By Sri. Gururaj Member:- This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant- Maheshkumar against the Branch Manager Sri Ram Auto Finance Ltd., Raichur. The brief facts of the complaint are as under: The complainant had purchased a Tata Truck bearing Registration No. KA36/1750 of 88 Model, Chassis No. 344 073 and Engine No. 692-D01 879916 for Rs. 2,00,000/- on 05-11-03 from its lawful owner, for which the complainant raised a loan of Rs. 1,40,000/- from the Respondent vide loan account No. RAI/75/83 agreeing to repay the same in equal monthly installment of Rs. 7070/-. It is the case of the complainant that he had paid the installments put the Respondent upto 05-04-06 regularly and in all he has paid Rs. 1,89,800/- upto 2006, this is more than 75% of the loan amount and the remaining balance is very meager. The complainant has spent huge amount for major repair of the vehicle in-question and he has also mounted a new tanker by fabricating the same from the body builder at the cost of Rs. 5,00,000/- in the year 2006, as such complainant could not pay the future installments to the Respondent hence requested the Respondent to enhance the loan amount as he has repaid more than 75% of the loan amount. But the Respondent did not heed the request of the complainant and illegally seized the vehicle in-question on 14-04-06 without informing the same to the complainant and without following the due procedure of law and principle of nature justice. The complainant immediately after coming to know about the seizer, met the Respondent on the very day and requested him to release the vehicle, so that he can arrange funds from other sources for repaying the meager installments due. But the Respondent turned down the request of the complainant and did not release the vehicle. By virtue of the illegal seizer of the vehicle the complainant has suffered great loss as he would have earned 500 per day from the vehicle and he has also suffered constantly loss to the tune of Rs. 15,000/- per month. Further it is the case of the complainant that when he had paid more than 75% i.e, Rs. 1,89,800/- of loan amount the Respondent cannot seize the vehicle in-accordance with the settled proposition of law relating to HP Agreement. Therefore it amounts to deficiency in service on the part of the Respondent. Recently i.e, on 17-07-08 the complainant approached the Respondent with the balance installment amount due and informed the Respondent to release the vehicle in-question as he is ready to repay the balance installment. But the Respondent by exhorbitating the loan amount has illegally demanded excess amount and refused to release the vehicle in-question and the Respondent also refused to accept the list of repayment of installments with the receipts submitted by the complainant and demanded excess amount from the complainant with the sole intention defraud and dupe the complainant. Further it is the case of the complainant that the Respondent has caused a loss of Rs. 5,00,000/- to the complainant by illegally seizing the vehicle which was valued at Rs. 5,00,000/- as on the date of its seizer as New Tanker was built for the said vehicle very recently and also caused loss to the tune of Rs. 15,000/- pm for this reason the complainant has sought a direction against the Respondent to release the vehicle in-question forth-with in the same condition as it was at the time of seizer or in the alternative direct the Respondent to pay the compensation amount of Rs. 5,00,000/- i.e, the value of the vehicle at the time of its seizer in case if the Respondent is unable to return the vehicle to the complainant together with loss. 2. The Respondent appeared through his counsel and has filed his written version: The Respondent Transport Finance Insurance Company Ltd., has contended that the complainant has availed loan from the Respondent Financial Institution to purchase 1988 Model Tata Tanker by executing loan-cum-hypothecating Agreement dt. 26-04-06. In-view of availment of loan the complainant is borrower of the Respondent Institution and the complainant has availed loan for the purposes of Transportation business and it is purely for commercial purpose therefore borrower is not a consumer within the meaning of Section 2 (1) (d) of C.P. Act and for these two reasons the complaint of the complainant is not maintainable. Further the Respondent contended that the complainant is habitual defaulter in repayment of monthly installments to the Respondent