M.Chandrashekar,

M.C.R. Transports,

Kumbarara beedi, Complainant

Pavagada town,





vs



The Manager,

Sriram Finance Co. Opposite party

Upstairs, Opp: Dwaraka hotel,

M.G.Road, Tumkur





ORDER




2. Through this complaint, the complainant prays for an order against the Opposite Party (hereinafter called as the OP for short) to pay the amount of Rs.8,27,147/- minus Rs.1,75,732/- i.e. Rs.6,51,415/- with interest at 18% per annum from the date of seizure of lorry on 17-7-2008 till payment together with damages of Rs.30,000/- and further for a direction to the OP to release the seized lorry to the custody of the complainant together with costs and for such other reliefs.



3. The facts given rise to institute the complaint may be summarized as thus:

The complaint is the owner of ten wheelers lorry bearing Reg.No.KA-06-A-4374. At the time of purchase of the lorry he had approached the OP for finance with necessary documents. After following the procedure as contemplated under OP company rules, on 22-3-2004 the OP has sanctioned the loan of Rs.8,60,000/- through DD. After sanction, the OP has opened an account in the name of the complainant and in the said account, it has been mentioned as under:

1) Sanctioned amount Rs.8,60,000/-

2) By way of interest Rs.1,89,200/-

3) For 3 years insurance premium Rs.70,000/-

Total Rs.11,19,200/-



4. It is further contended that, the OP has directed the complainant to discharge the amount of Rs.11,19,200/- in equal instalments. Though the amount was sanctioned in the month of April 2004 for about 5 months the complainant was unable to pay the loan instalments, because, the OP had not allowed the complainant to credit loan instalments, stating that the concerned officer who sanctioned the loan by name Sathish met with an accident and hospitalized. Therefore, the complainant was given an option to credit the loan installments as per his conveniences, assuring him that, they will not claim O.D. to the balance amounts. Subsequently, the OP has intimated the complainant to repay the said loan in 48 instalments as follows:

1) First 16 instalments at the rate of Rs.31,500/-

2) Second 16 instalments at the rate of Rs.28,700/-

3) Third 16 instalments at the rate of Rs.9750/-.



5. It is further contended that, then the complainant has approached the OP and expressed his inability to pay the loan as stated above and requested the OP to accord equal instalments. Then, the OP having obliged to his request, directed him to pay the loan amount according to his convenience. Accordingly, the complainant has paid the following instalments to the OP Company:

