Date of Filing:17.04.2009<br /> Date of Order:31.07.2009<br /> <br /> <br /> <br /> BEFORE THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE-20<br /> <br /> Dated: 31ST DAY OF JULY 2009<br /> PRESENT<br /> <br /> <br /> <br /> Sri S.S. NAGARALE, B.A, LL.B. (SPL.), President.<br /> Smt. D. LEELAVATHI, M.A.LL.B, Member.<br /> Sri BALAKRISHNA. V. MASALI, B.A, LL.B. (SPL.), Member.<br /> <br /> <br /> COMPLAINT NO: 879 OF 2009<br /> <br /> Anand A.R,<br /> S/o Ramachandraiah,<br /> R/at I Floor, Opp: to TCH College,<br /> Kothanoor main road,<br /> Hari nagar, Bangalore-560 078. Complainant<br /> <br /> <br /> V/S<br /> <br /> 1. The Manager,<br /> HDFC Bank, <br /> Near Manipal Center,<br /> Door No.3, Kodihalli,<br /> Airport road, Bangalore-560 017. <br /> <br /> 2. The Manager,<br /> HDFC Bank, <br /> 4th Floor, Titanic Building,<br /> 26 A, Narayana Properties,<br /> Chandivali, Andheri East,<br /> Mumbai-400 072. Opposite Parties<br /> <br /> <br /> <br /> <br /> <br /> ORDER<br /> By the President Sri. S.S. Nagarale<br /> <br /> This is a complaint filed u/Section 12 of the Consumer Protection Act, 1986.<br /> The brief facts of the complaint are that, the complainant has purchased SUZUKI ZEUS XU Motor Cycle in the month of June-2007 from Apple Auto Agency Pvt Ltd., Kathriguppe, BSK III Stage, Bangalore by paying down payment of Rs. 22,682/- by way of cash. The copy of the cash receipts three in number is produced. For the remaining balance amount, the complainant has approached the Centurion Bank, which is now merged with the opposite parties. After getting necessary documents the Centurion Bank sanctioned loan of Rs.26,540/- vide loan account No.91801507 to the complainant. At the time of sanctioning the loan the complainant has produced all necessary documents like address proof, income proof, bank account, surety etc., and as per the demand of the Bank the complainant has given five blank cheques. After sanctioning the loan the bank has retained the original registration certificate and one ignition key, which was directly taken from the agency of the Motor Cycle. The mode of repayment of the said loan is by way of monthly installments of Rs.1,875/- and the same is credited to the account of the opposite party through ECS from the complainant’s Bank account. Except for the month of October-2008 the complainant has cleared all the installments. The said installment has been paid by way of cash on 23/10/2008 and the opposite parties have collected the cheque bounce charges of Rs.450/-. The repayment receipt dated 23/10/2008 is produced. Even though the complainant has cleared all the installments the opposite party No.1 sent one of its officer along with goondas on 31/01/2009 at about 6-20 AM and forcibly taken his Motor Cycle by threatening that “if you make any attempt to give any information to the police you will face serious consequences”. On the same day the complainant rushed to the office of the opposite party No.1 and requested to verify the balance and requested to return his Motor Cycle, but nobody was bother about his several requests or no one can hear his difficulties. On 05/02/2009 the complainant got appointment with the Manager of the opposite party, but shockingly he has made it clear that they will not return the Motor Cycle. The complainant repeatedly approached opposite party No.1 to return the Motor Cycle by tendering alleged due, they have refused to deliver the Motor Cycle and finally told that the Motor Cycle has been sold out and refused to give any information regarding the sale transaction. The opposite parties have taken illegal possession of the Motor Cycle by force and sold, without giving any proper intimation or any opportunity tender alleged due in spite of repeated request. Hence, the complaint.<br /> <br /> 2. Notice was issued to opposite party through RPAD. Notice was served by registered post. The opposite party appeared through Advocate and filed defence version stating that the complainant had availed the vehicle in question under hypothecation agreement from the opposite party and at the time of availing the said facility, the complainant had executed the agreement and the transaction between the complainant and the opposite party is governed by the terms of the agreement executed by the complainant. The complainant was a defaulter as against the terms of the agreement. According to the complainant he was not due any installments, whereas the complainant was due in a sum of Rs.12,907/-. Hence, the opposite party was entitled to repossess the vehicle as per the terms of the agreement. After repossession of the vehicle, the opposite party had issued a notice dated 02/02/2009 recalling the entire amount outstanding of Rs.17,907/-. The repossession of the vehicle is due to default by the complainant. As the complainant had agreed to abide by the terms of the agreement, the opposite party had extended the facility to the complainant. Hence, the complainant cannot be permitted to take benefit of his own mistakes. If at all any such incidents as alleged by the complainant had happened, the complainant should have filed the complaint before the jurisdictional police. Failure on the part of the complainant proves that the allegations are false and frivolous. The complaint is not maintainable as the opposite party had acted to repossess the vehicle only after the default by the complainant as against the terms of the agreement executed by the complainant. In view of all the reasons stated above, the opposite party prayed to dismiss the complaint. <br /> <br /> 3. Affidavit evidences are filed. Arguments are heard.