BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD : THIRUVANANTHAPURAM

PRESENT:

SHRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENA KUMARI .A : MEMBER

SMT. S.K. SREELA : MEMBER

O.P.No. 157/2003 Filed on 11/04/2003

Dated: 31..08..2009

Complainant:

Babu.S., Beena Nivas, T.C.No.36/1916, Enchakkal Junction, Vallakkadavu-P.O., Thiruvananthapuram.

Opposite parties:

1. The General Manager, India Cements Capital & Finance Limited, “Status Quo”, Corpn. Office, 38,Sterling Road, Chennai – 600 034.

2. Jacob John, Assistant General Manager, India Cements Capital & Finance Limited, Menathottam Chambes, Pattom, Thiruvananthapuram.

    

(By Adv. P.S. Pradeep)

This complaint is disposed of after the period so specified under the Consumer Protection Act, 1986. Though the case was taken up for orders by the predecessors of this Forum on 02..09..2005, the order was not prepared accordingly. This Forum assumed office on 08..02..2008 and re-heard the complaint. This O.P having been heard on 30..05..2009, the Forum on 31..08..2009 delivered the following:

ORDER

SHRI.G. SIVAPRASAD, PRESIDENT:

The facts leading to the filing of the complaint are that the complainant purchased Swaraj Mazda Supreme Truck No.KL-01/V-7617 under hire purchase agreement, that complainant entered into hire purchase agreement as HP.No.12100414 dated 21/09/2001 for Rs.4,00,000/- with the 1^st opposite party through the 2^nd opposite party for purchasing the said vehicle, that the said amount financed by the 2^nd opposite party is to be paid by the complainant by 35 installments of Rs.14,000/- each, that complainant paid 12 installments and after that there occurred some delay and complainant could not remit the installments in due dates, that 2^nd opposite party sent a notice dated 21/12/2002 informing the complainant about the over due of Rs.70,734/-, that complainant informed the opposite party that he needs some more time to settle the account, but opposite parties without any legal basis taken away the said vehicle from the house of the complainant on 5/2/2003, that 2^nd opposite party again sent a notice dated 10/2/2003 to clear the dues, that thereafter complainant paid Rs.70,000/- on 26/3/2003 and also paid Rs.3,000/- as the vehicle recovery charge, that after receiving the said amount opposite parties re-delivered the said vehicle, but complainant did not accept the same because opposite parties caused heavy damages to the said vehicle. The vehicle had run only 35000kms and not even undergone a single repair, that the said vehicle was in good running condition, that the opposite parties adopted unfair trade practice and removed the new gear box worth Rs.1,25,000/-, new starter worth Rs.10,000/-, new clutch assembly and cover worth Rs.10,000/- and re-affixed old items in the place of the above new things and altogether caused a loss of Rs.1,75,000/-. There is deficiency in service and unfair trade practice on the part of the opposite parties. Hence this complaint to direct the opposite parties to pay a sum of Rs.3,59,250/- with interest as compensation, a sum of Rs. 50,000/- as compensation towards mental injury and a sum of Rs. 5,000/- towards cost.

2. 1^st opposite party did not turn up inspite of service of notice, no version filed. Hence 1^st opposite party set ex-parte.

3. 2^nd opposite party entered appearance and filed version contending that complainant failed to remit the installments properly as per the agreement, that opposite parties sent notice to the complainant informing him of the due amounts of Rs.70,734/-, that but the complainant did not respond, that the 2^nd opposite party over telephone requested the complainant for the payment of dues, that on 5/2/2003 the said vehicle was repossessed by the 2^nd opposite party and informed the same to the complainant. On 20/2/2003 complainant came to the office of the 2^nd opposite party and requested that he may be permitted to close the dues as installments, that complainant did not settle the dues, that 2^nd opposite party already disposed the vehicle and realised asset after proper notice and grace days to the complainant, that the 2^nd opposite party did not commit any violation nor did 2^nd opposite party make any deficiency in service. There is nothing unfair trade practice or deficiency in service on the part of opposite parties. The complainant is not entitled to obtain any relief and hence 2^nd opposite party prayed for dismissal of the complaint with cost.

