Punjab

StateCommission

A/605/2017

Cholamandalam Investment and Finance Co. Ltd. - Complainant(s)

Versus

Suresh Kumar - Opp.Party(s)

Varun Katyal

28 Nov 2017

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL COMMISSION,   PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

 

                   First Appeal No.605 of 2017

 

 

                                                          Date of Institution: 18.08.2017

                                                          Order Reserved on : 27.11.2017       

                                                          Date of Decision  : 28.11.2017

 

Cholamandlam Investment and Finance Co-Limited G.T Road, Hanuman Chowk, Bathinda through its authorized representative Sh. Yogesh Kumar Bansal Sr. Executive (Legal).

 

                                                                      Appellant/Opposite party  

                   Versus

 

Suresh Kumar son of Satnam Rai r/o House No. 16976, Aggarwal Colony, Street No. 1-A, Bathinda.

 

 

                                                                   Respondent/Complainant

 

 

First Appeal against order dated 12.06.2017 passed by the District Consumer Disputes Redressal Forum,  Bathinda

Quorum:-

          Shri J. S. Klar, Presiding Judicial Member.

           

Present:-

 

          For appellant         :      Sh.Varun Katyal, Advocate

          For respondent    :      Sh. Mukand Gupta, Advocate

 

 

 ………………………………………………………………………..

J.S KLAR, PRESIDING JUDICIAL MEMBER :-

         

          Challenge in this appeal by appellant is to order dated 12.06.2017 of District Consumer Disputes Redressal Forum Bathinda, directing the appellant to pay Rs.3,00,000/- as compensation along with interest @ 12% and Rs.10,000/- as costs of litigation. Appellant of this appeal is opposite party in the complaint and respondent of this appeal is complainant in the complaint before District Forum and they be referred as such, hereinafter for the sake of convenience.

2.      The complainant has filed complaint U/s 12 of Consumer Protection Act, 1986 (in short, "the Act") against OPs on the averments that he took loan from OP for purchasing one vehicle bearing no. RJ-07GA-7045 and same was disbursed to him. He purchased the vehicle for earning his livelihood by means of self-employment. He has been making payment of installments regularly to OP,  but it took forcible possession of his above vehicle in Haryana, when it was loaded with perishable goods by employing hooligans. He approached OP for release of the above vehicle, but it proclaimed that it  would not release the vehicle nor goods loaded therein. The vehicle was then carrying perishable goods and the person to whom the goods were to be delivered clearly told him that in case of non-delivery of goods or late delivery, he would take full claim of the goods worth Rs. 3 lac from him. As such under compelled circumstances, he was made to sign on some blank printed documents at the instance of OP. OP  instead of returning the vehicle, sold the same to its own person at throw away prices. The OP has adopted illegal means firstly by taking the vehicle forcibly into possession and then by selling the same at throwaway prices. The market value of the vehicle was not less than Rs. 10 lac. He requested the OP to return the vehicle, but to no effect. On this backdrop of facts, he alleged deficiency in service on the  part of OP. He has, thus, filed complaint directing the OP to return the vehicle or to refund its amount to him. He also sought compensation of Rs. l lac for mental harassment from OPs and Rs.11,000/- as costs of litigation.  

