By Smt. C.S. Sulekha Beevi, President, 1. Briefly stated the case of complainant is that he availed loan of Rs.6,50,000/- from opposite parties to purchase an Eicher Tipper Lorry. The loan was to be repaid in 46 monthly instalments of Rs.16,750/- each commencing from 01-12-05. The vehicle was purchased by him for earning his livelihood. He worked as driver of the vehicle and regularly repaid the installments. While so, the vehicle met with an accident on 22-02-07 and sustained damages. It took almost three months to repair the vehicle. Thus complainant was put in a financially difficult situation and he was unable to pay a few instalments in due time. Almost three months were defaulted. Opposite parties forcefullly seized the vehicle on 12-7-07 and thereafter issued a notice that complainant could opt to foreclose the loan. The details of payment to be made to foreclose the loan was also given in the notice. Complainant decided to foreclose the loan in order to get back his vehicle. To raise the amount, he availed finance of Rs.3,85,630/- from Sriram Investments Ltd. On 10-8-07. The balance was arranged by him in cash. He approached opposite party to foreclose the loan. He was made to wait saying that the Manager was out of station. Later, opposite party gave him an account statement and stated that the vehicle was sold to another person for Rs.3,50,000/-. Complainant alleges unfair trade practice and deficiency in service. Hence this complaint praying for Rs.2,50,000/- which is the balance of the market value of the vehicle, Rs.25,000/- towards mental agony and hardships and Rs.3,000/- towards the additional amount paid by complainant to Sriram Investments. 2. Though notice to both opposite parties were served they failed to appear and were set exparte on 17-4-08. Evidence consists of the affidavit filed by complainant and Exts.A1 to A8 marked on the side of complainant. No version was filed by opposite parties. 3. The say of complainant is that the Tipper Lorry KL-10 X 884 was purchased availing loan of Rs.6,50,000/- from second opposite party. Ext.A2 is the retail invoice issued by the dealer dated, 08-11-05. the purchase price of the vehicle as per Ext.A2 is Rs.8,13,700/-. Ext.A8 is the account statement issued by opposite parties. Admittedly the amount financed towards purchase price is Rs.6,50,000/-. This means that complainant has contributed Rs.1,63,700/- towards the purchase price of the vehicle. As per Ext.A8 complainant has repaid Rs.3,35,000/- by instalments. Out of this Rs.2,62,502/- is adjusted towards principal and Rs.72,498/- is adjusted towards interest by opposite party. The last two instalments paid by complainant are Rs.30,000/- and Rs.5,000/- on 29-05-07 and 28-6-07 respectively. According to complainant the vehicle met with an accident on 22-2-07 and sustained damages. That he defaulted three instalments due to the financial stringency which arose out of this situation. Ext.A1 is the copy of First information Report dated, 23-02-07 registered by Vazhakkad Police with regard to the accident involving this vehicle. Ext.A8 shows default in payment of instalments in 2007 February and April. This proves that the complainant who was making proper repayment had defaulted only due circumstances beyond his control. Complainant alleges that the vehicle was forcefully seized on 12-7-07. The incidents thereafter shows that complainant had tried desperately to get back his vehicle. To the attempts and enquiries made by complainant to get back his vehicle second opposite party has issued Ext.A6 letter dated, 06-8-07. It is stated in Ext.A6 that the letter is issued in response to the complainant’s request to foreclose the loan. Second opposite party has given the details of foreclosing the loan in Ext.A6 which is as follows:- “In response to your request for foreclosure of your above mentioned ICICI Bank loan, we give you the details of the amount payable as follows:- Principle o/s : 439,887.00 L.P.P. Charges : 16,551.00 Cheque Bouncing charges and Other charges : 0.00 Interest for the month : 421.17 Foreclosure charges @ 4.49% at O/S Principle : 19,750.93 Interest in Pending Installment : 15,488.00 Refunds : 0.00 Total Amount Payable : 492,098.10 + 12000= 504098.10 Repossession charge + godown Rent + legal charge : 12,000.00 Kindly Note That: 1.above calculation assumes that your last installment has been cleared. 2.We have taken the date of foreclosure as August, 6/2007. For each day beyond this date an additional interest will be charged at the rate of Rs.84.23 per day. 3.If you foreclose a loan after September 1/2007, the installment for the following month will become payable. 4.We will return your unutilized post-dated cheques when you foreclose the loan. 5.If you foreclose the loan on or after 18th of the month, request you to please make a stop payment for your next month installment. 6.The above mentioned amount is valid subject to clearance of all the cheques/installments till date. If you decide to foreclose, please make payments of the above “Total amount payable” through a cheque or draft favouring ICICI bank ltd. at the time of foreclosure kindly submit a photo copy of invoice and registration book. Thus in Ext.A6 complainant was given option of different dates to foreclose the loan. He could foreclose the loan, on 06-8-07 by paying Rs.5,04,099.10. For each day beyond 06-8-07 additional interest of Rs.84,23 would be charged. If complainant choses to foreclose after 01-9-07, the instalment for the following month will become payable. If complainant forecloses the loan on or after 18-8-07 he should request, to make stop payment for the instalment of next month. It is evident from Ext.A6 that complainant was informed details of how he could choose to foreclose the loan at least upto 01-9-07. Believing Ext.A6 letter complainant approached second opposite party and informed that he is willing and ready to foreclose the loan and obtain release of the vehicle. Thereafter, in order