State Consumer Disputes Redressal Commission
State Bank Of Inida vs Rahul Jaiswal & Anr. on 22 February, 2014
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/13/283
Instituted on : 16.04.2013
State Bank of India, Branch Ambikapur,
Through : Chief Manager, State Bank of India,
Ambikapur, District Surguja (C.G.) ... Appellant.
Vs.
1. Rahul Jaiswal, S/o Late Kanhaiyalal Jaiswal,
R/o : Ambikapur, District Surguja (C.G.)
2. Salauddin Siddique, S/o Abdul Rashid Siddique,
R/o : Sadar Road,
Ambikapur, District Surguja (C.G.) ... Respondents.
PRESENT: -
HON'BLE JUSTICE SHRI R.S.SHARMA, PRESIDENT
HON'BLE MS. HEENA THAKKAR, MEMBER
COUNSEL FOR THE PARTIES: -
Shri Rajesh Tiwari, Advocate for the appellant.
Shri Mukesh Sharma, Advocate for respondent.
None for respondent No.2. (Ex-parte).
ORDER
Dated : 22/02/2014 PER :- HON'BLE JUSTICE SHRI R.S.SHARMA, PRESIDENT. This appeal is directed against the order dated 19.03.2013 passed by District Consumer Disputes Redressal Forum, Surguja, Ambikapur (henceforth called "District Forum"), in complaint case no.31/2007. By the impugned order, learned District Forum, has partly allowed the complaint of the respondent no.1/ complainant against appellant/O.P.No.1 and directed the appellant/O.P.No.1 to pay a sum of Rs.2,75,700/- within a month from the date of order to the // 2 // respondent No.1/complainant along with interest @ 6% p.a. from the date of filing of the complaint i.e. 09.03.2007 and also to pay a sum of Rs.5,000/- towards compensation for physical and mental agony and inconvenience suffered by him and Rs.2,000/- as cost of litigation.
2. Brief facts of the complaint of the respondent no.1/complainant before the District Forum are : that the respondent No.1/complainant is registered owner of tractor bearing registration No.M.P.27-B/1378 and trolley bearing registration No.M.P.27-B/1379. The respondent no.1/complainant obtained loan of Rs.2,00,000/- from the appellant/O.P.No.1/Bank. The said loan was payable by the respondent no.1/ complainant in 18 half yearly installments of Rs.11,120/- each. The appellant/O.P./Bank is charging interest in accordance with the guidelines issued by the Reserve Bank of India (R.B.I). The complainant averred that the appellant/O.P.No.1/Bank has no right to seize the vehicle or land directly. The appellant/O.P.No.1/Bank has only right to seize the crop of the mortgaged land and to recover the amount of loan from the sale proceeds of the crop standing in the field. On 28.09.2006, the vehicle was looted by Salauddin Siddique and some other persons. Salauddin Siddique, is authorised agent of the appellant/O.P.No.1/Bank and he was using the tractor and trolley unauthorizedly. The vehicle was seized on 28.09.2006 forcibly with the help of muscleman namely // 3 // Salauddin Siddique. Salauddin Siddque has no right to delegate the power to other person and authority letter dated 11.03.2006 was forged and fabricated document. The respondent no.1/complainant further averred that the appellant/O.P.No.1/Bank charged interest arbitrarily and without obtaining insurance policy on behalf of the respondent/complainant amount of insurance premium was deducted by the appellant/O.P.No.1/Bank illegally. On being asked by the respondent no.1/complainant, the appellant/O.P.No.1/Bank did not provide the insurance policy to the respondent No.1/complainant. The amount of loan was paid by the respondent No.1/complainant till 31.03.2005 and he deposited a sum of Rs.2,75,700/- till 06.08.1999, but the amount was not adjusted in the loan account of the respondent no.1/complainant by the appellant/O.P./Bank. Thus, the appellant/O.P./Bank committed deficiency in service. The respondent/complainant filed consumer complaint before the District Forum.
