Dharam Singh son of Sh. Hari Ram resident of village Girinala, Post office Churadha, Tehsil Sundernagar, District Mandi,
1.ICICI. Bank Ltd through its Branch Manager, Mandi District Mandi, H.P.
2.Sh.Gurpreet Singh Collection Manager, ICICI Bank
Ltd Mandi, District Mandi, H.P.
For the complainant Sh.Bhupinder Sharma, Advocate
For the opposite parties
No.1and 2 Sh. Narinder Chandel
vice Sh A.S. Thakur, Advocate
Complaint under Section 12 of the
Consumer Protection Act, 1986.
This order shall dispose of a complaint under Section 12 of the Consumer Protection Act, 1986( hereinafter referred to as the “Act”) instituted by the complainant against the opposite parties. The case of the complainant is that he is the registered owner of Mahindra and Mahindra Pick up jeep bearing registration No. HP-31B-0264 and the same was purchased by him after raising loan to the tune of Rs.3,60,000/- and paid Rs.70,000/- in cash to the opposite party No.1 The rest of the loan amount was agreed to be paid within 47 monthly instalments with effect from 22-2-2004 to 22-12-2007 .The complainant has averred that after raising loan, he had paid Rs.2,01,100/- by depositing 27 instalments up to 20-5-2006 apart from Rs.70,000/- given at the time of sanction of the loan . In this way, the complainant had paid Rs..2,71,000/- till 20-5-2006. It has been averred that the opposite parties by employing their musclemen without the consent and permission of the complainant behind his back forcibly lifted the vehicle in question on 10-6-2006. When the complainant came to know about this fact , he visited the office of the opposite party No.1 and requested to release the vehicle . On 15-6-2006, the complainant again visited the opposite parties and tried to pay the instalments but he was not attended to . The complainant visited nine times to the opposite party and has requested them to receive the rest of entire loan amount , but they did not accede to his request nor the vehicle was released. Upon this , the complainant approached the police station Sunder Nagar on 12-2-207 and first information report under section 382, 420,506 IPC was registered agaisnt the opposite parties . It has been alleged that the opposite parties were not competent to take the vehicle forcibly except in accordance with law. The complainant had
purchased the vehicle after raising loan from the opposite parties to run his business and he had attached his vehicle with Sabzi Mandi Sunder Nagar and was earning Rs.18,000/- per month from the vehicle in question. It has further been alleged that the act of the opposite parties in forcibly taking and selling the same amounts to deficiency in service . The complainant has suffered loss of Rs.2,16,000/- per annum with effect from 10-6-2006 on account of earning apart from this he had suffered physically and mentally. The police has failed to recover the vehicle and to restore the possession of the same to him. The complainant had claimed damages/ loss suffered by him due to non availability of vehicle at Rs.4,14,000/- with effect from 10-6-2006 to 10-5-2008 at the rate of Rs.18,000/- per month , Rs.2,00,000/- as compensation on account of mental tension and Rs.15,000/- as costs of litigation. .On these allegations, the complainant had sought a direction to the opposite parties to hand over the possession of the aforesaid vehicle to him Apart from this , damages, compensation and costs as referred above has also been claimed.
2. The opposite parties resisted the complaint by raising preliminary objections that there exists commercial transaction and as such the complaint is not a consumer and that the complaint is not maintainable and sustainable in the eyes of law ..On merits , the opposite parties had admitted that the vehicle was financed by them and the complainant is owner of the vehicle It has been denied that Rs.70,000/- was paid by the complainant to them . The opposite parties had denied that the complainant was regular in depositing the instalments of loan and averred that he had made huge default. The complainant had concocted false story just to save his skin from liability. It has been averred that w hen the complainant failed to pay the loan amount , he himself surrendered the vehicle for want of loan amount and now in order to harass the opposite parties this complaint has been filed . The opposite parties have rightly repossessed the vehicle in question. The opposite parties have not denied lodging of criminal case against t them by the complainant but pleaded that false first information report has been lodged. The complainant was served with pre-sale notice as well as post sale notice but despite service of notice complainant did not approach them and lastly the vehicle was disposed of through public auction. The opposite parties have denied any deficiency in service . It has further been denied that the complainant has suffered any loss due to the act of the opposite parties Rest of the allegations of the complaint have been denied being wrong .The opposite parties have also alleged that this Forum has no jurisdiction to try and entertain the complaint . The opposite parties had prayed for dismissal of the complaint qua them .
