BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD
FA NO.68 OF 2014 AGAINST CC NO.109 OF 2009
ON THE FILE OF DISTRICT FORUM, RANGAREDDY
Between:
K.Lakshmaiah S/o K.Nagaiah,
Aged about 38 years,
R/o Sri Sai Clinic, Monda Market,
Kummaribasti, Uppal,
Rangareddy district.
…Appellant/Complainant
And
The Manager, HDFC Bank Ltd.,
(Auto Loan Department),
Retail Asset Division,
4th Floor, Lala Land Mark,
D.No.5-4-94, Ranigunj branch,
Secunderabad.
…Respondent/Opposite party
Counsel for the Appellant : Sri A.Rama Krishna
Counsel for the Respondent : Sri N.Sudarshan
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
and
Sri Patil Vithal Rao … Member
Thursday, the Twenty Second day of December
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
1) This is an appeal filed by the unsuccessful Complainant before the forum below aggrieved by orders dated 31.01.2013 of the District Forum, Rangareddy made in C.C.No.109 of 2009 in dismissing the complaint.
2) For the sake of convenience, the parties are referred to as arrayed in the complaint.
3) The case of the complainant, in brief, is that the Complainant purchased Hero Honda Passion plus motorbike from Phoenix Motors (M/c Div) Pvt., Ltd., Uppal, Hyderabad, which was assigned the registration mark as AP-29R-4094 and the same was insured with United India Insurance Company on 04.01.2007. The Complainant stated to have made the down payment of Rs.21,804/- on 04.01.2007 and the balance of Rs.30,000/- was availed as loan from the Opposite party vide loan account No.11058003.
4) While granting loan, Opposite party took five blank cheques from the Complainant. Complainant had bank account with State Bank of India, Prashant Nagar branch, Uppal. On 06.08.2007 as per the agreement, Complainant was required to pay Rs.38,070/- towards loan instalments in equal monthly instalment of Rs.1269/- for a period of 30 months which commenced on 05.02.2007 and concluded on 05.07.2009. Complainant has been regular in payment of instalments till 05.07.2007.
5) On 12.11.2007 at 10.00 p.m. the Complainant stated to have parked the subject vehicle inside the gate of his house and on the next day morning at 9-00 a.m. he found the vehicle missing, to that effect, he lodged complaint with Police, Uppal vide Cr.No.1144/2007 for the offence U/s 379 of IPC. On 26.11.2007, when the Complainant had been to the office of Opposite party to inform about the missing vehicle, they handed over the notice showing outstanding dues against the subject vehicle at Rs.33,216.22 till 28.11.2007 by mentioning Rs.5,000/- towards vehicle recovery charges. Only then, the Complainant could know that the vehicle was seized by the Opposite party. When he approached the opposite party expressing his willingness to pay the dues, they refused and failed to respond.
6) Without causing any notice and without following due process of law, the Opposite party seized the vehicle, even without intimation. The Complainant got issued notice on 20.04.2009, to which, the Opposite party failed to respond. Due to non-availability of vehicle, the Complainant suffered a lot and could not attend his avocation. Hence the complaint with a prayer to direct the Opposite party to return the subject motorbike or to refund the amount of Rs.30,687/- paid by the Complainant together with interest @ 18% p.a. from the date of complaint till realization; to pay Rs.30,000/- as compensation towards physical strain and mental agony along with costs.
7) Opposite party resisted the claim by way of written version contending that the complaint is not in accordance with Section 2 (1)(c) of C.P. Act, 1986 and the complainant is not a ‘consumer’ as defined under Section 2(1)(b) & (d) of the Act. The complaint is barred by resjudicata u/s 11 of CPC as the issue has been pending between the parties in a suit. In fact, Complainant appeared in CC No.43/2008 on the file of District Forum-II, Hyderabad and the complaint was dismissed for default on 23.04.2009. Without disclosing the said fact, again filed the present complaint before District Forum, Rangareddy.
8) Complainant had approached them to avail loan of Rs.38,070/- vide loan account No.11058003 by entering into an agreement on 13.01.2007, which is repayable in 30 equal instalments @ Rs.1269/-. The cheques issued by the complainant were dishonoured on presentation, which the Complainant paid in cash subsequently. All the five cheques issued by Complainant were dishonoured and Complainant was irregular in payment of instalments. In spite of regular follow-up and constant demands, the Complainant failed to clear the instalment dues, as such, after following due procedure, repossessed the vehicle from the complainant. By letter dated 13.11.2007 intimated the police concerned about repossession of the vehicle and also obtained surrender letter from the Complainant, intimating the total due amount of Rs.33,319/- inclusive of collection, repossession and godown charges to be paid by the complainant, on or before 20.11.2007, else, the vehicle will be auctioned and sold.
