PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER

This revision petition has been filed by the petitioner against order dated 03-08-2012 passed by the learned State Consumer Disputes Redressal Commission, Maharashtra (in short, ‘the State Commission’) in Appeal No. A/00/2028 – Director, Berar Finance Ltd. Vs. Satishkumar Prabhakarrao Borker, by which while dismissing appeal, order of the District Forum allowing complaint was upheld.

2.      Brief facts of the case are that one Mr. Shaikh Imam borrowed loan of Rs.30,000/- from opposite party/petitioner on 18-11-1998 and purchased motor cycle for Rs.44,960/- and hypothecated with opposite party.  Amount was to be repaid in 24 monthly instalments of Rs.1,688/- and agreement was executed between them.  Complainant/respondent on 16-02-1999 purchased aforesaid motor cycle from Shaikh Imam through agent of opposite party and opposite party agreed to transfer the loan amount of Shaikh Imam in complainant’s name and complainant agreed to re-pay outstanding dues of loan amount of Shaikh Imam.  Complainant paid Rs.28,416/- to opposite party from time to time and also issued four cheques for payment of balance amount which could not be encashed due to mistake of opposite party.  On 06-12-1999 opposite party without prior notice visited house of the complainant and seized the vehicle.  Alleging deficiency on the party of the opposite party, complainant filed complaint before District Forum.  Opposite party resisted complaint and admitted grant of loan to Shaikh Imam but denied purchase of vehicle by complainant from Shaikh Imam through agent of opposite party.  It was also denied that opposite party agreed to transfer loan account of Shaikh Imam in the name of the complainant.  It was further submitted that there was no privacy of contract between the complainant and the opposite party but admitted seizure of vehicle from the complainant as there was default in payment of instalment.  It was further submitted that Shaikh Imam was necessary party and prayed for dismissal of complaint.  Learned District Forum after hearing both the parties allowed complaint and directed opposite party to refund Rs.52,416/- with 18% p.a. interest or in the alternate allot new motor cycle and further granted compensation of Rs.10,000/- and cost of Rs.2,000/-.  Appeal filed by the opposite party was dismissed by learned State Commission vide impugned order against which this revision petition has been filed.

3.      Heard learned Counsel for the parties finally at admission stage and perused record.

4.      Learned counsel for the petitioner submitted that on account of default in payment of instalment petitioner rightly seized the vehicle and sold it and learned District Forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal, hence revision petition be allowed and impugned order be set aside.  On the other hand learned counsel for the respondent submitted that petitioner had no right to seize motor cycle without due procedure and order passed by learned State Commission is in accordance with law, hence revision petition be dismissed.

5.      It is not disputed that Shaikh Imam got vehicle financed from opposite party and later on Shaikh Imam sold the vehicle to complainant.  Perusal of record reveals that complainant also made payment against the due instalments and in such circumstances it can be inferred that loan account of Shaikh Imam was shifted to the complainant and complainant was under an obligation to pay balance dues and instalments.

6.      It is also not disputed that there was outstanding amount against the aforesaid loan account and opposite party by notice dated 07.12.1999 asked complainant to pay balance amount of Rs.32,548/- up to 20-12-1999  failing which vehicle will be sold. Complainant by telegram dated 16-12-1999 while admitting receipt of notice asked opposite party to refrain from disposal of vehicle and later on sent legal notice on 17-12-1999 in which it was expressed that complainant is ready to pay all the dues.  It appears that after this notice nothing was paid by complainant and opposite party sold the vehicle on 23-12-1999.  Learned State Commission observed in its order that there were some dues outstanding and recoverable from the original borrower or complainant but it was necessary for the opposite party to issue notice to the borrower or complainant before taking vehicle into possession.  Learned State Commission referred judgment of Hon’ble Apex Court in the case of Managing Director, Orix Auto Finance (India) Ltd. Vs. Jagmander Singh & Anr. [2006 (39) AIC 90(SC)] but observed that aforesaid judgment is not applicable in the present case as complainant’s contention was that he was not defaulter.