to raise the amount mentioned in Ext.A6, complainant approached Sreeram Transport Finance, Manjeri, another financier, for taking over the loan. Sreeram Finance sanctioned an amount of Rs.3,85,630/- and a cheque for this amount dated, 10-8-07 drawn on U.T.I. Bank was handed over to complainant. Photo copy of this cheque is produced and marked as Ext.A7. Complainant arranged the balance amount as cash and approached second opposite party on the same day to foreclose the loan and get back his vehicle. The Manager of 2nd opposite party Sri. Manzoor was not available at the office on that day and following dates. On getting instructions from staff of second opposite party complainant telephoned the Manager. Complainant was assured by the Manager that he will be back soon and the matter could be finalised. Believing these words complainant waited with the cheque and cash in his hands. To his surprise an account statement was given to him which showed that his vehicle was sold for Rs.3,50,000/- to another person and thus the amount has been recovered from him. Ext.A8 account statement is dated, 30-8-07. It shows that opposite parties have sold the vehicle for Rs.3,50,000/- and adjusted the amount on 13-8-07. Ext.A7 sufficiently proves that complainant was ready to foreclose the loan and obtain release of the vehicle. Opposite parties have forcefully seized the vehicle and sold it without knowledge and consent of the owner/complainant which is illegal. It is settled position at present, that banks should resort to procedure recognized by law to take possession of vehicles or recover amount, in cases where the borrower has committed default in payment of instalments. In Ext.A6 opposite party has charged Rs.19,750.93 as foreclosure charges. It has been held by Hon’ble National Commission in State Bank of India Vs. Dr.Usha Vaid and another, R.P.No.2466/07 decided on 26-7-07 that Banks and Financial Institutions should not collect any preclosure charges if the loan is discharged by the borrower before the agreed period. Hence the amount of Rs.19,750.93 levied and recovered as preclosure charges is illegal. Further in this case, complainant opted to foreclose his loan only due to pressure-tactis applied by opposite party. According to complainant the market value of the vehicle at the time of seizing was Rs.5,00,000/-. Complainant relies upon Ext.A4 which is the copy of Insurance Certificate of the vehicle for the period 08-12-2006 to 07-12-07. In Ext.A4 the Insured Declared Value of the vehicle for this period is Rs.5,00,000/-. In case of total loss of vehicle during this period complainant would get Rs.5,00,000/- from the Insurance Company. As per Ext.A8 on 13-8-07 opposite parties have sold the vehicle for Rs.3,50,000/-. The act of opposite party selling the vehicle at a throw away price of Rs.3,50,000/- is sheer high handedness. Further when complainant had already informed his willingness to foreclose the loan opposite party should not have sold the vehicle prior to the date mentioned in Ext.A6 notice. This case illustrates how a person who has purchased a vehicle availing loan for earning his livelihood is put into total helplessness by the illegal act of banks. The Hon’ble Apex Commission has held in Citi Corp Maruthi Finance Ltd. Vs. S. Vijayalaxmi 2007 CTJ 1145 (CP) NCDRC decided on 27-7-07 “in a case where the vehicle was repossessed by use of force and thereafter sold without informing the borrower, it would be unjust to direct him to pay the balance amount. if such relief is given to the lender, it would be unjust enrichment to him and against equity.” The Hon’ble Apex Commission has taken similar views in Tata Finance Ltd. Vs. Francis Saciro F.A.No.720/03 decided on 22-02-08. Complainant has established and proved a case in his favour. From the above discussion we find that the act of opposite party in claiming unjustifiable amounts to foreclose the loan, seizure of the vehicle with force and sale of the vehicle at an unjustifiably low price without any presale notice amounts to gross deficiency in service. Opposite parties are liable to make up the deficiency to the complainant. The value of the vehicle at the time of sale was Rs.5,00,000/-. The claim of complainant is only for Rs.2,50,000/- which we consider is only modest and reasonable. 4. In the result, we allow the complaint and order both opposite parties jointly and severally to pay a sum of Rs.2,50,000/-(Rupees Two lakh, fifty thousand only) to the complainant along with interest @ 9% per annum from the date of complaint till realisation together with costs of Rs.5,000/-(Rupees Five thousand only). Dated this 11th day of June, 2008. Sd/- C.S. SULEKHA BEEVI, PRESIDENT Sd/- E. AYISHAKUTTY, MEMBER APPENDIX Witness examined on the side of the complainant : Nil Documents marked on the side of the complainant : Ext.A1 to A8 Ext.A1 : Photo copy of the First Information Report dated, 23-02-07 Prepared by A.S.I. of Police, Vazhakkad. Ext.A2 : Photo copy of the retail invoice No.420 dated, 08-11-05 from Automotive Marketing Pvt.Ltd., Authorised Dealer for Eigher Vehicles to the complainant. Ext.A3 : Original Motor Vehicle Insurance Cover Note No.235554 of vehicle KL-10/X-884 dated, 10-11-05 from Oriental Insurance Co.Ltd., to complainant. Ext.A4 : Photo copy of the Certificate-cum-policy of the vehicle for the period from 08-12-06 to 07-12-06 Ext.A5 : Photo copy of the Certificate of Registration in respect of vehicle No.KL10 X-884 dated, 11-11-05 issued by Addl. Registering Authority, Malappuram. Ext.A6 : Photo copy of the letter send by 2nd opposite party to complainant. Ext.A7 : Photo copy of the cheque for Rs.3,85,630/- dated, 10-8-07 in favour of complainant to opposite party. Ext.A8 : Photo copy of the statement of account from 2nd opposite party to complainant. Witness examined on the side of the opposite parties : Nil Documents marked on the side of the opposite parties : Nil Sd/- C.S. SULEKHA BEEVI, PRESIDENT Sd/- E. AYISHAKUTTY, MEMBER

