Delhi

StateCommission

A/09/237

KOTAK MAHINDRA PRIME LTD. - Complainant(s)

Versus

DHIRAJ SETHI AND ANR. - Opp.Party(s)

10 Aug 2017

ORDER

 

IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL, COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments :02.08.2017

Date of Decision :10.08.2017

First Appeal No.237/2009

 

IN THE MATTER OF:

 

M/s. Kotak Mahindra prime Ltd.,

Through its Authorised Representative

Mohd. Rashid, Associate

Having its registered office at:

36-38 Nariman Bhavan, 227, Nariman

Point, Mumbai-40021.

And its office at

Plot No.4, Unit no.101,

DDA Center, First Floor,

District Center, Laxmi Nagar,

Delhi-110092.                                                                                                ……Appellant

 

                                                                        Versus

 

1. Shri Dhiraj Sethi,

S/o. Shri Inder Mohan Sethi,

R/o. BM-88, West Shalimar Bagh,

Delhi.                                                                                     ……….Respondent no.1

 

2. Shri Inder Mohan Sethi,

S/o. Shri Mohan Lal Singh,

R/O. BM-88, West Shalimar Bagh,

Delhi.                                                                                     ……….Respondent no.2

 

 

CORAM

HON’BLE SH. O.P.GUPTA, MEMBER(JUDICIAL)

HON’BLE SH. ANIL SRIVASTAVA, MEMBER

 

 

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                               Yes/No

2.      To be referred to the reporter or not?                                                                                                        Yes/No

 

Present:     Shri Umesh Kumar, counsel for appellant.

                   None for the respondents.

 

PER  :SHRI ANIL SRIVASTAVA, MEMBER

            The challenge in this first appeal filed under Section 15 of the Consumer Protection Act, 1986 is to the impugned order dated 01.08.2008  passed by the District Consumer Disputes Redressal Forum, New Delhi (hereinafter referred to District Fora) in CC 73/07, directing, inter alia, as under:-

a)      OP to pay a sum of Rs.1,30,245/- to the complainant, the difference of price taken in excess by the OP by sale of the car;

b)      OP to pay a sum of Rs.2,00,000/- to the complainants as compensation for causing him mental agony, harassment and for deficiency of service; and

c)      OP to pay Rs.20,000/- towards cost of  litigation to the complainant.

          Facts of the case relevant for the disposal of the appeal are these.

          Shri Dhiraj Sethi and  Shri Indra Mohan Sethi, resident of Delhi, (complainant, before  the Distt. Fora and respondent in this appeal) had approached M/s. Kotak Mahindra Prima Ltd., a finance company, (appellant here and OPs before the Distt. Fora) for grant of a loan for the purpose of financing the purchase of a ‘TOYOTA’ Qualis’ vehicle. The appellant agreed to finance the purchase of the vehicle and consequently a loan  agreement was signed sanctioning a loan amount of Rs.5,22,000/- against the security by way of hypothecation of the vehicle in favour of the appellant and the vehicle bearing registration number DL-8-CJ-9702 was purchased. The loan so sanctioned was to be repaid in 48 equated monthly installments, each installment amounting to Rs.12,993/-. Relevant portion of the agreement, clause 14 and clause 27 are detailed below hereinafter:

14.    Consequences upon event of default:

14.1  Upon the occurrence of any event of default and any time thereafter the lenders shall be entitled to declare all sums due and to become due hereunder for the full terms of the agreement  as immediately due and payable including that the borrower shall be liable to pay to the lender fore closure charges calculated as the percentage (as per schedule1) of the balance principal outstanding along with  other dues including unpaid installment service taxes late charges etc due as on date of such declaration and upon the borrower failing to make the said payment in full with in 7 days thereof the lender may at its sole discretion do any one or more of the following:-

a)      Upon  notice to the borrower terminate this agreement.