1. 7-10-2004 - Rs.30,000/-

2. 6-11-2004 - Rs.30,000/-

3. 31-12-2004 - Rs.30,000/-

4. 7-2-2005 - Rs.30,000/-

5. 28-3-2005 - Rs.31.000/-

6. 28-3-2005 - Rs.10,000/-

7. 30-5-2005 - Rs.30,000/-

8. 30-6-2005 - Rs.30,000/-

9. 22-8-2005 - Rs.80,000/-

10. 31-8-2005 - Rs.1,00,000/-

11. 8-10-2005 - Rs.25,000/-

12. 10-10-2005 - Rs.25,000/-

13. 28-11-2005 - Rs.20,000/-

14. 26-12-2005 - Rs.25,000/-

15. 30-01-2006 - Rs.25,000/-

16. 26-04-2006 - Rs.25,000/-

17. 10-05-2006 - Rs.25,000/-

18. 24-06-2006 - Rs.20,000/-

19. 26-07-2006 - Rs.20,000/-

20. 14-09-2006 - Rs.20,000/-

21. 25-12-2006 - Rs.70,000/-

22. 25-12-2006 - Rs.20,000/-

23. 24-02-2007 - Rs.10,000/-

24. 07-02-2007 - Rs.30,000/-

25. 06-03-2007 - Rs.20,000/-

26. 21-04-2007 - Rs.20,000/-

27. 28-5-2007 - Rs.20,000/-

28. 24-12-2007 - Rs.30,000/-

29. 25-12-2007 - Rs.91,968/-

Upto 25-12-2007 the complainant has credited loan amounts Rs.9,43,468/-



As per terms and conditions of loan, the amount payable

by the complainant as stated supra was Rs.11,19,200/-



The complainant so far paid Rs.9,43,468/-



Balance amount to be paid by the complainant as on

January 2008 was Rs.1,75,732/-





6. It is further contended that, the complainant was ready to pay the above said amount of Rs.1,75,732/- . In the meanwhile, the said vehicle met with the accident on 20-6-2007 and the vehicle was badly damaged. It is further contended that, the complainant has repaired it by borrowing loans from his friends and thereafter submitted all the documents to the OP and requested them to claim the insurance from the insurance company and further requested the OP to adjust the above balance amount of Rs.1,75,732/- out of the insurance claim amount. It is further contended that, on account of the accident, he was unable to pay the loan instalments from June 2007 to December 2007. But the OP has not applied to the insurance company for award of compensation for about 4 months. Latter, the complainant has approached the OP and requested them to claim the compensation amount, but the OP has given his deaf ear to the requests of the complainant. However, the complainant got the compensation amount.



7. It is further submitted that, till 25-12-2007, the complainant had paid amount towards loans to the tune of Rs.9,43,468/-. But on 17-7-2008 the OP has seized the complainant’s lorry stating that he has committed default in payment of Rs.5,46,793/-. In this regard, the complainant is liable to pay Rs.1,75,732/- plus interest on it till 17-7-2008 and not the amount as claimed by the OP i.e. Rs.5,46,793/-. Then the complainant has approached the OP and requested them to furnish the details payment of Rs.5,46,793/- but the OP has failed to heed to his request and to failed furnish the statement of account. It is further contended that, the complainant is ready to pay the balance amount of Rs.1,75,732/- plus interest till the date of seizure of the lorry. Since, the OP has shown deficiency of service towards the complainant in not furnishing details of the said amount of Rs.5,46,793/-, he could not clear the loan.



8. It is further contended that, on account of deficiency of service in not paying the insurance premium to the insurance company eventhough they had collected Rs.70,000/- from the complainant, he has suffered loss in the following manner

1. The OP has paid Rs.21,120/- as insurance premium on 23-3-2005. Thereafter, the OP has paid 4th insurance premium of Rs.22,733/- on 29-4-2006. But the OP ought to have paid premium on 23-3-2006 however the OP has paid the premium after lapse of one month seven days i.e. 37 days. During which period, the complainant has stopped the vehicle running. Thus, he has suffered loss of Rs.3000/- per day. Thus it comes to Rs.3000 x 37 = Rs.1,11,000/-. Out of Rs.70,000/- obtained at the time of sanction of loan towards insurance premium, the OP has paid two premiums i.e. Rs.21,120/- and Rs.22.733/- in total Rs.43,853/-. Thus if these amounts are deducted from Rs.70,000/- then it comes to Rs.26,147/- which is payable by the OP pertaining to insurance premium. Thus, in all OP is liable to pay Rs.1,11,000/- + Rs.26,147/- = Rs.1,37,147/-.

2. It is further submitted that, the 5th year premium was not paid by the OP as on 23-3-2007. The complainant’s lorry was plying in Goa during the month of March 2007. That on 27-4-2007 the concerned officers have checked the documents of complainant’s vehicle including insurance policy. Since the OP has not paid the insurance premium for the year 2007 though the OP had collected the insurance premium amount from the complainant, the concerned officers have seized the lorry and detained the same for about 20 days. Then the complainant has approached the OP and enquired about the matter. But the OP has not shown any inclination to reply him and directed him to pay the insurance premium. Accordingly, the complainant has paid the insurance premium of Rs.18,345/- and got the insurance renewed. For detention of 20 days at Goa, the complainant has suffered loss to the tune of Rs.3000/- per day for 20 days i.e. Rs.60,000/- which the OP is liable to pay to the complainant.

