Tamil Nadu

South Chennai

CC/282/2014

Proland Realty (P) Ltd., - Complainant(s)

Versus

T.S.Mahalingam & Sons - Opp.Party(s)

V.Balaji

11 Aug 2022

ORDER

Date of Complaint Filed : 30.06.2014

Date of Reservation      : 12.07.2022

Date of Order               : 11.08.2022

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION,

CHENNAI (SOUTH), CHENNAI-3.

 

PRESENT:    TMT. B. JIJAA, M.L.,                                                : PRESIDENT

                       THIRU. T.R. SIVAKUMHAR, B.A., B.L.,                :  MEMBER  I 

                       THIRU. S. NANDAGOPALAN., B.Sc., MBA.,        : MEMBER II

 

CONSUMER COMPLAINT No.282/2014

THURSDAY, THE 11^th DAY OF AUGUST 2022

Proland Realty (P)Ltd,

Reptd. By its Authorised Signatory,

Mr.P.D.Sewag,

Raja Annamalai Building,

19/72, Marshalls Road,

Egmore,

Chennai – 600 008.                                                                                                                                                           ... Complainant    

 

..Vs..

1.T.S. Mahalingam & Sons,

   Rep. by its Manager,

   No.240, Royapettah High Road,

   Chennai – 600 014.

 

2.State Bank of India,

   Rep. by its Assistant General Manager,

   Retail Assets Central Processing Centre,

   No.16, Whannels Road,

   Egmore,

   Chennai – 600 008.

 

3.The Assistant Registering Authority,

   Chennai (Central),

   Office of the Regional Transport Authority,

   Ayanavaram,

   Chennai -600 023.                                                                                                                                                         ...  Opposite Parties

******

Counsel for the Complainant           : M/s. V.Balaji

Counsel for the 1^st Opposite Party   : V.P.Raman

Counsel for the 2^nd Opposite Party  : C.P.R. Kamaraj

Counsel for the 3^rd Opposite Party   : Mr.Ponram Rajaa

               

        On perusal of records and after having heard the oral arguments of the Counsel for the Complainant, and having treated written arguments as oral arguments of the 1^st Opposite Party, we delivered the following:

 

ORDER

Pronounced by the President Tmt. B. Jijaa, M.L.,

1.      The Complainant has filed this complaint as against the Opposite Party under section 12 of the Consumer Protection Act, 1986 and prays to pay a sum of Rs.19,00,000/- towards the compensation for the negligent and irresponsible act of the officers of the 2^nd Opposite Party by taking possession of the Complainant’s vehicle and delay in handing over of the vehicle, rendering the deficiency in service causing damages and loss of reputation to the Complainant and also to pay a sum of Rs.50,000/- towards cost of the legal expenses.