b)      Demand that the borrower return the product to the lenders at the risk and expense of the borrower in the same condition as was delivered to it (ordinary wear and tear excepted) at such location as the lender may designate and upon  failure of the borrower to do so within the period of demand as agents and constituted to do so within the period of demand premises where the product and take immediate possession  of and remove the same without liability to the lenders or their agents of such return of the product or upon the lender taking agents of such entry or for damage to property or otherwise upon such  return of the product or upon the lender taking possession of the product as herein before stated stand cancelled and provided however the remedies available to the lender as herein given shall survive such cancellation of the loan and the lender shall be entitled and authorized to exercise its right herein including. In connection with the product to recover its dues under this agreement .

c)      On such terms and conditions and so for such consideration as the lender may deem fit and with or without any notice to the borrower sell the product at a public or private sale otherwise dispose off hold upon such terms the product or use operate lease to another or keep give on hire such product as free and clear of any right  to the borrower and without any duty to account  to the borrower for such action or inaction or for any proceeds in respect thereof.

d)      By written notice to the borrower require the borrower to pay to the lender (as liquidated damages or less or a bargain and not as a penalty) on the date specified in such notice an amount (plus interest at the rate of 36% per annum for the use period until receipt of the said amount) equal to all unpaid EMIs payments and all other payment which in the absence of a default would have been payable by the borrower hereunder for the full term hereof or.

e)      Exercise any other right of remedy, which may be available to the lender under the applicable law.

f)       It being agreed and understood by the borrower that the right to the lender to recover the amount payable and / or repayable or reimbursable to the satisfaction of the lender shall survive any such cancellation of loan and / or termination of the agreement  and the lender’s rights wherever given in connection with initiating of action for enforcing its rights to recover  the amount shall also survive the cancellation of the loan or the termination of the agreement as the case may be and the lender shall be entitled to take all or any of the steps thereof and the borrower shall not take defence of such termination or cancellation of loan under this agreement.

27.    Arbitration:

          All disputes differences and/ or claim arising out of these presents or in any way touching or concerning the same or as to constructions meaning or effect  hereof or as to the right and liabilities of the parties  hereunder shall be settled  by arbitration to be held in accordance with the provision of the Arbitration and Conciliation Act 1996 or any statutory amendments thereof and shall be referred to the sole arbitration to be nominated by the lender may appoint a new arbitrator the arbitrator shall not be required to give any reasons for the award and the award  of the arbitrator shall be final binding on all parties concerned the arbitration proceedings shall be held in Chennai.

          The complainant paid six installments as per schedule. With a little delay the complainant paid his 11^th installment to the appellant company. The complainant has alleged that despite the installments having been paid upto May, 2005, the vehicle was forcibly reprocessed on 28.06.2005 and obtained, again by force, his signatures on some printed paper and surrender papers of the said vehicle.

          The complainant had accordingly filed a complaint before the Distt. Fora. Matter was contested. Directions were issued to the appellant company. The company has now filed this appeal praying for relief as under:-

a)      Set aside the impugned order dated 01.08.2008 passed by the learned District Consumer Disputes Redressal Forum, Barracks Kastubra Gandhi Marg, Delhi in complaint case no.73/2007 filed by the respondent herein.

b)      Pass any other or further orders as deemed fit by this Hon’ble Court in the facts and circumstances of the present case.

          The appeal was initially dismissed on 15.10.2009 being barred by limitation but by way of an order dated 06.07.2010 passed by the Hon’ble NCDRC, the appeal was ordered to be heard on merit, delay having been condoned by the National Commission.

          Again this appeal was  dismissed for default on 27.08.2012 but restored by the  Hon’ble NCDRC by their order dated 14.03.2013.

          The complainant / respondent were noticed and they have contested the appeal by filing their written statement, submitting that the company has concealed many  facts in the appeal, and therefore not approached this Commission with clean hands. The respondents have specifically denied the averments contained in the appeal. They have emphatically argued that the impugned order passed is as per the law laid down by the apex court and the NCRDC.

          The matter was listed before us for final arguments on 02.08.2017 when both the  parties appeared through their counsel. We have heard the arguments advanced and perused the records. We have given our careful consideration to the matter.

          We have read and re-read the agreement signed between the parties laying down, inter alia that the company, in the event of default in making the payment, would be competent to take action as contemplated in the agreement but only after due notice. The company had  issued the notice on 28.06.2005 but on the same day without waiting for the response of the respondents, forcibly entered their house with ‘Goondas’ and repossessed the vehicle and forcibly obtained their signatures on some papers, surrendering the  vehicle.

