BEFORE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD
F.A.No. 1257 OF 2013 AGAINST C.C.NO.1097 OF 2010 DISTRICT CONSUMER FORUM HYDERABAD-III
Between
The Manager
Bajaj Auto Finance Limited
R/o H.No.12-13-1274, 4th Floor
Mas Pack House, above Spencers Marked
Tarnaka, Hyderabad-500 017
Appellant/opposite party
A N D
Syed Sadullah Hussain
S/o Syed Ameerullah Hussain
Aged 34 years, Occ: Business
R/o H.No.22-8-521, Chatta Bazar
Purana Haveli, Hyderabad
Respondent/complainant
Counsel for the Appellant Sri Nelson Mathews
Counsel for the Respondent Sri M.A.Ahmed
QUORUM :
HON’BLE SRI JUSTICE B.N.RAO, PRESIDENT
&
SRI PATIL VITHAL RAO, MEMBER
MONDAY THE THIRD DAY OF APRIL
TWO THOUSAND SEVENTEEN
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
This appeal is directed against the order dated 12.07.2013, passed by District Forum-III, Hyderabad in CC No.1097 of 2010. By the impugned order, the complaint has been allowed and the appellant/opposite party has been directed to pay a sum of Rs.37,436/- with interest @ 9% per annum from the date of filing of complaint till realization together with compensation of Rs.25,000/- and costs of Rs.5,000/-.
2. The brief facts of the complaint are that the complainant purchased the two wheeler by availing finance of Rs.37,436/- from the opposite party on 11.07.2007 to use the same for his real estate business. The complainant started repaying the loan in equated monthly installments regularly. The complainant deposited advance postdated cheques with the opposite party as security for repayment of finance amount in which one or two cheques were dishonored due to mistake committed by the Bank but ultimately the opposite party seized the vehicle of the complainant on 31.07.2009. Though the opposite party collected repossession charges, penalty, overdue charges and other charges from the complainant but the opposite party did not release his vehicle. The complainant paid a total amount of Rs.86,684/- for the finance amount of Rs.37,436/- which is illegal. The complainant got issued legal notice dated 08.06.2010 to the opposite party but having received the same the opposite party neither refunded the excess amount nor released the vehicle. Hence, the complainant filed the complaint praying to direct the opposite party to release the vehicle to the complainant with no due certificate together with Rs.10,000/- per month from the date of seizure of the vehicle till the date of delivery and pay compensation of Rs.40,000/- and costs of Rs.10,000/-.
3. The opposite party resisted the case and contended that the complainant has entered into loan agreement on 23.01.20007 and availed finance of Rs.37,436/- for the purchase of Bajaj Platina. The monthly installment to be paid per month was Rs.1934/- for 24 months. As the complainant was having the arrears of Rs.19270/-, the opposite party taken the repossession of the vehicle on 27.07.2009 as per clause 20 of the terms and conditions of the loan agreement i.e., almost six months after expiry of the contract period of the loan agreement. The act of the opposite party of taking the vehicle in possession does not amount to unfair trade practice or deficiency of service. The complainant was a chronic defaulter. Most of the cheques issued by the complainant has returned unpaid with the remark “ insufficient funds”. After taking possession of the vehicle the complainant has never made the payment towards repossession charges, penalty, over dues charges and other charges. The opposite party has never received excess amount from the complainant and therefore the question of refund does not arises at all. In spite of repeated follow up and reminders to the complainant regarding the payment of pending dues the complainant has not came forward and paid the instalment dues hence as per the terms and conditions of the loan agreement the opposite party has sold the vehicle in question for highest bidder price of Rs.17,000/- and even after sale proceed of the vehicle the opposite party has incurred loss of Rs.2270/-. Hence, the opposite party prayed to allow the appeal by dismissing the complaint and direct the complainant to pay the due amount of Rs.2270/-.
4. The complainant has filed his affidavit and got Exs.A1 to A8 marked. While on behalf of the opposite party, its employee filed his affidavit and got Ex.B1 marked.