By Smt. C. S. Sulekha Beevi, President,

This case was originally disposed by this Forum on 11-6-2008. Opposite party was then exparte. Appeal was preferred by opposite party as F.A.299/08. Vide judgment dated, 8-5-2009, the case was remanded for fresh disposal on condition that opposite party pays Rs.7,500/- to complainant. Amount was paid and the case was retaken on file.

1. Facts:-

Complainant availed a loan of Rs.6,50,000/- from opposite party for purchase of Eicher Tipper Lorry which was later registered as KL10/X-884. The loan was to be repaid in 46 EMI of Rs.16,750/- each, commencing from 01-12-2005. Complainant worked as driver in the vehicle and was repaying the instalments regularly. While so, the vehicle met with an accident on 22-02-2007. The vehicle sustained damage and it took almost three months to get the vehicle repaired. Complainant was put in a financially difficult situation and therefore could not pay the instalments. He defaulted three instalments. The vehicle was forcefully repossessed by opposite parties on 12-7-2007. Opposite parties then send a letter dated, 06-8-2007 in which the details of the amount due was stated. The amount due as principal, L.P.P. Charges, interest, foreclosure charges, interest on pending instalments, repossession charges, godown rent and legal charges were stated in this letter. It was also stated that the amount stated is the amount due to foreclose the loan on 06-8-2007 and for each day beyond this date, additional interest will be charged. It also contained instructions regarding the option to foreclose the loan on 18-8-2007 and 01-9-2007. On receiving this letter complainant approached opposite party and informed his willingness to foreclose the loan and requested short time to arrange for the fund. Complainant then approached another financier, Shri Ram Transport Finance and after negotiations they agreed to take over the loan for an amount of Rs.3,85,630/-. A cheque for the said sum dated, 10-8-2007 drawn on U.T.I. Bank Ltd. in favour of opposite parties was issued to the complainant. He managed to arrange the balance by cash and approached second opposite party to foreclose the loan. He was told that the manager, named Manzoor at the office of second opposite party is not available in the office. On subsequent dates also he could not meet the manager. As instructed by the office staff of second opposite party, complainant telephoned the Manager and the Manager assured the complainant that he will return immediately and that the matter can be finalised. Complainant[s neighbour, Ashraf has witnessed these incidents. Believing the words of second opposite party complainant waited with the cheque and cash in his hand. But unfortunately the complainant received an account statement from opposite party stating that Rs.3,50,000/- has been credited to the account of the complainant on 13-8-2007. On making enquiries he came to know that opposite parties have sold the vehicle to one Shihabudheen.V.K., S/o Hamza, Vellathollam, Erattupetta, Pala for an amount of Rs.3,50,000/-. That second opposite party has willfully played and delayed the complainant from foreclosing the loan and getting release of the vehicle. The vehicle has been sold for a meagre amount. After the accident complainant did repairs spending lots of money. He even fitted a speed governor worth Rs.15,000/-. He had paid insurance and tax before plying the vehicle. Opposite party has forcefully seized the vehicle and sold it without complying norms and procedures. These are illegal acts committed on the side of opposite parties. That opposite parties are not entitled to claim L.P.P. charges, foreclosure charges and other charges. The charges levied are exorbitant and baseless. At the time of repossession the market value of the vehicle was Rs.6,00,000/-. Even in the insurance policy, the IDV is shown as Rs.5,00,000/-. Taking into consideration, the insurance and vehicle tax paid for the vehicle together with the value of speed governor, the value of the vehicle will be definitely Rs.6,00,000/-. The account statements furnished tot he complainant are not correct. The illegal acts of opposite parties amount to deficiency. Complainant prays for Rs.2,50,000/- being the value of the vehicle after deducting Rs.3,50,000/-. He also claims Rs.25,000/- towards mental agony and hardships and Rs.3,000/- as monetary loss for the amount he had to pay to Sri Ram Finance for availing the loan for a short duration.

2. Opposite party entered appearance and filed version admitting that finance facility of Rs.6,50,000/- was given tot he complainant to purchase an Eicher Tipper Lorry which was registered as Kl-10 X 884. Opposite party disputes the complainant to be a consumer. It is alleged that the vehicle is a commercial vehicle and complainant was using the vehicle as taxi for profit making. That complainant has no license and badge to drive the vehicle and was employing different drivers for wages. That the vehicle was used for commercial purpose and the complainant is not a consumer under the Consumer Protection Act.

