This revision petition has been filed by the Petitioner, Kotak Mahindra Bank Ltd. against the order dated 18.10.2011 passed by the State Consumer Disputes Redressal Commission, Panchkula, Haryana (for short, ‘State Commission’) in First Appeal No.841/2010. 2. Brief facts of the case are that complainant/respondent is the owner of Swaraj 735 tractor bearing No.HR02N-7963 which was financed by the OP/petitioner for a sum of Rs.2,18,000/-. The complainant had paid Rs.1,00,000/- to the seller directly.In this way, the total value of the vehicle was Rs.3,18,000/-. The loan amount was to be returned in 35 monthly installments of Rs.7,525/-each. It is the case of the complainant that he was regularly paying the due installments as per the agreement executed between the parties, but complainant could not repay one next installment on which the OP forcibly repossessed the tractor. The complainant had received a letterin the second week of October, 2006 wherein the OP claimed Rs.2,29,856.47 from the complainant including account of repossession charges and legal charges.This was totally false and wrong. Thus alleging it a case of deficiency of service and unfair trade practice, the complainant invoked the jurisdiction of the District Forum and prayed for directing the OP to produce the tractor in Court and the same be handed over to the complainant and complaint be accepted with costs. 3. The complaint was resisted by the OP and the written statement was filed stating that after the seizer of the vehicle, the petitioner had sent a notice/letter dated 19.9.2006 through Regd. Post to the complainant asking to deposit the amount of R.2,29,856.47 within 5 days, failing which the tractor will be sold, but even then the complainant has failed to deposit the amount and he did not approach the petitioner and therefore, after waiting sufficiently, the vehicle was sold to Javinder Singh, vide agreement dated 29th September, 2006 for Rs.2,27,000/-. Therefore now the complainant cannot claim anything over the hypothecated vehicle and the complaint is liable tobe dismissed with heavy costs. 4. The District Forum after considering the submissions made by both the parties, allowed the complaint vide order dated 22.4.2010 as under: “Reluctantly we allow the complaint of the complainant by directing the respondents to pay Rs.1,17,100/- alongwith interest @9% p.a. from the date of repossession of the vehicle i.e. 30.7.2006 till its realization and to pay Rs.20,000/- as compensation for mental agony sand harassment as well as Rs.3300/- as cost of proceedings. Order be complied within 30 days from the date of this order failing which penal action under Section 27 of the C.P. act shall be taken against them. File be consigned to record room after due compliance.” 5. The OP-Bank preferred an appeal against the order of the District Forum bearing Appeal No.841 of 2010 before the State Commission. The State Commission vide order dated 18.10.2011 dismissed the appeal. 6. Hence, the present revision petition. 7. Heard the learned counsel for both parties and perused the record. 8. The learned counsel for the petitioner stated that loan of Rs.2,18,000/- was given to the respondent for purchase of tractor. The agreement of loan/hypothecation is dated 28.1.2006. The loan was to be re-paid in 35 monthly equally installments of Rs.7,525/-. The respondent paid only 4 installments and he stopped paying further installments. Therefore, the vehicle was re-possessed on 19.9.2006. Learned counsel for the petitioner stated that both the fora below have taken the date 30.7.2006 of re-possession which is not correct. Thus, the State Commission has made up its mind that as if the vehicle was re-possessed for non-payment of the next installment only. In many decisions of the Hon’ble Supreme Court, it has been held that the financier is the owner of the vehicle and under the hypothecation agreement he has right to re-possess the vehicle on default of payment of installments. In spite of reminders for payment of installments, the complainant did not come forward to pay the installments and the vehicle was re-possessed from his village without any force. The State Commission has wrongly given its finding that vehicle was re-possessed by using force. Had this been the case, there would have been some FIR filed by the complainant on the same date, but no FIR was filed or even no information was sent to the Bank on the same date. The notice was also given on 19.9.2006 to the complainant for payment of Rs.2,29,856.47 which included the cost of re-possession and other handling charges etc. Instead of re-paying the loan and taking the tractor from the Bank, the complainant filed a complaint before the District Forum. The District Forum has allowed the complaint and directed the petitioner to pay an amount of Rs.1,17,100/-, whereas there is no justification for the same. The District Forum has taken into account Rs.1 lakh which was allegedly paid to the seller by the complainant apart from loan amount taken from the Bank. The District Forum has also ordered in a way the refundof Rs.30,000/- which was deposited as payment of four installments by the complainant to the petitioner for which there can be no justification because the same was towards the repayment of loan. The tractor was sold for Rs.2,27,000/- whereas the notice was issued to the complainantfor Rs.2,29,856.47. Thus, there was some payment due against the complainant as well. Therefore, the order of the District Forum was totally illegal and the State Commission has confirmed that order by dismissing the appeal filed by the petitioner. The learned counsel thus requested to allow the revision petition and to set aside the order passed by the fora below. 