5. The Dist. Forum after considering the evidence placed on record opined that though the complainant has repaid his loan in total even if delayed he was deprived of the ownership of his vehicle and allowed the complaint by awarding Rs.37,436/- with interest @ 9% per annum together with compensation of Rs.25,000/- and costs of Rs.5,000/-
6. Aggrieved by the said decision, the opposite party preferred the appeal contending that the Dist. Forum did not appreciate the facts or law in correct perspective. The complainant was a chronic defaulter to the loan account. The complainant has not submitted any documents, cash receipts to the effect that after taking possession of the vehicle the complainant has remitted cash or not. The complainant has also not submitted any cash paid receipt against the bounce installments. The opposite party acted as per the loan agreement only. The opposite party had given reasonable opportunities to the complainant to pay the loan dues and take the delivery of the vehicle. The complainant issued letter dated 8.6.2010 Ex.A3 after one year of possession fo the subject vehicle by the opposite party. The District Forum in its come to the conclusion that the complainant has paid total sum of Rs.86,684/- as per Ex.A1 but is not so although the said amount of Rs.86,684/-include Rs.9670/- towards bounce instalments, Rs.730/- towards insurance premium of Rs.23,000/- towards waiver of other default charges to close the loan accounts internally and it is an internal waiver adjustment. The opposite party relied on the following judgments:
- Charanjeet Singh Chadda Vs Sudhir Mehra reportred in AIR 2001 SC 3721 (3722 and 3724)
- Manipal Finance Corp. Vs T.Bangarappa reported in 1994 Supp.(1) SCC 507
- Bharat Mehta Vs State By Inspector of Police Chennai reported in 2008 (2) Supreme Court 596
- UG Sampat Vs Sh Ram Investment Limited III (1995) CPJ 524, Tamilnadu State Commission
- Surender Kumar Agarwal Vs Telco Finance Ltd., & Anr. Reported in II (2010) CPJ 163 (NC)
- Sheela Kumari Vs Tata Engineer and Locomotive Company & Anr repoted in 2007 NCJ 570 (NC): II 2007 CPJ 92 NC
7. In all the above judgments it is held that in the event of the default of the repayment of the dues repossession of the hypothecated vehicle without prior notice is not the deficiency in service
8. The counsel for the complainant has filed written arguments
9. The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
10. The admitted facts are that the complainant had taken the loan of Rs.37,436/- from the opposite party on 11.07.2007 for purchase of Bajaj Platina. For the refund of the loan amount along with interest, 24 instalments were payable at the rate of Rs.1934/- The complainant has pleaded that he issued post dated cheques in which one or two cheques were dishonoured due to mistake of his banker and basing on the said dishonor, the opposite party seized the vehicle on 27.07.2009. The complainant had alleged that he had gone to the office of the opposite party and made the payment of due amounts including repossession charges, penalty, over due charges and other charges but the opposite party did not release the vehicle. These facts have been denied by the opposite party. The opposite party pleaded that the complainant was a chronic defaulter to the loan account and he was due an amount of Rs.19,270/-. The complainant has not submitted any documents, cash receipts to the effect that after taking possession of the vehicle the complainant has remitted cash or not. The complainant has also not submitted any cash paid receipt against the bounce installments. The opposite party acted as per the loan agreement only. The opposite party had given reasonable opportunities to the complainant to pay the loan dues and take the delivery of the vehicle. The complainant issued letter dated 8.6.2010 Ex.A3 after one year of possession of the subject vehicle by the opposite party.
11. The complainant complain that at the time when seizure was made at no time notice was issued that he had committed default in payment of amount nor factum of seizure. It is not the case of the opposite party even that notice was issued demanding the amount nor alleged that there was default in payment of amounts towards EMI. Evidently, the complainant had issued postdated cheques. In fact account of the complainant shows that he has been paying the amounts. The opposite party did not dispute any of these entries in the account. The account copy reveals that he had paid Rs. 86,684/- or Rs.80,684/- as against Rs. 37,436/- between 15.02.2007 and 15.01.2009. A perusal of statement of account filed by the appellant shows that it had included cheque bounce charges, overdue charges, which it could not explain, obviously to show that the complainant had committed default. In the written version/counter it could not plead as to the period for which the complainant did not conform to the schedule. Since no notice was ever issued demanding the amounts nor intimated the complainant about seizure, the act of opposite party in seizing the vehicle cannot be up-held.