3. It is stated that at the time of availing finance the complainant had executed an agreement. As per terms and conditions of the agreement the complainant ought to have repaid the loan in 46 EMI of Rs.16,750/- on the first day of every month commencing from 01-12-2005 and ending on 01-12-2009. Complainant committed defaults in repayment. He repaid only Rs.2,53,000/- including principal and interest. That too not within stipulated dates. Several notices were issued through courier service demanding payment of pending dues. Though complainant received the notices he did not repay. Thereafter second opposite party send a registered notice through lawyer on 09-5-2007 demanding payment of pending dues within seven days or that legal action will be initiated. Though complainant received the notice he neither replied nor repaid the amount. Opposite party denies the averments in the complaint, that the vehicle met with an accident and that it took three months to repair and thereby the instalments fell due. The complainant has suppressed real facts. The averments is paragraph two of the complaint that opposite party had send a letter dated, 06-8-2007 detailing the principal amount etc. and that there are also instructions regarding foreclosure of the loan on 01-9-2007 etc. are not true or correct. That on 06-8-2007 the complainant came to second opposite party office and requested to give the foreclosure statement. Opposite party gave the same to the complainant. After seeing the statement the complainant told second opposite party that he cannot pay the amount. He told second opposite party to continue the sale proceedings. In the foreclosure statement except the figures, dates and month all others are general statements. The complainant is now using the said statement as a weapon against opposite parties to get unfair advantage. Opposite parties have taken possession of the vehicle in a peaceful manner after giving intimation to Station House Officer,. Vazhakkad police station. As per the agreement, if complainant commits default, opposite parties have a right to take back the vehicle. The allegation that opposite parties have forcefully repossessed the vehicle on 12-7-2007 is denied. The vehicle was taken back on 11-7-2007 in peaceful manner after complying the formalities. At the time of repossession an amount of Rs.96,594/- was due from the complainant. After repossession opposite parties prepared a valuation statement through an insurance surveyor, Sri.Ranjish Puthukudi on 12-7-2007. On 14-7-2007 opposite parties issued a registered letter to complainant informing him to settle the account and take back the vehicle. Complainant received the letter, but did not pay the amount. While so, on 23-7-2007 complainant came to the office of opposite party and executed a letter requesting opposite party to grant time till 31-7-2007 to close the loan or else opposite party is at liberty to dispose the vehicle as per the terms of agreement. Complainant did not repay as per this letter. Thereafter on 11-8-2007 opposite parties sold the vehicle to one Sri.Srijith, at Calicut for best market price of Rs.3,50,000/- after giving publicity about sale through internet. The amount received was credited to the account of complainant. Thereafter second opposite party issued letter dated, 18-8-2007 to complainant informing that the vehicle is sold for Rs.3,50,000/- and that after crediting the amount in the account, the complainant is liable to pay Rs.1,50,843/- to opposite parties. Complainant received the letter. But did not respond. That opposite parties had given several opportunities. The allegation in para 3 of the complaint, that the complainant approached Sri Ram Transport Finance and obtained loan of Rs.3,85,630/- which was given by cheque dated, 10-8-2007 drawn on UTI Bank Ltd., and that he managed balance in cash and approached opposite party office, and was informed that the Manager is out of station and will be available on 10-8-2007 etc. are denied by opposite party. The averment that complainant on enquiry found that the vehicle was sold to V.K. Shihabudheen, S/o Hamza for Rs.3,50,000/- is incorrect and cooked up. The allegation in para 4 that opposite party willfully played tricks and sold the vehicle for meagre consideration is denied. Opposite party also denies that complainant did repairs of the vehicle after accident and installed speed governor for Rs.15,000/- and paid insurance and tax. The claims made in the complaint are baseless and incorrect. Complaint is filed to escape from paying the balance of Rs.1,50,843/-. That there is no deficiency in service.

4. Evidence consists of the affidavit filed by complainant and Exts.A1 to A9 marked for him. PW1 is the witness examined on behalf of complainant. Counter affidavit filed by opposite party and Exts.B1 to B7 marked for opposite parties.

5. Points for consideration:-

(i) Whether complainant is a consumer?

(ii) Whether opposite parties are deficient in service.

(iii) If so reliefs and costs.

6. Point (i):-

Opposite party disputed the complainant to be a consumer raising the contention that the vehicle was purchased for commercial purpose. That complainant has no badge or license to drive the vehicle and that he was engaging paid drivers to drive the vehicle. The vehicle is a tipper lorry which has a commercial use. Complainant has pleaded and affirmed that he was working as driver in the vehicle and was earning his livelihood. Against this opposite party relied upon Ext.B7 to contend that at the relevant time of accident the complainant was not driving the vehicle. On perusal of Ext.B7 final report it is seen that on 22-02-2007 when the vehicle met with an accident the vehicle was driven by one Muhammed Saleem. It is true 'self employment' negates employment of another. But the rigour of this section has been softened by the Supreme Court in the case Laxmi Engineering Works Vs. P.S.G. Industrial Institute 1986-95 consumer 1553(NS). Another contention raised by opposite party is that complainant is a sand mining labourer. The identity card relied by opposite party for this purpose shows that the card is valid from 2004 to 31-12-2005 only. The repayment of this loan transaction commences only from 01-12-2005. So this contention is also untenable. Opposite party relied upon decisions 2008 NCJ 228(NC), 2008(2)CPR 124(NC), 2006(3)CPR 385(NC) and 1998 (3)CPR 28 (NC). We do not find any of these decisions having application to the facts of this case. It was further argued that complainant has purchased another vehicle with loan availed from Shri Ram Finance. There is nothing prohibiting the complainant to purchase another vehicle when the vehicle which belonged to him was repossessed and sold. For these reasons we find that complainant is a consumer and that complaint maintainable. Point found in favour of complainant.

7. Point (ii):-

The allegations raised by the complainant are four fold. Firstly the vehicle was repossessed by opposite parties using force and without notice which is illegal repossession. Secondly, that by letter dated, 06-8-2007 opposite parties gave option to the complainant to foreclose the loan and to take release of the vehicle. But playing deceitful tactics opposite party prevented the complainant from foreclosing the loan. Thirdly, opposite party sold the vehicle at a meagre price without complying necessary procedures, and the sale so conducted is illegal. Lastly, that opposite party has collected preclosure charges and such other charges which are baseless and excessive. According to complainant the vehicle was repossessed forcefully on 12-7-2007 with the help of recovery agents. Refuting the allegation of forceful repossession, opposite parties contend that the vehicle was repossessed on 11-7-2007 in a peaceful manner after intimating the Station House Officer. That complainant had defaulted instalments, and opposite parties have a right to repossess the vehicle as per the terms and conditions of the agreement.

8. Complainant admits defaulting three instalments. It is his case that the vehicle met with an accident on 22-2-2007 and that it took 3 months to get it repaired. That due to financial difficulty after the accident of the vehicle he could not pay the instalments regularly and committed default. Admittedly the vehicle was repossessed in July, 2007. Ext.A8 is the account statement given by opposite parties to the complainant. As per the agreement upto 01-7-2007 the complainant has to pay 20 EMI of Rs.16,750/- each. This means he was liable to pay Rs.3,35,000/- upto 7/07. Complainant has paid Rs.2,53,250/- opposite parties admit repayment of Rs.2,53,000/-. Ext.A8 shows that complainant has committed default intermittently. The payments made by complainant, five months prior to repossession of the vehicle as seen from Ext.A8 is as under:

01-02-2007 15^th EMI Defaulted

31-03-2007 16^th EMI Rs.16,750/- paid

01-04-2007 17^th EMI Defaulted

29-05-2007 18^th EMI Rs.30,000/- paid

28-06-2007 19^th EMI Rs.5000/- paid

-07-2007 Vehicle repossessed by opposite party

11-08-2007 Vehicle sold by opposite party

13-08-2007 .. Rs.3,50,000/- seen adjusted

to the account as sale proceeds.