4. The points that arise for consideration are:

1. Whether complainant is a defaulter of payment of monthly installments?

2. Whether re-possession of financed property from the complainant was lawful?

3. Whether there is any deficiency in service on the part of opposite parties?

4. Whether complainant is entitled to get a sum of Rs.3,59,250/- from the opposite parties?

5. Whether complainant is entitled to get any other reliefs?

In support of the complaint, complainant has filed proof affidavit and Exts.P1 to P12 & C1 were marked. Complainant has been cross examined by the 2^nd opposite party and Exts. D1 to D7 were marked. One witness has been examined as PW2. Witness has been cross examined by the 2^nd opposite party. In rebuttal 2^nd opposite party has filed counter affidavit.

5. Points (i) to (v): Admittedly, complainant availed the financial assistance from opposite parties for purchase of the vehicle, Swaraj Mazda Supreme Truck No.KL-01/V-7617, and entered into a hire purchase agreement with 1^st opposite party through 2^nd opposite party for Rs.4,00,000/-. It is also not in dispute that the said amount of Rs.4,00,000/- has to be repaid by the complainant by 35 installments of Rs.14,000/- each. It has been the case of the complainant that he had paid 12 installments and thereafter some delay occurred in the remittance. The due amount was informed by the opposite party to the complainant by notice dated 21..12..2002. Ext.P1 is the photocopy of receipt dated 20..09..2001 for Rs.15,250/- issued by Nirmal Automobiles (P) Ltd. in the name of the complainant. Ext.P1(a) is the photocopy of receipt dated 17/09/2001 for Rs.1,05,000/- issued by Nirmal Automobiles (P) Ltd in the name of the complainant. The said amounts as stated in Ext. P1 & P1(a) are seen remitted by the complainant to the dealer of the vehicle, Ext.P2 is the photocopy of the second schedule (Forming part of hire purchase agreement dated 21..09..2001) issued by the 2^nd opposite party. In the 1^st page of of Ext.P2 it is seen stated that the copy of hire purchase contract and repayment schedule are enclosed, complainant did not furnish the copy of the hire purchase agreement. Ext.P3 series are copies (9 Nos.) of the receipts issued by the 2^nd opposite party to the complainant. As per Ext.P3 series complainant remitted Rs.14,000/- on 24..10..2001, Rs.14.000/- on 20..11..2001, Rs. 14,000/- on 20..12..2001, Rs.14,000/- on 20..1..2002, Rs.14,000/- on 20..02..2002, Rs.14,000/- on 20..03..2002, Rs.14,000/- on 20..04..2002, Rs. 14,000/- on 7/5/2002 and Rs.14,000/- on 30..05..2002, altogether as per Ext.P3 series complainant has remitted Rs. 14,000/- x 9 = 1,26,000/-, Ext. P4 is the copy of the statement, Ext.P5 is the copy of the notice dated 21..12..2002 issued by the opposite party to the complainant informing him of Rs.70,734/- towards dues. It is seen stated in Ext.P5 that all overdue would attract penal interest at the rate of 3% per month and complainant was requested to clear the overdue immediately. Ext.P6 is the copy of receipt dated 29..01..2003 for Rs.14,000/- issued by the 2^nd opposite party to the complainant, Ext.P7 is the copy of the letter dated 6..02..2003 to the complainant sent by the opposite party. As per Ext. P7 it is seen stated that due to non-payment of installments opposite party had repossessed the vehicle No.KL-01/V-7617, Ext. P8 is the copy of letter dated 10..05..2003 addressed to the complainant by the 2^nd opposite party. As per Ext.P8 letter it is informed the complainant that due to non-payment of the overdue installments by the complainant even after repeated reminders opposite parties constrained to repossess the asset on 6..02..2003. It is further requested as per Ext.P8 to settle the account within 10 days from the date of Ext.P8 notice failing of which opposite parties will dispose the asset and any loss incurred in this regard will be made good from complainant's account, Ext.P9 series (4 Nos.) are receipts issued by opposite parties. As per Ext.P9 series it is seen that complainant remitted Rs.14,000/- on 15..03..2003, Rs.28,000/- on 15..03..2003, Rs.8,000/- on 19..03..2003 and Rs.20,000/- on 26..03..2003, altogether Ext.P9 series show the receipt of Rs.70,000/-. Ext.P10 is the copy of the receipt dated 7..04..2003 for Rs. 3,000/- issued by the 2^nd opposite party in the name of the complainant, Ext.P11 is the copy of the letter dated 25..08..2003 issued by the 2^nd opposite party addressed to the complainant. As per Ext.P11 it is seen stated that “As already informed to you, vide our letters dated 10/02/2003, 05/05/2003 and 04/08/2003 we have sold the above vehicle for the best offer received for Rs.2,85,000/-. After adjusting the sale price, to the above account, there is a balance of Rs.26,025/- which will be credited to your account HPC 12100456 on getting your confirmation”. Ext.P12 is the copy of the letter dated 05/05/2003 issued by the 2^nd opposite party to the complainant. As per Ext.P12 complainant was directed to settle the account within 5 days from the date of notice failing to which opposite parties would dispose the asset and any loss incurred in this regard would be made in his account. Ext.C1 is the Commission Report it is reported by the Commissioner that the said vehicle has been sold by the opposite parties to one Mr. Ayyappan, Vithura and at the time of visit opposite parties had given a letter which is seen attached with the Ext.C1. In the said letter dated 26^th August 2003, it is stated that the said vehicle was auctioned and sold on 30/07/2003. Since Mr. Babu was unable to clear the dues and take back the vehicle. On going through Exts.P3, P5, P6, P7 & P10 it is found that complainant has remitted a sum of Rs.2,27,000/- to the opposite parties. In addition to that as per Ext.P1 complainant has remitted Rs.1,05,000/- and Rs.15,250/- to Nirmal Automobiles (P) Ltd. Ext.D1 is the agreement dated 21^st September 2001 executed between 1^st opposite party and the complainant. As per the said agreement the hirer shall pay to the owner on the execution of the agreement the sum of