3. It is further submitted that, since the date of seizure i.e. from 17-7-2008 till now i.e. for 7 months the complainant has suffered loss at the rate of Rs.3000/- per day for 210 days i.e. Rs.6,30,000/- which the OP is liable to pay to the complainant.





9. It is further contended that, the total loss suffered by the complainant, on account of OP’s deficiency in service are as follows:

1. On account of non-payment of 4th installment

Premium, loss of earnings and the balance

Insurance premium amount Rs.1,37,147/-

2. On account of seizure of the vehicle by

Goa officers loss of earnings Rs.60,000/-

3. Loss incurred by the complainant on

Account of seizure of lorry

On 17-7-2008 and detention Rs.6,30,000/-

Total Rs.8,27,147/-



10. Thus, it is alleged that, he is liable to pay the balance amount of Rs.1,75,732/- + interest on it upto 17-7-2008. But the OP is liable to pay to the complainant towards loss suffered by him by way of damages on account of OP’s deficiency of service is Rs.8,27,147/-. Under the circumstances, the OP is due to the complainant Rs.8,27,147/- minus Rs.1,77,232/- with interest. Thus, it is alleged that, he is not liable to pay any amount much less Rs.5,46,793/- as claimed by the OP.



11. It is further contended that, the complainant and his family members are depending upon the income derived from the said lorry. On account of OP’s illegal seizure and detention of the vehicle, the complainant and his family are facing great hardship and financial crises. Except this lorry avocation, he has no other avocation.



12. In this regard, on 20-3-2009 the complainant got issued a legal notice to the OP and the said notice was served on the OP. Inspite of service of notice, the OP has failed to settle the matter. Hence, this complaint.



13. The OP who has been notified of the complaint entered appearance through his counsel and resisted the same by filing his objections.



14. The gist of the written version of the OP is as follows:

In the written version filed by the OP, it is contended that, the allegations made by the complainant are all false, frivolous and vexatious. The same is not tenable in law or on facts. The complainant has filed a false and dubious complaint knowing it to be false one with a sole intention to harass the financial institution.



15. It is further alleged that, the complainant had availed loan from the OP under their SRTO scheme from UTI Bank Ltd, to purchase TEN wheelers lorry bearing Reg.No.KA-06-A-4374 by executing tripartite Loan agreement dated 18-3-2004. In view of availment of loan from the OP financial institution, the complainant is a borrower of the OP. Therefore, “Borrower” is not a consumer within the meaning of Section 2 (1) (d) of the CP Act. Hence, this complaint is not maintainable.



16. It is further alleged that, the complainant has availed loan through the OP by executing Tripartite Loan Agreement dated 18-3-2004 to purchase the above said vehicle for purpose of “Transportation Business”. The loan availed by the complainant is purely for the commercial purpose. Hence the complainant is not a consumer within the meaning of Section 2 (1) (d) of the CP Act. Therefore, the dispute raised by the complainant cannot be adjudicated by this forum. Thus, the complaint is not maintainable.



17. It is further submitted that, once the agreement is executed complainant is bound by the terms and conditions. The payment indicated by the complainant, in his complaint indicates fact that, he has not paid installments regularly as on the due date every month. Further, according to clause 3.2 of the loan agreement, the complainant is liable to pay overdue interest, late payment charges. The clause 3.2 of the loan agreement reads as follows:

“3.2 The Borrower shall be liable to pay Shriram late payment fees of Rs.100/- per installment per month or part thereof for overdue amount. In addition, the borrower shall also be liable for overdue interest @ 20% per annum (with minimum of Rs.100/-) on the outstanding amount from the due date till the date of receipt of payment and shall also be liable to reimburse the Shriram all the costs and expenses whatsoever, including legal fees incurred or suffered or sustained by Shriram in the process of collection of payments from borrower. Nothing contained in this clause shall prejudice the other rights of Shriram in law or otherwise”