3.      Upon notice, OP appeared and filed written reply and contested the complaint of the complainant by raising preliminary objections that District Forum has no territorial jurisdiction to entertain and decide the  complaint. The vehicle in question was re-possessed at Jhajjar in Haryana. It did not fall within the jurisdiction of this Forum. Hence, this Forum has got no territorial jurisdiction to decide the complaint. The complainant has suppressed the material facts from the Forum. On merits, it was averred that complainant obtained loan against vehicle from OP. The loan agreement dated 30.10.2012 was executed between by complainant and his co-executant regarding vehicle in question and duly signed the same after admitting its contents. The complainant agreed to abide by the terms and conditions enumerated therein. It was further averred that complainant is a big transporter, having more than two trucks in his own name. He has availed loan/finance facility against two big trucks from Abohar branch of OP. Tata LPT Truck-Trolla bearing registration no. RJ-07-GA-7045 to the tune of Rs.8,50,000/- as principal loan amount, vide loan agreement dated 30.10.2012 and hypothecated the truck by way of hire purchase entry by getting the RC endorsed from competent Registering Authority. Secondly, Tata 2515 Bulker Truck bearing Registration no. RJ-07-G-5159 to the tune of Rs.4,85,000/- as principal loan amount, vide loan agreement dated 19.03.2013 and hypothecated the truck by way of hire purchase by getting the RC endorsed from competent Registering Authority. The complainant has not driven his vehicle personally. The claim of the  complainant that vehicle was purchased for earning his livelihood by means of self employment is totally wrong, baseless, false. The relationship of complainant and OP is that of borrower and debtor/lender exclusively. The complainant agreed to repay the loan amount with interest in 46 monthly of EMI of Rs.24,343/-. He agreed to abide by financial discipline i.e. making timely payment of installments falling due from month to month with other agreed charges, in case of delay in payment of installments. The complainant and his wife Sunita Rani as co-borrower/guarantor again approached Abohar Branch of OP for availing another loan facility against his other TATA 2515/Bulker Truck bearing registration no. RJ-7-G-5159 and by adopting same procedure. He was granted loan of Rs.4,85,000/- against that truck, vide loan agreement dated 19.03.2013, which was signed by him   and his wife after admitting its contents. He agreed to repay the loan amount with interest in 33 monthly EMIs of Rs.17,710/- plus other charges and penal charges. It was further averred that after payment of few installments, the complainant started committing defaults, as fully detailed in account statements of both vehicles. All requests made orally as well as notices served upon complainant to regularize his loan accounts and produce the vehicles for inspection of OP proved futile, resulting in compelling the OP to take recourse to repossess the truck in question in exercise of its vested right under the  loan agreement. Vide letter dated 03.01.2015, intimation was given to police before taking the possession of the vehicle in question. After taking the  possession of the vehicle, police of the said police station also given post-possession intimation, which was duly received by police officer. In this way, vehicle was repossessed in a lawful and peaceful manner without any hesitation. After re-possessing vehicle in question, OP served pre-sale letter dated 05.01.2015 upon complainant and requiring him to deposit Rs.5,16,675/- as detailed in the said letter. The complainant give reply to above letter in a very false manner.  Under these circumstances, OP in exercise of its right under loan agreement sold the  truck in question after due proper procedure on 28.02.2015 for a consideration of Rs.6,10,000/-. A sum of Rs.5,21,917/- has been adjusted in his loan account. After adjusting loan account, a sum of Rs.88,083/- was found in excess, which has also been adjusted in another truck account of the complainant. Even after adjusting Rs.88,083/- in other account of complainant bearing agreement dated 19.03.2013 regarding truck bulker bearing registration no. RJ-7-G-5159, a sum of Rs.75,751/-was deducted and Rs.1,41,680/- is due. The truck in question was loaded with Namkeen/goods at the time of its repossession by OP. The complainant approached OP for removal of the loaded goods. OP allowed the same for which complainant executed a letter of indemnity and authorized one Mr. Vishnu Dutt to take delivery of Namkeen articles loaded therein on 09.01.2015. Accordingly, OP vide letter dated 09.01.2015 allowed removal of goods from Truck in question by said authorized person. The loaded goods were removed from the truck and it was disposed off. Rest of the averments were denied by OP and it prayed for dismissal of the complaint.