Rs.14,000/- as initial payment by way of hire and a sum of Rs.1,000/- as service charges both of this shall become the absolute property of the owner. As per clause IV of the said agreement the hirer shall duly perform and observe all the terms and conditions contained in the agreement. Rs.14,000/- is the monthly sum and hire amount is Rs.4,90,000/-. Ext.D2 is the copy of the job card issued by Nirmal Automobiles (P) Ltd dated 28/05/2003. Ext.D3 is the cheque dated 20/10/2002 issued to the opposite parties by Smt. Maya Devi. The said cheque issued in favour of the opposite parties is seen bounced due to “Full cover not received Funds expected, please present again”. Ext.D4 is the cheque dated 20/01/2003 for Rs.14,000/- which is also seen bounced due to insufficient funds, Ext.D5 is the original cheque dated 20/08/2002 for Rs. 14,000/- issued to opposite party which is also bounced due to insufficient funds, Ext.D6 is the original cheque dated 20/12/2002 for Rs.14,000/- issued to opposite party by Maya Devi. The said cheque is also seen returned due to insufficient funds, Ext.D7 is the original cheque dated 20/11/2002 for Rs.14,000/- issued to opposite party by Maya Devi the said cheque is also seen bounced due to insufficient funds. As per Ext.D1 the hire amount is Rs.4,90,000/-, whereas the case of the complainant is that he entered into hire purchase agreement for Rs.4,00,000/-. On going through the evidence available on records complainant had remitted a sum of Rs. 2,27,000/- to opposite parties as per hire purchase agreement, the vehicle is seen purchased as per hire purchase agreement on 21/09/2001. As per Ext.P7 the said vehicle is seen repossessed by opposite parties on 6/2/2003. In this context, it is to be highlighted the guidelines to be strictly followed by finance company before it exercise its power to repossess a vehicle which have been re-iterated time and again various High Courts. “If the amount is not paid by the borrower, it would be open to finance company in exercise of its power under the finance agreement to recall the loan. If it exercises of this power another notice be given to the borrower intimating that the loan has been re-called the borrower should be called upon to repay the amount due within 7 days of receipt of notice. This notice is to be sent by registered post at the address given by the borrower, if no amount is paid within the stipulated period as per notice the finance company would be authorised to repossess the vehicle, but this power of repossession would not entitle the finance company to take the vehicle while plying on the road. In case the borrower refuses to sign papers when the vehicle is repossessed, on repossession of the vehicle immediate information to be provided by finance company to local Police intimating the time and place when the vehicle was repossessed”. In the instant case no such guidelines are seen followed by the opposite parties before it exercises its power to repossess the vehicle concerned. As per Ext.P7 a message seen sent by the opposite parties to the complainant stating that due to non repayment of installments opposite parties has repossessed the vehicle. From Ext.P7 it is crystal clear that the said message is seen sent to the complainant after repossession of the vehicle. Further it is after the repossession of the said vehicle a notice is seen sent by virtue of Ext.P8. As per Ext.P8 notice complainant was requested to settle the account within 10 days from the date of the notice failing which opposite parties will dispose the said account and any loss incurred in this regard will be met from complainant's account. In the said notice opposite party has not mentioned the due amount be remitted by the complainant. Even in Ext.P7 message the due amount is not mentioned. By Ext. P9 series complainant remitted Rs.70,000/- on 3 days – 15/3/2003, 19/3/2003 and 26/3/2003. It is only after the receipt of the said amount of Rs.70,000/- from the complainant, the vehicle is seen sold by the opposite parties without following the guidelines. As per Ext.P11 dated 25/8/2003 the vehicle is seen sold for Rs.2,85,000/-. Opposite parties never furnished any document showing the said price of the said vehicle. It is pertinent to note that the hire purchase amount was availed by the complainant on 21/9/2001, the vehicle was repossessed on 6/2/2003, thereby it is presumed that complainant had used the said vehicle only for about one year and four months. He has remitted initial payment to the dealer of Rs. 1,05,000/- + 15,250/- towards part payment that together comes to Rs. 1,20,250/- . Out of the hire purchase amount of Rs.4,90,000/- complainant is seen remitted a sum of Rs.2,27,000/-. Complainant never furnished document showing the price of the vehicle. Even though agreement permits opposite parties to repossess the vehicle the same was done by the opposite parties without the guidelines stipulated by the various High Courts. Hence we find the repossession of the said vehicle was unilateral and against guidelines. No document furnished by opposite parties to show the sale of the vehicle at Rs.2,85,000/-. If the life of the vehicle is supposed to be 15 years, the complainant has used the vehicle only for one year and four months but he had remitted Rs.2,27,000/- to opposite parties, in addition to the initial amount of Rs.1,20,250/- remitted to the dealer. Opposite parties cannot claim full ownership of the vehicle, since he has remitted around half of the loan amount and a sum of Rs. 1,20,250/- to the dealer. On going through the evidence available on record we find complainant is a defaulter on payment of EMI. But repossession of the vehicle of the opposite parties was unilaterial and without following the established guidelines, to the extent of which, there is deficiency in service on the part of the opposite parties. Taking into consideration of the totalitarian of circumstances, including the use of the vehicle and the amount remitted by the complainant we think justice will be well met if complaint is allowed a compensation of Rs.2,00,000/-.