18. This OP while emphatically denying all the complaint averments as false and untenable, interalia pleaded that, under Article 8.2 of the loan agreement upon occurrence of event of default, the OP being a financier and absolute owner of the vehicle is entitled to repossess the vehicle, without notice to the borrower/complainant. Therefore, such right cannot be questioned by the complainant before this Hon’ble Forum. The clause 6 h of the loan agreement reads as follows:

“6 h The borrower hereby agrees and acknowledges that the bank has authorised Shriram to undertake all collection, repossession and other related activities on its behalf and to that extent the borrower agrees to make payment of EMI’s, late payment charges, penalty for bouncing cheque to Shriram as may be required. The borrower also agrees to Shriram’s right to repossess the vehicle financed on behalf of the bank, in case the borrower is in default of the loan repayment”.



The clause 8.2 reads as follows:



8.2 Upon occurrence of any of the events of default and at any time thereafter, the bank shall declare all sums for the full terms of the loan immediately due and payable and upon the borrower failing to make the said payments within 7 days thereof, the bank may as its sole discretion.

a. Demand that the borrower return the vehicle to the bank/Shriram in the same condition as delivered reasonable wear and tear and excepted and in the event of failure of the borrower to comply with the same within 7 days from the date of demand, enter upon the premises where such vehicle is located and take immediate possession of and remove the same, all without the liability to the bank or its agents for such entry of, for damage to property or otherwise. For the purpose of repossession of the vehicle, the borrower expressly grants irrevocable licenses to the bank/Shriram or its agents or any others authorised representative for the purpose of exercising its right under this clause.

b. Sell the vehicle by public auction or private sale with or without notice to the borrower or otherwise dispose off, hold, use. Operate hire to others, or keep idle such vehicle, without any duty to account to the borrower for such action or inaction or for any proceeds with respect thereto”.



19. It is further submitted that, the total dues payable by the complainant to the OP financial institution as on 24-3-2009 was Rs.9,78,708/-.



20. It is further submitted that, the complainant has filed a false complaint, contrary to the terms of Loan Agreement. It is further submitted that, obligation arising out of the agreement cannot be questioned by the complainant before this Forum. Moreover, the rights and obligations which are conferred by the terms of the agreement cannot be construed as “Deficiency of service”, within the meaning of section 2 (1) (c) of the CP Act. Therefore such disputes cannot be adjudicated by this forum. Moreover, seizure of vehicle by the financial institution according to terms of agreement does not constitute deficiency of service. Accordingly, he prays for dismissal of the complaint with compensatory costs of Rs.25,000/-



21. In support of the case, the complainant and the OP have filed their affidavits. The complainant and the OP have also pressed in to service of relevant documents. The OP have filed written arguments alongwith some citation. We have heard the learned counsels appearing for the parties. We have also examined the materials available on record.



22. The questions that arise for our considerations are:

1. Is the complaint not maintainable?

2. Is there is any deficiency of service by the OP?

3. Is the complainant entitled for the relief as prayed for?



23. Our findings on the above questions are here under:

Point No.1: Negative

Point No.2: Negative

Point No.3: As per order



REASONS



24. At the very threshold, we must point out that, a clear reading of the contentions of both the parties, it is crystal clear that, the complainant had availed loan from the OP for the purpose of purchasing a lorry for his lorry transportation business and executed necessary hypothecation agreement agreeing to repay the loan within 48 installments at the rate of Rs.31,500/- for first 16 installments, Rs.28,700/- for second 16 installments and Rs.9,750/- for third 16 installments. It is further seen from the allegation in the complaint that, on account of seizure of the vehicle, he has suffered loss in his business as detailed in his complaint. Therefore, from the tenor of the pleading, it is crystal clear that, he has purchased the vehicle for carrying on his transporting business. The necessary documents executed by the complainant in favour of the OP also substantiate this fact. Therefore, the question that has to be examined is whether the compliant could be maintained by him?



25. The learned counsel appearing for the OP, placed reliance on a judgement reported in 1993 (I) CPR 392, wherein the State Consumer Disputes Redressal Commission, Orissa has held thus:



“When the complainant purchased truck for transport business then purchase of vehicle being for commercial purposes complainant is not consumer”.



