National Consumer Disputes Redressal
M/S Magma Fincorp Limited vs Shri Ashok Kumar Gupta on 19 July, 2010
OP 10/1998 NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2158 OF 2009 [Against the order dated 13.03.2009 in Appeal No. 266 of 2009 of the M.P. State Consumer Disputes Redressal Commission, Bhopal] M/s Magma Fincorp Limited (Formerly Magma Leasing Finance Ltd.) Having its Zonal Office at A-193 Okhla Industrial Area, Phase-I Opposite Okhla Police Station New Delhi-110 020 Vs. Shri Ashok Kumar Gupta S/o Shri Gulab Chand Gupta R/o Ward No.3, South Gate Chikan Mohall, Purani Basti P.O. & Police Station Maihar Tehsil Maihar, District Satna Madhya Pradesh Petitioner/Opposite Party Respondent/Complainant Appearance :- For the petitioner/opposite party For the respondent/complainant Mr. Sanjeev Singh, Advocate Mr. Dhruv Kumar, Advocate BEFORE: HON'BLE MR. S.K. NAIK, PRESIDING MEMBER Pronounced on : 19th July, 2010 M/s Magma Fincorp Limited had contested the complaint of Shri Ashok Kumar Gupta, the respondent herein, whose allegation of forcible repossession of his truck by them resulting in harassment, financial loss and mental agony has been upheld by both the Consumer Fora below, resulting in a direction by the District Consumer Disputes Redressal Forum, Satna, M.P. (District Forum for short) to pay a sum of Rs.6,21,636/-, if the vehicle after its repossession has been sold by the petitioner, and in addition pay a sum of Rs.500/- as costs. This award of the District Forum has been upheld by the M.P. State Consumer Disputes Redressal Commission, Bhopal (State Commission for short). Aggrieved by the concurrent finding and award against them that this revision petition has been filed by the petitioners M/s Magma Fincorp Limited. Facts of
the case, stated briefly, are that the respondent/complainant entered into a Hire Purchase Agreement with the petitioners for the financing of a truck for a sum of Rs.11,95,000/-. As per the terms of the agreement, he was liable to pay the hire charges in 46 monthly installments at the rate of Rs.34,650/- (perhaps the first advance installment) and the rest at the rate of Rs.33,660/- each.
Alleging failure on part of the respondent/complainant to pay the installments regularly, the truck in question was taken possession of on the 18th of March, 2008. It was subsequently sold out.
Alleging forceful and illegal possession of the truck, the respondent/complainant approached the District Forum seeking a direction to the petitioners to return his truck, failing which to compensate him for the loss of his income and other investments made in the construction of a body on the chassis. The complaint was contested by the petitioners/opposite party. On consideration of the evidence before it, the District Forum allowed the complaint in terms of its award. The order of the District Forum thereafter was challenged by the petitioners before the State Commission, who vide the impugned order dismissed their appeal and found that the order passed by the District Forum was fully justified. It is in this background that the petitioners M/s Magma Fincorp Limited feeling aggrieved have filed this revision petition.
Learned counsel for the petitioners and learned counsel for the respondent/complainant have been heard at length.
While the learned counsel for the petitioners contends that the possession of the truck by the petitioners was legally valid under clause 14 of the terms of the agreement, as the respondent/complainant had failed to pay the installments and had become a defaulter and further that a due notice in this regard dated 01.11.2007 had been given to him and the police had also been informed, it was totally wrong on part of the Fora below to have held that the vehicle was taken forcible possession of. He has also laid much stress on the existence of an arbitration clause in the agreement and has contended that when the arbitrator has passed an award, second award that too running contrary to the award of the arbitrator could not have been passed by the District Forum.
Records of the case have been perused.
Undoubtedly, the respondent/complainant had availed financial support of Rs.11,95,000/-, which had been provided by the petitioners under a Hire Purchase Agreement. This amount was to be repaid in 46 monthly installments.
The petitioners have not refuted the claim of the respondent/complainant that after the purchase of the chassis, he had spent Rs.2.00 Lakhs in constructing the body on the said vehicle.