<br /> <br /> 4. The points for consideration are:-<br /> 1. Whether there was any deficiency in service on <br /> the part of the opposite party Bank?<br /> <br /> 2. Whether the repossession of vehicle by the opposite party is legal and valid?<br /> <br /> 3. Whether the complainant is entitled for compensation? If so what is the quantum of compensation? <br /> <br /> REASONS<br /> 5. It is an admitted case of the parties that the complainant has availed loan of Rs.26,540/- from the opposite party Bank for purchasing Motor cycle. The total installments of loan were 17 months. The EMI fixed was Rs.1,875/-. The complainant submitted that he was regular in payment of EMI. The installments were credited to the account of the opposite party through ECS from the complainant’s bank account. The complainant has paid EMI of October-2008 on 23/10/2008 by cash. The opposite party Bank has collected Rs.450/- towards cheque bounce charges. In this way the complainant has paid Rs.2,235/- to the opposite party Bank. To prove this fact the complainant has produced receipt of the opposite party dated 23/10/2008. For the month of December-2008 a sum of Rs.1,875/- was debited on 10/12/2008 towards HDFC Bank EMI through ECS debit in the Bank account of the complainant in Corporation Bank. As per the statement of account, on 21/01/2009 Rs.1,875/- received and said amount was credited to the loan account of the vehicle. The balance as on 21/01/2009 is shown as Rs.6,453/- in the account statement produced by the opposite party Bank itself as on 21/01/2009. On 21/01/2009 the installment was bounced and therefore, outstanding balance was shown as Rs.8,328/- in the loan account of the complainant. It is the case of the complainant that on 31/01/2009 the Bank has sent some goondas to the house of the complainant at about 6-30 AM and they forcibly took away the Motor cycle by threatening the complainant. The complainant failed to resist the illegal activities of the Bank. Complainant submitted that he rushed to the Bank and requested to verify the balance and return the Motor cycle. The complainant repeatedly approached the Bank and requested for return of the Motor cycle, but the opposite party Bank refused to release the Motor Cycle and finally they told the complainant that Motor Cycle has been sold. The only defence taken by the opposite party in the defence version is that, the complainant was defaulter, he was due in sum of Rs.12,907/-. Hence opposite party was entitled to repossess the vehicle as per the terms of the agreement and after repossessing the vehicle opposite party issued notice dated 02/02/2009. During the course of argument the learned counsel for the opposite party submitted that the vehicle has been sold in the public auction for Rs.28,400/- on 16/02/2009 and the said amount was credited to the loan account. The counsel for the opposite party submitted that Rs,15,216/- is the amount under credit and said amount is liable to be refunded to the complainant and the Bank submitted that vehicle was repossessed as per the terms of the agreement, but unfortunately the opposite party Bank has not produced the agreement said to have been executed by the complainant before this Fora. It is an admitted case of the Bank that vehicle has been seized or repossessed without the intervention of the Court. Admittedly the opposite party Bank has not taken any orders from the Court of law for seizing the vehicle. The opposite party has not issued any show cause notice to the complainant before repossessing the vehicle. The opposite party has not produced any document or copy of notice to show that notice was served on the complainant before seizing the vehicle. Even the opposite party Bank has not produced agreement to show that there was a term authorizing the opposite party Bank to repossess the vehicle. The learned counsel for the complainant submitted that the seizure of the vehicle by the opposite party Bank is illegal and without authority of law. Therefore, the complainant had suffered lot by the illegal act committed by the opposite party Bank and submitted that the complainant be suitably compensated for the unlawful act committed by the opposite party Bank. The counsel for the complainant in support of his argument relied upon by the judgment of Hon’ble National Commission, New Delhi reported in III (2007) CPJ 161 (NC) in a case of Citicorp Maruti Finance Ltd., Vs. S. Vijayalakshmi, wherein it has been held as under:-<br /> <br /> “(i) Consumer Protection Act, 1986 – Section 21(b) – Hire Purchase Agreement – Forceful seizure of vehicle – Practice of hiring musclemen as recovery agents deprecated, needs to be discouraged – Recovery of loans or seizure of vehicle permitted only through legal means – Banks cannot employ goondas to take possession by force – Slow procedure of law, no excuse for use of force for repossessing vehicle – Permitting hypothecatee to physically repossess hypothecated goods against wishes of hypothecator enables hypothecatee to take law in his own hands, deprive hypothecator of his defence by depriving him use of goods.”