9) The said letter was received by the Complainant and produced before the District Forum-II, Hyderabad marked as Ex.A9, but there was no reply from the Complainant, hence, after giving ample time, the vehicle was sold to the highest bidder for Rs.33,292/-. However, Complainant intentionally and maliciously filed a complaint before the Police with false allegations. The notice dated 20.04.2009 was received on 22.04.2009, by which time, the proceedings in CC No.43/2008 filed by the Complainant were in progress. After waiting for considerable time, the Opposite party had taken the decision to repossess and sell the vehicle.
10) As per banking norms, if the borrower defaults in payment of EMIs for more than two months, the bank can initiate repossession proceedings against the customer. Complainant approached the forum with unclean hands for wrongful gain and to cause wrongful loss to the Opposite party. Prior to this complaint, Complainant filed CC No.43/2008 before the District Forum-II, Hyderabad for the same cause of action which was dismissed for default on 23.04.2009, which operates as resjudicata. Instead of taking steps for restoration, filed the present complaint. There is no deficiency in service. Hence, prayed to dismiss the complaint with exemplary costs of Rs.5,000/-.
11) During the course of enquiry before the District Forum, in order to prove his case, the Complainant got filed his evidence affidavit and Exs.A1 to A12 and the Opposite party got filed the affidavit of one A.Raja, its Legal Officer and marked Ex.B1 to B10.
12) The District Forum after considering the material available on record, dismissed the complaint bearing CC No.109/2009 by orders dated 31.01.2013.
13) Aggrieved by the said orders, the Appellant/Complainant preferred this appeal contending that the forum below (a) failed to appreciate the question of fact and law in its true prospect; (b) wrongly held that the Respondent was authorized to exercise the right of repossession of the vehicle as per conditions of the agreement; (c) erred in holding that the Appellant cannot question the seizure of vehicle having committed default; (d) wrongly relied on Ex.B7 surrender letter where there is an endorsement of refusal to sign; (e) ought to have taken note of the notice period after service of notice before proceeding with auction of vehicle, without disclosing the date of auction; (f) ought to have allowed the complaint as the Respondent sold the vehicle without following due process of law. Hence, prayed to allow the appeal by setting aside the dismissal order.
14) The point that arises for consideration is whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner? To what relief ?
15) It is pertinent to mention here that the forum below had earlier, passed orders on 23.04.2010 allowing the complaint and directing the Respondent herein to refund Rs.30,687/- with 9% interest p.m. from the date of filing the complaint and to pay Rs.1,500/- towards costs to the complainant, granting time of 30 days. Aggrieved by the same, the Respondent herein had preferred an appeal vide FA No.791/2010 before the then A.P. State Commission, wherein, vide orders dated 28.12.2011, the said Commission remanded the matter back for disposal afresh. But the order which is under challenge in this appeal is the subsequent order.
16) It is not in dispute that the Appellant obtained loan amount of Rs.30,000/- from the Respondent bank for purchase of the subject vehicle, repayable in 30 equal instalments @ Rs.1269/- per month in between 05.02.2007 and 05.07.2009. The only dispute is that as the Appellant fell in arrears of the loan instalments, the Respondent bank seized the vehicle without following due process of law and sold away the same at its whims and fancies.
17) In order to prove his case, the Appellant relied on Ex.A7 complaint given to the Police Station, Uppal on 18.11.2007 wherein in crystal clear terms, it is mentioned that on the night of 12.11.2007 he parked his vehicle in a rented house and on the morning at about 9-00 a.m. he found the vehicle missing and to that effect, the Police registered a case in cr.No.1144/2007 U/s 379 IPC. Ex.A8 is the copy of the first information report. Thereafter, when the Appellant approached the Respondent bank to inform about missing of his motorcycle, Ex.A9 notice was issued wherein the Respondent bank demanded Rs.33,216.22 towards prepayment charges including the repossession charges of Rs.5,000/-. It is mentioned in Ex.A9 that the calculations shown are valid till 28.11.2007.
18) In the written version filed before the forum below, the Respondent/Opposite party would contend that the vehicle was sold to the highest bidder for Rs.33,292/-. To show that the Appellant committed default in payment of loan instalments, the Respondent relied on Ex.B8 statement of account for the period from 05.02.2007 to 30.06.2008. A keen perusal of the same would goes to show that on 09.04.2007 the Appellant committed default in paying instalment amount for which, Rs.450/- was debited against his account on the name of cheque bouncing charges and later the instalment amount was paid. Again on 07.09.2007, 06.10.2007 and 06.11.2007 the Appellant committed default in payment of instalments, for which, Rs.450/- for each default was debited against the account of the Appellant. Altogether, the appellant fell due an amount of Rs.5,707/- as on 06.11.2007. Not only the Respondent bank debited the cheque bouncing charges but also deducted overdue charges.
