Complaint filed on: 10-01-2011
Disposed on: 15-06-2011
BEFORE THE BANGALORE IV ADDITIONAL DISTRICT
CONSUMER DISPUTES REDRESSAL FORUM,
BANGALORE URBAN DISTRICT, NO.8, SAHAKARA BHAVAN, CUNNINGHAM ROAD, BANGALORE – 560 052
C.C.No.55/2011
DATED THIS THE 15th JUNE 2011
PRESENT
SRI.D.KRISHNAPPA., PRESIDENT
SRI.GANGANARASIAH, MEMBER
SMT.ANITHA SHIVAKUMAR, MEMBER
Complainant: -
Y.Kumar
S/o. Y.Yarappa Naidu,
Aged about 30 years,
# 12, 3rd Cross,
Bannerghatta Road,
Bangalore-560 030
V/s
Opposite parties: -
1. Tata Motors Limited,
Tata Motors Finance,
DGP House, 4th Floor,
Old Prabhadevi Road,
Mumbai-400 025
Rep. by its Manager
2. Prerana Motors,
Kantacourt,
# 132, Lalbagh Road,
Bangalore-27
Rep. by its Manager,
O R D E R
SRI. D.KRISHNAPPA., PRESIDENT.,
The grievance of the complainant against the OPs in brief is, that he had approached the Ops for financial assistance to purchase an Indica Car costing of Rs.3,26,903=00. Ops had advanced loan of Rs.2,45,000=00 and he paid the balance amount of Rs.96,500=00 and booking charge of Rs.1000=00. He had furnished additional bank security through cheques for repayment of the loan. That he had spent in all Rs.27,000=00 for extra fittings to his vehicle. As tourism business affected, he could not run the car profitably and he found difficulties in repayment of the loan and to lead his livelihood, as he had purchased the car for earning his livelihood. That on 8-2-2009, the car met with an accident and he spent Rs.20,000=00 towards repair. That because of financial difficulties he could not repay the loan amount and committed default in paying certain installments. During Feb.2009, when the vehicle was on road, all of a sudden recovery agents of OP forcibly took possession of the vehicle. That thereafter met the OP for repayment of loan and to get the vehicle released, but Ops told him to had sold the car for Rs.60,000=00. The complainant contending that the car is sold for a very low price has further contended that the vehicle is sold without his knowledge and consent. Therefore has contended the vehicle would have fetched him Rs.2,50,000=00 on sale, but sold to very lesser amount. That he has paid 16 installments amounting to Rs.1,36,600=00 and thereby contended that the sale of the vehicle by Ops is illegal and has prayed for a direction to the Ops to refund his booking charges of Rs.1000=00, initial payment of Rs.96,500=00, Rs.1,36,600=00 repaid through installments, to pay cost of extract fittings repair charge and to award compensation of Rs.1,00,000=00.
2. Ops were duly served with notice of this complaint. OP No.2 since remained absent is set exparte. OP No.1 has appeared through his advocate and filed version contending that the complainant is not a consumer and the complaint is not maintainable. It is further contended that the complainant defaulted in repayment within the prescribed time and thereby has failed to repay the loan installments regularly and even cheques issued by him towards repayment are dishonoured due to closure of the bank account by the complainant. OP denying that the vehicle was re-possessed forcibly has admitted advancing of loan of Rs.2,45,000=00 at the instance of the complainant and contended that the complainant has repaid Rs.1,86,567=00 including the sale proceeds of the car Rs.51,514=00 and stated that as on 23-2-2011, the complainant was due, over due installments Rs.1,30,189=00 and over due charges Rs.1,39,181.48 in all amounting to Rs.2,69,370.48. It is further stated that when the complainant committed default in repayment of the loan two pre-repossession notices dated 14-12-2006 and 5-2-2008 were given informing the complainant to repay over due installments. But when the complainant failed to respond to them they repossessed the vehicle on 27-8-2008, as per the terms of agreement. The complainant despite opportunity, and did not pay the loan amount, they sold the vehicle on 27-2-2009 and referring to the outstanding amount and further denying that the complainant approached them for repayment of the loan has further denied the extra fittings, that the complainant alleged to had fitted to his car and called upon the complainant to prove it and further denying all other allegations of deficiency has prayed for dismissal of the complaint.
3. In the course of enquiry into the complaint, the complainant and 1st OP have filed their affidavit evidence reiterating what they have stated in their respective complaint and version. The complainant alongwith the complaint has produced Xerox copies of papers connecting to sanction of loan, tax invoice of the car, copies of insurance policy for the year 2006-07, copies of bank statement towards payment certain installments. OP No.1 has produced a copy of statement of repayments made by the complainant, copies of loan hypothecation cum guarantee agreement and copy of receipt for having received Rs.60,000=00 on selling the complainant’s car. Counsel for the complainant has filed written arguments. We have heard the counsel for the 1st OP and perused the written arguments and connected records.
4. On the above contentions following points for determination arise.
1) Whether the complainant proves that OPs have caused deficiency in their service in selling the hypothecated car without his knowledge or consent and that the value fetched is inadequate?
2) To what reliefs, the complainant is entitled to?
5. Our findings are as under:
Point no.1: In the affirmative
Point no.2: See the final Order
REASONS
6. Answer on Point No.1: As narrated above in brief, we find no dispute between them, with regard to the sanction of loan, quantum of loan sanctioned by the OP and also defaults committed by the complainant in repayment of installments of loan as agreed. We also do not find any dispute between the parties in the complainant after availing loan has repaid Rs.1,36,600=00 and thereafter committed default in paying the remaining installments. With this we shall consider whether Ops after seizure of the complainant’s car had given him an opportunity to either clear the loan and get the vehicle released or atleast to participate in the auction process.
