Delhi

StateCommission

A/07/293

M/S. MAGMA LEASING LTD - Complainant(s)

Versus

SHRI MAHINDER SINGH - Opp.Party(s)

22 Aug 2017

ORDER

IN THE STATE COMMISSION: DELHI

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

 

                                                                      Date of Decision: 22.08.2017

First Appeal No. 293/2007

(Arising out of the order dated 13.03.2007 passed in Complaint Case No. 251/2005 by the District Consumer Disputes Redressal Forum II, Udyog Sadan C-22 & 23 Institutional Area Behind Qutab Hotel New Delhi-110016)

In the matter of:

M/s. Magma Leasing Ltd.

Having its branch office at:

8, Sant Nagar East of Kailash

New Delhi

 

And also at:

A-193, Phase I

Okhla Industrial Area

Opposite Police Station

Okhla, New Delhi-110020                                         .........Appellant

 

Versus

          Sh. Mahinder Singh

S/o Sh. Sukhveer Singh

R/o B-8 Vill. & P.O. Sadipur

Bulandshahar (UP)

 

And Plot No. A-23

Shop No. G-72

Ghaziabad (UP)                                                           ……..Respondent

                                                                  

 

CORAM

 

N P KAUSHIK                        -                  Member (Judicial)

 

1.             Whether reporters of local newspaper be allowed to see the judgment?                                                Yes

2.             To be referred to the reporter or not?                                                                                              Yes

 

N P KAUSHIK – MEMBER (JUDICIAL)

 

Present:     None for the appellant.

Shri  Ankit Prakash, counsel for the respondent.

