State Consumer Disputes Redressal Commission
Branch Manager vs Nagen Verman & Anr. on 7 February, 2014
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/12/763
Instituted on : 22.12.12
Branch Manager, Bank of Baroda,
Branch Ambikapur,
Dist. SURGUJA (C.G.) ... Appellant.
Vs.
1. Nagen Verman, S/o: Late Shri Bharat Chand,
2. Umesh Verman, S/o: Shri Nagen Varman,
R/o: Village Ajirima, Post - Raghavpuri, Tah. Surajpur,
Dist. SURGUJA (C.G.) ... Respondents.
PRESENT: -
HON'BLE JUSTICE SHRI R.S.SHARMA, PRESIDENT
HON'BLE MS. HEENA THAKKAR, MEMBER
COUNSEL FOR THE PARTIES: -
Shri Ashok Dubey, Advocate for the appellant.
None for respondents.
ORDER
Dated:07/02/2014 PER :- HON'BLE JUSTICE SHRI R.S.SHARMA, PRESIDENT. This appeal is directed against the order dated 21.11.2012 passed by District Consumer Disputes Redressal Forum, Surguja, Ambikapur (henceforth called "District Forum"), in complaint case no.54/2011. By the impugned order, learned District Forum allowed the complaint of the complainant and directed the appellant Bank to refund Rs.2,05,230/- to complainants / respondents along with interest @ 6% p.a. from the date of complaint till the date of payment.
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2. Brief facts of the complaint case filed by the complainants / respondents are that the complainants/respondents purchased tractor Mahendra 275 D I Engine No. & Chasis No.RDT 8501 and trolley from Shastri Automobile, Ambikapur at the cost of Rs.4,79,285/-. The complainants/ respondents obtained loan from the appellant / OP Bank. Registration and insurance would be obtained by the appellant / OP Bank, but the appellant / OP Bank failed to obtain registration and insurance and committed deficiency in service. The complainants / respondents deposited instalments regularly to the appellant /OP Bank, but on 03.02.2011, appellant / OP Bank forcibly repossessed the vehicle with the help of Ambe Associates Mopka, Bilaspur and repossessed the vehicle with the help of muscle power and sold the same illegally and committed deficiency in service. The complainants/ respondents filed consumer complaint before the District Forum seeking direction for payment of compensation.
3. Appellant / OP Bank filed written version before the District Forum and averred that the complainants / respondents failed to deposit the instalments of loan in time and, so, their account become Non Performing Asset and so appellant / OP Bank had become entitled to repossess the vehicle, which was hypothecated with it, as security of loan. The vehicle in question was repossessed by the appellant / OP Bank and proclamation (bf'rgkj) was published in daily // 3 // newspaper Dainik Bhaskar before auction and the vehicle was sold by public auction and the appellant / OP Bank had not committed any deficiency in service.
4. Learned District Forum, on the basis of materials available before it, came to the conclusion that the appellant / OP Bank was guilty in deficiency in service, as the vehicle was repossessed by it with the help of muscleman and directed the appellant / OP Bank to refund the amount of Rs.2,05,230/- deposited by the complainants/ respondents with the appellant / OP Bank along with interest @ 6% p.a. and further directed the appellant / OP Bank to pay Rs.3,000/- for mental agony and Rs.1,000/- for cost of litigation.
5. Learned counsel for appellant, Shri Ashok Dubey, argued that the complainants / respondents had not deposited the amount regularly and the complainants / respondents defaulted in making payment of instalment, therefore, the appellant / OP Bank repossessed the vehicle. Appellant / OP Bank never took possession of the vehicle by using force. He further argued that notice was sent to the complainants/ respondents, but the complainants / respondents failed to deposit the instalments. Hypothecation deed was executed by the complainants/ respondents in favour of appellant / OP Bank and the appellant / OP Bank is owner of the vehicle and the complainants / // 4 // respondents are simply a bailee of the vehicle. Before auction, the proclamation was published in daily newspaper. Even, after publication of proclamation, the complainants / respondents have not bothered to deposit the instalments. Therefore, the appellant / OP Bank sold the vehicle by public auction, which is within its jurisdiction. Appellant / OP Bank did not committed any deficiency in service and the order passed by learned District Forum is erroneous and is not sustainable in the eye of law.
6. None appeared for the respondents, despite notice served upon him and notice was duly served upon respondents by way of advertisement in the newspaper under Order 5 Rule 20 (1) (1A) of CPC.