19) If really the cheques issued by the Appellant were dishonoured, nothing prevented the Respondent bank from resorting to initiation of proceedings under Section 138 of the Negotiable Instruments Act. Suffice to say, no piece of paper in that regard is exhibited to accept their bonafides. Admittedly, the subject vehicle was brand new one purchased on 04.01.2007 for a consideration of Rs.42,850/-, and got insured the same with United India Insurance Company Limited vide policy No.052051/31/06/01/00010006, as is evident from Ex.A1 to A4. For deduction of Rs.450/- towards cheque bounce charges, the Respondent relies on Schedule appended to the Loan Agreement marked as Ex.B5. Admittedly, the alleged cheques which are stated to have been dishonoured are not filed, at least, the copies thereof.
20) The Respondent would contend that after giving ample time, the vehicle was repossessed. To vouchsafe their contention, they relied on Ex.B6 and B7 letters. Admittedly, these letters do not contain the signature of the Appellant. Moreover, a perusal of Ex.B6 dated 13.11.2007, the authorization letter to repossession agency would go to show that it is addressed to HDFC Bank Ltd., by the authorized signatory of HDFC Bank Limited authorizing V.V.K. enterprises. It does not contain either the particulars of the sender (addresser) or the receiver (addressee) except a bare mention as “HDFC Bank Ltd” at the place of address and bare logo of HDFC Bank, while the contents of the letter speak something else. It also does not contain the particulars of quantum of amount fell in arrears and for which period. Ex.B7 is stated to be the surrender letter from the borrower dated 13.11.2007. Though the same is captioned as “surrender letter from the borrower”, it does not contain the signature of the borrower, except an endorsement “refuse to sign”. It is not clear as to who refused to sign. Admittedly, this letter does not contain the signature of the Appellant. No evidence is placed on record to show that repossession of the subject vehicle was made by following due process of law.
21) The Respondent also would contend that the Appellant suppressed the factum of filing a complaint before the District Forum-II, Hyderabad which ended in dismissal for non-prosecution. In support of its claim, filed Ex.B2 to B4 documents. Ex.B2 is the copy of consumer complaint in CC No.43/2008 on the file of District Forum-II, Hyderabad. Ex.B3 is the written submissions made by the Respondent. Ex.B4 is copy of orders dated 23.04.2009 in CC No.43/2008 wherein, on account of non prosecution of the case, the complaint was dismissed. Ex.B1 complaint appears to have been filed in December 2007 and the same is dismissed on 23.04.2009 for non-prosecution of the complaint. The complaint CC No.109/2009 is filed on 29.05.2009. Admittedly, the loan instalments would conclude on 05.07.2009, hence, the complaint is within the period of limitation. We may state that the alleged surrender letter from the borrower under Ex.B7 dates 13.11.2011, which had arisen the cause of action for filing the complaint. Section 24A of C.P. Act, 1986 contemplates limitation period for filing the complaint, which reads as follows:
“24A Limitation period
(l) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (l), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:
Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.”
It would be seen from the aforesaid provision that it is peremptory in nature and requires consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual cause of action. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice ofand give effect to it. We may state that the cause of action in this case has arisen on 13.11.2007 when the Respondent bank has taken the repossession of the vehicle without the knowledge, intimation and consent of the Appellant. Hence, the present complaint is within the period of limitation.
22) The burden lies on the Respondent bank to prove that the repossession of the vehicle was effected in accordance with the law. The documents Ex.B6 and B7 do not establish any such act. Ex.B8 is the letter dated 30.11.2007 addressed by HDFC Bank Ltd., Ranigunj, Secunderabad to the HDFC Bank Ltd., Ranigunj, Secunderabad. It is very astonishing to note the address of sender and receiver is the same and the contents of the letter speak something else, while the signature therein is of some third party who is in no-way related to either the sender (addresser) or the receiver (addressee). However, from the contents of the document, it is evident that the vehicle was purchased by one Bikezone, without there being any particulars. It is the contention of the Respondent that they sold the seized vehicle to the highest bidder, surprisingly, no single paper is filed to believe their contention. It is also the claim of the Respondent that it intimated on 13.11.2007 to the police about the repossession of the vehicle, but no such document is filed.
23) We may state that the Hon'ble Supreme Court in the judgment reported as “ICICI Bank vs. Prakash Kaur & Ors”
“Now the bank is the aggressor and the public is the victim. The first step to recovery of the money due is through the so called Recovery Collection Agents. A very dignified term used for paid recovery agents who are individuals and independent contractors hired by the Banks to trace the defaulters and to both physically, mentally and emotionally torture and force them into submitting their dues.