26. Contrary view taken by the Hon’ble National Commission or our Hon’ble State Consumer Disputes Redressal Commission has not been pressed into service nor could we place our hands on such decisions. Therefore, we hold that, the complaint is not sustainable.



27. It is the contention of the OP that, since the relationship between the complainant and the OP is that of a borrower and creditor, the complainant can not be called as a “Consumer”. In that connection he placed a reliance of a judgement of our Hon’ble State Commission reported in 1993 (III) CPR page 93 wherein it is held:

“Where relation between Complainant & opp-party is that of borrower & creditor, complainant cannot be said to be a consumer in respect of loan transaction & cannot maintain complaint before consumer forum”.





28. Admittedly, the complainant having borrowed the loan in question had executed hypothecation loan agreement. Therefore, on this score is also the complaint is not sustainable.



29. Now coming to merits of the case, it is seen that, the entire dues or the installments of the loan have not been paid by the complainant to seek the reliefs as prayed for. The complainant has not placed any acceptable evidence a material to show that, he was given permission by the OP to pay the instalments at this convenience. On account of default, the OP exercised its power of seizure of the vehicle as provided in the heir purchase agreement. The said seizure of the vehicle in accordance with the terms and conditions of the loan can not be construed as a deficiency in service. In this regard, the learned counsel appearing for the OP has pressed into service the following judgments.

(1) 1992 (I) CPR 456

(2) 1995 (3) CPR 293 and

(3) 2004 (2) CPR 584



30. In those decisions it has been held as here under:

1. “Seizure of tractor by the bank, in accordance with terms &

conditions of loan, on failure of loanee/complainant to repay the

installment of loan does not amount to deficiency in service”

2. “Exercise of right under the hire purchase agreement cannot be

construed as a deficiency in service”.

3. “Where financer repossessed vehicle under hire purchase

agreement strictly in accordance with terms and conditions of

agreement, consumer complaint for deficiency in service would

not be maintainable”



31. It is not the case of the complainant that, the vehicle in question was seized illegally without following the principles of natural justice Therefore, we hold that, the complaint is devoid of merits and it is liable to be rejected.



32. Being that opinion, we proceed to pass the following:



ORDER



The complaint is dismissed but without costs.

Sh.Chaman Lal son of Sh. Beli Ram resident of village Suma Ropa Post Office Jari, Tehsil and District Kullu, H.P.


…Complainant


V/S

SRIRAM F Finance company Limited Branch Office Ist Floor Banga complex NH-21 Gandhi nagar, Kullu Tehsil and District Kullu, H.P through its Branch Manager.



..Opposite parties




ORDER.

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 party. The case of the complainant is that he is an agriculturist and had purchased a tractor bearing chassis No.345JOFO12172 and engine No.3102TIOF012016 from M/s Kisan Motors NH-21, Nerchowk District Mandi, H.P. The amount of the vehicle was Rs.4,05,000/- out of which the complainant had paid a sum of Rs.1,50,000/- as margin money and rest of the amount was financed by the opposite party. The complainant alleged that he could not register the vehicle about six months after the delivery of the vehicle as the opposite party had not supplied the requisite documents pertaining to the vehicle well in time and as such he was unable to ply the same as commercial vehicle.


The complainant further alleged that he has paid Rs.20,000/- to the opposite party towards the instalment of the tractor . The complainant also alleged that on 31-3-2008 at about 11 AM ,5-6 persons came to the place of the complainant and misbehaved and manhandled him and represented that they are the officials of the opposite party and explained that the complainant has failed to pay the monthly EMI of the financed tractor and forcibly took away aforesaid tractor alongwith its trolley and that too without intimating or giving notice to the complainant. It is submitted that the complainant has got the trolley manufactured at his own cost by spending Rs.50,000/-.