9. The pattern of repayments evidence that the complainant was vigilant to repay the instalments and was not a chronic defaulter. It was argued on behalf of the complainant that opposite parties did not issue any notice of repossession prior to repossession of the vehicle. It is affirmed by complainant that the vehicle was repossessed forcefully with the help of recovery agents. Ext.A1 which is the copy of F.I.R. in Vazhakkad crime No.32/2007 which shows that the vehicle was involved in an accident on 22-7-2007. The case of the complainant that he was put to financial stringency as the vehicle met with an accident is therefore believable. It is necessary to point out that though complainant defaulted 17^th EMI., he paid higher amount of Rs.30,000/- the very next month. This shows that the complainant was earnest to repay the loan.

10. Before repossession of security/vehicle the borrower is entitled to a notice alerting the default as well as intimating the amount outstanding, and also informing the intention to repossess the security. Complainant denies to have received such a notice.

11. Against this it is contended by opposite party that proper notice prior to repossession was issued. Opposite party relied on Ext.B1 which is a notice dated, 09-5-2007 issued to complainant by opposite party through a lawyer. Though the postal receipt of sending the notice is produced, the acknowledgement card is not produced by opposite party. There is no document to show that Ext.B1 was served on the complainant. It is not mentioned in Ext.B1 that the vehicle will be repossessed. The relevant portion of Ext.B1 reads as under:

“അതിനാല്‍ ഈ നോട്ടീസ് കൈപ്പറ്റി 7 ദിവസത്തിനകം താങ്കളിപ്പോള്‍ അടച്ചുതീര്‍ക്കുവാന്‍ ബാക്കി വെച്ച 67000 രൂപയും പലിശയും മേലാല്‍ ചിലവുകളും അടച്ച് തീര്‍ക്കേണ്ടതാണ്. അല്ലാത്ത പക്ഷം താങ്കള്‍ക്കെതിരെ യുക്തമായ സിവില്‍ , ക്രിമിനല്‍ നിയമ നടപടികള്‍ ഉണ്ടാകുമെന്ന് ഓര്‍മിപ്പിക്കട്ടെ. അപ്രകാരം സംഭവിച്ചാല്‍ ബാങ്കിന് വരുന്ന സകലവിധ ചിലവുകള്‍ക്കും നഷ്ടങ്ങള്‍ക്കും താങ്കള്‍ മാത്രമായിരിക്കും ഉത്തരവാദി.“

12. As per Ext.B1, the complainant is cautioned that opposite party will be taking legal steps under civil and criminal remedy to recover the loan. By repossessing the vehicle opposite party has acted contrary to Ext.B1. Further after issuing Ext.B1, opposite party has collected Rs.30,000/- and Rs.5,000/- from the complainant. When complainant has made payments after Ext.B1 and opposite party has received the same, then the complainant is entitled to a fresh/further notice prior to repossession intimating the amount outstanding after accounting the amount collected from him. Ext.B2 is an intimation issued by opposite party through courier on 14-5-2007 to Station House Officer of Vazhakkad Police Station informing the intention to repossess the vehicle. Ext.B2 is issued two days after Ext.B1. The vehicle was repossessed two months later. During this two months opposite party remained silent and collected the payments made by the complainant. The process of repossession has to be streamlined in accordance with the law of the land. Merely issuing an intimation to Station House officer of a Police Station will not make the repossession a legal repossession. Such intimations to Station House Officer is only a cautions effort taken by the financier to prevent the police from entertaining any complaints received in the matter of forceful repossession. We are able to conclude that complainant was denied a proper notice before repossession and also that the vehicle was repossessed forcefully without complying legal process and constitutes illegal repossession.

13. The second allegation is that though opposite party issued a letter dated, 06-8-2007, after repossession of the vehicle, in which opposite party offered time to the complainant to foreclose the loan and take back the vehicle, the complainant was prevented by opposite party, by deceitful tactics, from foreclosing the loan.

14. Opposite party admits issuing a foreclosure statement to the complainant on 06-8-2007. Opposite party refutes the allegations by putting forward a blanket denial of the efforts of the complainant to foreclose the loan.

15. Complainant laid thrust on Ext.A6, Ext.A7, Ext.A9 and oral evidence of PW1. It is the case of complainant that as per Ext.A6 letter dated, 06-8-2007 he was offered option to foreclose the loan with extended time. The relevant portion of Ext.A6 is reproduced as under:

“In response to your request for foreclosure of your above mentioned ICICI Bank loan, we give you the details of the amount payable as follows:-

Principle o/s : 439,887.00

L.P.P. Charges : 16,551.00

Cheque Bouncing charges and Other charges : 0.00

Interest for the month : 421.17

Foreclosure charges @ 4.49% at O/S Principle : 19,750.93

Interest in Pending Installment : 15,488.00

Refunds : 0.00

Total Amount Payable : 492,098.10 + 12000= 504098.10

Repossession charge + godown Rent + legal charge : 12,000.00

Kindly Note That:

1. above calculation assumes that your last installment has been cleared.

2. We have taken the date of foreclosure as August, 6/2007. For each day beyond this date an additional interest will be charged at the rate of Rs.84.23 per day.

3. If you foreclose a loan after September 1/2007, the installment for the following month will become payable.

4. We will return your unutilized post-dated cheques when you foreclose the loan.

5. If you foreclose the loan on or after 18^th of the month, request you to please make a stop payment for your next month installment.