A man's self respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernized version of Shylock's pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner."
Hon’ble National Commission, New Delhi in the matter of “Citicorp Maruti Finance Ltd., vs. S.Vijayalaxmi, reported in 2007 CTJ 1145 (CP) : (2007) CPJ 161 (NC), it was held as under :
"1. When a vehicle is purchased by a person (consumer) by borrowing money from the money lender/financier/banker, the consumer is the owner of the vehicle and not the money lender/financier/banker, unless the ownership is transferred.
2. In a democratic country having well established independent judiciary and having various laws it is impermissible for the money lender/financier/banker to take possession of the vehicle for which loan is advanced, by use of force.
3. Legal or judicial process may be slow but it is no excuse for employing musclemen to repossess the vehicle for which loan is given. Such type of 'instant justice' cannot be permitted in a civilized society where there is effective rule of law. Otherwise, it would result in anarchy that too when the borrower retorts and uses the force.”
It was also held by the Hon'ble National Commission reported as "Tata Motors Ltd. Versus Indrasen Choubey and others", 2009 CTJ 840 (CP) (NCDRC) 840 that:-
"It is impermissible for the money lender/financier/banker to take possession of a vehicle for which loan was advanced, by use of force-Such type of 'instant justice' cannot be
24) Admittedly, in the present case, no notice was issued demanding payment of the loan instalment dues. Likewise, no notice was caused on the Appellant before repossessing the subject vehicle. As is evident from the records, without due procedure, the repossessed vehicle was sold at cheap rate in order to recover the arrears of loan instalments amounting to Rs.5,707/- as on 06.11.2007 though the same was brand new one having purchased on 04.01.2007 for a consideration of Rs.42,850/-. It is very astonishing to note that in Ex.B9, under the caption “Particulars of vehicle”, insurance is shown as ‘No’ while the Ex.A4 insurance policy would clearly establish that the insurance is provided to the subject vehicle for the period from 04.01.2007 to 03.01.2008 under policy No.052051/31/06/01/00010006. Admittedly, the particulars of engine number and chassis number mentioned in the Ex.A4 policy and the schedule under Ex.B5 are one and the same.
25) We may state that the Appellant was also not informed by the Respondent at the time of sale of the vehicle to a third person, even no procedure was followed. There is no evidence of any notice having been sent to Appellant before repossessing vehicle. Even before selling vehicle repossessed from Appellant, Respondent bank did not convey date on which vehicle was proposed to be sold by it. There is no evidence of any public notice having been given by the Respondent bank in a newspaper before selling vehicle repossessed from the Appellant. It cannot be said that vehicle was sold following a fair and transparent process. The cost of the vehicle as on the date of sale was Rs.42,850/- and the same was sold at a throw away price of Rs.33,292/-. We may need to say that while the fraudulent defaulters can be dealt with by taking the police help for such action, it is only when law is taken into hands of the so-called recovery agents, who are appointed on contract basis, the issue gets aggravated. At last, we say that we are governed by a rule of law in the country. The recovery of loans or seizure of vehicles could be done only through legal means. In the present case, no legal means are employed by the Respondent as is evident from the evidence placed on record. And for illegal seizure/repossession of the subject vehicle, the Appellant had suffered lot and battling for justice for the last nine years without any fruits. The sufferance of the Appellant cannot be measured in any terms. We can understand the quantum of inconvenience and pain undergone by the Appellant for non-availability of the vehicle for the last nine years, for which, he is entitled to appropriate compensation. It is pertinent to state here that since the vehicle is already sold to third party, ordering the repossession would not justify in any manner.
26) In the above facts and circumstances, we do not see any reason not to allow the appeal. In the circumstances discussed supra, we answer the point framed for consideration in paragraph No.14, supra, in favour of the Appellant and against the Respondent. Accordingly, we allow the appeal and set aside the order of the forum below.
27) In the result, we allow the appeal and set aside the order dated 31.01.2013 of the District Consumer Forum, Rangareddy made in CC No.109/2009 and direct the Respondent to refund the whole amount paid by the Appellant towards loan instalments and other charges including processing charges till 13.11.2007, covered by loan agreement No.11058003, dated 02.01.2007 together with interest @ 12% p.a. from the date of respective payments till actual payment and further to pay compensation of Rs.30,000/- for causing inconvenience in non-utilization of the vehicle and on account of illegal repossession, and the costs of the proceeding at Rs.5000/-. Time for compliance : 30 days.
PRESIDENT MEMBER
Dated 22.12.2016