The complainant averred that he was ready to pay the instalments but without his knowledge and consent , the opposite party forcibly and illegally took away the tractor alongwith its trolley. The complainant further averred that he approached the opposite party and represented that he wanted to pay the monthly EMI but of no avail . With these allegations the complainant sought a direction to the opposite party to hand over the tractor with keys and to pay Rs.1,00,000/- as compensation for harassment and cost of the complainant .

2. The opposite party had filed reply and resisted the complaint by raising preliminary objections that this Forum has got no jurisdiction to try and decide this complaint, that the complainant is not a consumer nor the opposite party had rendered any service to the complainant and the transaction involved in the present case is purely of commercial nature and the same does not fall within the preview of the act , that the agreement was entered into at Bilaspur and vehicle was financed from Bilaspur Branch , , that the complaint is not maintainable in the present form, that the complicated questions of law and facts are involved requiring adducing of detailed evidence and also rendition of accounts and for adjustment of entries in the statement of account which can be decided by civil court , that the complainant had not came to the court with clean hands . On merits , the opposite party had admitted that the sale price of the vehicle was Rs.4,05,000/-.


It is submitted that the complainant had approached the opposite party at Bilaspur for the finance of aforesaid tractor in the month of December 2006 which was accepted by Branch Manager, Bilaspur and advanced a sum of Rs.2,80,000/- with financial charges i.e. Rs.90,300/- and agreement value was Rs. 3,70,300/- which was to be repaid in 35 instalments of Rs. 10,580/- as per agreement No.BSH/STFC/1720/SL on 26-12-2006. It has further been averred that the complainant had paid margin money of Rs.1,25,000/- as per Annexure -1 and not Rs.1,50,000/- as alleged by him . The opposite party averred that the delivery of the vehicle was taken by the complainant from Kisan Motors , Ner chowk Mandi alongwith all sale documents and the supplying of documents did not arise .


The opposite party had admitted that the complainant had paid Rs.20,000/- on 21-8-2007 but pleaded that the complainant had paid the aforesaid instalment after seven months of the execution of the agreement and thereafter did not pay any instalments towards purchase liability. The opposite party had denied forcible possession of the vehicle in question and pleaded that the vehicle was handed over by the agent of the complainant to the company official as complainant was unable to pay the arrears pending against him . The opposite party further pleaded that the possession of the tractor was taken without trolley on 3-1-2008 and not on 31-3-2008. It has further been submitted that before taking possession of the vehicle several official notices for making the payment of the arrears were sent to the complainant and even legal notice dated 21-8-2007 Annexure -9 had also been issued but the complainant had never replied the notices nor paid the instalments .


It has further been averred that before taking possession of the tractor without trolley , information had been given to the concerned police ,hirer and guarantor The opposite party had submitted that the complainant had not paid the EMI of the tractor to the opposite party despite issuance of several notices for making arrear of instalments and the complainant had failed to comply with the terms and conditions of the Hire Purchase agreement . The opposite party had denied that the complainant approached it and made any request . It has further been submitted that Gopi Chand agent of the complainant had signed the surrender letter and after taking possession of the vehicle the same was valued by Sh.Rajesh Sood Surveyor on 16-7-2008 and thereafter notice of sale / auction had been issued to the complainant on 17-7-2008 and opportunity was given to the complainant to deposit outstanding amount of Rs.1,89,958/- and as the complainant had not responded the notice , the vehicle was sold for Rs.1,75,000.-. Rest of the allegations have been denied . On these grounds the complaint had been sought to be dismissed with exemplary costs

3. The complainant had filed rejoinder reiterating the contents of the complaint and controverted the allegations made in the reply .

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 had snatched the vehicle forcibly on 31-3-2008 when 5-6 persons came to the place of the complainant , they misbehaved and manhandled the complainant and represented that they are the officials of the opposite party and forcibly took away the tractor in question alongwith its trolley. The ld. counsel for the complainant further argued that the above act on the part of the opposite party tentamounts to deficiency in service and he is entitled for re-possession of the vehicle .