3. The complainant had filed rejoinder reiterating the contents of the complaint and denying those contrary to the complaint.
4. We have heard the ld. counsel for the parties and have carefully gone through the record.
5. The ld. counsel for the complainant had argued with full force that the opposite parties through their representative seized the vehicle of the complainant and taken it away behind his back which act on the part of the opposite parties tentamounts to deficiency in service and the complainant is entitled for re-possession of the vehicle apart from compensation and cost of litigation.
6. On the other hand , the ld. counsel for the opposite parties had strenuously argued that since the complainant had not paid the instalments regularly as alleged by him in the complaint , therefore , he had surrendered the vehicle to the employee of the opposite parties and as such there is no deficiency in service on their part.
7. Therefore, the matter has to be scrutinized and examined with respect to the aforesaid contentions of the ld. counsel for the parties.
8. The question which requires determination in this complaint is whether the opposite parties are entitled to repossession of the vehicle and whether the financer is invested with the right to repossess the vehicle by use of force in case of default in payment of instalments. As per the complaint the vehicle was taken away on 10-6-2006 without his consent behind his back by the opposite parties with the help of some muscle men . On the other hand the case of the opposite parties is that the complainant was not regular in the payment of the instalments and he voluntarily surrendered the vehicle to their employee The onus was upon the opposite parties to prove that the vehicle was surrendered by the complainant himself and not snatched by them. The opposite parties should have filed the surrender letter duly signed by the complainant in case the complainant surrendered the vehicle voluntarily for non payment of instalments, but surrender letter had not seen the light of the day. There is not even an iota of evidence on record on the basis of which it can be inferred that the complainant had surrendered the vehicle voluntarily . On the other hand the complainant had placed on record photocopy of the First Information report No.66 dated 12-2-2007 of Police Station Sunder Nagar which depicts that the complainant had specifically levelled allegations against the opposite parties that they have snatched the vehicle . Since no evidence has been placed on record by the opposite parties to show that the vehicle was surrendered voluntarily by the complainant himself therefore, it can safely be held that the opposite parties have taken the possession of the vehicle forcibly by taking the assistance of third persons without intimating the complainant. Now the question which arises for consideration before this Forum is as to whether the opposite parties had a right to re-possess the vehicle in case of default of payment by use of force. The Hon’ble Supreme Court in the case titled Manager ICICI Bank Ltd vs Prakash Kaur and others AIR 2007 Supreme Court 1349 had held that recovery of the Bank Loans or seizure of the vehicles could be done only through legal means and the Bank cannot employ goondas to take the possession by force. In the order passed by Hon’ble National Commission in Citicorp Maruti Finance and ltd vs S.Vijayalaxmi , III(2007)CPJ-161(NC) it has been held by the Hon’ble National Commission that the recovery of the loan or seizure of vehicle could be done only through legal means .and the Banks cannot employ muscle men to take the possession by force. In para No.23 and 24 of the aforesaid order it has been held as under:-
“23. From the aforesaid law laid down by the Apex Court as well as the High Court of Delhi, it is clear that even though the hire purchase agreement may give right to take possession of the vehicle , money lenders/ financial institution/ banks have no power to take possession by use of force and have to follow the statutory remedy which may be available under the law.
24.May be that the procedure of law is slow but that is no excuse for use of force for repossessing the vehicle. If the contention of the petitioner that it can take possession of the vehicle by means of force is accepted ,the rule of jungle would prevail and might would be right.”
In the present case also, it cannot be said that the opposite parties have taken the possession of the vehicle by following the statutory remedy available to them under the law and since the vehicle had been taken into possession by use of force , it was a clear cut case of unfair trade practice on the part of the opposite parties in view of the decision of Hon’ble National Commissioner cited supra.
