ORDER (ORAL) Challenge in this Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short “the Act”), by Mahindra Finance (for short “the Finance Company”), the sole Opposite Party in the Complaint, is to the order dated 11.09.2007, passed by the State Consumer Disputes Redressal Commission, Uttar Pradesh at Lucknow (for short “the State Commission”) in Appeal No.1862 of 2007. By the impugned order, the State Commission has affirmed the order dated 29.06.2007, passed by the District Consumer Disputes Redressal -2- Forum, Kushi Nagar (for short “the District Forum”) in Complaint No.13 of 2005. By the said order, while accepting the Complaint filed by one Sh.Ram Nakshatra, since expired, alleging deficiency in service on the part of the Finance Company in repossessing the vehicle, viz, Mahindra Marshal Deluxe, which had been purchased by the deceased under an Hire Purchase Agreement dated 13.09.2000, by use of force and without notice before repossession and sale, the District Forum had directed the Finance Company to return the said vehicle or in the alternative refund the cost of the vehicle, i.e. ₹4,10,540/- after deducting depreciation @ 10% per year on the said amount; pay interest @ 8% p.a. from the date of filing of the Complaint till realization and a further sum of ₹50,000/- as compensation for the financial, physical and mental torture suffered by the Complainant on account of the afore-said action. 2. Since the factum of the purchase of the vehicle under the said Agreement as also the fact that there were a few defaults on the part of the Complainant in paying the Equated Monthly Installments (EMIs) on time, is not in dispute, it is unnecessary to state the facts, giving rise to filing of the Complaint in extenso. It would suffice to state that the main grievance of the Complainant in the Complaint was that despite his offer to the Finance Company to take back the vehicle as he was not in a position to pay the EMIs, instead of considering his request, the vehicle was forcefully repossessed and the same was also sold by not following the due process of law. 3. On a query as to what evidence was led by the Finance Company in support of its stand that due process of law was followed before taking possession of the vehicle, learned Counsel for the Finance Company has invited my attention to a telegram dated 31.07.2004, purportedly sent by the Company to the Complainant, asking him to deposit a sum of ₹1,50,000/- along with additional finance charges -3- @36% p.a., and on failure to do so, the Company would repossess the vehicle. In so far as the question of intimating the Complainant about the auction of the vehicle in question, is concerned, learned Counsel submits that since by letter dated 12.09.2004, the Complainant had himself surrendered the vehicle with a request that after disposal of the vehicle, the sale consideration may be accounted for in the loan account, it was not necessary for the Finance Company to issue a fresh notice before selling the same. 4. In the light of the afore-stated factual scenario, the question for consideration is whether there was any deficiency in service on the part of the Finance Company in repossessing the vehicle and selling the same? 5. The practice of repossessing the Hypothecated goods or vehicle forcibly and its disposal in an opaque manner has been deprecated by the Hon’ble Supreme Court and by this Commission. Time and again, it has been emphasized that resumption of possession of goods or vehicle by use of force is against the public policy and the Bankers/Financial Institutions cannot be allowed to take law in their own hands and repossess the vehicle by use of muscle power on the ground that the loanee had defaulted in payment of a few instalments on time. 6. In ICICI Bank Ltd. vs. Prakash Kaur and Ors. – (2007) 2 SCC 711, deprecating the practice of hiring of recovery agents for taking possession of the vehicle by use of force, the Hon’ble Supreme Court had observed as follows: “Before we part with this matter, we wish to make it “clear that we do not appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents, wo are musclemen, is deprecated and needs to be discouraged. The Bank should resort to procedure recognized by law to take possession of vehicles in cases where the borrower -4- may have committed default in payment of the instalments instead of taking resort to strong-arm tactics.” 7. Again, in Citicorp Maruti Finance Ltd. vs. S. Vaijayalaxmi – (2012) 1 SCC 1, a three Judge Bench of the Hon’ble Supreme Court has reiterated that even in case of mortgaged goods, subject to hire-purchase agreements, the recovery process has to be in accordance with law and the recovery process referred to in the agreements also contemplates such recovery to be effected by due process of law and not by use of force. 8. Therefore, it needs little emphasis that even though, under the Hire Purchase Agreement or Loan-Cum-Hypothecation Agreement, in the event of default in payment of EMIs for the debt due to it, a right accrues in favour of the Banker/Money Lender/Financial Institution to take possession of the vehicle but they have no power to resume the vehicle by use of force. They are obliged to follow the legal procedure in place for recovery of the mortgaged asset. The procedure to be followed has to be transparent and not an eye-wash to complete the procedural formality. A clear notice in writing, to the loanee before repossessing the vehicle and then to put it to sale is the clear mandate of law. 9. Tested on the touchstone of the afore-stated broad legal principles, which, unfortunately are still being ignored in a large number of cases, I am in complete agreement with the conclusion arrived at by both the Fora below that the Finance Company had repossessed and sold the vehicle in question by not following the due process of law and hence, there was deficiency on their part on that score. I do not find any substance in the submission of learned Counsel for the Finance Company that before taking possession of the vehicle on 31.07.2004, a ‘telegram’ was sent to the Complainant to deposit a sum of ₹1,50,000/-, otherwise the Company would -5- repossess the vehicle. In my view, such kind of intimation to the Complainant, receipt whereof is otherwise not proved, is no notice as contemplated in law. I am also unable to persuade myself to agree with the learned Counsel appearing for the Finance Company that having himself requested the Company to take possession of the vehicle and sell it off, no intimation about the proposed sale was required to be given to him. Assuming for the sake of argument that such an offer was in fact made, having failed to accept the same and proceeding to repossess and sell the vehicle, did require a proper notice to the Complainant proposing to sell the vehicle, as undoubtedly the amount to be realized by auction/sale has a direct and material bearing on the liability of a loanee towards the Finance Company. A loanee is entitled to know the procedure to be adopted for selling the mortgaged property. The mode and method for sale has to be transparent and not confined to the closed doors of the Finance Company. 10. Having arrived at the afore-said conclusion, a residual question remains to be addressed. The question is whether on facts at hand, the award of interest on the amount directed to be refunded to the Complainant, after deducting depreciation @ 10% p.a. on the relevant Written Down Value (WDV) as also award of additional afore-noted compensation was justified? 11. Regard being had to the fact that admittedly, there were defaults on the part of the deceased Complainant in making payment of EMIs on time, I am of the view that the award of interest as also the compensation is not warranted. 12. Consequently, the Revision Petition is partly allowed; the impugned order is set aside, to the extent indicated above, with a direction to the Finance Company to pay to the legal representatives of the Complainant the principal amount, as directed by the Fora below, -6- by deducting depreciation as already directed. It is pointed out that in terms of the order dated 11.01.2008, passed by this Commission, the Finance Company had deposited in the State Commission 50% of the amount awarded by the Fora below. If that be so, the said amount, along with accrued interest, if any, shall be released to the widow of late Sh. Ram Nakshatra. The balance amount, if any payable to the legal heirs in terms of this order, after accounting for the amount directed to be released to them shall be remitted by the Finance Company to the widow within four weeks from the date of receipt of a copy of this order, failing which the said amount shall carry interest @ 9% p.a. from the date of this order till actual realization. 13. The Revision Petition stands disposed of in the above terms leaving the parties to bear their own costs. | 