6. On the other hand , the ld. counsel for the opposite parties had strenuously argued that as per the Hire purchase agreement , they had the authority to take the vehicle into possession in case of default of instalments and since the complainant had shown his inability to pay the due amount, therefore , the possession of the tractor without trolley was obtained from the agent of the complainant and as such there is no deficiency in service on its part and the complaint had been sought to be dismissed.

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 first question which requires determination is as to whether the opposite party had forcibly taken the possession of the vehicle as alleged by the complainant or the vehicle was snatched by opposite party with the help of third parties . As per the complainant , on 31-3-2008 at about 11.AM 5-6 persons came to the place of the complainant and represented that they were officials of the opposite party and mishandled him and forcibly took away the tractor alongwith its trolley. To the contrary is the version of the opposite party . As according to it, the complainant was unable to pay the arrears of instalments pending against him and the vehicle in question was handed over by the agent of the complainant to the company officials .


The opposite party had placed on record photocopy of the surrender letter dated Nil addressed to the Manager of the opposite party. The perusal of the surrender letter shows that it has been signed by one Sh. Gopi Chand . The complainant in the rejoinder had specifically refuted that he had any acquaintance with aforesaid Gopi Chand . Therefore, in this back ground , it was incumbent upon the opposite party to have proved that Sh.Gopi Chand was the agent of the complainant and that he had surrendered the vehicle to the opposite party on his behalf but no evidence had been produced by the opposite party to this effect. The opposite party could have filed the affidavit of Sh.Gopi Chand but the same had not seen the light of the day. Therefore, no benefit can be derived by the opposite party from the surrender letter in view of the fact that the vehicle has not been surrendered by the complainant himself There is no other evidence on record to suggest that the vehicle was taken into possession by the opposite party with the consent of the complainant.


The opposite party had also placed on record information which was stated to be given to the hirer , guarantor , S.H.O. Police station, Kullu SHO Police Station Bhunter but no credence can be attached to these documents because these are only photocopies. Moreover, no authenticated document like first information report or Daily diary report of the concerned Police Station has been placed on record by the opposite party to establish that the complainant himself had surrendered the vehicle or Sh. Gopi Chand has surrendered the vehicle with the consent of the complainant. Therefore, in view of the facts and circumstances of the case, it can safely be held that the opposite party had taken the possession of the vehicle forcibly by taking the assistance of third persons.



9. Now the question which arises for consideration before this Forum is as to whether the opposite party 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.”

10 In the present case also, it cannot be said that the opposite party has taken the possession of the vehicle by following the statutory remedy available to it 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 party in view of the decision of Hon’ble Apex court and the Hon’ble National Commission, cited supra.

11. 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 . Since the vehicle has been sold, therefore, no direction can be issued to the opposite party to return the same to the complainant. It has been admitted by the opposite party that the vehicle had been sold for Rs.1,75,000/- after taking possession and it was duly valued by Sh.Rajesh Sood, Loss Assessor on 16-7-2008 as per surveyor report Annexure -14, We have perused the valuation report of Sh. Rajesh Sood Annexure 14 but no weightage can be attached to it because it is not supported by any documentary evidence on record which could show that on what basis the value of the vehicle had been assessed at Rs.1,75,000/-. No affidavit of the valuer has been placed on record by the opposite party in support of the valuation report. Moreover the valuation certificate Annexure 14 is only a photocopy and no reliance can be placed upon it for the purpose of assessing the value of the vehicle .



12. 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 bank 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. ”

13 In the present case also , there is no evidence on record to suggest that as to whether there is any procedure prescribed by the opposite party for selling the vehicles in public auction and if yes whether prescribed procedure had been adopted by it during the sale of the vehicle in question. There is no material on record to show that any prescribed procedure has been followed by the opposite party in selling the vehicle in question. No opportunity has been granted to the complainant to either purchase the vehicle at the sale price of Rs.1,75,000/- or to bring better buyers . As per the notice issued by the opposite party to the complainant on 23-7-2007 Annexure -6 only a sum of Rs. 74060/- was out standing as arrears against the complainant but despite that the vehicle was sold at throw away price of Rs. 1,75,000/-.