          Point for consideration is whether due notice was served on the complainant/ respondent. We note that notices having been sent on 28.06.2005, action followed on the same day. That reflects that no due notice was served, an act contrary to the agreement executed between the parties. Due notice would always envisage that a reasonable opportunity is afforded to the erring party  to advance his defence or submission. Short of that it would tantamount as if no notice was issued. The act of the company in our considered view was therefore against the principles of natural justice, good conscious and equity, apart from being contrary to the agreement with which the parties are bound.

          The company has further alleged that the complainant was defaulter in making payments towards the installments. Huge amount remained unpaid forcing them to take steps for repossession of the vehicle. If the amount, otherwise due, remains unpaid, the company was within this competence under the agreement to take steps  to recall the loan as contemplated by giving the notice under the registered AD intimating that the loan has been recalled and the borrower should be called upon to tender the amount due within the prescribed duration. But no notice  as prescribed was issued. Secondly if the amount is paid in response to the notice, the company was within its competence to repossesses  the vehicle but again in the manner as contemplated in the agreement. The company does not get the authority to repossess the vehicle even when the vehicle was playing on the road.

          In the case under consideration notice as required was not given. Besides the vehicle was repossessed while the vehicle was passing through Pankha Road, New Delhi and all this forcibly through muscle men. Secondly, intimation of repossession of the vehicle was required to be conveyed to the local police authorities before and after repossession, which action, though required to be undertaken as per the guidelines of the Reserve Bank of India,  binding on all the Banks, financial institutions and  finance companies was not taken. This leads to a conclusion that the company was found acting contrary to the guidelines of RBI.

          The company has made an averment in the appeal that the Distt. Fora has passed order impugned herein, granting relief to the complainant which was not even prayed for. We have pondered over the submission regarding relief prayed for and the relief granted.  We do not agree with the submission of the company as we note that the relief granted are connected with or related to the prayer made.

          The argument of the company is that the Distt. For a has erred in passing an order in a matter which arises out of a contract having  arbitration clause. We do not agree with this submission . Keeping in view the judgment of the Hon’ble National Consumer Disputes Redressal Commission passed on 13.07.2017 in CC 701/2015 in the matter of Aftab Singh Vs. Emaar MGF Land Limited & anr., holding that the arbitration clause in the agreement between the complainant and the OP cannot circumscribe the jurisdiction of a Consumer For a, notwithstanding the amendments made to Section 8 of the Arbitration Act as the remedies provided under the Consumer Protection Act, 1986  are in addition to and not in derogation of other laws  in force (National Seeds Corporation Limited Vs. Madhusudan Reddy & anr reported in (2012) 2 SCC 506. Hence the contention of the appellant on the subject, being not maintainable, is rejected.

          Coming to the merit of the case, the company has been founded to be faultering both procedurally and on merit. Repossessing of the vehicle, the way it has been done, without notice, without intimation to the police and finally when the vehicle was plying on road, is contrary the guidelines of RBI and the agreement.

          In view of the aforesaid admitted position and in the light of Catena of decisions by the Hon’ble Supreme Court, including in Citicorp Maruti Finance Ltd. Vs. S. Vijaylaxmi IV(2011) CPJ 67 (SC), wherein forcible repossession of Maruti Omni Car has been deprecated, we are of the view that repossession and sale of the vehicle in question without proper notice to the complainant was absolutely illegal and per SC  amounted to deficiency in service and unfair trade practice on the part of the finance company.

          Resultantly we do not find any infirmity in the order passed by the  Distt. Fora and we uphold it. We order accordingly leaving the parties to bear their cost,

Copy of this order be sent to both the parties free of cost as contemplated under the Consumer Protection Rules 1987 read with Consumer Protection Regulations 2005.

 

 

Copy of the order may be sent to the District Forum for their information records.

File be consigned to Record Room.

 

 

(ANIL SRIVASTAVA)                                                  (O.P.GUPTA)

MEMBER                                                                     MEMBER (JUDICIAL)