3. The respondent/O.P./Bank filed written version before the District Forum and averred that the tractor and trolley was financed by the appellant/O.P./Bank and there was hypothecation agreement in respect of the vehicle. As per terms of that hypothecation agreement, in the event of default in payment of loan amount, the // 4 // vehicle was seized and in doing so, no deficiency in service was committed.
4. Learned District Forum vide order dated 11.06.2009 allowed the complaint and directed the appellant/O.P./Bank to handover the vehicle to the respondent No.1/complainant in the same condition which was at the time of seizure on 28.09.2006 within a month from the date of order.
5. The appellant/Bank filed Appeal No.372/2009 before this Commission against order dated . This Commission vide order dated 06.08.2010 has allowed the appeal of the appellant/Bank, set aside the order of the District Forum and remanded back the matter to the District Forum with the direction that opportunity be provided to the respondent herein for impleading second borrower also, as complainant in the matter and after providing opportunity to both parties for filing their respective statement of account and other documents in respect of sale of vehicle, the matter be decided afresh on merits."
6. Learned District Forum, again allowed the complaint vide order dated 19.03.3013 and directed the appellant/O.P./Bank to pay compensation to the respondent no.1/complainant, as mentioned in paragraph no.1 of this order.
// 5 //
7. Shri Rajesh Tiwari, learned counsel for the appellant/O.P./Bank argued that the appellant/complainant had not deposited the instalments regularly and defaulted in making instalments, therefore, the appellant/O.P./Bank repossessed the vehicle in question, as per rules. He further argued that the respondent no.1/complainant executed Deed of Hypothecation in favour of the appellant/O.P./Bank and as per the terms and conditions mentioned in the Mortgage Deed and Deed of Hypothecation, the appellant/O.P./Bank is entitled to repossess the vehicle in question and the appellant/O.P./Bank is owner of the vehicle. He further argued the appellant/O.P./ Bank, has rightly repossessed the vehicle in question and has not committed any deficiency in service, hence the order passed by the District Forum, suffers from irregularity or illegality and is liable to be set aside and the appeal filed by the appellant/O.P./Bank is liable to be allowed.
8. Shri Mukesh Sharma, learned counsel for the respondent no.1/complainant supported the impugned order and argued that the complainant deposited the instalments regularly and he had deposited the amount as mentioned in paragraph no.9 of the complaint.
9. None appeared for respondent no.2 before us, therefore, he was proceeded ex-parte.
10. We have heard learned counsel for the parties and have also perused the record of the District Forum.
// 6 //
11. The respondent no.1/complainant filed documents. Document Ex-A-1 is copy of First Information Report lodged at Police Station, Udaipur, Surguja (C.G.), Ex-A2 is letter dated 25.11.2006 sent by the General Manager (Network -2), State Bank of India, Bhopal (M.P.) to Rahul Jaiswal (respondent no.1/complainant), Ex.A-3 is letter dated 11.03.2006 sent by the Branch Manager, Branch Ambikapur (C.G.) sent to Shri Salauddin Siddique, Ex.A-4 is a document containing a heading "To Whomsoever it may concern" dated 15.02.2006, document A-5 is letter dated 22.11.2006 sent by General Manager (Network - 2), State Bank of India, Bhopal (M.P.) to the Rahul Jaiswal (respondent no.1/complainant), document A-6 is Arrangement Letter for Agriculture, document A-7 is Agreement for Hypothecation, document A-8 is Deed of Guarantee, document A-11 is Mortgage Deed, document A-12 is Agricultural Term Loan Account Sheet.
12. Appellant/O.P./Bank also filed documents. Document D-1 is Arrangement Letter for Agriculture, document D-2 is Agreement for Hypothecation, D-4 is Mortgage Deed, document D-5 is Detail Account Inquiry, document D-6 is information regarding auction of tractor trolley, document D-7 is details regarding vehicle sold in auction, document D-8 is Statement of Account, D-9 is also Statement of Account, D-10 is Protested Bills (AGL), document D-11 is interest not collected account, D-12 & D-13 are demand notice, D-14 is Notice s dated 21.11.2012, D-15 is Tractor Insurance Renewal Process, D-16 is // 7 // letter dated 04.09.2003 sent by the appellant/Bank to the respondent no.1/complainant, D-17 is letter dated 29.12.2003 sent by the appellant/Bank to Lakhan, D-19 is letter written by the Chief Manager, State Bank of India, Ambikaur Branch, Surguja (C.G.), document D-19 is statement of account, D-20 is interest not collected account, D-21 is term loan (agricultural) account statement, D-22 is Protested Bills (AGL), D-23 is statement of account, D-24 to D-28 is statement of account, D-29 is calculation of interest.