Financial Institution. The complainant has fabricated a false story to suit his ill-need. The damages estimated and claimed by the complainant in the present complaint is false and baseless and imaginary one. The Respondent have exercised their right according to the terms & conditions of the Loan-cum-Hypothecation Agreement. Therefore act of this Respondent does not constitute any deficiency in service. The complainant is bound by the terms & conditions of the said agreement. According to the terms of agreement the complainant has availed loan and finance charges to be paid as follows: (i) Amount financed -Rs. 73.000=00 (ii) Finance charges -Rs. 23,360=00 (iii) Insurance Deposit -Rs.10,000=00 ________________ The Total amount to be repaid by the -Rs.1,06,360=00 complainant is ---------------------- The complainant was habitual defaulter in payment of monthly installments therefore repossessed the vehicle on 10-08-06 even after repossession of vehicle sufficient reminder are issued to the complainant. He has turned with deaf ears therefore having no option Respondent Institution has sold the vehicle on 09-10-06 at the best market price of Rs. 69,000/- available to the vehicle by adopting due procedure. After appropriation of sale amount to the account of the complainant still there is a due payable by the complainant to this Respondent to the tune of Rs. 46,766/- as on 25-11-08 along with legal expenses. The Respondent issued notice to the complainant to repay the due amount but the complainant has not turned up therefore the Respondent has exercised its rights according to article 6.1 (ii) and (iii) of Loan-Cum-Hypothecation Agreement possessed and sold the vehicle. In-view of exercise of right by the Respondent Institution does not constitute deficiency of service and complainant is not at all entitled for any sought of damages claimed in the complaint. It is further contended that the complaint of the complainant is false one and contrary to the Loan-cum-Hypothecation Agreement. The obligation arising out of the agreement cannot be questioned by the complainant before this Forum more-over the rights and obligations which are conferred by the terms of the agreement cannot be construed as deficiency of service within the meaning of section 2 (1) (c) of the CP Act. Therefore such disputes cannot be adjudicated by this Forum. The complainant after having full knowledge that, Respondent is a financier, he has unnecessarily driven them before this Forum by filing false dubious complaint on untenable grounds without their being any real cause of action. Hence attitude of the complaint is required to be dealt with heavy hands by awarding compensatory costs to the tune of Rs. 25,000/- and sought for dismissal of the complaint. 3. During the course of enquiry the complainant has filed his sworn-affidavit by way of examination-in-chief In-rebuttal one Sri. Sunil Sadare of Hubli has filed his sworn affidavit by way of examination-in-chief on behalf of Respondent. On behalf of complainant (22) documents were got marked as Ex.P-1 to Ex.P-22. Similarly on behalf of the Respondent (2) documents at Ex.R-1 & Ex.R-2 were got marked. 4. Heard the arguments of the complainant counsel and the counsel for the Respondent has filed his written argument, perused the same along with records filed by the both parties. The following points arise for our consideration and determination:- 1. Whether the complainant proves deficiency in service by the Respondents, as alleged.? 2. Whether the complainant is entitled for the reliefs sought for.? 5. Our finding on the above points are as under:- 1. In the Affirmative. 2. As per final order for the following REASONS POINT NO.1:- 6. The complainant has produced (1) RC Book in-respect of the vehicle in question bearing Registration No. KA-36/1750 is at Ex.P-1, (2) The Pass Book of the complainant issued by the Respondent is at Ex.P-2, (3) Receipts for having paid the installments by the complainant to the Respondent Institution (19) in all are marked at Ex. P- 3 to Ex.P-21. (4) The quotation issued by Karnataka Motors for Fabrication of Tanker is marked at Ex.P-22. Similarly the Respondent has filed (1) Copy of Loan-Cum-Hypothecation-Agreement dt. 25-04-06 is at Ex.R-1, and (2) Copy of Power of Attorney is at Ex.R-2. 