2.     The averments of Complaint in brief are as follows:-

        The case of the complaint is that the Complainant had purchased a Motor Vehicle FORD ENDEAVOUR bearing Registration No.TN 03 K 6757. The said Motor Vehicle was originally purchased by one Viji son of Anthony on 28.03.2013, after availing hire purchase finance from Shri Ram Finance, which hypothecation was cancelled. Through the 1^st Opposite Party the Complainant purchased the vehicle on 16.12.2013 for a valid sale consideration. Thereafter the transfer of ownership was entered into original Registration Certificate by the 3^rd Opposite Party on 16.12.2013 in R.No.A1/88781/13. Immediately after the transfer of ownership, the policy also was transferred in the name of the Complainant. Whileso, after attending a function, the Complainant had taken important guests including woman,  child and elderly persons to Mylapore by the said Motor Vehicle. At about 9.30 PM when the car approached Judge Sundaram Salai, three unknown persons stopped the vehicle and forcibly thrown the driver and guests and taken away the vehicle. The Authorized Officer of the Complainant immediately gave complaint on the same day at 10.30 PM at E-1, Mylapore Police Station. On 07.05.2014 the investigating officer informed him that the 2^nd Opposite Party, through their henchmen called its recovery agent repossessed the vehicle, since there was a loan against the vehicle. As per advice the Complainant approached the 2^nd Opposite Party, who informed the said Viji has borrowed vehicle loan and executed Hypothecation Agreement. When the Complainant specifically asked the 2^nd Opposite Party, was there any Hypothecation Agreement endorsed in R.C. Book, the 2^nd Opposite Party was unable to give any concrete answer. At the time the Deputy General Manager interfered and admitted their mistake and agreed to release the vehicle but it was not done. The Complainant had given protest letter on 09.05.2014 informing the 2^nd Opposite Party about the illegal possession of the vehicle. On 13.05.2014 the 2^nd Opposite Party informed the Complainant that the vehicle was purchased out of Bank Finance. As the complaint has been lodged against the original borrower A.Viji the 2^nd Opposite Party required the Complainant's assistance and at last, after the Complainant was put to severe harassment for not of their fault, the 2^nd Opposite Party, on 16.05.2014 released the vehicle. On 16.05.2014 the vehicle was released without prejudice to the bank’s right of hypothecation charges. The vehicle was in the custody of the 2^nd Opposite Party from 06.05.2014 to 16.05.2014. Only after verification that Mr.Viji, who availed finance from Shri Ram Finance had discharged the loan the vehicle was purchased by the Complainant, through the 1^st Opposite Party, strictly in accordance with law. The Complainant on legal advice states that if at all any hypothecation agreement entered into by the 2^nd Opposite Party with Mr. Viji, which was void under section 20 of the Indian Contract Act. The proposition of law is that "If the vehicle is purchased by the consumer in his own name registered in his name, Insurance also taken in his name and earnest money also ownership of the vehicle is that of consumer. The 2^nd Opposite Party has engaged the hired muscle man to engage the repossession of the vehicle. The Apex Court in ICCI Bank -Vs- Prakash Kaur held that practice of hiring of recovery agent who are muscle man is depreciated and needs to be discouraged.

The Full Bench of Supreme Court also subsequently affirmed the said proposition and hold that "We reiterate the earlier view taken 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 by due process of law and not by use of force. The 2^nd Opposite Party has not verified with details of the ownership of the car, which is lawfully owned by the Complainant on the date of re-possession. The 2^nd Opposite Party, though knowing well that the Guests including women and children were in the car, illegally threatened with dire consequences and forcefully pulled out the occupants, who are the reputed guests of the Complainant, in whole public view and pulled out the driver in the vehicle and drove away the vehicle without even communicating that they are repossessing the car. Thereby, the 2^nd Opposite Party deliberately committed an act with gross negligence and in irresponsible manner, which had highly damaged the reputation of the Complainant thereby causing irreparable loss and hardship to the Complainant. Hence the complaint.

3.  Written Version filed by the 1^st Opposite Party in brief is as follows:-

The 1^st Opposite Party stated the limited role played by the 1^st  Opposite Party in relation to the purchase and sale of the Ford Endeavour car in question bearing registration number TN 03 K 6757. The said vehicle was sold to the 1^st Opposite Party by one Mr.A.Viji and it was purchased  after making the necessary due diligence by the 1^st Opposite Party. The RC book provided by Mr.A.Viji was verified and the same revealed that there was a prior hypothecation agreement with M/s.Shree Ram Finance and that the same was discharged by Mr.A.Viji on 26-11-2013 in reference No.67044/ B2/2013 by the RTO (North-East) Chennai - 600 081 in the Registration Certificate. No other hypothecation agreement was endorsed in the RC book relating to the said vehicle. The Complainant's representative(s), during their visit to the 1^st Opposite Party evinced an interest to purchase the Ford Endeavour car bearing registration number TN 03 K 6757. Upon negotiation, the car was purchased from the 1^st Opposite Party by the Complainant. Therefore, the purchase of the vehicle by the Complainant from the 1^st Opposite Party is in accordance with the law and that the Complainant went ahead with the purchase from the 1^st Opposite Party only after verification of the same. Furthermore, on a request made to the 1^st  Opposite Party by the Complainant, this Opposite Party issued a letter dated 08-05-2014 to the 2^nd Opposite Party stating the circumstances under which the car was purchased from Mr.A.Viji and thereafter sold to the Complainant. The 1^st Opposite Party expressed its shock and disappointment to the 2^nd Opposite Party for the high handed behaviour and put them to terms and requested for release of the vehicle to the Complainant immediately. No reply has been forthcoming from the 2nd Opposite Party. However, it is understood from a perusal of the Complainant that the vehicle was released on 16-05-2014. This implicitly underscores the case of the Complainant that the possession was taken over illegally. Hence, it is prayed that this Opposite Party be discharged from the present case and the complaint to be dismissed as against this Opposite Party.

