State Consumer Disputes Redressal Commission
The Managing Director Kotak Mahindra ... vs V. Baskaran Old No.87, Godown Street ... on 30 May, 2011
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE : Honble Thiru Justice M.THANIKACHALAM PRESIDENT Thiru J. JAYARAM, M.A.,M.L., MEMBER (JUDICIAL) Thiru S. SAMBANDAM MEMBER II COMMON ORDER IN F.A.NO.63/2009 & F.A.NO.70/2009 (Against order in CC.NO.28/2006 on the file of the DCDRF, Chennai (South) DATED THIS THE 30th DAY OF MAY 2011 F.A.NO.63/2009 1.
The Managing Director Kotak Mahindra Bank Ltd., 36-38-A, Nariman Bhavan No.227, Nariman Ports, Mumbai 400 021
2. The Manager Kotak Mahindra Bank Ltd., CEEBROS CENTER M/s. M.B. Gopalan 1st Floor, No.39, Montieth Road Counsel for Egmore, Chennai- 600 008 Appellants/ 1 & 2 Opposite parties Vs. V. Baskaran M/s. M. Anbalagan Old No.87, Godown Street Counsel for Chennai-
600 001 Respondent/ Complainant F.A.NO.70/2009 V. Baskaran M/s. M. Anbalagan Old No.87, Godown Street Counsel for Chennai-
600 001 Appellant/ Complainant Vs.
1. The Managing Director Kotak Mahindra Bank Ltd., 36-38-A, Nariman Bhavan No.227, Nariman Ports, Mumbai 400 021
2. The Manager Kotak Mahindra Bank Ltd., CEEBROS CENTER M/s. M.B. Gopalan 1st Floor, No.39, Montieth Road Counsel for Egmore, Chennai- 600 008 Respondents/ 1 & 2 Opposite parties The complainant filed a complaint before the District Forum against the opposite parties praying for the direction to the opposite parties to handover the possession, alongwith compensation of Rs.2,00,000/-. The District Forum allowed the complaint. Against the said order, this appeal is preferred in F.A.No.63/2009 praying to set aside the order of the District Forum dt.20.05.2008 in CC.No.89/2006, F.A.No.70/2009 by the complainant for enhancement.
This petition coming before us for hearing finally on 09.05.2011. Upon hearing the arguments of the counsels on both sides, perusing the documents, lower court records, and the order passed by the District Forum, this commission made the following order:
M. THANIKACHALAM J, PRESIDENT
1. The opposite parties 1 and 2, in OP.No.28/2006, on the file of District Forum, Chennai (South), as well as the complainant, are the appellants in F.A.No.63/2009 and 70/2009, respectively.
2. The parties are referred, as arrayed in the complaint.
3. The complainant, availing loan facilities of RS.5 lakhs, from the opposite parties, had purchased a vehicle bearing Regn.
No.TN-65 D-6565, agreeing, to repay the loan amount, in 47 instalments of Rs.15,273/-, for which the complainant issued 47 cheques also. The complainant, due to prior business commitment, unable to make the payment, due by October 2004, and requested time to make the payment, which was agreed. However, without prior notice, demand or intimation, the opposite parties unauthorisedly repossessed/ taken possession of the vehicle, which should be construed as deficiency in service. Thereafter, the opposite parties have issued a foreclosure letter dt.17.11.2004, stating that a sum of RS.5,49,616.57/- is due, asking him to pay the amount. Immediately, the complainant approached the opposite party, requested for extension of time, for which time was given till 18.12.2004, after receiving a sum of Rs.40000/-. Thereafter, without notice, the opposite party informed the complainant, that they have sold the vehicle on 17.1.2005, not giving any notice, unilaterally pre-closing the loan, even not causing any publication, thereby they have committed once again deficiency, not honouring the agreement. Even after the foreclosure, they have not returned the cheques. In view of the above narrated facts, the opposite parties have committed deficiency in service, for which the complainant is entitled to a sum of Rs.2 lakhs, as compensation, in addition to a direction to handover the vehicle, unlawfully repossessed by the opposite parties. Hence the complaint.
4. The opposite parties, admitting the advancement of the loan sanctioned by them, to the complainant, as well the repayment schedule, resisted the case, interalia contending that even as admitted by the complainant, he was in arrears of RS.30,546/-, and the cheques issued by him, when tendered for collection, returned for want of funds, that as per the agreement between the parties, the vehicle was repossessed on 16.11.2004, after issuing a notice on 5.11.2004, which was later intimated on the next day itself, that after repossessing, informing the amount payable, requesting the complainant to settle the claim, which he failed, that in view of the default committed, after due publication they have sold the vehicle, assessing the value also properly, issuing notice, that even after the sale, still the complainant is liable to pay the amount, this being the position, there is no question of deficiency of negligence, thereby praying for the dismissal of the complaint.