13. Looking to the documents filed by both the parties, it appears that the appellant/complainant obtained loan from the respondent/O.P./Bank and the respondent/O.P./Bank sent notice to the appellant/complainant for depositing the amount due. The vehicle was repossessed by the respondent/O.P./Bank and it is also established that appellant/complainant did not deposit the full amount of the loan taken by him for purchasing the said vehicle.
14. In the case of Suryapal Singh v. Siddha Vinayak Motors & Anr., III (2012) CPJ 4 (SC), Hon'ble Supreme Court, has observed thus :-
"2. This Court vide its judgment in Trilok Singh & Ors. v. Satya Deo Tripathi, AIR 1979 SC 850, has categorically held that under the Hire Purchase Agreement, the financier is real owner of the vehicle, therefore, there cannot be any allegation against him for having the possession of the vehicle. This view // 8 // was again reiterated in K.A. Mathai @ Babu & Anr. v. Kora Bibbikutty & Anr., 1996 (7) SCC 212; Jagdish Chandra Nijhawan v. S.K. Saraf, IX (1998) SLT 477 = IV (1998) CCR 118 (SC) = 1999 (1) SCC 119; Charanjit Singh Chadha & Ors. v. 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. v. The State of Kerala & Anr., AIR 1966 SC 1178; Smt. Lalmuni Devi v. State of Bihar & Ors., I (2001) SLT 26 = I (2001) CCR 9 (SC) = 2001 (2) SCC 17 and Balwinder Singh v. Asstt. Commissioner, V (2005) SLT 195 = III (2005) CCR 8 (SC) = CCE 2005 (4) SCC 146."
15. In the case of Pramod Kumar Rai v. Shriram Transport Finance Co. Ltd., III (2012) CPJ 553 (NC), Hon'ble National Commission has observed that Finance Company is well within its right to seize the vehicle as per the agreement. Hon'ble National Commission has further observed thus :
"3. Learned Counsel for the petitioner argued that the petitioner is a poor person. When we asked whether he was ready to deposit the instalments in three months, he wanted another one month to deposit the above said three instalments. It is, thus, clear that the petitioner has no intention to pay off the loan. The but and ben stand set up by the petitioner cannot produce the desired result.
4. Again, it is well settled that as per agreement, the respondent, finance company is well within its right to seize the said truck. This view is supported by National Commission in the case of Surendra Kumar Agrawal v. Telco Finance Limited & Anr., II (2010) CPJ 163 (NC)."
16. In the case of Shriram Transport Finance Co. Ltd. and Anr. v. Mr. Chaman Lal., 2012 (4) CPR 75 (NC), Hon'ble National Commission has observed thus :
// 9 // "6. .........Hon'ble Supreme Court has recently in Suryapal Singh v. Siddha Vinayak Motors and Anr., II (2012) CPJ 8 (SC) held :
"Under the Hire Purchase Agreement, it is the financier who is the owner of the vehicle and the person who takes the loan retain the vehicle only as a bailee / trustee, therefore, taking possession of the vehicle on the ground of non-payment of instalment has always been upheld to be a legal right of the financier. This Court vide its judgment in Trilok Singh & Ors. v. Satya Deo Tripathi, AIR 1979 SC 850, has categorically held that under the Hire Purchase Agreement, the financier is 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. v. Kora Bibbikutty & Anr., 1996 (7) SCC 212; Jagdish Chandra Nijhawan v. S.K. Saraf, IX (1998) SLT 477 = IV (1998) CCR 118 (SC) = 1999 (1) SCC 119; Charanjit Singh Chadha & Ors. v. 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. v. The State of Kerala & Anr., AIR 1966 SC 1178; Smt. Lalmuni Devi v. State of Bihar & Ors., I (2001) SLT 26 = I (2001) CCR 9 (SC) = 2001 (2) SCC 17 and Balwinder Singh v. Asstt. Commissioner, V (2005) SLT 195 = III (2005) CCR 8 (SC) = CCE 2005 (4) SCC 146."