7. We have heard, learned counsel for the appellant / OP Bank and also perused the record of the District Forum.
8. The complainants/ respondents filed a complaint before the District Forum and the District Forum allowed the complaint vide order dated 14.11.2011 and directed the appellant / OP Bank to pay Rs.2,80,000/- to the complainants / respondents and failing which interest @ 6% p.a. will be payable from 13.04.2011 till the date of satisfaction. Appellant / OP Bank then filed appeal No.773/2011 // 5 // before this Commission and this Commission allowed the appeal vide order dated 05.05.2012 and the case was remitted back to the District Forum with a direction "to take on record, the Agreement for Hypothecation executed by complainants / respondents and other relevant documents, as filed by the appellant / Bank before it and then to provide opportunity to both parties for filing their affidavits, in support of their case and to controvert the documents of each other and then to decide the matter afresh on merits."
9. Learned District Forum, after due appreciation of material available before it, again allowed the complaint of the complainant vide order dated 21.11.2012 and awarded compensation to the complainants / respondents as mentioned in paragraph no.1 of this judgment. The complainants filed document A1(I) Delivery Chalan of Shastri Automobiles, A1(II) Insurance Policy, A1(III) & A1(IV) Certificate of Insurance, which is Farmer Package Insurance and document A1(V) & A1(VI) Sale Certificate. Document A2(I) letter dated 23.07.2010 sent by the appellant Bank to the complainant no.1 / respondent no.1, Nagen Verman, document A2(II) letter dated 11.08.2010, which is sent by the appellant / OP Bank to Nagen Verman. Document A3(I) Copy of letter dated 03.02.2011 and document A3(II) Panchnama. Document A4(I) Receipt of sending notice and A4(II) Legal Notice.
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10. The appellant / OP Bank also filed document D/1 photocopy of daily newspaper Exhibit-1, in which Auction Notice has been published. Document D/2 Exhibit-2 Account Ledger Details Report. Document, Exhibit - 3 (A) Sanction Letter, (B) Demand Promissory Note, (C) Repayment Schedule. Document D/4 is Agreement for Hypothecation and other documents were also filed by the appellant / OP Bank.
11. Looking to the documents filed by both parties, it appears that the complainants / respondents obtained loan from the appellant / OP Bank and the appellant / OP Bank sent a notice to the complainants / respondents for depositing the instalment. From bare perusal of document A2(I), A2(II), A4(I) and A4(II), it appears that the appellant / OP Bank sent notice to the complainant for depositing instalments. The appellant / OP Bank filed Account Ledger Details Report and looking to the same, it appears that full amount was not deposited by the complainants / respondents.
12. 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 // 7 // 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."
13. 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.
14. In the case of Pramod Kumar Rai v. Shriram Transport Finance Co. Ltd., III (2012) CPJ 553 (NC), Hon'ble National Commission has 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)."
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15. 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 :
"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."
16. In the case of Magma Fincorp Ltd. v. Sh. Subhankar Singh (Supra), 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 // 9 // 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 :
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 // 10 // 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 contend that the hirer is prejudiced. We agree with the view taken by the State Commission".
17. According to the complainants / respondents, appellant Bank forcibly repossessed the vehicle with the help of muscleman, but the complainants / respondents had not produced any document to indicate that the appellant / OP Bank took possession of the vehicle by using muscleman. According to the complainants / respondents, appellant / OP Bank forcibly took possession of the vehicle on 03.02.2011 and the respondents/ complainants did not lodge any report, regarding forcibly repossession of the vehicle. Had the appellant Bank took possession of the vehicle forcibly, the complainant / respondent would have lodge report immediately before the Police Station, but the complainant / respondent did not submit or file any document regarding forcefully possession of the vehicle by the appellant / OP Bank. Even, he did not file any copy of report lodged with Police Station, if any.
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18. Looking to the documents filed by the appellant / OP Bank, it appears that the appellant / OP Bank sent notice to the complainant / respondent for depositing the instalments and before auction of vehicle, the proclamation was published in daily newspaper and thereafter the vehicle was sold by the appellant / OP Bank.
19. It is undisputed fact that the complainant / respondent, Nagen Verman purchased the vehicle in question with the financial help of the appellant / OP Bank and hypothecation deed was executed between the appellant / OP Bank and the complainants / respondents. Appellant / OP Bank specifically pleaded in his written version that the complainant / respondent did not deposit the amount, therefore the appellant / OP Bank proceeded for auction under Section 13 of SARFAESI Act.
20. The complainants / respondents utterly failed to prove that the vehicle in question was forcibly repossessed by the appellant / OP Bank. The pleading advanced by the complainants / respondents is not reliable and is not acceptable, therefore, the order passed by the District Forum suffers from irregularity and illegality and is not sustainable in the eye of law and is liable to be set aside.
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21. Hence the appeal of the appellant / OP Bank is allowed and the impugned order dated 21.11.2012 passed by District Forum is set aside. Consequently, the complaint filed by the complainant before the District Forum also stands dismissed. No order as to the cost of this appeal.
(Justice R.S.Sharma) (Ms.Heena Thakkar)
President Member
/02/2014 /02/2014