12. Hon’ble Supreme Court in Citicorp Maruthi Finance Ltd. Vs. S. Vijaya Laxmi in Civil Appeal No. 9711 of 2011 reiterated the earlier view taken in ICICI Bank Ltd. Vs. Prakash Kaur reported in (2007) 2 SCC 711 that even in case of mortgaged goods subject to Hire-Purchase Agreements, the recovery process has to be in accordance with law and 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. Till such time as the ownership is not transferred to the purchaser, the hirer normally continues to be the 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. The guidelines which had been laid down by the Reserve Bank of India as well as the Appellant Bank itself, in fact, support and make a virtue of such conduct. If any action is taken for recovery in violation of such guidelines or the principles as laid down by this Court, such an action cannot but be struck down.”
13 Whenever the financer chooses to take possession of the vehicle and sell it, it has to refund the contribution and payment made by the person concerned after adjusting the unpaid instalment in the sale proceeds that too till the date of seizure of the vehicle and not beyond that as no person can be deprived of the amount contributed towards the purchase price of the vehicle and financer or Bank cannot be allowed encashment of post dated cheques as the vehicle or for that purpose any goods against which loan was advanced had been seized and the consumer inspite of being owner of the vehicle is no more in possession of the goods for which he had raised the loan nor is he in a position to enjoy the fruits. With seizure and sale of the vehicle or goods the contract stands terminated and the loan amount stands recovered.
14. In such a situation financer recovers the dues accruing from the unpaid instalments and the principal by seizing and selling the vehicle. Hence all the postdated cheques have to be returned. In case it intends to return the vehicle, it can do so on payment of unpaid instalments due by that date.
15. Further the sale price of such a vehicle cannot be fixed by the financer at its whims or caprice. Experience shows that one or two year old vehicles are sold off at throwaway or at half or little more value to the known people or friends or by way of an auction. That is why we have taken the view that cost i.e. sale price of the vehicle shall be assessed and adjusted by way of depreciated value @ 10% per year in case of own vehicle. But the complainant did not furnish the cost of the vehicle. If we roughly fix the vehicle cost at Rs.50,000/-, the vehicle run nearly 2 ½ years and if we adjust deprecated value @ 10% per year it comes to Rs.37,500/-. The District t Forum rightly awarded Rs.37,436/- towards refund. The opposite party did not file any public notice to show that they are going to sell the vehicle in auction and also not filed any document to show that to whom the vehicle was sold in the auction at what price.
16. Foregoing reasons persuade us to hold the opposite party guilty for grossest kind of deficiency in service and unfair trade practice for breach of terms of contract of hire-purchase/loan agreement by seizing the vehicle illegally and selling it at throwaway price and recovering the dues in respect of goods i.e. vehicle which had ceased to be in his possession and rendered the contract extinct as with the possession and sale of vehicle the entire liability not only stood discharged but also entitled the consumer to claim the margin money contributed by him towards the price of the vehicle or goods.
17. The Supreme Court held that the compensation to be awarded is to be fair and reasonable. In Charan Singh vs Healing Touch Hospital and others 2000SAR(Civil) 935 the Apex Court stressed the need of balancing between the compensation awarded recompensing the consumer and the change it brings in the attitude of the service provider. The Court held While quantifying damages , consumer forums are required to make an attempt to serve ends of justice so that compensation is awarded, in an established case, which not only serves the purpose of recompensing the individual, but which also at the same time aims to bring about a qualitative change in the attitude of the service provider. Indeed calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application. While awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to established judicial standards where the claimant is able to establish his charge.
18. In view of the above decision the compensation of Rs.25,000/- and interest awarded by the District Forum is hereby set aside while confirming the rest of the order.
In the result the appeal is allowed in part modifying the order of the District Forum by setting aside the compensation of Rs. 25,000/- lakh and interest awarded by the District Forum and directing the opposite party to pay Rs.37,436/- only to the complainant together with costs of Rs.5,000/-. Time for compliance four weeks.
PRESIDENT MEMBER
Dated: 03.04.2017