17. In the case of Magma Fincorp Ltd. v. Sh. Subhankar Singh, I (2013) CPJ 27 (NC) , Hon'ble National Commission observed that :
"9. It is apparent that the learned Counsel for the respondent has raised copious objections merely for the sake of cavil. Notice dated 16.6.2009 has been placed on record. It is clear that he did not pay the instalments for the months of April, May and June. He also did not pay delay payment charges, total being Rs.59,246/-. Notice dated 11.7.2009, reveals that the said amount stood enhanced to Rs.80,050/-. Payment of one instalment in the month of July is no compliance of the terms and conditions of the agreement, placed before this Commission. There was no need to give the notice. The petitioner Company could have no moto taken the possession of the vehicle. The relevant extracts of the agreement reads, as under :-
"14. Events of default rights and remedies Thereon : (i) in case the Hirer/s shall during the continuance of this Agreement do or suffer one or more of the following :
// 10 // Fail to pay in time any of the hire instalments or part thereof herein reserved or any other sum of money payable under this agreement.
To (p) xxxxxxxxx (ii). (a) xxxxx (b) MAGMA SHRACHI shall be entitled to take possession of the said assets(s)/vehicle(s) and sell and/or cause to be sold or otherwise dispose of all or any part of the said asset(s)/vehicle(s) or any fittings thereof in such manner and/or made as prescribed more fully and particularly in appendix "A" hereto and apply the net sale proceeds of such sale in or towards liquidation of the amount outstanding due to MAGMA SHRACHI from the said hirer(s) as on the date of such sale. It, therefore means that there was no need to give notice, however, the petitioner gave two notices in this respect".
11. The National Commission, in case reported in Surendra Kumar Agrawal v. Telco Finance Ltd. & Anr., II (2010) CPJ 163 (NC), Hon'ble Mr. Justice Ashok Bhan, President, was pleased to hold as under :-
6. Aggrieved by the order passed by the District Forum petitioner filed the Appeal before the State Commission. The State Commission relying upon the judgment of Hon'ble Supreme Court of India in Managing Director Orix Auto Finance (India) Ltd. Vs. Sh.
Jagmandar Singh & Anr. reported in 127 (2006) DLT 278 (SC) = II (2006) BC 108 (SC) = II (2006) SLT 166 = II (2007) CPJ 45 (SC) = (2006) 1 SCC 708, dismissed the Appeal. It was held that no settlement of account showing details of repayment of loan installments is filed by the petitioner/complainant. That the petitioner had defaulted several times. That the said judgment of the Apex Court has clearly endorsed the rights of the finance in respect of repossessing the vehicles in case of default by the hirer.
7. xxxxx
8. xxxxx
9. It is not disputed before us that the petitioner had raised a loan of Rs.6,15,000/- to purchase the truck. No statement of account showing repayment of loan instalments has been filed by the petitioner. It was admitted before the State Commission that the petitioner had defaulted several times in making the payment on the date when it was due. Further it is not disputed that as per Hire Purchase Agreement the financier was authorized to repossess the vehicle in case of default in repayment of loan instalments. Supreme Court of India in Managing Director Orix Auto Finance (India) Limited case (supra) has held that the financier can repossess the vehicle if the agreement permits the financier to take possession of financed vehicle. There is nothing to show that the vehicle was repossessed forcibly. Mere fact that possession was taken by the respondents cannot be the ground to // 11 // contend that the hirer is prejudiced. We agree with the view taken by the State Commission".