7. As admitted by the complainant himself, he has committed several defaults in repayment of installments and several installments became over due. No doubt, the Ops proved to had sent pre-repossession notice to the complainant calling upon him to repay the loan. The complainant has not denied receipt of such notices prior to repossessing of the vehicle. But the next important aspect is regarding sale of the vehicle.
8. The complainant has contended his seized car is sold by OPs without his knowledge or consent and for a very low price. The 1st OP has not denied this allegation nor it is his case, that they had issued sale notice to the complainant before bringing the seized car for sale as pre sale notice is warranted in all case with an intention to given an opportunity to the borrower to either pay the entire amount due and get the vehicle released or to take part in the sale process to purchase of the vehicle by himself. But Ops admittedly have not given any such presale notice to the complainant prior to selling the car. Ops have nowhere in their version or in the affidavit stated to had issued presale notice and have also not produced any documents in support of that. Hence, the contention of the complainant that the seized vehicle has been sold by Ops without his knowledge and consent stands proved. As the result denial of an opportunity to the complainant either to pay the entire over due amount and to get the vehicle released or to participate in the sale preceding which is nothing short of deficiency in the service of the Ops and it amounts to unfair trade practice.
9. Coming to the price for which the car is sold by the Ops is concerned, admittedly, the vehicle was purchased during June-2006 for a sum of Rs.3,26,903=00 and it was insured for the period from 15-6-2006 to 14-6-2007 with the insured value of Rs.3,10,555=00. Admittedly, the Ops repossessed the complainant’s vehicle on 27-8-2008, nowhere either in the version nor in his affidavit Op has stated what was the amount due to them as on the date repossession of the vehicle. After repossession of the vehicle, Ops kept quite till 27-7-2009 and sold the same for a paltry amount of Rs.60,000=00. In between has stated above Ops have not proved to had issued any notice of the proposed sale to the complainant indicating the amount due but sold the same after expiry of six months and has now come with the version that the complainant is over due towards installments Rs.1,30,189=00 and over due charge of Rs.1,39,181.48 totaling Rs.2,69,370.48 as on 23-2-2011. We underline the date 23-2-2011. This due is calculated after lapse of two years and six months and above. In the absence of the statement of Ops as to what was the amount in all due by the complainant as on the date of repossession. The subsequent calculation and over due amount worked out by the OP can not be considered as basis for the claim of the Ops and has no relevance. Because if OP had exercised proper diligence and responsibility when sold the vehicle in proper and reasonable value could have been fetched for it. By that the over due amount of the complainant could have been appropriated and the balance could have been recovered by even levying interest or penal interest in accordance with the conditions of loan. The Ops purposely appears to had not determined the amount due as on re-possession and given before us. Therefore the over due amount of Rs.2,69,370.48 shown as on 23/02/2011 is misleading one.
10. Coming to the value for which the vehicle was sold as stated above the car was a new car purchased during June-2006 and the car was repossessed after two years and about two months. The vehicle was though used as Taxi by the complainant for earning his livelihood depreciation of the vehicle cannot be morethan 23% per year as it is established is to be allowed. Therefore if 23% depreciation per year is taken then the depreciation for the first year on Rs.3,26,906/- would be Rs.75,197.67, then the net value of the vehicle after such depreciation was Rs.2,51,715.31. Further similar percentage of depreciation is allowed for the second year it would be Rs.57,894.54, then the value of the car as on the date of repossession after deducting depreciation would be Rs.1,93,810.59. The car therefore ought to have fetched Rs.1,93,810.59 or little more or less and not Rs.60,000/- for which the Ops claim to have sold. Ops have not placed before us any materials as to the method of selling the vehicle. The value for which the Ops alleged to have sold a new car after two years touches conscious of anybody and this act of the Ops in our view is obnoxious and un-tolerable. As stated supra if the Ops had determined the amount due as on the date of the repossession or atleast as on the date of sale and had sold the car in a legal manner for proper value it would have fetched them not less than Rs.1,93,810/- or little either less or more. The stealthy away adopted in disposing of the car of the complainant by Ops amounts to unfair trade practice. The complainant also has not placed material before us as to what was the amount due by him as on the date of repossession of the vehicle or sale of the vehicle. Taking into consideration all these materials, we hold that sale of the car by Ops for such a low value of Rs.60,000/- is un-pardonable and therefore find it just and reasonable to direct the Ops to waive all the amounts said to be due by the complainant as on 23-3-2011 and to take that no amount is due to them by the complainant. We further declare that the complainant will not be liable to pay any amount to the Ops, in connection with this loan transaction and he is also not entitled for refund of any money from the Ops.
11. The complainant has not placed any materials before us regarding additional fittings he got done to his car and expenditure incurred and towards repair charges. Considering the illegal method that the Ops have adopted in sale of the vehicle and in not placing transparent details of account, we call that, the Ops act is an unfair trade practice and as a caution for future acts, we propose to impose punitive damages and cost against them. With the result, we answer point no.1 in the affirmative and pass the following order:
ORDER
Complaint is allowed in part.
Ops are jointly and severally are directed to waive all dues said to be due from the complainant in connection with this loan transaction and shall not make any claim against him.
Ops are jointly and severally are directed to pay punitive damages of Rs.10,000=00, out of which Rs.5,000=00 be paid to the complainant and balance shall be remitted to the Legal Aid Account of this forum.
Ops shall pay cost of Rs.2,000=00 to the complainant.
The complainant is held as not entitled for any other reliefs.
Dictated to the Stenographer, Got it transcribed and corrected, Pronounced on the Open Forum on this 15th June 2011.
Member Member President
