State Consumer Disputes Redressal Commission
Mulakh Raj vs Kotak Mohindra Bank Ltd. on 9 February, 2016
Daily Order FIRST ADDITIONAL BENCH STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB SECTOR 37-A, DAKSHIN MARG, CHANDIGARH. First Appeal No.1352 of 2012 Date of Institution: 10.10.2012 Date of Decision: 09.02.2016 Mulakh Raj S/o Sh. Sai Dass C/o Maan Furniture House, Chowk Chibbu Mal, Purana Bazar, Khanna, Tehsil Khanna, District Ludhiana (Since Deceased), now Represented through his following Legal Heirs :- 1) Narinderpal S/o Late Sh. Mulakh Raj, R/o House No.288, Ward No.16, C/o Maan Furniture House, Shibumal Chowk, Purana Bazar, Khanna, Tehsil Khanna, District Ludhiana. 2) Surinder Kumar S/o Late Sh. Mulakh Raj, R/o House No.288, Ward No.16, C/o Maan Furniture House, Shibumal Chowk, Purana Bazar, Khanna, Tehsil Khanna, District Ludhiana. 3) Neena Kumari (Daughter of Late Sh. Mulkh Raj) W/o Sh. Sohan Lal, St. No.3, Mani Singh Basti, Ludhiana. ...Appellants/Complainants Versus 1. The Managing Director, Kotak Mohindra Bank Ltd., 36-38-A, Nariman Bhawan 227, Nariman Point, Mumbai. 2. The Manager, Kotak Car Finance, SCO 120, 6th Floor, Feroze Gandhi Market, Ferozepur Road, Ludhiana. ..Respondents /Opposite Parties First Appeal against order dated 22.08.2012 passed by the District Consumer Disputes Redressal Forum, Ludhiana Quorum:- Shri J. S. Klar, Presiding Judicial Member.
Shri. H.S. Guram, Member Shri. U.S. Brar, Member Present:-
For the appellant : Sh.Sandeep Bhardwaj, Advocate For the respondent no.1 : Sh.A.S Virk, Advocate For the respondent no.2 : Ex-parte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J.S KLAR, PRESIDING JUDICIAL MEMBER :-
The appellants of this appeal (the complainants in the complaint) have directed this appeal against the respondents of this appeal (the opposite parties in the complaint), challenging order dated 22.08.2012 of District Consumer Disputes Redressal Forum Ludhiana, dismissing the complaint of the complainant. The instant appeal has been preferred against the same by the complainants now appellants.
2. The complainant (since deceased) has filed the complaint U/s 12 of The Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that he purchased a Tempo Tracks Pick UP Van bearing registration no.PB-10BE-8456, Model 2003, Chassis No.T59002829H03, Engine No.DI1001558, which was financed by OP No.1 for Rs.3,40,000/-, vide loan agreement no.601102 dated 18.12.2003. OP No.2 obtained signatures of the complainant on some blank cheques, blank papers and printed forms. The complainant agreed to repay the loan amount in 46 monthly installments of Rs.9,065/- per month to OPs. The complainant paid 16 installments to OPs by March 2005 regularly. OPs No.1 and 2 put pressure on complainant to pay more money than the original financed amount and raised the demand of Rs.2,61,099/- by means of undated letter. The complainant has already paid Rs.1,45,040/- to OPs for repayment of loan amount in 16 regular monthly installments and Rs.2,44,747/- was still payable by complainant to OPs, but OPs started raising demand of Rs.2,61,099/-. The OPs threatened to take forcible possession of the vehicle from the complainant. The complainant filed civil suit before Additional Civil Judge (Sr. Division) Khanna for permanent injunction against OPs restraining them from forcibly and illegally taking possession of the vehicle. The vehicle was seized forcibly by OPs on 28.05.2005 at about 5.00 pm by threatening him. The complainant moved an application to Senior Superintendent of Police, Khanna on 30.05.2005 in this regard. The police had not taken any action against the said persons. The complainant withdrew the civil suit with permission to file the consumer complaint. The OPs produced application form bearing serial no.13503 for commercial vehicle in the name of the complainant, whereupon photo of some other person was affixed instead of the complainant. The complainant has, thus, filed the complaint against the OPs praying that the period spent in the civil court be condoned and OPs be directed to pay Rs.3,09,040/- as cost of tempo and Rs.50,000/- as compensation for mental tension and Rs.22,000/- as costs of litigation.