7.      Hon’ble Apex Court in the aforesaid judgment observed as under:-

“If agreements permit the financier to take possession of the financed vehicles, there is no legal impediment on such possession being taken.  Of course, the hirer can avail such statutory remedy as may be available.  But mere fact that possession has been taken cannot be a ground to contend that the hirer is prejudiced.”

8.      In the case in hand similar agreement was executed between Shaikh Imam and opposite party as was executed in case of Jagmander Singh and this case was squarely applicable to the facts of the present case.  Learned State Commission has committed error in holding that aforesaid judgment is not applicable to the present case and in such circumstances complaint was liable to be dismissed.

9.      Learned counsel for the respondent submitted that four cheques issued by the complaint were dishonoured on account of fault of petitioner.  Admittedly if these cheques were dishonored, amount remained outstanding against the complainant and complainant was under an obligation to make payment of the dishonoured cheques.  Learned counsel for the respondent could not show any receipt of payment towards dishonoured cheques.  Rather in notice dated 17.12.1999 admitted to make payment of any outstanding amount.  Had there been no outstanding amount he should have specifically stated that no amount was lying outstanding against him.

10.    Learned counsel for the respondent has placed reliance on judgment of Hon’ble Apex Court in the case of Manager, ICICI Bank Ltd. Vs. Prakash Kaur & Ors. - (2001) 1 SCC 481, in which it was observed that practice of hiring recovery agents who are muscle men is deprecated and needs to be discouraged.  For removing vehicle by force some view has been expressed by Hon’ble Apex court in the case of Citicorp Maruti Finance Ltd. Vs. S. Vijayalaxmi – (2012) 1 SCC 1.

11.    I agree with the aforesaid observations of Hon’ble Apex Court but as vehicle had been possessed on account of default in payment of instalments and has been sold after due notice, no deficiency on the part of the opposite party can be presumed in the light of judgment of Hon’ble Apex Court delivered in III (2012) CPJ 4 (SC) – Suryapal Singh Vs. Siddha Vinayak Motors & Anr., which runs as under:--

“2.  This court vide its judgment in Trilok Singh & Ors. Vs. Satya Deo Tripathi, AIR 1979 SC 850, has categorically held that under the Hire Purchase Agreement, the financier is the real owner of the vehicle, therefore, there cannot be any allegation against him for having the possession of the vehicle.  This view was again reiterated in K.A. Mathai @ Babu & Anr. Vs. Kora Bibbikutty & Anr., 1996 (7) SCC 212; Jagdish Chandra Nijhawan Vs. S.K. Saraj, IX (1198) SLT 477 = IV (1990) CCR 118 (SC) = 1999 (1) SCC 119; Charanjit Singh Chadha & Ors. Vs. Sudhir Mehra, VI (2001) SLT 883=III (2001) CCR 232 (SC) = 2001 (7) SCC 417, following the earlier judgment of this Court in Sundaram Finance Ltd. Vs. The State of Kerala & Anr., AIR 1966 SC 1178; Smt. Lalmuni Devi Vs. State of Bihar & Ors., I (2001) SLT 26=I (2001) CCR 9 (SC) +2001 (2) SCC 17 and Balwinder Singh Vs. Asstt. Commissioner, V (2005) SLT 195=III (2005) CCR 8 (SC)=CCE 2005 (4) SCC 146.

3.        In view of the above, prima facie we are of the view that the Courts below has committed an error in granting compensation to the present petitioner and which appears to be non-sustainable in law.  In view of the above, issue notice to the petitioner as well as to the respondents why the judgments and order impugned be not set aside. The petitioner is restrained to make any recovery from the respondent of the amount which has been awarded to him by the Courts below.”

12.    In the light of aforesaid judgment revision petition is to be allowed and order passed by learned State Commission and District Forum are to be set aside.

10.    Consequently, revision petition filed by the petitioner is allowed and order dated 03-08-2012 passed by learned State Commission in Appeal No. A/00/2028 – Director, Berar Finance Ltd. Vs. Satishkumar Prabhakarrao Borkar and order of District Forum dated 31-10-2001 passed in Complaint No. 8/2000 – Satishkumar Prabhakarrao Borkar Vs. Director, Berar Finance Ltd.  is set aside and complaint stands dismissed with no order as to costs.