5. The District Forum, as per the order dt.10.12.2008, based upon the admitted facts, agreeing the terms and conditions are binding upon the parties, has come to the conclusion, that even as contemplated under Rule 2.10 of the terms of the agreement, no notice was issued, before repossessing the vehicle, which is nothing but unfair trade practice, and deficiency in service. In this view, negativing the main prayer, ordered the opposite parties to pay a sum of RS.50000/-, as compensation, for mental agony with cost of RS.3000/-, as per order dt.10.12.2008, which is challenged by the opposite parties in F.A.No.63/2009, whereas the complainant not satisfied regarding quantum of compensation alone, filed F.A.No.70/2009, for enhancement.
6. The complainant, executing loan agreement (Ex.B1), borrowed a sum of Rs.5 lakhs, from the opposite parties on 7.9.2004. It is also an admitted fact, that including interest, the complainant had agreed to repay the above said amount, in 47 instalments of Rs.15,273/- p.m. Having borrowed loan, purchased a vehicle, obtaining a fancy number, unable to pay even the first EMI, as admitted in paragraph 4 of the complaint itself. He has also not paid the 2nd EMI due, in the month of November 2004.
Therefore the opposite parties had no option, except to issue a foreclosure letter, which they sent dt.17.11.2004, admittedly. Thereafter the complainant, who used the vehicle, approached the opposite party, for extention of time, which was also given. Even thereafter the entire EMI payable, upto December 2004, was not paid, Though a part of EMI viz.
Rs.40000/- was paid. In view of the recalcitrant attitude of the complainant, and continuous default committed by him, the financier, to safeguard their interest, as empowered under the agreement, repossessed the vehicle, sold the same, and still it appears there is a balance, as informed by the opposite party, which we will discuss infra. Thus, the complainant, who had borrowed the vehicle, without any advance, and incapacity to pay the instalment, having committed default, allowing the opposite party to enforce their right, has come to the consumer forum, as if the opposite parties have committed deficiency in service, for the return of the vehicle/ repossessed, in addition to claiming a compensation of Rs.2 lakhs, though he had committed torture and mental agony to the financier, in not paying the amount, complaining as if he was subjected to harassement, mental agony suffering etc., which was unfortunately accepted by the District Forum, thereby the opposite party is justified in preferring the appeal, and we do not find any reason, why the complainant also has preferred an appeal, being a defaulter and incapable of paying the premium, and not honouring the agreement. Such a person is not entitled to claim enhancement of compensation, since the grant of compensation itself has to be upset, for the reasons which we are going to record hereunder.
7. The District Forum, find fault with the opposite party, as if they have not given three clear working days notice, as contemplated under Rule 2.10 of the terms of the agreement, which alone is recorded as the deficiency in service, thereby further concluding, the seizure of the vehicle without notice, should be considered, as deficiency in service. If this is factually in correct, or in other words, if the opposite parties have issued notice before repossessing the vehicle, then it cannot be said, that the opposite parties have committed, deficiency in service.
8. It is the dictum of the Apex court, that under Hire Purchase Agreement, if the borrower had committed default in payment of instalments, the financier is entitled to re-posses the vehicle, unless the terms and conditions are set aside, on the ground un-consignable or opposed to public policy, which is not the case here also, as held in Orix Auto Finance (India) Ltd., Vs. Jagmander Singh & Another, reported in II 2007 CPJ 45 SC. In the case involved in the above decision also, a defence was taken, as if vehicle was repossessed, without notice, or without authority, and while testing the terms and conditions of the Hire Purchase Agreement, the Apex Court has held so far as the question of repossession is concerned, it is clearly permissible, in terms of clause 10 of the Hire Purchase Agreement, referred to above, and the said clause reads Then on the occurrence of any such event, the right of the Hirer under this Agreement, shall forthwith stand determined ipso facto without any notice to the Hirer and all the instalments previously paid by the Hirer shall be absolutely forfeited by the owner who shall thereupon be entitled to enter into any house or plce where the said vehicle may then be remove, and retake possession of the same, and to sue for all the instalments due and for damage for breach of the Agreement and for the costs of retaking possession of the said vehicle and all costs occasioned by the Hirers default. In this view of the matter, if Ex.B1agreement empowers the opposite party to repossess the vehicle, giving notice, that cannot be faulted.