In our opinion, the opposite party had no right to sell the vehicle (the value of which was Rs.4.05,000/- excluding trolley on 27-12-2006 at the time of purchase by the complainant) in the meagre sum of Rs. 1,75,000/- only to the detriment of the complaint and the aforesaid act in selling the vehicle at throw away price amounts to unfair trade practice on the part of the opposite party especially in view of fact that after seizure of the vehicle , the complainant was willing to pay the out standing amount . In our opinion the value of the vehicle would not come down to Rs.1,75,000/- from Rs.4,05,000/- within a period of two years from the date of its purchase. 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 the 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 ”

16. In the present case , as per the complainant the vehicle in question was a commercial vehicle and the same was purchased by him on 27-12-2006 in the sum of Rs.4,05,000/- excluding trolley. The vehicle was taken into possession by the opposite party on 3-1-2008 and was sold for Rs. 1,75,000/-. The opposite party had not filed any documentary evidence to establish that on which date the said vehicle was auctioned. The complainant had purchased the vehicle in the month of December 2006 and the opposite party had seized the same on

3-1-2008 Therefore at that time of seizure of the vehicle, the age of the vehicle in question exceeded one year but did not exceed two years from the date of its purchase by the complainant . Hence , the cost of the vehicle at the time of its seizure has to be adjusted by calculating its market value by depreciating the amount at the rate of 20% ( i.e.10% per year) from Rs.4,05,000/- i.e. the actual purchase price of the vehicle by the complainant as the vehicle is admittedly a commercial vehicle .The complainant had also averred that he had got prepared the trolley by spending Rs.50,000/- and in this respect reliance has been placed on the Invoice of Him Trading Corporation dated 29-11-2006.


No evidence has been led by the opposite party that tractor was taken into possession without trolley. Therefore , in the absence of any evidence on record , it cannot be said that the opposite party had obtained the possession of the tractor without trolley. The opposite party had also admitted that the complainant had paid Rs.1,25,000/- as margin money and on 21-8-2007, the complainant had paid Rs.20,000/- towards payment of the instalments . Therefore, in view of the facts and circumstances of the case, it would be in the interest of justice if we direct the opposite party to adjust the sale proceed of the vehicle towards

the satisfaction of the dues by calculating its market value by deducting 20% of the amount from Rs.4,05,000 /- i.e. from the purchase price of the vehicle by the complainant The opposite party is further directed to adjust Rs.1,25,000/- the margin money ,Rs.20,000/- paid towards the payment of the instalments, Rs.50,000/- as costs of trolley 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.1,00,000/-on account of harassment due to illegal act of the opposite parties besides cost of litigation. In this respect, it would be relevant to mention here that the entire action of the opposite party in selling the vehicle at throw away price of Rs.1,75,000/- 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. Therefore, in such circumstances an amount of Rs. 25,000/- is granted on this score and Rs.5,000/- as costs of litigation in favour of the complainant.

16. In view of what has been stated hereinabove, the complaint of the complainant is allowed against the opposite party with directions as under:-

(i) The opposite party is directed to adjust the sale proceeds of the vehicle towards the satisfaction of the dues by calculating its market value by deducting 20% of the amount from Rs.4,05,000/- i.e. the purchase price of the vehicle by the complainant instead of Rs.1,75,000/- and also to adjust the margin money of Rs.1,25,000/-, Rs.20,000/- amount deposited on account of instalment and Rs.50,000/- as amount spent for preparation of trolley , after adjusting unpaid instalments till the date of seizure of the vehicle. It is further directed that the after adjustment of the amounts as aforesaid, if it is found that the excess amount has been paid by the complainant , the same shall be refunded to him.

(ii) The opposite parties are further directed to pay Rs.25,000/- on account of harassment, mental agony and pain and Rs.5 000/- as cost of litigation.

17 Copy of this order be supplied to the parties free of cost as per Rules.

18. File, after due completion be consigned to the Record Room.