7. From a close perusal of Ex.P-1, i.e, R.C. Book produced by the complainant it appears that the complainant has purchased the vehicle bearing Registration No. KA-36/1750 from one Smt. Shakeela Begaum W/o. Hussain Sab, R/o. Maddipeth Raichur and at Page No-10 of this said Ex.P-1 it appears that the said vehicle has been hypothecated with Respondent Finance Institution on 10-11-03. From the perusal of Ex.P-2 the Pass Book issued by the Respondent Institution it appears that the complainant has availed the loan through A.G.No. RAI/75183 and it also discloses the details of the loan as under: Advance amount is 1,40,000/- Finance Chare 56,000/- Insurance Deposit 16,000/- ------------------------- Agreement value 2,12,000/- -------------------------- From this Ex.P-2 it is also very clear that the term of loan is 30 months which is commencing from 05-12-03 and ends on 05-05-06. The first installment due is on 05-12-03 and the last due date is 05-05-06. According to this document it appears that the complainant has repaid the loan amount to the tune of Rs. 1,89,800/- out of total agreed value of Rs. 2,12,000/- as on 27-02-06 and balance was Rs. 22,200/- as on the same date. The complainant has also produced receipts for having paid the installments in-respect of loan availed from the Respondent Institution. The customer copy of the said receipts which are produced at Ex.P-3 to Ex.P-21 are clearly discloses that the complainant has repaid the loan amount in part. The entries shown in Ex.P-2 and these receipts are similar to each other. Of course the Ex.P-2 and Ex.P-3 to Ex.P-21 though they are particularly shows about the repayment of loan installments but these documents discloses that the complainant is not in-regular in repayment of installment amount and it is also discloses that there was a delay in making the payment. However no-doubt he has repaid more than 75% of the agreed value of the loan amount. When the documents of Respondent are clearly speaks about the repayment of the loan to the tune of Rs. 189,800/- and about the balance to the tune of Rs. 22,200/- even if the Respondent claims interest on due amount it may not be a huge amount for which the Respondent cannot take severe action against the complainant by way of seizing the vehicle etc., without any prior notice to the complainant and due procedure under law. But in this case the Respondents have seized the vehicle of the complainant without any procedure and prior notice against the complainant this amounts to deficiency in service on the part of the Respondent. 8. The Respondent in their written version and arguments particularly at Para-10 of the written version and Para-11 (A) of written argument contended that the loan availed by the complainant is as under: Loan amount is 73,000/- Finance Chare 23,360/- Insurance Deposit 10,000/- ------------------------- The total amount 1,06,360/- to be paid by the ------------------------ complainant. In order to prove this contention the Respondent has produced Ex.R-1 Loan-Cum-Hypothecation Agreement dt. 25-04-06. From the perusal of this Ex.R-1 as schedule-I it appears that the date of agreement is as 25-04-06 and tenure of the loan is 24 months, number of installments 24. First installment commencing from 25-05-06 and last installment to be paid as 25-04-08 further it is also discloses that, first 23 installments, the installment amount is Rs. 4,450/- and 24th installment is Rs. 4,010/-. Further the Respondent contended that on 16-08-06 repossessed the vehicle after sufficient reminder and sold the same on 09-10-06 at best market price of Rs. 69,000/- after appropriation of sale amount total due to the Respondent by complainant is Rs. 46,766/- as on 25-11-08. From the close perusal of said Ex.R-1 it appears that this Ex.R-1 came into existence only in the year 2006 i.e, on 25-04-06, but Ex.P-2 RC Book issued by the competent authority i.e, RTO Raichur discloses that the vehicle has been hypothecated on 10-11-03 after the loan has been sanctioned by the Respondent. Apart from this the Ex.P-2 the Pass Book issued by the Respondent Institution itself discloses that the due date as 05-12-03 to 05-05-06, Installment amount as Rs. 7,070/- and First date of collection of installment amount is as 27-12-03. This receipt No. 2105645 at Ex.P-3. The said Ex.P-2 is the document mainly pertaining to the Respondent Institution and same has been issued by the Respondent and the Ex.P-3 to Ex.P-21 are the receipts which are also issued by the Respondent Institution itself, when their own documents clearly speaks about the commencement of installments in-respect of loan taken by the complainant as 05-12-03 and received the