It is also a fact that the vehicle had met with an accident during December, 2007, for which the respondent/complainant has claimed that an amount of Rs.1,75,000/- was incurred by him on its repairs. Despite these difficulties, he had paid Rs.3,90,236/- towards the installments. It was in these circumstances that he had failed to pay few installments and the vehicle was taken possession of on the 18th of March, 2008. While the respondent/complainant claims that the possession was taken forcibly by pushing out the driver, the petitioners contend that the possession was taken only after a notice had been served on the respondent/complainant vide letter dated 01.11.2007. This aspect has been gone into by both the Fora below and their clear cut finding is that the notice was a sham and had been issued only after the vehicle had been repossessed. The receipt of the letter dated 01.11.2007 has been denied by the respondent/complainant.
Learned counsel for the petitioners seeks to justify that this notice was sufficient for the petitioners to repossess the vehicle.
His contention cannot be accepted.
Even if it is considered that such a notice indeed had been issued, it did not meet the full legal requirement to repossess a vehicle. This Commission in the case of Citicorp Maruti Finance Ltd. Vs. S. Vijayalaxmi [III (2007) CPJ 161 (NC)] after having dealt with the entire gamut of Hire Purchase Agreements normally entered into by the financing agencies with the consumers has in categorical terms held that the banks/financing agencies should resort to procedure recognized by law to take possession of vehicles in cases where the borrower may have committed default in payment of the installments instead of taking resort to strong arm tactics. In this regard, it would be relevant to refer to the guidelines of the Reserve Bank of India, which have been filed by the petitioners themselves.
While the learned counsel for the petitioners has claimed that as per these guidelines they were fully entitled to repossess the vehicle, a plain reading of the agreement violates these very guidelines, inasmuch as when the Reserve Bank of India guidelines prescribe that a provision regarding final chance to be given to the borrower for repayment of loan before the sale/auction of the property and the procedure for giving repossession to the borrower and further the procedure for sale/auction of the property should find clear mention in the terms and conditions of the agreement, in the case in hand the petitioners have neither provided for such term in the agreement nor have they given any such opportunity to the respondent/complainant.
In his other limb of argument, the learned counsel for the petitioners has laid much stress on the clause of arbitration and has contended that when the arbitrator has passed an award, the Consumer Fora was debarred from passing any further award. This contention of the learned counsel has to be noted only to be rejected for the simple reason that the respondent/complainant had the choice either to go in for arbitration or resort to a consumer complaint. This remedy was available to him as per Section 3 of the Consumer Protection Act, 1986, which provides that 3. Act not in derogation of any other law.The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. Further, it is noticed that while the District Forum had decided the complaint and passed an award vide its order dated 16.12.2008, the award of the arbitrator appointed by the petitioners themselves was passed on the 13th of January, 2009, much after the award of the District Forum. Reliance by the petitioners on the order of this Commission passed in the case of Instalment Supply Ltd. Vs. Kangra Ex-Serviceman Transport Co. and Anr. [I (2007) CPJ 34 (NC)] would not support his case, as in that case the Consumer Fora had passed an award after the dispute had been finally adjudicated by an arbitrator and his award had already been passed.
The case of Surendra Kumar Agarwal Vs. Telco Finance Limited & Anr. [II (2010) CPJ 163 (NC)], which has also been cited by the learned counsel for the petitioners in support of his case will also not come to his rescue, as in that case the petitioner had defaulted several times. The facts of that case are clearly distinguishable. In the case in hand, the respondent/complainant had not participated in the arbitration proceedings and, therefore, the award of the arbitrator was not binding on him.
In overall consideration of the facts and legal issues, therefore, this Commission is of the view that no case for interference in revision has been made out against the concurrent finding of both the Fora below. The revision petition, accordingly, is dismissed at this stage of admission itself.
The petitioners are directed to comply with the award/order of the State Commission within a period of two months.
Sd/-
(S.K. NAIK) (PRESIDING MEMBER) Mukesh/