4.  Written Version filed by the 2^nd Opposite Party in brief is as follows:-

        This is a case of fraud committed by the original owner one Mr. Viji, the Vendor of the said Vehicle to the above Complainant. Originally the said Vendor Viji availed a Car loan to the tune of Rs. 19,50,000/- from the 2^nd Opposite Party's Kodambakkam Branch, Chennai on 19.03.2013 to purchase the Vehicle under dispute agreeing to repay the same in 84 EMIs @ Rs.32,828/-. Necessary loan documents were executed by the said borrower Mr. Viji and a hire purchase/hypothecation agreement dated 20.03.2013 was also entered between him and this 2^nd Opposite Party. Necessary hypothecation endorsement in favour of this 2^nd Opposite Party was also made in the Original R.C. Book. This 2^nd Opposite Party has substantial proof to establish the same. The Bank got valid hypothecation charges over the said Vehicle. The Hire Purchase agreement clause enumerates that the Borrowers shall not during the continuance of this security create any charge or encumbrance of any kind over the hypothecated vehicle nor shall dispose of the same without repaying in full the Loan/Overdraft amount, interest, costs, charges and expenses secured here under. The said Vehicle was purchased originally out of the 2^nd Opposite Party’s finance and the borrower Viji also submitted the RC book with the endorsement of Hypothection in favour of the 2^nd Opposite Party Bank The said loan account become NPA and thereafter the 2^nd Opposite Parties official immediately informed on 02.12.2013 the RTO Office in Tondiarpet, Chennai where the Vehicle was originally registered and requested them not to effect any further transfer of vehicle and got it acknowledged by them. The 2^nd Opposite Party also lodged a Police Complaint with the Commissioner of Police on 17.12.2013. When this is so, it is not clear how the Complainant purchased the said Vehicle under dispute without proper verification of records and what prompted him to register the same at Aynavaram RTO Office without obtaining a NOC from Tondiarpet RTO Office where the Vehicle was originally registered Further the Sale receipt was not produced by the above Complainant and the amount for which the said Vehicle was purchased by him from the Original Borrower, etc., were not stated in his Complaint. The real intention behind the act of the above Complainant has to be properly probed by the Police authorities. The hypothecated vehicle was admittedly repossessed by the 2^nd Opposite Party for non payment of EMIs through their authorised repossession agents as per the rules and guidelines of Reserve Bank of India. Subsequently the above Complainant lodged a Police Complaint against this 2^nd Opposite Party and the said Vehicle was taken back by the above Complainant and is in his custody. Hence to dismiss the complaint.

5. Written Version filed by the 3^rd Opposite Party is as follows:-

        The complaint is to be dismissed against this Opposite Party on the ground that there is no Consumer and Service Provider relationship between the Complainant and this Opposite Party. The 3^rd Opposite Party is discharging duties as Transport Officer as provided in the statute only and has done all his duties without any default or deficiency. Hence the Complainant cannot invoke the provisions of the Consumer Protection Act as no service is provided to him and also submits that no consideration was paid by the Complainant to this Opposite Party. There is no prayer for the payment of compensation against this Opposite Party in the complaint except the transfer of ownership was entered into original Registration Certificate by this Opposite Party on 16.12.2013 in R.No.A1/88781/13 which was mentioned in the complaint in paragraph No.4 and the same is admitted by this Opposite Party. The complaint is to be dismissed against this Opposite Party on the ground that there is no allegation raised by the Complainant against this Opposite Party in the complaint itself and that the complaint has not made out any case for compensation on any rationale.