JUDGMENT

1.         Appellant Magma Fincorp. Ltd. Company has impugned the orders dated 13.03.07 passed by the Ld. District Forum II, New Delhi. Vide said orders, appellant/ OP was directed to refund an amount of Rs. 8,38,734/- to the respondent/ complainant. Litigation charges to the tune of Rs. 5000/- were also awarded.
2.         Parties hereinafter shall be referred to by their status in the original complaint. In brief, the complainant Shri Mahender  Singh purchased a Hydraulic Excavator Loader Machine of JCB make from the OP at a total cost of Rs. 17,36,899/-. Complainant paid the margin money of Rs. 2,75,000/- and the balance money of Rs. 14,76,000/- was financed by the OP. This amount alongwith interest was payable in 29 EMIs of Rs.57,734/- each from 15.06.04 to 15.10.06. JCB machine was delivered to the complainant by the OP on 14.06.04. An amount of Rs.23,300/- on account of insurance and another amount of Rs.13,000/- towards file charges was also paid to the OP. Complainant  further submitted that he paid an amount of Rs.50,000/- towards fitting of extra equipment on the machine. Complainant employed the machine in Uttrakhand after obtaining a contract by 19.01.2005. The complainant had paid in all an amount of Rs.3,27,734/- to the OP. In January, 2005 complainant informed the OP that due to heavy snow fall in Uttrakhand, the work order had to be suspended. For these reasons there was a delay in payment of installments. Complainant however compromised to pay such installments immediately after getting payments from the contractor.
3.         Next submission of the complainant is that the OP asked him to bring the JCB machine to Delhi where he would provide him the work. Complainant accordingly brought the machine to Delhi on 01.02.05. OP parked the machine in its godown at Ghaziabad. No work was provided to the complainant in two weeks. Complainant approached the OP on 19.02.2005 seeking delivery of machine to him. Complainant wanted to take the machine back in Uttrakhand and operate it there. Upon this, OP told the complainant that the machine would be seized by it and unless the balance amount of Rs.2,33,000/- was paid within two days. On 23.03.05 the complainant approached the OP with a sum of Rs.1,50,000/- for payment towards the arrears of installments. OP however refused to receive the money and release the machine. The complainant again approached the OP on 24.02.2005 when its Assistant Manager, Ashutosh Jha accepted the sum of Rs.1,50,000/- from the complainant in the presence of the Senior Manger, Aditya. Complainant was further told to bring the balance amount of Rs.88,000/-. Mr. Ashutosh Jha refused to issue any receipt for the amount of Rs.1,50,000/-.Complainant lodged a complaint with Police Station Lajpat Nagar, New Delhi on 24.02.05 itself.
4.         Defence raised by the OP is that the complainant defaulted in making payment of installments and himself surrendered the machine. Ld. District Forum accepted the version of the complainant that he was asked to bring the machine to Delhi on the pretext that he would be provided work. It was observed by the District Forum that the OP used deceptive means to seize the JCB machine. Versions of the complainant was also accepted on the count that the complainant had paid an amount of Rs.1,50,000/- to the OP without receipt. Complainant had lodged a complaint with Police Station Lajpat Nagar New Delhi on the same day. Non issuance of the receipt of an amount of Rs.1,50,000/- was also held as a case of ‘deficiency in service’.
5.         It was the admitted case of the parties that the amount of Rs.7,52,734/- stood paid by the complainant to the OP. This amount included the amount of Rs.1,50,000/- paid without receipt. Adding the amount of Rs.23,000/- and Rs.13,000/-  referred to above and an amount of Rs.50,000/- spent by the complainant on extra equipment the amount totals to Rs.8,38,734/-.  
6.         Ld. District Forum observed that the repossession of the JCB machine ought have been done in a legal manner.
7.         Appeal has been filed on the grounds that the appellant followed the ‘hire purchase agreement’ in letter and spirit. JCB machine was seized in accordance with the procedure laid down. OP/appellant further submitted that he served a legal notice to the complainant before repossession of the vehicle. He stated that he sold the vehicle in accordance with the terms of hire purchase agreement. A legal notice was also served to the complainant. An intimation was given to the police before repossession of the vehicle. Appellant further submitted that the Ld. District Forum in the absence of evidence held that the complainant had paid an amount of Rs.7,52,734/- including the amount of Rs.1,50,000/- without receipt. Appellant/ OP submitted that the complainant owed to him a huge amount.
8.         I have heard at length the arguments addressed by the counsel for the appellant/OP Shri Ankit Prakash. Appellant/ OP did not deny the contention of the complainant that the vehicle was taken into possession on the pretext of providing work to the complainant in Delhi. Seizing the vehicle forcibly has never been permissible in the eyes of law. The courts have laid emphasis on legal or judicial process for this purpose.
9.         Law on the subject has been laid down by the superior courts in the case of Citycorp Maruti Finance Ltd. v. S.Vijaya Laxmi, (RP No. 737/2005 decided by Hon’ble National Commission) and the case of ICICI v. Prakash Kaur, AIR 2007 Supreme Court 1349.  The Hon’ble National Commission in the case of Citicorp Maruti Finance Ltd. (Supra) observed as under:

        “when a vehicle is purchased by a person(consumer) by borrowing money from the money lender/financier/banker, the consumer is the owner of the vehicle and not the money lender/financier/banker, unless the ownership is transferred.  In a democratic country hving well established independent Judiciary and having various laws it is impermissible for the money lender/finanier/banker to take possession of the vehicle for which loan is advanced, by use of force.  Legal or judicial process may be slow but it is no excuse for employing musclemen to repossess the vehicle for which loan is given.  Such type of instant justice cannot be permitted in a civilized society where there is effective rule of law.  Otherwise, it would result in anarchy, that too, when the borrower retorts and uses the force.

          A hire-purchase agreement is a normal one under which owner hires goods to another party called the hirer and further agrees that the hirer shall have an option to purchase the chattel when he has paid a certain sum, or when the hire-rental payments have reached the hire-purchase price stipulated in the agreement.