first installment amount on 27-12-03 in-respect of the vehicle under hypothecation agreement then say of the Respondent as per their written version and the argument about the execution of the Ex.R-1 on 25-04-06 and other details regarding loan amount, period of loan and amount of installment as mentioned in the said Ex.R-1 particularly at Schedule-1 are clearly goes to show that they are created for the purposes of to save their skin. Further it shows that the existence of Ex.R-1 itself is under doubt and the said Ex.R-1 itself is quite contrary to their own documents produced at Ex.P-2 to Ex.P-21 and it is also quite contrary to the Ex.P-1 ie, R.C. Book issued by the RTO Raichur. Under these circumstances the contents of said Ex.R-1 holds no value therefore we do not considered the said Ex.R-1 is as fair one. 9. Further the Respondent has contended that they have seized/repossessed the vehicle on 10-08-06 and even in-spite of sufficient opportunities and reminders given to the complainant about the repayment of loan the complainant has not turned up and not paid the due amount. The complainant has become chronical defaulter hence the Respondent sold the vehicle to some others person on 09-10-06. To believe this version of the Respondent there is no single document produced by the Respondent to show that they have made efforts to call the complainant to repay the dues. Because as per the Schedule -1 of the Ex.R-1 the date of loan sanctioned is 25-04-06, first installment dues is on 25-05-06 and last installment due is 25-04-08. The Respondent seized the vehicle on 10-08-06 and sold it on 09-10-06 from this version of the Respondent it appears that complainant vehicle has been seized in the month of August and sold it in the month of October-2006. Similarly the first due date is 25-05-06 from this version we can come to the conclusion that from the date of first installment due and from the date of seizer of the vehicle is hardly three months, thereafter the date of the sale of the vehicle to some other person is 09-10-06 then it is immediately after two months from the date of seizer of the vehicle. It means every thing has been happened within the span of almost all (5) months. Further the Respondent saying that as on 25-11-08 the complainant is due to the tune of Rs. 46,766/-. From close perusal of these contentions of the Respondents it appears that within the (5) months from the date of purchase of vehicle this complainant has repaid in all Rs. 59,594/- out of 1,06,360/- this is more than what the Respondent has fixed the installment as contended in Ex.R-1. Because as per the Ex.R-1 the installment amount is Rs. 4,450/- if it multiplies by five months it amounts to Rs. 22,250/- this is more than what the complainant has to repay to the Respondent in five months. If it is the case, how the complainant became chronical defaulter?. Then what was the necessity to seize the vehicle within five months from the date of Hire Purchase Agreement? for this there is no answer from the Respondent. Further it is also very clear that before seizing the vehicle they are suppose to issue prior notice for which the complainant is entitled to know about the status of his loan. But the Respondent have not done so therefore there is no wrong in saying that there is deficiency on the part of the Respondent. In this regard this Forum has referred the rulings/cases cited in Ashok Ley Land Finance ltd., V/s. Brijesh Moria case published in CPJ 2006 (iii) at Page 194. The jist of the referred case is as under: Hirer entitled to get prior notice before the default is alleged or vehicle is possessed- Hirer entitled to know status of loan also-default not proved-vehicle repossessed without prior notice about default- no prior notice even before repossession of vehicle-deficiency in service proved-return of vehicle ordered-compensation awarded. Similarly we have referred while deciding the present case another one case cited in Sri Ram Transport Finance Company Ltd, V/s. Surekh Khanoji Khemmar published in 2006 Part (i) CPJ (NC) the jist of the case decided by our Honble Natinal Commission is as under: Motor vehicle cannot be seized by the financing company if the borrower default in payment in due installments. Unless procedure through court is adopted- seizer of vehicle without intervention of court is illegal The financier directed deliver back the possession of vehicle to the borrower and the borrower directed to pay the rest of the loan in monthly installments. From the above said dictum laid down by the Honble National Commission it is very clear that before seizing the vehicle the financial institution are suppose to follow the procedures and they are also suppose to intimate the borrower regarding status of the report and dues unless otherwise they made so their act in respect of seizing of the vehicle amounts to deficiency in service. Similarly in the present case, there is a deficiency on the part of the Respondent. 