6.      The Complainant submitted his Proof Affidavit and On the side of the Complainant, documents Ex.A-1 to Ex.A-8  were marked. The Opposite Parties submitted Proof Affidavit and Written Arguments.        On the side of the Opposite Parties no document was filed.

Points for Consideration

1. Whether there is deficiency in service on the part of the Opposite Party?

2. Whether the Complainant is entitled for reliefs claimed?

3. To what other reliefs the Complainant is entitled to?

Point No.1

Originally the Motor Vehicle Ford Endeavour bearing Registration No.TN 03 K 6757 was purchased by one Viji, son of Anthony on 28.03.2013, after availing Hire Purchase finance from Sriram Finance, and hypothecation endorsement was made in the original Registration Certificate of RTO, (North-East), Tondiarpet, Chennai– 600 081 and the hypothecation endorsement was cancelled by removal of hypothecation endorsement in Ref. No.67044/B2 / 2013 by the RTO, (North-East), Chennai – 600 081 on 26.11.2013 as found in Ex.A-2.  The Complainant contends that he had purchased the said vehicle from the 1^st Opposite Party on 16.12.2013 for valid sale consideration. Thereafter transfer of ownership was entered in the name of the Complainant in the Registration Certificate by the 3^rd Opposite Party on 16.12.2013 in R No.A1/88781/13. As per Ex.A-3, the Insurance Policy of the said vehicle stood transferred in the name of the Complainant.

Whileso, on 06.05.2014, the said vehicle was forcibly taken by unknown persons for which a complaint was lodged by the Complainant as found in Ex.A-4. It has come to the knowledge of the Complainant that the 2^nd Opposite Party had repossessed the vehicle, alleging that the original purchaser Mr.Viji had borrowed vehicle loan and executed hypothecation agreement in favour of 2^nd Opposite Party. On 09.05.2014 the Complainant had issued a letter to the 2^nd Opposite Party about the illegal repossession of the vehicle. The 2^nd Opposite Party vide letter dated 13.05.2014 informed the Complainant about the car loan availed by Mr.Viji in respect of the said vehicle and that fraud has been committed by Mr.Viji and that complaint has been lodged against the said Mr.Viji as found in Ex.A-7. Subsequently as per Ex.A-8, the 2^nd Opposite Party had released the vehicle on 16.05.2014 without prejudice to their right of hypothecation charge and on the assurance to assist for prosecuting the offences of cheating and forgery against the said Mr.Viji.

The 1^st Opposite Party had contended that they had purchased the vehicle from Mr.Viji after due diligence and after discharging the prior hypothecation agreement entered by Mr.Viji with M/s Sri Ram Finance in Reference No.67044/B2/2013 by the RTO, (North-East) Chennai – 600 081 in the Registration Certificate. Thereafter the Complainant had purchased the said vehicle from the 1^st Opposite Party and that the 1^st Opposite Party was shocked about the illegal repossession of the vehicle from the Complainant.

The 2^nd Opposite Party has averred that the original owner Mr.Viji has availed a car loan to the tune of Rs.19,50,000/- from the 2^nd Opposite Party’s Kodambakkam Branch, Chennai on 19.03.2013 after executing necessary loan documents  and necessary hypothecation endorsement in favour of the 2^nd Opposite Party was also made in the Original RC Book. The hypothecated vehicle was admittedly repossessed by the 2^nd Opposite Party through authorised person which was subsequently handed over to the Complainant. The said Mr.Viji has committed fraud and forgery and the 2^nd Opposite Party has lodged a complaint with the Commissioner of Police, Chennai against the said Mr.Viji in December 2013. The Complainant is not a bonafide owner when the 1^st lien is vested with the 2^nd Opposite Party.

The 3^rd Opposite Party has averred that there is no consumer service provider relationship with the Complainant and the Opposite Party. They are discharging duties as Transport Officer as provided in the Statute. There is no prayer for the payment of compensation against the 3^rd Opposite Party except the transfer of ownership was entered into original Registration Certificate by the 3^rd Opposite Party on 16.12.2013 in R.No.A1/88781/13.