4.      The complainant tendered in evidence the affidavits Ex.C-1 and Ex.C-2 along with copies of documents Ex.C-2 to Ex.C-6. As against it; OP  tendered in evidence affidavit of Sh. Vikas Verma Senior Associate Legal Coordinator Ex.OP-1/1 along with copies of documents Ex.OP-1/2 to Ex.OP-1/15 and closed the evidence. On conclusion of evidence and arguments, the District Forum Bathinda accepted  the complaint of the complainant by virtue of order dated 12.06.2017. Dissatisfied with the order of the District Forum Bathinda opposite party now appellant, carried this appeal against the same.

5.      I have heard learned counsel for the parties at considerable length and have also examined the record of the case.

6.      The first submission raised by counsel for the appellant in this appeal is that District Forum Bathinda has no territorial jurisdiction to try the complaint and as such, order passed by it is without any jurisdiction and non est. Much emphasis has been laid on this point by counsel for appellant during the arguments. The complainant has instituted complaint against OP with address at G.T Road near Hanuman Chowk Bathinda. It is pleaded in para no.9 of the complaint that office of OP is situated at Bathinda and order to seize the vehicle was issued from Bathinda Branch and vehicle was also unauthorizedly sold at Bathinda, hence this District Forum has jurisdiction to try the complaint at Bathinda, where cause of action partly arose. The averments in the complaint have to be looked into for finding, if concerned Forum has jurisdiction to try the complaint or not. The complainant filed the complaint against OP with its office at Bathinda in this case seeking relief against it. The District Forum elaborated in its order on this point and came to the conclusion that Bathinda Forum has jurisdiction to entertain the complaint. Section 11 of Consumer Protection Act deals with the jurisdiction of the District Forum and eventualities, whereunder District Forum has been authorized to take cognizance of the matter, has been set out in Section 11 of the CP Act 1986, where either OP carries on business or personally works for gain or has  branch office. Concerned Forum of that area has jurisdiction to try the complaint, even where cause of action, wholly or in part has arisen and that Forum has jurisdiction to try the complaint. We are in agreement with the findings recorded by District Forum in the order under challenge in this appeal on this point. Notice Ex.C-3 was issued from Bathinda for seizure of the vehicle. Reply to the notice was also sent to Branch Office Bathinda by complainant. Consequently, all these facts taken cumulatively, more particularly when OP office is located at Bathinda gave the jurisdiction to District Forum Bathinda to try the complaint. The District Forum rightly concluded that it has territorial jurisdiction to try the complaint. The contention of counsel for appellant to the contrary in this appeal is not accepted on this point by this Forum.

7.      The last forceful submission raised by counsel for appellant  is that complainant is not a consumer and hence complaint merits dismissal on this score. The contention of counsel for the appellant is that complainant hired loan from OP for the purpose of purchase  truck, which is for commercial purposes and as such complainant is not consumer under Section 2(i)(d) of the Consumer Protection Act, 1986. I have bestowed my careful attention to this submission of counsel for the appellant, but find no force in it. The complainant specifically pleaded in para no.2 of the complaint that he purchased the vehicle for the purpose of earning his livelihood by means of self-employment. The complainant also tendered in evidence his affidavit Ex.C-1, wherein he also specifically stated in para no.3 of the affidavit on oath that he purchased the vehicle for the purpose of earning his livelihood exclusively by means of his self-employment. These pleadings and evidence of complainant on the file is to the effect that he purchased this vehicle for the purpose of earning his livelihood by means of self-employment. As against it, OP tendered in evidence affidavit of Vikash Verma Senior Associate Legal Coordinator Ex.OP-1/1  to the effect that vehicle has been purchased for commercial purposes by complainant. The complainant has first-hand knowledge of the fact, as to for what  purpose, he had purchased this vehicle in question. The complainant categorically stated on oath that he purchased it for earning his livelihood by means of self-employment. There is no sufficient rebuttal evidence by OP on the record to rebut this evidence of the complainant. Consequently, we are unable to agree with the contention of OP now appellant that complainant is not a consumer in this case, as per law laid down by National Commission in "M/s Indusind Bank Ltd versus Avtar Singh", reported in Revision Petition no. 3266 of 2012 decided on 02.05.2013. Undoubtedly, it has been held by National Commission in this authority that vehicle was financed for commercial purposes and hence complainant is not a consumer. In case in hand, there is categorical evidence on the record that complainant purchased the vehicle for earning his livelihood by means of self-employment. The Apex Court has also held in "Madan Kumar Singh (D) Thr. LR versus District Magistrate Sultanpur& Others " reported in 2009(4)CLT 404 that appellant purchased truck for personal use to earn his livelihood – Appellant comes within the definition of Consumer. In this appeal, specific pleading and evidence by complainant exists on the record that he purchased the truck for earning his livelihood by means of self-employment. He is, thus, held to be  a consumer. The reliance of counsel for OP on law laid down by National Commission (supra) would not help OP in view of law laid down by Apex Court in the above authority.