9. The next question which requires consideration is that when the repossession of the vehicle is held to be unfair what relief should be given to the complainant . It is the case of the opposite parties that the vehicle had been sold on 24-7-2006 after assessing the market value of the vehicle which was got assessed through registered valuer on 22-6-2006 at Rs.2,00,000/-. Photocopy of valuation certificate of Er. Vishal Kumar Gautam dated 22-6-2006 had been adduced in evidence. However the aforesaid valuation report is not supported by any documentary evidence to show that on what basis and in what manner the value of the vehicle has been assessed at Rs.2,00 000/-. There is nothing in the report that what procedure was adopted by the valuer in assessing the value especially in view of the fact that in the valuation report it has been mentioned that the vehicle was in good and working condition. Admittedly the complainant was not associated at the time of the assessment of the value of the vehicle. Moreover neither the original valuation report nor the affidavit of the Evaluer Er. Vishal Kumar Gautam has been placed on record by the opposite parties in support of the valuation report. Therefore, no reliance can be placed upon the aforesaid valuation report for assessing the value of the vehicle on the date of sale
10. The ld. counsel for the complainant next contended the complainant was willing to pay the due instalments but despite that the opposite party No.1 has sold the vehicle at a throw away price of Rs.1,80,000 /- to the detriment of the complainant without associating him .He further contended that the opposite party No.1 had not adopted a transparent procedure in selling the vehicle . Therefore, at this stage, the question which arises for determination by this Forum is as to whether the opposite party No.1 was justified in selling the vehicle in the sum of Rs.1,80,000 and whether the sale of the vehicle had been conducted after adopting transparent procedure especially when even according to the opposite party No.1 the market value of the vehicle was Rs.2,00,000/- The opposite party No.1 had not specifically mentioned the reserve price of the vehicle fixed at the time of the auction of the vehicle and had not filed any documentary evidence with respect to the proceedings of the auction of the vehicle to let this Forum know as to what was the reserve price of the vehicle fixed at the time of the auction of the vehicle and what procedure was adopted by the it for selling the vehicle. As such, an adverse inference has to be drawn against it for non placing on record the material documents.
11. At this juncture , it would be relevant to refer to the case law Citicorp case cited supra where in the Hon’ble National Commission had taken note of the Code of Conduct prescribed by the petitioner before taking the possession of the vehicle and the Hon’ble National Commission also referred to relevant portion of the Code of Conduct which gives an elaborate procedure before taking the possession of the vehicle. In the aforesaid judgment it has been held in para no. 44 as under:-
“44. It is to be stated that in this auction the consumer whose vehicle is seized has no voice or role to play. In any case , if an opportunity is given to the consumer, when his vehicle is likely to be sold at a particular price and option should be given to him to purchase the vehicle at the said price, then it is a transparent procedure. The procedure which is stated in the Conduct Book may appear to be attractive, but in practice it is not followed and causes loss to the consumer- because in many cases the bidders purchase vehicle at a throw away price. ”
12. In the present case , there is no evidence on record to suggest as to whether there is any procedure prescribed by the opposite party No.1 for selling the vehicles in public auction and if yes whether the prescribed procedure has been adopted by it during the sale of the vehicle in question. Therefore, in the absence of material evidence on record , it cannot be said that any transparent procedure had been followed by the opposite party No.1 at the time of auction of the vehicle in question. Moreover ,there is no material on record to suggest that any opportunity was granted to the complainant to purchase the vehicle at the sale price of Rs.1,80,000/-Similarly there is nothing on record to suggest as to whether any opportunity was granted by the opposite party No.1 to the complainant to bring prospective buyers to purchase the vehicle over and above the price of Rs 1,80,000/-It is the admitted case of the opposite parties that a sum of Rs.3,06,600 /- had been advanced for the purchase of the vehicle on 27-1-2004 as per the vehicle loan-cum hypothecation agreement. However, no explanation has been put forth by the opposite parties as to why the vehicle was sold for a meagre sum of Rs.1,80, 000/only within a period of about two years and six months from the date of purchase which shows unfair trade practice adopted by the opposite parties by selling the vehicle at throw away price of Rs.1,80,000/- .Moreover , after seizure of the vehicle the complainant was willing to pay the due instalments but despite that the opposite parties have sold the vehicle. It is hard to believe that the value of the vehicle would come down to Rs.1,80,000/- only within a period of two years and six months from the date of its purchase especially in view of the fact that the vehicle was in a good working condition as observed by the valuer in his report dated 22-6-2006. No explanation has been given by the opposite parties as to why they have sold the vehicle at Rs.1,80,000/- despite the fact that they themselves assessed the market value of the vehicle at Rs.2,00,000/-.