9. On the other hand, learned counsel for the respondent/complainant stated that no notice was served before re-possession of the tractor and it was re-possessed from his village by force. The musclemen of the petitioner came and took away the tractor. The complainant could not pay few installments only due to his poor financial condition at that time. However, he was ever willing to pay the installments. When the notice was given on 19.9.2006 for payment of Rs.2,29,856.47, the complainant never expected that the tractor will be sold within a period of ten days by the petitioner, otherwise, the complainant would have tried to get released the tractor from the petitioner by paying some amount. No separate notice of sale was also ever given to the complainant.There are many judgments of the Hon’ble Supreme Court that if notice of re-possession and notice of sale are not given, then the action of re-possession would be bad in law. Hence, all the actions on the part of the petitioner regarding re-possession and sale of the vehicle are contrary to the law laid by the Hon’ble Supreme Court In this regard. Learned counsel for the respondent cited the following judgments to support his assertions: 1. H.D.F.C. Bank Limited vs. R. Govardhan Reddy (R.P. No.3354 of 2014) wherein this Commission held as under: “8. Though the petitioner-bank claims to have sold the tractor in question in an open public auction, there is no material or even an averment that before conducting auction of the tractor, a public notice was given by the petitioner-bank in a newspaper circulating in the area where the auction was allegedly held. In the absence of a public notice, the proposed auction did not get adequate publicity and, therefore, it cannot be said with a fair amount of certainty, that the tractor fetched the prevailing market price in the auction, which the petitioner-bank claims to have held. This was yet another act of deficiency on the part of the petitioner-bank in rendering services to its consumer.” 2. In H.D.F.C. Bank Limited vs. Balwinder Singh,III (2009) CPJ 40 (NC), this Commission has held as under: “There is no evidence that any notice was given to the respondent for repossessing the vehicle on account of default of payment of installments. 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.” 10. I have carefully considered the arguments advanced by both the sides and have examined the record. It is clear from the facts of the case that the tractor was actually purchased in February, 2006 and 4 instalments were paid by the complainant till 30.7.2006. It is also clear that no notice of re-possession was issued by the petitioner-Bank and neither any separate notice of sale was issued to the respondent. The notice issued on 19.9.2006 is after re-possession on the same date. The complainant has spent Rs.3,18,000/- for purchase of this tractor in which the loan amount was Rs.2,18,000/- only and the complainant had paid Rs.1 lakh from his own pocket which was given directly to the seller. In the whole process of purchase, finance, re-possession and auction/sale of the vehicle, in a way the complainant has suffered loss of Rs.1,00,000/- which was directly given to the seller and Rs.30,000/- towards payment of installments and on that basis only the District Forum has allowed the compensation of Rs.1,17,000/- after deducting 10% depreciation for use period. On the other hand, the petitioner-Bank has given a loan of Rs.2,18,000/- only and has received Rs.30,000/- as re-payment of installments and Rs.2,27,000/- by way of sale of tractor. Thus, the petitioner Bank received more than the loan amount. Definitely, there may be some expenses incurred in re-possession of vehicle and arranging for its sale. However, as the procedure has not been followed as laid down by law and Reserve Bank of India, the deficiency on the part of the petitioner-bank is proved. 11. I further find that the amount of Rs.30,000/- which was paid by the complainant as re-payment of loan by way of 4 installments is not allowable for being refunded to the complainant because these payments were in the nature of hire charges for the period the tractor was kept with the complainant. However, the complainant had paid Rs.1 lakh directly to the seller and the complainant actually has suffered that loss in the whole process. Therefore, the complainant is definitely entitled to receive this amount from the petitioner-Bank with 10% deduction for depreciation as observed by the District Forum. Hence, the respondent is liable to receive only Rs.90,000/- from the petitioner-Bank. 12. Based on the above discussion, the revision petition is partly allowed and order of the District Forum is modified to the extent that amount of Rs.1,17,100/- is reduced to Rs.90,000/- only. Remaining part of the order of the District Forum remains unchanged. The order of the District Forum as modified by this order be complied with by the petitioner bank within a period of six weeks from the date of this order. No order as to cost for this revision petition. |