          As against this, when a person desires to purchase vehicle/goods and not having sufficient money on hand, borrows the amount needed from a money lender/financier/banker and pays it over to the vender of the vehicle, the transaction between the consumer and the money lender will unquestionably be a loan transaction.  In such a case the vehicle purchased by the consumer is registered in the name of the consumer and remains t all material times so registered in his name.  The consumer remains qua the world at large the owner and remains in possession of the vehicle. BY an agreement the vehicle can be given as security for the loan advanced.  In such a case, the right to seize the vehicle is merely  a licence to ensure compliance with the terms of the so called hire purchase agreement.  It is to be stated that many financiers/banks are in race for giving loan for purchase of vehicles or various articles.  After giving loan and taking interest in advance, the polite behavior changes because of the documents which are signed on the dotted lines by the borrower.  On occasions, borrower suffers harassment, torture, or abuses at the hands of the musclemen of the money lender.  Such a behavior is required to be prohibited and the process of repossession is required to be streamlined so as to fit in cultural civilized society.  Let the rule of law prevail and not that of jungle where might is right.

In such cases, even the Police does not register the FIR or help the aggrieved consumer.  In the present case, nothing has been done by the Police for years despite the complaint.  In any case, taking of pound of flesh is require to be discouraged.

In a case when the vehicle was repossessed by use of force, and thereafter, sold without informing the Complainant, in our view, it would be unjust to direct the consumer to pay the balance amount, as alleged by the financier to be outstanding. If such a relief is given to the money lender/financier, it would be unjust enrichment to the money lender and against equity. That question may arise for consideration only if the Complainant willingly surrenders the vehicle for sale and for recovery of the outstanding amount.  Then, in such cases, consumer dispute would not arise.

Where the vehicle is forcefully seized and sold by the money lender/financer/banker it would be just and proper to award ‘reasonable compensation’ to the Complainant. ‘Reasonable compensation’ would depend upon facts of each case.”

 

10. Applying the above said law to the case in hand, clearly the OPs were not entitled to re-possess the vehicle and especially so when the entire payment towards repayment of loan stood made.
11. Clearly in the present case the vehicle JCB machine was repossessed in an arbitrary and illegal manner.  Ld. Trial forum rightly held it a case of ‘deficiency in service’ and ‘unfair trade practice’.
12. During the course of arguments Ld. Counsel for the appellant/ OP stated that the vehicle had been sold to a third person after its seizure for an amount of Rs.13,60,000/-. After adjusting the amount outstanding, an amount of Rs.44,312/- was payable to the complainant. A demand draft for the amount of Rs.44,312/- dated 24.03.05 was sent but the complainant  refused to accept the same. It may be mentioned here that the appellant/ OP failed to disclose the name of the buyer to whom the vehicle was allegedly sold. The sale price of Rs.13,60,000/- for the vehicle purchased  seven months back for an amount of Rs.17,36,899/- was on the lower side. Ld. District Forum did not award any compensation to the complainant observing that the complainant had used the machine for about 7 months. Ld. District Forum did not appreciate the fact that the complainant was put to a lot of harassment and inconvenience despite being deprived of earning his livelihood.
13. Hon’ble Supreme Court in the case of Ghaziabad Development Authority vs. Balbir Singh, (2004) 5 Supreme Court Cases 65, laid down the principles for awarding of compensation.  It was held that compensation for loss or injury has to be based on a finding of loss or injury.  It has to co-relate to the amount of loss or injury.  It was further held that the award of compensation must be under different heads and must vary from case to case depending on facts of each case.  Compensation for harassment/injury both mental and physical may be given alongwith compensating the loss.  Hon’ble Supreme Court further held that the Commission or the forum is entitled to award not only the value of goods but also to compensate the consumer for injustice suffered by him.
14. In the facts and circumstances of the case I am on the considered opinion that the complainant is entitled to compensation for harassment/ injury. Accordingly OP/ appellant is directed to pay a compensation to the tune of Rs.3,00,000/- to the complainant.
15. The excess amount of Rs.44,312/- has not been paid to the complainant so far. Let this amount be refunded to the complainant along with  interest 18% per annum w.e.f.  24.03.05 till the date of its realization. All these payments shall be made to the complainant within a period of 60 days from today failing which these shall carry interest at the rate of 24% per annum.
16. Appeal is accordingly disposed of. File be consigned to Record Room.

 (N P KAUSHIK)
MEMBER (JUDICIAL)