13 Now the point left for consideration is that what should have been the value of the vehicle at the time of its sale by the opposite parties . In a case titled Magma Leasing Ltd vs Bharat Singh 1 (2007) CPJ-200 it has been held by the Hon’ble Delhi State Consumer Disputes Redressal Commission that in such cases cost of the vehicle shall be adjusted by depreciating the value at the rate of 5% per year in case of passengers vehicle and @ 10% per year in a case of commercial vehicle .Para No.10 and 11 of the order reads as under:-
“10.Whenever the financer chooses to take possession of the vehicle, it has to refund the contribution made by the person concerned after adjusting the unpaid instalment till the date of seizure of the vehicle and not beyond that as no person can be deprived of the amount contributed toward the purchase price of the vehicle. By giving loan amount of Rs.3,90,000/- against the cost of Rs.5,89 lacs , financier cannot be allowed recovery of post dated cheques as the vehicle against which loan was advanced had been seized and the consumer is no more in possession of the goods for which he had raised the loan.
11. In such a situation , financier has to adjust the value of the vehicle by way of depreciated value and the value at which it has auctioned or sold the vehicle. The value of such a vehicle cannot be fixed by the financier at its whims or caprice. Experience shows that one or two years old vehicles are sold at half or little more value to the known people or friends or for many other consideration. That is why we have taken a view that cost of the vehicle shall be adjusted by depreciated value @
5 % per year in case of passenger vehicle and @ 10% in case of commercial vehicle ”
14. In the present case , as per the admitted case of the parties , the vehicle in question was a commercial vehicle and the same was purchased by the complainant in the month of January 2004. As per the affidavit dated 7-3-2009 filed by Sh. Harkesh Kumar ,Collection Manager of opposite party No.1 the vehicle was seized on 14-6-2006 and was sold for Rs.1,80,000/- on 24-7-2006 .Therefore at the time of the sale , the age of the vehicle in question had exceeded two years but not exceeded three years from the date of its purchase by the complaint . Hence the cost of the vehicle at the time of the sale has to be adjusted by calculating its market value by depreciating the amount at the rate of 30% ( i.e.10% per year) from. the actual purchase price of the vehicle by the complainant Since the vehicle has been sold , therefore , no direction can be issued to the opposite party No.1 to return the same to the complainant. Therefore, in the facts and circumstances of the case, it would be in the interest of justice if we direct the opposite parties to adjust the sale proceeds of the vehicle towards the satisfaction of the dues by calculating its market value by deducting 30% of the amount from the actual price of the vehicle instead of Rs. 1,80,000/-and to adjust the margin money, if any, contributed by the complainant towards the purchase price of the vehicle and also to adjust various amounts deposited by the complainant from time to time with the opposite party No.1 towards the payment of the instalments after adjusting unpaid instalments till the date of seizure of the vehicle and not beyond that as the vehicle against which the loan was advanced had been seized and the complainant was no more in possession of the same for which he had raised loan as laid down by the Hon’ble Delhi State Consumer Disputes Redressal Commission in the case titled Magma Leasing Ltd vs Bharat Singh 1 (2007) CPJ-200, supra.
15. The complainant had claimed Rs.2,00 000/- as damages besides costs of litigation. In this respect, it would be relevant to mention here that the entire action of the opposite party No.1 was illegal and arbitrary in nature and the complainant had suffered humiliation before his neighbours, friends and relatives and also suffered mental pain and agony besides loss of business . Therefore, in such circumstances an amount of Rs.25,000/- will be sufficient to meet the ends of justice on this score and Rs.2000 /- as costs of litigation.
16. In view of what has been stated hereinabove, the complaint is allowed against the opposite party No.1 with directions as under:-
(i) The opposite party No.1 is directed toadjust the sale proceeds of the vehicle towards the satisfaction of the dues by calculating its market value by deducting 30% of the amount from the actual purchase price of the vehicle by the complainant instead of Rs.1,80,,000/-and to adjust ,the margin money, if any, contributed by the complainant towards the purchase price of the vehicle and also to adjust various amounts deposited by the complainant from time to time with the opposite party No.1 towards the payment of the instalments after adjusting unpaid instalments till the date of seizure of the vehicle . It is further directed that after adjustment of the amounts as aforesaid, if it is found that any excess amount has been paid by the complainant , the same shall be refunded to him.
(ii) The opposite party No.1 is further directed to pay Rs.25,000/- on account of harassment, mental agony , pain , loss of business and Rs.2000/- as costs of litigation.