8.      The complainant got the vehicle financed from OP in connection with purchasing it.  Undoubtedly, truck in question was hypothecated with OP. Affidavit of complainant Ex.C-1 has been duly perused by me on the record, coupled with supplementary affidavit Ex.C-2 of Satish Kumar. On the other hand, OP tendered in evidence affidavit of VikasVerma Ex.OP-1/1 on the record with regard to financing this vehicle by OP and it was hypothecated with OP. Loan agreement Ex.OP-1/2 was executed between the complainant and OP recording the terms and conditions thereof. Clause 11 of the loan agreement Ex.OP-1/2 deals with repossession, termination and company's other rights, which is reproduced as under :-

REPOSSESSION, TERMINATION AND COMPANY'S OTHER RIGHTS:

a)      On the occurrence of any of the aforesaid Events of Default   contained in Article 10, the rights of the Borrower over the   Asset shall stand determined void ipso facto without any notice       and the Borrower shall be bound to deliver forthwith the Asset           to the Company in the same condition in which it was originally        received by him with all accessories/modifications done by       Borrower whatsoever (in the case of vehicle), ordinary wear         and tear excepted. Failure or refusal of the Borrower to           surrender the Asset shall constitute unlawful retention for        which the Company shall be entitled to initiate criminal action,       without prejudice to other rights/ legal remedies available to the     Company.

          i) Notice: In case of any default in repayment including an      occurrence of any of the aforesaid Events of Default and/or       failure to surrender the Asset as mentioned herein above, the •      Company shall cause a 7 day notice to be issued to the    Borrower at his address as registered with the Company. The          notice shall be deemed to be served on the Borrower within 24     hours of posting the notice by the Company even if the notice          so served returns unserved for whatever reason and the    confirmation from any authorized officer of the Company for   having posted the notice to the Borrower shall be final and         binding in this regard.

          ii) Repossession: In case the Borrower fails to make payment         of the dues or surrender the asset to the Company and/or   rectify the breach of the terms of the contract in compliance         with the notice mentioned above, to the satisfaction of the           Company, without prejudice to its other rights available under           the Agreement, the Company may be entitled to take   possession of the Asset (referred to as" repossession") and for the said purpose, enter any place or places where the Asset         may then be or is likely to be, remove or take possession of the       same. The Borrower agrees and undertakes not to prevent or   obstruct the Company from exercising its right of repossession        of the Asset in the event of default by the Borrower. It shall be    the sole responsibility of the Borrower to remove any goods           (perishable, non-perishable) available in the Asset at the time           of its repossession by the Company and the Borrower shall    make his/their own arrangements to transfer such goods from    the said Asset to and transport it back at his own cost and         expenses and the Company shall not be liable to the Borrower           for any damage, depreciation value, loss in transit etc. or for   any damages arising on account of non-delivery of the same to   anyone during or after such repossession. The Company shall        not be responsible for any loss or destruction and damage to   the hypothecated Asset, whether by theft, fire, rain, flood,           earthquake, lightening, accident or other case whatsoever to the repossessed Asset, notwithstanding anything to the contrary contained in Section 151 of the Indian Contract Act.