10. Further the Respondent contended that the complainant is a borrower and he has availed the loan for the purposes of transportation business hence he is not a consumer. To prove this the Respondent has not produced any documents to show that the complainant is and was running the Transport business nor the Respondent has produced any document to show that the said vehicle is used for other than for bread earning of complainant. In the absence of such evidence we cannot hold that the complainant has purchased the vehicle for the purposes of commercial purposes, at the same time we have come to the conclusion that though the complainant has purchased the vehicle for hiring it to transport the goods it is just for earning of his own livelihood. Under these circumstances the say of the Respondent in this regard holds no good. Therefore we hold that the complainant is the consumer under the purview of section 2(1)(d) of C.P. Act. Viewing from all angles the complainant has proved the deficiency on the part of the Respondent. Hence we find deficiency on the part of Respondent as contended by the complaint and therefore Point No-1 is answered in the Affirmative. POINT NO.2:- 11. The complainant has sought for direction against the Respondent to release the vehicle i.,e Tata Tanker Truck bearing Registration No. KA-36/1750 forthwith in the same condition as it was at the time of seizer, or in the alternative to direct the Respondent to pay compensation of Rs. 5,00,000/- towards value of the vehicle at the time of its seizer, in case, if the Respondent is unable to return the vehicle in-question. So far as the first relief is concerned, the Respondent in para-10(B) of his written version submitted that the seized vehicle has been sold on 09-10-06 for Rs. 69,000/- hence first relief is concerned, for returning of vehicle in favour of the complainant does not arise. For the alternative relief is concerned, the complainant has sought direction against the Respondent to pay Rs. 5,00,000/- towards cost of the vehicle at the time of its seizer by the Respondent. The complainant in first Para of his complaint contended that he had purchased the vehicle for Rs. 2,00,000/. Naturally the value of the vehicle was Rs. 2,00,000/- at the time of its seizer. The complainant has contended that out of borrowed loan of Rs. 2,12,000/- he has repaid in all Rs. 1,89,800/- by leaving a balance of Rs. 22,200/-. Further the complainant has sought interest and compensation against the Respondent but he has not specifically stated the rate of interest and quantum of compensation. Even though he has contended in his complaint that due to illegal seizer of the vehicle by the Respondent he has sustained loss of earning to the tune of Rs. 15,000/- per month, but he has not substantiated by any material particular. However for above discussions and facts we feel it just proper to hold that the complainant is entitled to Rs. 1,77,800/- being the value of the vehicle with interest at the rate of 6% p.a. on this sum from the date of the seizer of the vehicle till its realization and a global compensation of Rs. 25,000/-.including cost of litigation. In this view of the matter we pass the following order: ORDER The complaint of the complainant is allowed in part. The Respondent shall pay Rs. 1,77,800/- to the complainant towards cost of the vehicle with interest @ 6% p.a. on the said amount from the date of seizer of vehicle till realization and global compensation of Rs. Rs. 25,000/- including cost of litigation. The Respondent shall comply this order within (6) weeks from the date of receipt of copy of this order. Office to furnish certified copy of this order to both the parties forth-with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 20-02-09) Sd/- Sri. N.H. Savalagi, President, District Forum-Raichur. Sd/- Sri. Gururaj, Member, District Forum-Raichur. Sd/- Smt.Pratibha Rani Hiremath, Member. District Forum-Raichur.
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