<br /> <br /> (ii).......................<br /> <br /> “(iii) Consumer Protection Act, 1986 – Section 21(b) – Hire Purchase Agreement – Default in payment of loan – 14 days’ time given for making one-time settlement – Vehicle seized forcefully before expiry of said time – Sold – No notice given before repossession for repossession not followed – Unjust to direct consumer to pay outstanding balance amount when vehicle repossessed by force and sold without prior notice – OP liable to pay market value of vehicle with interest @ 9% - Compensation – Punitive damages awarded by State Commission set aside. <br /> <br /> 6. In a very recent judgment the Hon’ble State Commission, Punjab, Chandigarh reported in 2009 CTJ 324 in a case Standard Chartered Bank Vs. H.S. Saini, it has been held as under:-<br /> <br /> “Banking – Repossession of vehicle – Consumer Protection Act, 1986 – Deficiency in service – Section 2(1)(g) – Section 2(1)(0) – Complainant purchased a motor car after raising loan from the appellant – Loan made payable to the appellant in monthly installment of Rs. 7,904/- - Default in making payment of some installments – Motor car repossessed by the appellant by force – Ultimately the car sold off by it – Complaint to the District Forum for payment of compensation – Appellant directed to make payment of Rs.35,000 towards the cost of accessories got fitted by the complainant, Rs. 71,136 as the amount of 9 installments at the rate of Rs.7,904/- each and Rs.25,000 as compensation – Appeal – A notice found sent to the complaint demanding Rs.26,283.55 in account of arrears due from him – Soon another notice sent showing the arrears to be of Rs.44,926.52 – Break up of the amounts not given – Even after taking possession of the vehicle, appellant got encashed some cheques of the complainant in its possession – Clearly the appellant took the law into its own hands by forcibly taking possession of the vehicle despite the assurance of the complainant to make payment of the overdue installments – Appeal, therefore, dismissed with cost of Rs.10,000. <br /> <br /> Further it has been observed the legal or judicial process as under:-<br /> <br /> <br /> “The legal or judicial process may be slow but it is no excuse for the financier to employ musclemen to repossess the vehicle for which the loan is given. Such type of ‘instant justice’ cannot be permitted in a civilized society where there is effective rule of law.” <br /> <br /> <br /> 7. By the above judgments of Hon’ble National Commission and Punjab State Commission, it is very clear that the repossess of vehicle by the opposite party Bank in this case is absolutely illegal and unwarranted one. Therefore, the opposite party Bank is bound to pay just, fair and reasonable compensation to the complainant for the mental suffering and agony caused to the complainant. The complainant has made down payment of Rs.22,682/- for purchasing the vehicle to the dealer and he has produced receipts and obtained loan of Rs.26,540/- from the opposite party Bank. He had prepaid the substantial loan amount through ECS. As on 21/01/2009 the balance due was Rs.8,128/- only as per the statement of the opposite party Bank itself and in the month of January itself the vehicle had been repossessed illegally by the Bank without fallowing the due process of law. Even the Bank has not shown curtsey of issuing show cause notice to the complainant before repossessing the vehicle from the custody of the complainant. The Bank has sold the vehicle on 16/02/2009 for Rs.28,400/-. The sum of Rs.15,216/- is available with the Bank, the said amount is requires to be paid to the complainant. Apart from that amount the Bank shall have to be directed to pay Rs.30,000/- as compensation to the complainant for mental agony, harassment and loss sustained by him. I feel award of compensation of Rs.30,000/- in this case to the complainant would be just, fair and reasonable compensation. In the result, I proceed to pass the following:- <br /> ORDER<br /> <br /> 8. The complaint is allowed. The opposite parties are directed to pay Rs.15,216/- which is available in the loan account of the complainant as credit balance. Apart from that amount the opposite party Bank is directed to pay Rs.30,000/- as compensation to the complainant. In this way the opposite parties are directed to pay Rs.45,216/- to the complainant within 10 days from the date of this order. In the event of non-compliance of the order within the time granted to the Bank, the above amount carries interest at 9% p.a from the date of this order till payment/realisation. <br /> 9. The complainant is also entitled for Rs.1,000/- as cost of the present proceedings from the opposite parties. <br /> 10. Send the copy of this Order to both the parties free of costs immediately as per statutory requirement. <br /> 11. Pronounced in the Open Forum on this 31ST DAY OF JULY-2009. <br /> Order accordingly,<br /> <br /> <br /> PRESIDENT<br /> We concur the above findings.<br /> <br /> <br /> MEMBER MEMBER<br /> Rhr., <br /> <br />