6. The above mentioned amount is valid subject to clearance of all the cheques/installments till date.

   If you decide to foreclose, please make payments of the above “Total amount payable” through a cheque or draft favouring ICICI bank ltd. at the time of foreclosure kindly submit a photo copy of invoice and registration book.”

16. Ext.A6 evidences that complainant was given option to foreclose the loan on different dates. He could foreclose on 18-8-2007 and 01-9-2007. The amount to be repaid is also stated. It is pleaded and affirmed by the complainant that after receiving Ext.A6 letter he approached another financier, Shri Ram Transport Finance and requested to take over the loan. After negotiations Shri Ram Transport Finance agreed to give finance upon the vehicle, and issued a cheque for Rs.3,85,630/- dated, 10-8-2007 drawn on UTI Bank Ltd. in favour of opposite party. That complainant arranged for the balance in cash and approached second opposite party to foreclose the loan. But he was send back saying that the Manager is out of station. On subsequent days also his efforts to meet the Manager and foreclose the loan failed due to the lack of assistance from opposite party, saying one reason or the other. Later he was issued an account statement of 30-8-2007 showing that Rs.3,50,000/- has been credited to his account on 13-8-2007 after sale of the vehicle. Ext.A7 is the photo copy of the cheque issued by Sri Ram Transport Finance for Rs.3,85,630/- dated, 10-8-2007 in favour of opposite party. The branch manager of Sri Ram Transport Finance was examined as PW1 and he testified that Shri Ram Transport Finance had agreed to take over the loan and had issued Ext.A7 cheque to facilitate foreclosure of the loan with opposite party Bank. The evidence of PW1 in this regard is under:

“ ഞാന്‍ Sri Ram Finance, Manjeri-യിലെ Branch Manager ആണ്. Ext.A7 shown to witness. ഈ രേഖ Ext.A7 എന്‍റെ കംപനി പരാതിക്കാരന് issue ചെയ്ത cheque- ന്‍റെ photocopy-യാണ് എന്നു പറഞ്ഞാല്‍ ശരിയാണ്. Ext.A7 cheque ICICI Bank-ലുളള പരാതിക്കാരന്‍റെ loan take over ചെയ്യാന്‍ വേണ്ടി കൊടുത്തതാണ്. ടി ചെക്ക് Eicher KL10 X 884 നംപര്‍ വാഹനത്തിന് ICICI Bank-ല്‍ നിലവിലുളള loan take over ചെയ്യാന്‍ വേണ്ടിയാണ് കൊടുത്തത്. Ext.A7 ചെക്ക് പ്രകാരമുളള സംഖ്യ പരാതിക്കാരന്‍ utilise ചെയ്യാതെ തിരിച്ചു തന്നു. ചെക്ക് കൊടുക്കുന്നതിന്നു മുന്‍പ് loan agreement പരാതിക്കാരനുമായി 2007 August 11-ന്ന് ഒപ്പിട്ടിട്ടുണ്ട്. എന്‍റെ സ്ഥാപനം 4,05,000/-ക.യുടെ loan ആണ് പരാതിക്കാരന് പാസ്സാക്കി കൊടുത്തത്. ആദ്യത്തെ instalment-ഉം service charge-ഉം കഴിച്ചുളള സംഖ്യയാണ് പരാതിക്കാരന് Ext.A7 cheque പ്രകാരം disburse ചെയ്തത്. അപ്രകാരം കൊടുത്ത സംഖ്യ 3,85,630/-ക.യാണ്. Loan കൊടുക്കുന്നതിന്നു മുന്‍പ് വാഹനം ICICI Bank- ന്‍റെ yard-ല്‍ വച്ച് പരിശോധിച്ചു. ICICI Bank- ന്‍റെ അറിവോടെയാണ് yard-ല്‍ കയറി പരിശോധിച്ചത്. വാഹനം പരിശോധിച്ച് value തീരുമാനിച്ചാണ് loan amount fix ചെയ്യുന്നത്. വാഹനത്തിന്‍റെ value 5,00,000/-ക. assess ചെയ്തിട്ടുണ്ട്. 1-9-2007-ന്ന് ആണ് പരാതിക്കാരന്‍ Ext.A7 cheque മടക്കിത്തന്നത്. Loan ആവശ്യമില്ല എന്നു പറഞ്ഞ് cheque തിരികെത്തന്നത്. “

17. Nothing was brought out in cross-examination to disbelieve the above testimony of PW1. The counsel for opposite party Sri. S. Prasad vehemently argued that Ext.A7 cheque is dated, 10-8-2007, whereas Ext.A9 shows that complainant entered into loan agreement with Shri Ram Transport Finance on 11-8-2007. That the contradiction of these dates would show that the contention of the complainant that he was ready with the amount to foreclose the loan is false. We have only to say that such arguments on the side of opposite party is only a frail effort to breathe through a straw hole. Ext.A7, Ext.A9 and the evidence of PW1 clinchingly establishes that complainant had taken effort to foreclose the loan and had arranged funds for this. PW1 has deposed that complainant returned the cheque on 01-9-2007 without utilising it. On such circumstances we do not find any discrepancy in Ext.A7 cheque being dated, 10-8-2007 and the loan agreement being signed on 11-8-2007.

