BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT
HYDERABAD
F.A.No.528 OF 2010 AGAINST C.C.NO.104 OF 2006 DISTRICT FORUM NELLORE
Between:
ICICI Bank Limited,
Nellore Branch,, 15/181, Kavitha Krishna
Annexy, Near Kanaka Mahal Theatre
Nellore, rep. by its Legal Manager,
V.Anil Kumar S/o Rajeshwar Appellant/opposite party
A N D
Vemireddy Venkateshwar Reddy
S/o B.Vemireddy Subbareddy
Aged about 40 yrs, R/o D.No.26-3-1800
7th Cross, Chandramouli Nagar,
Vedaya Palem, Nellore-004 Respondent/complainant
Counsel for the Appellants M/s Hari & Associates
Counsel for the Respondent Served by way of publication
QUORUM: SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER
AND
SRI THOTA ASHOK KUMAR, HON’BLE MEMBER
WEDNESDAY THE TWENTY EIGTH DAY OF MARCH
TWO THOUSAND TWELVE
Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)
***
1. The opposite party is the appellant.
2. The respondent availed car loan of `2,90,000/- from the appellant bank under loan agreement repayable in monthly installments commencing from 1.01.2006 to 1.06.2008 @ `11,530/-. The respondent executed hypothecation deed dated 30.11.2005 and power of attorney in favour of the appellant bank. The appellant had deducted the first instalment at the time of disbursement of the loan amount. The respondent paid the installments for January,2006 and February,2006. As the respondent committed default of the loan installments, the appellant reposed the car on 23.06.2006. The appellant said to have issued notice dated 8.06.2006 requesting the respondent to pay the amount of `34,590/- and another letter dated 26.06.2006 for an amount of `3,01,244/- The respondent claimed to be due three installments amounting to Rs.34,590/- and he expressed his readiness to pay the amount and to the effect, the respondent addressed letter dated 30.06.2006 to the appellant bank.
3. The appellant bank resisted the claim on the premise that the respondent failed to honour the terms and conditions of the hypothecation agreement and committed default in payment of the installments. The appellant sold the vehicle in auction to the highest bidder, Janardhan on 20.07.2006 for consideration of `2,93,000/-.2 No deficiency in service is made out on the part of the appellant bank.
4. The District Forum allowed the complaint on the premise that the Appellant Bank had not followed due procedure and repossession of the vehicle was not made in accordance with the terms of the hypothecation agreement.
5. Feeling aggrieved by the order of the District Forum, the opposite party bank has filed appeal contending that the District Forum has not considered the notice issued by the appellant bank prior to taking repossession of the vehicle and the notice dated 26.06.2007 and that the District Forum without any basis directed the appellant hand over possession of the vehicle to the respondent as also that the respondent failed to implead the purchaser of the car.
6. The points for consideration are:
1. Whether the appellant followed due procedure while repossessing the car?
2. Whether the respondent is entitled to possession of the car?
3. To what relief?
7. POINTS NO.1 &2: The respondent purchasing the car bearing registration number AP09 AU 29 on hire purchase agreement with the appellant bank is not disputed. It is not denied that the appellant bank deducted the 1st loan installment from the loan amount and it is also not disputed that the respondent failed to stick to the terms of the hypothecation agreement in terms of which he is required to pay monthly loan installments @ `11,530/-. The loan amount paid to the respondent is `2,90,000/-. The respondent paid the installments for the months of January,2006 and February,2006. The appellant taken repossession of the car on 23.06.2006 and by the time, the respondent was due four monthly installments. Prior to repossessing the vehicle, the appellant bank issued notice dated 8.06.2006 with a demand to the respondent to pay an amount of `34,590/- and overdue charges within seven days from the date of receipt of the notice. Communication of the notice to the respondent is proved by the receipt issued by the Courier, Sri Vigneshwera Enterprises, Nellore.
8. The respondent after receiving the letter from the appellant bank and after the appellant bank repossess the vehicle on 23.06.2006, got issued notice on 30.06.2006 stating that he is due an amount of `34,500/- and he was ready to pay the same amount to the appellant bank. Prior to selling the car in auction, the appellant bank issued notice on 20.06.2006 informing the respondent that despite their reminders, requests and personal visits, the respondent has failed to pay the contractual dues as also violated material conditions of the agreement. The amount mentioned hereunder was required to be paid by the respondent within seven days from the date of the notice .
