicle for which loan is advanced, by use of force.

 

3. Legal or judicial process may be slow but it is no excuse for employing musclemen to repossess the vehicle for which loan is given. Such type of ‘instant justice’ cannot be permitted in a civilised society where there is effective rule of law. Otherwise, it would result in anarchy that too when the borrower resort and uses the force.

 

 

    It is admitted that on 03.01.15 the OP repossessed the vehicle but not as per law and not by fulfilling under formalities as required under  the law. From perusal of the evidence on record as discussed above it clearly reveals that OP without issuing any notice by using force and with the help of some musclemen repossessed the vehicle by abusing the driver and dropping the handicapped son of the complainant who was moving for his treatment to Dibrugarh by the said vehicle and fled away from the place of occurrence taking the vehicle by the musclemen. Thus, repossession of the vehicle with the use of force by the OP is not legal and amount to deficiency in service. The OP repossessed the said vehicle illegally and arbitrarily.

 

It is pertinent to mention here that SDJM (M), Charaideo, Sonari vide his order dated 27.01.15 allowed the Zimma of the vehicle to the complainant Sri Khagendra Nath Gogoi. The OP being dissatisfied with the above order filed a Criminal Revision Petition before the Sessions Judge, Sivasagar and the case is still pending. Further, it appears that OP in order to recover the loan amount has filed a Title Suit being T.S. No.52/15 against the complainant in the court of Civil Judge, Dibrugarh on 03.07.15 as the complainant failed to pay/liquidate the loan amount with interest in spite of repeated request and demand. The said civil suit has not been decided and still pending in the court of Civil Judge, Dibrugarh. From perusal of the record it reveals that the present case was filed on 01.06.15 before this Forum whereas, the civil case was filed by the OP on 31.07.15. It is settled principle that there is no room for any doubt that the proceeding under Consumer Protect Act and in Civil Court can simultaneously go on, even if issues involved in two proceedings are substantially similar. Even if two proceedings are not allowed to proceed parallaly, still in the present case the cause of action and relief sought in both the cases are different and as such, both the cases are independently cans be decided. The complainant filed the present case for compensation of illegal possession of the vehicle whereas, the OP filed the civil suit for recovery of unlequidated amount. Now considering the above fact and circumstances stated above the question of compensation to be given to the complainant, it is found quite clear that the OP failed to prove that they have repossessed the vehicle as per legal procedure. Thus, it appears clear that the vehicle was forcefully repossessed by the OP, which constitute a serious deficiency in service for which complainant is required to compensated by punitive law. Under the circumstances, it is clear that the C.P. Act has provided provision for correcting shortcoming in the service for goods provided by way of awarding compensation or other means specified in the provision of 14 (d). As such, the Forum comes to conclusion that there is deficiency in service and loss suffered by the complainant for the reason discussed above. Accordingly, this Forum doth order to pay compensation of Rs.10,000/- to the complainant for giving such mental and physical harassment and also ordered to pay Rs.3000/- as cost of filing the instant case.

 

Since a civil case in the court of Civil Judge, Dibrugarh is pending for recovery of the loan amount this Forum has no jurisdiction to settle the recovery of loan and as such, the complainant and OPs are to wait for the order  passed by the Civil Court since in this matter the order of the Civil Court is binding upon them.

The OP shall comply the order within one month from the date of this judgment. Furnish copy of the judgment to OP for compliance.