On careful consideration of the facts and circumstances of the case, it is evident that the Complainant is a bonafide purchaser of the said vehicle for valid sale consideration from the 1^st Opposite Party. Though the 2^nd Opposite Party has averred that they had repossessed the vehicle against the car loan availed by one Mr.Viji from the 2^nd Opposite Party for the purchase of the vehicle, the 2^nd Opposite Party has not given the details of the loan agreement and neither produced the alleged loan agreement entered between the said Mr.Viji and the 2^nd Opposite Party. No endorsement of the hypothecation agreement as alleged by the 2^nd Opposite Party is found in the Registration Certificate.

The counsel for the Complainant relied on the Order passed by the National Consumer Disputes Redressal Commission, New Delhi reported in III (2007) CPJ 161 (NC), Citicorp Maruti Finance Ltd., Vs S.Vijayalakshmi, wherein the practice of hiring musclemen as recovery agents was deprecated and Do’s and Don’ts at the time of repossession were enumerated. In the present case the 2^nd Opposite Party has forcibly taken possession of the vehicle from the Complainant.

Reliance was also placed on the Judgement dated 14.11.2011 of the Hon’ble Supreme Court reported in (2012) 1 SCC 1, passed in C.A.No.9711,9712-16 of 2011, where reference was made to Section 51 of the Motor Vehicle Act, 1988, in cases covered under hire-purchase agreements, provision has been made by the registering authority to make entry in the certificate of registration regarding the existence of such agreement.  Clause (b) of Section 51 provides for cancellation of such an endorsement on proof of termination of the agreement by the parties and also upheld 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 to be effected by due process of law and not by use of force.

        Hence the act of the 2^nd Opposite Party in repossessing the vehicle from the Complainant forcibly without proper verification of ownership of vehicle and not in accordance of law would amount to deficiency in service. Since no relief is claimed as against the 1^st and 3^rd Opposite Parties, this complaint is dismissed as against the 1^st and 3^rd Opposite Parties. Accordingly, Point No.1 is answered.

Point No.2 and 3:-

        As discussed as decided Point No.1 in favour of the Complainant, the Complainant is entitled from the 2^nd Opposite Party a sum of Rs.2,00,000/- towards compensation for the deficiency in service and loss of reputation to the Complainant along with cost of Rs.5,000/-. Accordingly, Point No.2 and 3 is answered.

In the result the complaint is allowed in part. The 2^nd Opposite Party is directed to pay a sum of Rs.2,00,000/-  (Rupees Two Lakhs Only) towards compensation for the negligent and irresponsible act of the 2^nd Opposite Party  by taking possession of the Complainants’ vehicle and delay in handing over the vehicle and for the deficiency in service and for the loss of reputation  along with cost of Rs.5,000/- (Rupees Five Thousand Only) to the Complainant, within 8 weeks from the date of the order, failing which the above amounts shall carry interest at the rate of 6% p.a from the date of this order till the date of payment.

In the result the Complaint is allowed.

Dictated to Steno-Typist, transcribed and typed by her, corrected and pronounced by us in the Open Commission, on   11^th of August 2022. 

 

 

S. NANDAGOPALAN               T.R. SIVAKUMHAR                 B.JIJAA

         MEMBER II                       MEMBER I                        PRESIDENT

 

List of documents filed on the side of the Complainant:-

 

Ex.A1		Copy of Bank Statement
Ex.A2	28.03.2013	Copy of Certificate of Registration
Ex.A3	27.03.2013	Copy of Insurance Policy
Ex.A4	06.05.2014	Copy of Community Service Register
Ex.A5	08.05.2014	Copy of Letter from 1st Opposite Party
Ex.A6	09.05.2014	Copy of Letter from the Complainant.
Ex.A7	13.05.2014	Copy of Letter from the 2nd Opposite Party
Ex.A8	16.05.2014	Copy of Letter from the 2nd Opposite Party

 

List of documents filed on the side of the Opposite Parties:-

 

NIL

 

 

 

S. NANDAGOPALAN               T.R. SIVAKUMHAR                   B.JIJAA

         MEMBER II                       MEMBER I                         PRESIDENT