18. It is further submitted on behalf of opposite parties that after repossessing the vehicle on 11-7-2007, a valuation report of the vehicle was prepared by an insurance surveyor on 12-7-2007. Opposite parties then issued a registered letter on 14-7-2007 to the complainant informing him to settle the accounts to take back the vehicle within seven days. That complainant did not respond. On 23-7-2007 complainant came to the office of second opposite party and executed a letter requesting to grant him time upto 31-7-2007 to foreclose the loan, or else opposite party would have liberty to dispose the vehicle. That complainant did not pay the amount as per this letter. On 06-8-2007 complainant came to the office and requested to give the foreclosure statement. Opposite parties then issued Ext.A6 foreclosure statement to the complainant. It is contended by opposite party that after receiving Ext.A6 foreclosure statement complainant told opposite parties that he is unable to pay the amount and told them to continue with the sale of the vehicle. That opposite parties sold the vehicle on 11-8-2007 for Rs.3,50,000/-. On 18-8-2007 opposite party issued registered letter informing the sale of the vehicle and demanding the payment of balance of Rs.1,50,843/-. Opposite parties placed reliance on Ext.B4, B5 and B6 documents. Ext.B4 is the notice dated, 14-7-2007. Though opposite party has produced the postal receipt, the acknowledgement card is again not produced by opposite party. Ext.B4 which is seen issued after repossession opposite party has called upon the complainant to pay Rs.5,00,843/- within seven days and to take release of the vehicle. Ext.B5 is purported to be the letter executed by complainant on 23-7-2007 requesting time upto 31-7-2007 to foreclose the loan. Complainant has denied executing any such letter. It is affirmed by him that the document is a concocted one. On the face of Ext.B5, it is clear that the contents are not handwritten by the complainant. Even if we accept Ext.B4 and B5 to be correct, we have to say that as per Ext.A6 foreclosure statement opposite party has given the complainant further time to foreclose the loan. Opposite party admits that complainant approached opposite party with intention to foreclose the loan on 06-8-2007. The vehicle was not sold till then. If complainant was given extension of time to foreclose the loan, then opposite parties ought to have issued a further presale notice to the complainant before the sale. The vehicle is contended to have been sold on 11-8-2007 for Rs.3,50,000/-. Opposite parties have not produced any document to establish what is the actual consideration received on sale of the vehicle. Opposite party has not issued any presale notice informing the date, place, time of sale and the upset price fixed for the vehicle. Opposite party contends that valuation of the vehicle was done on 12-7-2007. But opposite party has not communicated a copy of the valuation report to the complainant, when he approached opposite party on 06-8-2007 with intention to foreclose the loan. Opposite party has not even disclosed the details of valuation in Ext.A6 foreclosure statement. Hiding from the borrower, the steps initiated for disposal of the vehicle is nothing but malafide act. Even a chronic defaulter has a right to notice from financier prior to repossession and prior to sale. Such presale notice should contain details of the sale. Opposite party contends that the sale was published through internet. The intention of publication of sale is to inform the borrower as well as bidders so as to fetch the best price for the vehicle. The contention that sale was published through internet is too lame to be accepted besides not being supported by any evidence. The acts done by the Bank in recovering the loan should be transparent enough to enable the consumer to know how his account has been settled. In case the sale does not fetch an amount so as to close the loan,t he borrower will be called upon to make up the balance liability. So also if the sale proceeds fetch a value in excess of the amount to be paid to the Bank, such excess has to be paid to the borrower. Deprivation of a presale notice makes the sale invalid. All these lead to the conclusion that opposite party has hastely conducted the sale of the vehicle preventing the complainant from foreclosing the loan and getting back his vehicle.

19. The facts of this case illustrates the principle laid in HDFC Bank Ltd in HDFC Bank Ltd. Vs Balwinder Singh 2009 CTJ 992 (CP) NCDRC where it was observed

“There is no evidence that any notice was given to the respondent for repossessing the vehicle on account of default of payment of instalments. There is also no evidence that any notice was given to the respondent before sale of the vehicle. In fact whole proceedings had been done in a perfunctory manner, rather in highhandedness manner. It is not proved on file that respondent had surrendered the vehicle voluntarily but it was snatched forcibly by the musclemen of bank. There is no affidavit of responsible officer of the bank that the respondent had voluntarily surrendered the vehicle and no force was used.”

20. In the recent decision Mohammed Anwar and others Vs. Shri Ram Transport Finance Co. Ltd. 2010 CTJ 532 (CP) NCDRC it was held that recovery of loan amount from the borrower by force is the modernised version of Shylocks pound of flesh'. Similar observation was made in Tata Finance Ltd Vs Francis Soerio 2008 CTJ 979 (CP) NCDRC. We therefore conclude that the sale of the vehicle by opposite party in a haste manner after extending time to foreclose the loan, and that too without issuing a proper presale notice is illegal sale amounting to deficiency in service.

21. Another grievance of the complainant is that opposite party has sold the vehicle for a meagre price of Rs.3,50,000/-. It is affirmed by the complainant that the vehicle is worth Rs.6,00,000/-. Ext.A4 shows that the IDV of the vehicle is Rs.5,00,000/-. Opposite party relied upon Ext.B3 valuation report and contended that the value of the vehicle assessed by the surveyor is only Rs.3,00,000/-, whereas opposite party has sold the vehicle for Rs.3,50,000/- and that the vehicle was sold for the best price. We are not able to place much credence upon Ext.B3. The vehicle had sustained an accident on 22-02-2007. But in Ext.B3 it is stated that the surveyor could not notice any accident. This carts shadow of doubt on the preparation of Ext.B3 report. The IDV of the vehicle upto 12/2006 was Rs.5,00,000/-. The vehicle was repossessed in 7/2007. The vehicle definitely has a value between 4 lakhs and 5 lakhs. The sale of the vehicle at Rs.3,50,000/- is therefore sale at a low price.

22. It was argued on behalf of the complainant that opposite party has collected L.P.P. charges, foreclosure charges etc. which are baseless and illegal. In Ext.A8 it is seen that opposite party has collected Rs.19,751/- towards foreclosure charges(pre-pay penalty). It has been held by Hon'ble Apex Commission in state Bank of India Vs. Dr. Usha Vaid and another R.P.No.2466/07 decided on 26-7-2007 that Banks and Financial Institutions should not collect any preclosure charges if the loan is discharged by the borrower before the agreed period. Similar observation has been made by Kerala State Consumer Disputes Redressal Commission in F.A.No.A/79/2008 decided on 05-5-2010. In the instant case, opposite party settled the account by selling the vehicle after illegal repossession of the same. There was no actual voluntary foreclosure by the complainant. By repossessing the vehicle and by not accepting the outstanding due and allowing to continue with the loan, the complainant was forced to a situation of foreclosure by opposite party. In such circumstances it is hideously harsh to impose preclosure charges.