In the result complaint is allowed. Opposite parties shall jointly and severally pay the complainant a sum of Rs.2,00,000/-.The said amount shall carry interest at the rate of 12%, if not paid within two months from the date of receipt of this order. Both parties shall bear and suffer their costs.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum, this the 3^1st day of August, 2009.

G. SIVAPRASAD,

PRESIDENT.

BEENA KUMARI .A : MEMBER

S.K. SREELA : MEMBER

ad.

O.P.No.157/2003

APPENDIX

I. Complainant's witness : NIL

II. Complainant's documents:

P1 : Photocopy of receipt No.1573 dated 20/9/2001 for Rs.15,250/-.

P1(a) “ No.1567 dated 17/9/2001 for Rs.1,05,000/-

P2 : “ letter dated 11/7/2002.

P3 series

(9Nos.) “ receipt No. SBTV-660 dated 24/10/2001

P4 : “ statement of accounts from 21/9/2001 to 21/5/2003.

P5 : “ letter dated 21/12/2002 issued by opposite party.

P6 : “ receipt dated 29/1/2003 for Rs.14,000/-

P7 : “ Telegraph message dated 6/2/2003

P8 : “ letter dated 10/2/2003 issued by opposite party.

P9 series

(4 Nos) : “ receipts 15/3/2003, 15/3/2003, 19/3/2003 & 26/3/2003.

P10 : “ dated 7/4/2003 for Rs.3,000/-.

P11 : “ letter dated 25/8/2003 issued by opposite party.

P12 : “ letter dated 5/5/2003 issued by opposite party.

III. Opposite parties' witness : NIL

IV. Opposite parties' documents:

D1 : Agreement dated 21/9/2001

D2 : Job cards No.8201 dated 28/5/2003.

D3 : Cheque No.361095 dated 20/10/2002 of Bank of Baroda for Rs.14,000/-.

D4 : Cheque No. 361098 dated 20/1/2003 of Bank of Baroda for Rs.14,000/-. D5 : Cheque No.367399 dated 20/8/2002 of Bank of Baroda for Rs.14,000/-.

D6 : Cheque No. 361097 dated 20/12/2002 of Bank of Baroda for Rs.14,000/-.

D7 : Cheque No.361096 dated 20/11/2002 of Bank of Baroda for Rs.14,000/-.

PRESIDENT