3. Upon notice, OPs appeared and filed written reply raising preliminary objections that complaint is not maintainable in the present form. The complaint is barred by time. The vehicle was repossessed on 28.05.2005 and complainant has no cause of action to file the complaint at that time. The complaint is barred by time because cause of action accrued in the year 2005. The civil court has no jurisdiction to extend the limitation before Consumer Forum. It was admitted by the OPs that complainant availed loan of Rs.3,40,000/-, vide loan agreement bearing no.CV601102 dated 18.12.2003 for purchase of vehicle. The loan amount was to be repaid in 46 equated monthly installments each for Rs.9,065/-. The complainant committed default in paying the monthly installments and failed to clear the same. A registered notice dated 12.04.2005 was duly served upon complainant as well as guarantor asking them to make the payment of balance amount, failing which OPs would be compelled to exercise their rights under Hire-Purchase Agreement, but the complainant failed to clear the balance amount. After waiting for four months, the OPs/Bank was forced to sell the vehicle in open market by calling quotations and vehicle was sold on 21.09.2005 for total sale consideration of Rs.1,05,000/-. There is still balance amount of Rs.1,95,031.09 from complainant after deducting the sale price of the vehicle of Rs.1,05,000/-. The OPs further averred that tempo in question was purchased by the complainant for commercial use and hence complainant is not a 'consumer'. The complaint was contested on above-referred grounds by OPs even on merits. Other averments of the complainant have been denied by OPs and prayed for dismissal of the complaint.
4. The complainant tendered in evidence, his affidavit Ex.C-A, affidavit of complainant along with copies of documents Ex.C-1 to Ex.C-29. As against it; OPs tendered in evidence affidavit of Sh. Sumit Arora Authorized Signatory of Kotak Mahindra Bank Ltd Ex.RW-1 alongwith copies of documents Ex.R-1 to Ex.R-7. On conclusion of evidence and arguments, the District Forum Ludhiana, dismissed the complaint of the complainant, vide order dated 22.08.2012. Dissatisfied with the order of the District Forum Ludhiana dated 22.08.2012, the complainants now appellants have preferred this appeal against the same.
5. We have heard learned counsel for the parties and have also examined the record of the case.
6. We have also evaluated the evidence adduced on the record by both the sides. It is an undisputed fact in this case that complainant obtained loan from OPs for purchase of tempo (truck) for Rs.3,09,040/- and also executed loan agreement No.601102 dated 18.12.2003 in this regard, vide Ex.C-1. The complainant relied upon the receipts Ex.C-2 to Ex.C-14 on the record. As per pleaded version of the complainant, he paid only 16 installments up to March 2005 to OPs whereas the total amount was to be repaid in 46 installments. The balance amount has not yet been paid by the complainant in this case, even by taking into account these receipts Ex.C-2 to Ex.C-14 on the record. The OPs sent registered notice Ex.C-15 to complainant calling upon him to clear the aggregate balance amount of Rs.2,58,341/-, which was sent to the complainant. Ex.C-16 is another copy of notice sent to Mulkh Raj complainant. Ex.C-17 is another unsigned copy of suit for permanent injunction between the parties. Ex.C-17/A is unsigned copy of application under Order 39 Rule 1 and 2 CPC. Ex.C-18 is copy of complaint sent to SSP Khanna on 30.05.05 by the complainant. Written statement is Ex.C-19 filed on behalf of OPs in the above civil suit. Ex.C-19/A is application to withdraw the suit with permission to file fresh one on the same cause of action. Ex.C-28 is copy of registered notice addressed to complainant. Ex.C-20 is copy of plaint of civil suit no.159 of 17.5.05 between the parties for permanent injunction. Ex.C-21 and Ex.C-21/A to Ex.C-21/D are copies of statement of account of complainant. Ex.C-23 is copy of registration certificate. Ex.C-24 is copy of insurance policy. Ex.C-25 to Ex.C-27 are copies of cash memos.