23. From the above discussions we find that the act of opposite party in claiming unjustifiable amounts as foreclosure charges, seizing the vehicle with force, and sale of the vehicle at a low price without any presale notice constitutes gross deficiency in service.

24. Point (iii):-

The complainant claims for Rs.2,50,000/- towards price of vehicle after deducting Rs.3,50,000/- that was adjusted to his loan, taking the value of the vehicle as Rs.5,00,000/-. Considering the effort made by the complainant to foreclose the loan and the gross deficiency committed by opposite party in preventing the complainant from foreclosing the loan, together with the act of hastly selling the vehicle, the complainant in our opinion has to be compensated for the loss of the vehicle. It is also to be considered that complainant has defaulted the instalments. The decision rendered in Citi Corp. Maruthi Finance Ltd Vs. S. Vijaylaxmi 2007 CTJ 1145 (CP) NCDRC is relevant to be applied to the facts of this case. It was held “in a case where the vehicle was repossessed by use of force and thereafter sold without informing the borrower, it would be unjust to direct him to pay the balance

amount. if such relief is given to the lender, it would be unjust enrichment to him and against equity.”

25. The act of opposite party has resulted in loss of the vehicle to the complainant. We are amazed that a Bank functioning under Banking Regulation Act and Control of Reserve Bank of India has acted in such desultory manner. In the facts and circumstances presented by the case, after taking into account the depreciation of the vehicle, we hold that complainant is entitled to an amount of Rs.1,00,000/- as compensation for loss of vehicle due to deficiency committed by opposite party. The hardships suffered by the complainant to arrange the alternate finance and the mental agony suffered by him on coming to know that the vehicle has been sold, thereby making all his efforts futile, can be imagined. We fix Rs.6,000/- as compensation towards mental agony and physical hardships suffered by the complainant. Complainant is also entitled to Rs.1,000/- being cost of this proceedings.

26. Before we part with this order we hold that the complainant is not liable to pay any amount further under this loan transaction or any amount demanded by opposite party as per Ext.B6 notice applying the principle laid in Citi Corp Maruthi Finance Ltd.(Supra).

27. In the result we allow the complaint and order opposite parties jointly and severally to pay Rs.1,00,000/- (Rupees one lakhs only) as compensation tot he complainant together with Rs.6,000/- (Rupees Six thousand only) towards mental agony and Rs.1,000/-(Rupees One thousand only) towards cost of proceedings within one month from the date of receipt of copy of this order.

Dated this 9th day of September, 2010.

Sd/-

C.S. SULEKHA BEEVI, PRESIDENT

Sd/-

MOHAMMED MUSTAFA KOOTHRADAN, Sd/-

MEMBER E. AYISHAKUTTY, MEMBER

APPENDIX

Witness examined on the side of the complainant : PW1

PW1 : Ranjish.H., Branch Manager of Sri Ram Transport Finance

Documents marked on the side of the complainant : Ext.A1 to A9

Ext.A1 : Photo copy of the First Information Report dated, 23-02-07

Prepared by A.S.I. of Police, Vazhakkad.

Ext.A2 : Photo copy of the retail invoice No.420 dated, 08-11-05 from Automotive

Marketing Pvt.Ltd., Authorised Dealer for Eigher Vehicles to the

complainant.

Ext.A3 : Original Motor Vehicle Insurance Cover Note No.235554 of vehicle

KL-10/X-884 dated, 10-11-05 from Oriental Insurance Co.Ltd., to complainant.

Ext.A4 : Photo copy of the Certificate-cum-policy schedule of the vehicle for the

period from 08-12-06 to 07-12-07

Ext.A5 : Photo copy of the Certificate of Registration in respect of vehicle

No.KL10 X-884 dated, 11-11-05 issued by Addl. Registering Authority,

Malappuram.

Ext.A6 : Photo copy of the letter send by 2^nd opposite party to complainant.

Ext.A7 : Photo copy of the cheque for Rs.3,85,630/- dated, 10-8-07 in favour of

complainant to opposite party.

Ext.A8 : Photo copy of the statement of account from 2^nd opposite party

to complainant.

Ext.A9 : True extract of Hirer Ledger details as on 07-12-2009 from Shriram Transport Finance Company.

Witness examined on the side of the opposite parties : Nil

Documents marked on the side of the opposite parties : Ext.B1 to B7

Ext.B1 : Photo copy of the lawyer notice dated, 09-5-2007 issued by opposite party to complainant.

Ext.B2 : Photo copy of the intimation letter dated, 14-5-2007 and Carbon copy of the courier receipt by opposite party to Station House Officer of Vazhakkad.

Ext.B3 : Photo copy of the valuation report dated, 12-7-2007 by Ranjish Puthukudi

Ext.B4 : Photo copy of the notice dated, 14-7-2007 by opposite party to complainant..

Ext.B5 : Letter dated, 23-7-2007 by complainant to opposite party.

Ext.B6 : Letter dated, 18-8-2007 by opposite party to complainant.

Ext.B7 : Photo copy of the final report prepared by L. Sajjandas, Asst. Police Sub Inspector, Vazhakkad.

Sd/-

C.S. SULEKHA BEEVI, PRESIDENT

Sd/-

MOHAMMED MUSTAFA KOOTHRADAN, Sd/-

MEMBER E. AYISHAKUTTY, MEMBER