          iii) Post Repossession: Upon taking possession of the           vehicle, as a final chance to rectify the default, a 7 days notice           shall be caused upon by the Company to the Borrower to         repay the termination price (which includes the charges and       expenses incurred for taking possession  of the vehicle including the legal expenses). The notice shall be deemed to     be served on the Borrower within 24 hours of posting the    notice by the Company even if the notice so served returns           unserved for whatever reason and the confirmation from any authorized officer of the Company for having posted the notice     to the Borrower shall be final and binding in this regard.

          iv) Waiver of Notice: The said notice(before and after taking possession of the Asset) mentioned here in above can be         waived at the discretion of the Company, in case the Company is of opinion that such action is likely to jeopardize the Asset or           the interest of the Company.

          v) On payment of the termination price within the time and       manner stipulated in the notice mentioned above, the        Company shall return the repossessed Asset to the Borrower       or his authorized representative to be specified in writing by the           Borrower. In case of failure on the part of the Borrower to make        payment of the termination price within the time and manner    stipulated in the notice mentioned above, the Company shall   sell, dispose of the asset in the manner it may deem fit without       any further notice to the Borrower notwithstanding exercising any other legal remedy or right against the Borrower available        to it. The Borrower hereby irrevocably authorizes the Company     to sell/transfer/assign the Asset without the intervention of    Court either by private treaty or public auction or in such other           manner as the Company may deem fit. The Borrower shall not         be entitled to raise any objection regarding the regularity of the   sale and/or actions taken by the Company nor shall the         Company be liable/responsible for any loss that may occasion    by the exercise of such power and/or may arise from any act or       default on the part of any broker or auctioneer or other person   or body engaged by the Company for the said purpose.

          vi)      The Borrower shall forthwith deliver to the Company all original certificates and policies of insurance including        Certificate of Registration (where the Asset is a vehicle), keys     and all other documents relating to the Asset. In the event of   the failure of the Borrower to do so, the Company shall be    entitled to immediately apply to the concerned authorities and      obtain the documents afresh, expenses for which shall be      charged to the account of the Borrower and shall form part of           the amount payable on the determination of this Agreement.         The Borrower agrees and undertakes that he shall not raise          any objection for such application by the Company.

          vii) Upon sale of the Asset and adjustment of the sale    proceeds towards the Loan dues (which includes the     expenses/charges incurred for parking, sale of vehicle, in addition to the termination price) there is any shortfall amount           due and payable, the same shall be made good by the        Borrower and/or the Guarantor.

Clause 11 of the loan agreement Ex.OP-1/2 deals with  re-possession, termination company's other rights defines re-possession as Clause 11(iii) lays down that upon taking possession of the vehicle, as a final chance to rectify the  default, a 7 days notice shall be caused upon by the company to the  borrower to repay the termination price (which includes the charges and expenses incurred for taking possession of the vehicle including the legal expenses). The notice shall be deemed to be served on the borrower within 24 hours of posting the notice by the company even if the notice so served returns un-served for whatever reason and confirmation from any authorized officer of the company for having posted the notice to the borrower shall be final and binding in this regard.