7. The OPs relied upon affidavit of Sumit Arora Authorized Signatory of Kotak Mahindra Bank Ltd., Ex.RW-1 on the record. Ex.R-1 is the loan agreement. Ex.R-2 is the copy of registered notice sent to the complainant calling upon him to clear the arrears of the loan amount. Ex.R-3 and Ex.R-4 is information given to police station about repossession of the vehicle by the OPs on 28.05.05. Ex.R-5 is notice sent to complainant for clearing the balance loan amount of Rs.2,74,202/-, failing which OPs would be constrained to sell the above vehicle. This is registered notice sent to complainant Mulkh Raj on 03.06.2005. We can draw presumption that it was delivered to complainant. The OPs called upon the complainant to clear the balance amount of the loan, failing which they would be constrained to sell the vehicle. The statement of account of complainant showing still balance amount of Rs.1,95,031.09 from complainant is Ex.R-6 on the record. The submission of counsel for appellant is that the vehicle cannot be repossessed and sold forcibly, as has been done in this case by the OPs. Much stress has been laid on this point by counsel for complainant now appellant before us. We do not dispute this proposition of law, as held by Supreme Court in Manager ICICI Bank Ltd.. versus Parakash Kaur & others, reported in 2007(2) RCR (Criminal) 76 that default in payment of installments by borrower, bank-taking possession of truck by hiring musclemen. Bank should resort to procedure recognized by law to take possession of the vehicles, in cases where the borrower may have committed default in payment of the installments instead of taking resort to strong-arm tactics. Similarly, Apex Court observed in ICICI Bank versus Shanti Devi Sharma and others, reported in 2008(7) Supreme Court Cases 532 that bank should seize the vehicle through legal means. Herein, we find that complainant now appellant was at default in clearing the loan amount and this fact is established on the record in this case. The OPs gave notice to complainant to clear the loan amount, failing which they would be constrained to go for sale of the vehicle. Our attention has been drawn to Clause 5.3 of the loan agreement to the effect that Bank has right to sell the asset and appropriate the proceeds thereof towards the amounts due under the agreement. The OPs have derived the right to sell the vehicle from this part of the agreement. The OPs duly served notice upon complainant to pay the loan amount, failing which they would go in for sale of the vehicle. It is submitted by counsel for respondent in this appeal that they waited for four months after sending notice but complainant ignored them and as such, they have no other remedy except to go in for sale of the vehicle. The counsel for appellant argued that no notice for auction of the vehicle was sent to the complainant now appellant and as such, he remained deprived of overseeing the proper auction of the vehicle.
8. Considering the facts and circumstances of the case, we find that the complainant took loan on 18.12.2003 for purchase of tempo (van) from OPs. The loan was payable in 46 equal monthly installments of Rs.9065/- per month. It is pleaded case of the complainant that he deposited 16 installments till March 2015 regularly towards repayment of loan to OPs. The tempo (van) was seized by the OPs on 28.05.2005 from the complainant. Sixteen installments were due before the advent of May, 2005 from the complainant to OPs. The complainant has paid 16 installments to OP and reference may be made to receipts Ex.C-2 to Ex.C-14 on the record. The truck of the complainant was forcibly seized on 28.05.2005 and by that time, only 16 installments became due, which were paid by the complainant to OPs by virtue of above-referred receipts. The OP auctioned the truck by seizing it on 28.05.2005 on the ground that balance amount was due from the complainant to OPs towards the loan agreement. The terms and conditions of loan agreement Ex.C-1 are on the record. The OPs could have resorted to putting the loaned vehicle to auction only, in case of default of the complainant in making the payment of the installments, as per relevant clause of the agreement. This was the only remedy available to OPs, as and when the amount under the agreement became due. We, thus, find that when no installment was due from the complainant to OPs, hence the OPs wrongly seized the truck and put the same to auction without giving any notice to the complainant.
9. From the above discussion, we find that the vehicle was forcibly seized by OPs on 28.05.2005 when no installment of loan amount was in arrears from the complainant. The vehicle has been auctioned and thereby the complainant stood deprived of the utility of the vehicle. The OPs cannot claim any interest from the complainant after seizure of the vehicle, as complainant remained deprived of earning his livelihood by use of Tempo Tracks Pick Up Van in question. Since the auction has been done illegally and unauthorizedly by OPs in the absence of complainant, hence, OPs are not entitled to recover any remaining amount from the complainant after forcible seizer of the truck w.e.f. 28.05.2005.
10. As a result of our above discussion, we accept the appeal of the appellants and award the amount of Rs.35,000/- as compensation for mental harassment to appellants and Rs.10,000/- as costs of litigation.
11. Arguments in this appeal were heard on 05.02.2016 and the order was reserved. Copies of the order be communicated to the parties as per rules.
12. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (H.S.GURAM) MEMBER (U.S BRAR) MEMBER February 9, 2016 (ravi)