18. In the case of Citicorp. Maruti Finance Ltd. v. S. Vijayalaxmi, AIR 2012 Supreme Court 509, Hon'ble Supreme Court observed thus :
"21. ......The aforesaid question has since been settled by several decisions of this Court and in particular in the decision recorded in ICICI Bank Ltd. v. Prakash Kaur (AIR 2007 SC 1349 : 2007 AIR SCW 1667 (supra). It is, not, therefore, necessary for us to go into the said question all over again and we reiterate the earlier view taken 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 in due process of law and not by use of force. Till such time as the ownership is not transferred to the purchaser, the hirer normally continues to be the owner of the goods, but that does not entitle him on the strength of the agreement to take back the possession of the vehicle by use of force. The guidelines which had been laid down by the Reserve Bank of India as well as the Appellant Bank itself, in fact, support and make a virtue of such conduct. If any action is taken for recovery in violation of such guidelines or the principles as laid down by this Court, such an action cannot but be struck down."
19. According to the appellant/complainant, the respondent/O.P./Bank forcibly repossessed the vehicle of the respondent no.1/complainant on 28.09.2006. The driver of the respondent no.1/complainant lodged FIR at Police Station, Udaipur, District Surguja (C.G.) on 29.09.2006.
// 12 //
20. Looking to the documents filed by both the parties, it appears that the appellant/complainant was a defaulter and due to non- payment of the amount due, the vehicle was repossessed by the respondent/O.P./Bank. It is undisputed fact that the appellant/complainant purchased the vehicle in question with the financial help of the appellant/O.P./Bank and mortgage deed and hypothecation agreement was executed between the appellant/Bank and respondent no.1/complainant.
21. In the complaint made in writing to Police Station, Udaipur, District Surguja (Ex.P-1) in left side the word "izkIr" is mentioned, but the complainant did not file any other documents relating to investigation made by the Police on the basis of written complaint.
22. Document Ex. P-2 is letter dated 25.11.2006 sent by the General Manager (Network - 2), Central Public Information Office, State Bank of India, Bhopal (M.P.) in which it is mentioned that Salauddin Siddique was authorised by the Bank for recovery of the loan amount and was he recovery agent of the State Bank of India. According to Ex.P-3 Salauddin Siddique was authorised by the State Bank of India to seize the property.
23. The appellant/O.P./Bank in its written version specifically pleaded that the amount was due against the respondent // 13 // no.1/complainant. Had appellant/Bank committed fraud or loot or the agent of the Bank looted the vehicle or cash amount from the driver of the vehicle, then the complainant would have lodge written complaint and the matter would have been investigated by the concerned Police Station and material or evidence would be available against Salauddin Siddique and charge sheet, would have been filed against Salauddin Siddique before the concerned Magistrate. Therefore, merely sending intimation to the Police is not sufficient to presume that Salauddin Siddique took forcible possession of the vehicle.
24. The respondent no.1/complainant utterly failed to prove that the vehicle in question was forcibly repossessed by the appellant/Bank by use of force.
25. It is not disputed that the respondent no.1/complainant purchased the vehicle with the help financial assistance given by the appellant/Bank and the respondent no.1/complainant executed Mortgage Deed and Hypothecation Agreement in favour of the appellant/Bank. Therefore, it is financer, who is owner of the vehicle and a person who takes loan retains the vehicle only as a bailee/trustee, hence taking possession of the vehicle on the ground of non payment of the instalment is always vested upon the financer and the financer has legal right to take possession of the vehicle.
// 14 //
26. In the instant case, the respondent no.1/complainant was a defaulter and he could not deposit the amount of instalments, therefore, the appellant/O.P./Bank took repossession of the vehicle and the appellant/O.P./Bank did not commit any deficiency in service. The respondent no.1/complainant has not been able to prove that the appellant/O.P./Bank took the possession of the vehicle with the help of muscleman by using force.
27. Therefore, the impugned order dated 19.03.2013, passed by the District Forum, is erroneous and is liable to be set aside.
28. Hence the appeal filed by the appellant/O.P./Bank is allowed and the impugned order dated 19.03.3013, passed by the District Forum, is set aside. Consequently, the complaint filed by the respondent no.1/complainant before the District Forum, is dismissed.
(Justice R.S.Sharma) (Ms.Heena Thakkar)
President Member
/02/2014 /02/2014