1. Principal outstanding Rs.2,62,350.14
2. Overdue/addl.int charges Rs. 17,683.63
3. Cheque dishonour charges Rs. 1,559.00
4. Foreclosure charges Rs. 14,717.84
5. Possession charges Rs. 5,000.00
Total amount payable Rs. 3,01,244.61
9. The respondent contended before the District Forum that the appellant bank has not calculated the amount payable by him in proper manner and that the appellant had not informed him that the cheques issued by him were dishonoured as also that the appellant bank had not followed the procedure due while selling the car in auction and the amount of Rs.2,93,000/- stated to have been the sale consideration of the vehicle does not reflect the true value of the car.
10. We have extracted the different counts under which the amount of `3,01,241/- was demanded by the appellant bank in its notice dated 26.06.2006. The different heads include the cheque bouncing charges of `1559.00. The respondent had received the notice and did not raise any objection in his notice dated 20.06.2006 that the appellant has not informed him about the dishonour of the cheques issued by him in discharge of the loan amount which agreed to be paid in installments.
11. The appellant bank has not adduced evidence in support of its plea that the vehicle was sold in auction and one Janardhan was the highest bidder who stated to have quoted the amount of `2,93,000/-. According to the respondent, the appellant bank has not conducted any auction nor sold the car to Janardhan and in the alternative he pleaded that the value of the car cannot be `2,93,000/- since he had purchased accessories for the car for an amount of `50,000/-. It is incumbent on the appellant bank to see that the auction to be conducted, highest bid to be accepted, and the respondent is not put to any loss on account of any lapse on its part in the matter of the sale of the vehicle.
12. The appellant bank had filed caveat before the Court of the Principal Junior Civil Judge at Nellore, anticipating the respondent approaching the Court for restraining the appellant from proceeding to sell the vehicle. In that context, the appellant could have filed the suit for sale of the vehicle and for reasons left unexplained, the appellant bank has not initiated any proceeding before the Court though it has lodged the caveat. The appellant sold the car for consideration of `2,93,000/-. It is not denied that the respondent had got fitted accessories worth `50,000/- to the car. The appellant has not stated the details of the number of the persons who said to have participated in the auction and the bid they quoted therefor.
13. Simply stating that Janardhan was declared successful bidder does not dispense with the transparency required to be maintained in selling the car which not only represented the property of the respondent and it also reflected the rights of the respondent vis-à-vis the appellant bank. In any view of the matter it can be said that the appellant has not followed the due procedure in conducting the sale of the vehicle and it has not taken steps to see that the vehicle was sold for a reasonable price as also the appellant acted arbitrarily insofar as the transfer of the title of the car was concerned. The appellant would have informed the respondent about the sale of the vehicle and the amount for which the car was sold and it could have requested the respondent to transfer the title in favour of the purchaser. As the appellant has not taken any of the aforementioned steps, it can be said that the appellant bank has rendered deficient service and subjected the respondent to hardship and mental tension.
14. In the circumstances where the car was already sold to third party, the direction of the District Forum to deliver possession of the car to the respondent is not sustainable. During pendency of the complaint, the respondent filed application, I.A.No.130 of 2006 seeking direction to the appellant bank not to sell the vehicle in auction and the appellant filed counter stating that the vehicle was already sold to third party. Inspite of the circumstances obtained in the light of the application filed by the respondent, the District Forum proceeded to grant relief for possession of the car to the respondent. To the extent of delivery of possession of the car to the respondent, the order of the District Forum is liable to be set aside
15. As the main relief granted is held to be set aside and in view of the finding returned by this Commission that the appellant bank had sold the car for consideration below its actual value and the worth of the accessories got fitted to the car was not considered at the time of sale of the vehicle, we are inclined to increase the amount awarded as compensation from `5,000/- to `50,000/- which would take in its ambit the difference amount of the actual value of the car and the consideration for which the appellant bank sold the car as also the amount would include the amount awarded by the District Forum under the head of damages for the respondent suffering mental agony. Accordingly, the appeal deserves to be allowed.
16. In the result, the appeal is allowed. The order of the District Forum is modified. The appellant /opposite party is directed to pay an amount of `50,000/- to the respondent together with costs of `2,000/- within one month from the date of receipt of the order. Failing which the amount of `50,000/- shall carry interest @9% p.a. from the date of repossession of the car bearing registration number AP 09 AU 0029.
MEMBER
MEMBER
Dt.28.03.2012
KMK*