9. Clause 2.10 of the Ex.B1, reads under the heading recall of the loan by the Bank The Borrower agrees that the Bank shall be entitled to, at any time, in its discretion, recall the loan by giving the Borrower three clear working days notice in writing. It is specified that the repayment schedule set out in Schedule 1 is without prejudice to the Banks right to recall the entire loan and to demand payment of the loan balance. Upon the expiry of the period of notice, the Loan Balance shall immediately stand repayable by the Borrower to the Lender and the Security shall immediately become enforceable, where we find three clear working days notice in writing. In the written version, as well as in the affidavit, the opposite parties have pleaded that on dishonour of both the cheques, the opposite party issued notice dt.5.11.2004, and even thereafter amounts were not paid. Thus, having pleaded so, unfortunately the document was not produced before the District Forum, which are produced under our direction before this commission. As seen from the documents, produced before us dt.5.11.2004, the opposite parties have informed the complainant, that the complainant is liable to pay a sum of RS.30,546/-, being the value of the dishonoured cheques, requesting them to settle the payment, failing which they will be compelled to institute appropriate legal action against the complainant, warning consequences also, which was acknowledged by the complainant as seen from the acknowledgement. Thus, a notice was issued on 5.11.2004. Admittedly, even as pleaded in the complaint, the vehicle was repossessed or taken back, by the opposite party only on 16.11.2004 i.e., after 10 days from the date of notice. Thus it is clear, as contemplated under clause 2.10 of the agreement, notice was issued, and even thereafter also, admittedly the complainant has not paid the EMI, as agreed, which can be seen from the documents.
10. The opposite parties giving notice dt.5.11.2004, repossessed the vehicle on 16.11.2004, and the same was informed, confirmed by Ex.A2 telegram. Thereafter on 17.11.2004, the opposite parties have written a letter to the complainant, informing that the complainant failed and neglected to pay the contractual dues, in terms of the agreement, and the total amount payable was Rs.5,49,617/-. Not only they have informed the amount, but also requested the complainant to settle the account, by remitting the same on or before 24.1.2004, further informing failure on the part of the complainant, they may be constrained to sell the vehicle, appropriate the sale proceeds etc., which is an admitted fact.
In the above procedure adopted by the opposite party, we are unable to see any deficiency, since the cheques issued by the complainant, were dishonoured as seen from Ex.B8 account of the complainant himself, that too, due to insufficient fund, as seen from the records. Only thereafter, as evidenced by Ex.A5, on 30.11.2004, a sum of Rs.40000/- was paid, leaving balance of Rs.52,389.61/- foreclosure receivable amount, or payable amount by the complainant.
11. In the complaint itself, it is stated, he had agreed to pay the real dues as on 30.11.2004. It is not shown how the above amount claimed by the complainant, though he would generally challenge, as if it is incorrect statement, for which we do not have any materials. Thus it is seen, after recalling the loan, which the opposite parties are entitled, when the complainant had not paid the foreclosure value, the opposite parties have no option, except to sell the vehicle, in order to realize the amount due, that too after the termination of the loan account.
Therefore, they have published the sale of the vehicle (Ex.B5, B6). Upon the seeing the information, one Koteeswaran, offered to purchase the vehicle for Rs.5,13,000/-, as seen from Ex.B7. The opposite parties in order to ascertain whether the person had offered correct value, or not, requested a licensed surveyor to assess the value of the vehicle, who has assessed the value of the vehicle at Rs.4,75,000/-, as seen from communication dt.19.5.2008 (Ex.B8).
On that basis the vehicle was sold, and the same was informed to the complainant under Ex.B9 dt.30.3.2005, wherein they have stated after appropriating the sale proceeds of Rs.5,13,000/- to the account, still there is a balance of Rs.4836.49/-. In the process so adopted by the opposite party, we find no violation of the terms of Ex.B1, and in fact empowered with Ex.B1 as per the rights conferred under Ex.B1, wherein there is some protection also, for the borrower, and giving that protection also to the complainant, viz.
issuing notice, vehicle was repossessed, for non-payment of dues, then before auction informed, then publication had taken place, then assessing the value of the vehicle also, the opposite parties have repossessed the vehicle, in which procedure, we are unable to find any deviation, this being the proved fact or admitted position, it is unfortunate for the complainant to say, that he was put to mental agony or torture etc., forgetting his dues, and liabilities. The District Forum, unnecessarily, without accepting the affidavit of the opposite party, which is now supported by the production of pre-closure notice also, slapped an order of compensation, which itself is liable to be upset, because of the fact, that there was no deficiency on the part of the opposite party, and this being the result of the FA.No.63/2009, there is no question of enhancing the compensation, as claimed by the complainant in F.A.No.70/2009. Thus F.A.No.63/2009 deserves acceptance, and F.A.No.70/2009 deserves rejection.
12. In the result, appeal in F.A.No.63/2009 is allowed, setting aside the order of the District Forum in CC.No.28/2006, and the complaint is dismissed, without cost. There will be no order as to cost in this appeal.
F.A.No.70/2009is dismissed with cost of Rs.5000/-.
S.SAMBANDAM J. JAYARAM M. THANIKACHALAM MEMBER II JUDICIALMEMBER I PRESIDENT INDEX : YES / NO Rsh/d/mtj/Bench-1/Insurance