It is, thus, plain from perusal of Clause 11 of loan agreement that in case of default in making payment by borrower, the lender-company could repossess the vehicle after giving notice in that regard. Clause 11(iv) deals with waiver of notice that notice can be waived at the discretion of the  company , in case the company is of opinion that such action is likely to jeopardize the asset or the interest of the company. Undoubtedly, OP has right to re-possess the vehicle by giving notice. In this regard, even Apex Court has held in "ICICI Bank Ltd versus Prakash Kaur & Ors", reported in 2007 AIR (SC) 1349 that bank cannot take possession of vehicle by hiring musclemen. The recovery of loan   or seizure of vehicle could be done only through legal means. Bank cannot employ musclemen to take possession by force - guidelines for advance and recovery of loan have been given by Apex Court in the cited authority. The Apex Court gave suggestions that chronic defaulters should mean a default of a maximum of three months, if intermittent payments have been made. Every statement sent by the bank should disclose clearly the rate of interest and the default interest and penalty charges separately calculated  and added to the amount pending and due by the customer. RBI guidelines should be followed in such matters. Here as correctly found by District Forum in its order, only one installment was due for the month of January 2015 amounting to Rs.24,343/-, whereas there is no evidence led by OP to prove that complainant was a defaulter in continuum of the connected accounts. OP gave intimation to the police for seizure of the vehicle vide Ex.OP-1/4 by entering that sum of Rs.30259/- was due from the complainant for recovery on 03.01.2015. OP resorted to force in this case for seizing the vehicle, which was loaded with perishable goods at that time. No opportunity of being heard has been given to complainant before seizing the vehicle in this case, when it was loaded with perishable goods. The vehicle was seized from the drive of the vehicle by OP. How could representative of complainant surrender the vehicle without knowledge of the complainant is not understandable. Since only one installment amount was at default of complainant, hence even issuance of pre-sale letter by OP is uncalled for and opportunity should have been given to complainant to deposit the amount and in case of his chronic default only as per direction of Apex Court, this pre-sale notice of the vehicle should have been issued to him. OP is entitled to take repossession of hypothecated vehicle in a legal course only and not with use of force as held by Apex Court in the above authority.

9.      In addition to that, I further find that OP sold the  vehicle in the absence of the complainant. There is no procedure placed on record with regard to auction of the  vehicle by OP. There is no public notice on the file issued for auction of this vehicle for inviting the maximum number of bidders to earn maximum bid therefor at the instance of OP. The auction has been done in surreptitious manner by OP, which is also deficient act on behalf of OP. The presence of complainant should have been sought at the time of auction of the vehicle and everything should have been done in his presence in a transparent manner. This has not been done in this case by OP and OP single handedly  sold the  vehicle without any public notice in a hushed up manner. There is no publication of auction in any document on the file. Only one installment of Rs. 24,343/- was outstanding from complainant but in pre sale notice dated 05.01.2015 EX.OP-6, it has been shown as Rs.516675/- without any justification by OP. Statement of account is Ex.OP-1/9 on the file. Vehicle was sold on 24.02.2015 by OP in an unauthorized manner in this case. OP has revealed sale of vehicle for Rs.6,10,000/-. This amount has been credited to the account of the complainant by OP. No auction proceeding brought on the file by OP and even name of the auction purchaser is not indicated anywhere on the record by OP. I can safely infer that OP indulged in unfair trade practice in an arbitrary manner just to cause loss to the complainant only. The District Forum has, thus, rightly award the amount of Rs. 3,00,000/- to complainant as compensation for unfair trade practice and deficiency in service of OP in this case. I have nothing to disagree with the findings of the  District Forum under challenge in this appeal. The order of the District Forum is, thus, affirmed in this appeal.

10.    As a result my above discussions, there is no merit in the appeal and the same is hereby dismissed by affirming the order of District Forum Bathinda dated 12.06.2017 under challenge in this appeal.

11.    The appellant had deposited the amount of Rs.25,000/-with this Commission at the time of filing of the appeal. This amount with interest, which accrued thereon, if any, be remitted by the registry to respondent/complainant by way of a crossed cheque / demand draft   after the expiry of 45 days, subject to stay order if any. Remaining amount as per order of the District Forum, if any due, shall be paid by the respondent/complainant within 45 days from receipt of copy of this order.

12.    Arguments in this appeal were heard on 27.11.2017 and the order was reserved. Certified copies of the order be communicated to the parties as per rules.

13.    The appeal could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                                          (J. S. KLAR)

                                                          PRESIDING JUDICIAL MEMBER

                    

                                                         

November, 28   2017                                                          

(ravi)