National Consumer Disputes Redressal
Indian Seamless Financial Services Ltd vs Smt. Ranjana S. Patel on 5 July, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 467 OF 2011 WITH IA NO.1 OF 2011 (for Stay) (From the order dated 18.08.2011 in Appeal No.486/1998 of the State Commission, Maharashtra) INDIAN SEAMLESS FINANCIAL SERVICES LTD. THE METROPOLITAN, 2ND FLOOR, EAST WING, BANDRA-KURLA COMPLEX, BANDRA (EAST) MUMBAI - 400051 Appellant Versus SMT. RANJANA S. PATEL 9, AXSHAR APARTMENT, A WING, 203, 2ND FLOOR, IRANI WADI NO.3, DATTANI GRAM, KANDIVALI (W) MUMBAI 400067 (MAHARASHTRA) Respondent FIRST APPEAL NO. 468 OF 2011 WITH IA NO.1 OF 2011 (for Stay) (From the order dated 18.08.2011 in Appeal No.487/1998 of the State Commission, Maharashtra) INDIAN SEAMLESS FINANCIAL SERVICES LTD. THE METROPOLITAN, 2ND FLOOR, EAST WING, BANDRA-KURLA COMPLEX, BANDRA (EAST) MUMBAI - 400051 Appellant Versus SMT. JAYASHREE V. PATEL 9, AXSHAR APARTMENT, A WING, 203, 2ND FLOOR, IRANI WADI NO.3, DATTANI GRAM, KANDIVALI (W) MUMBAI 400067 (MAHARASHTRA) Respondent BEFORE: HONBLE MR.JUSTICE V.B. GUPTA, PRESIDING MEMBER HONBLE MR. VINAY KUMAR, MEMBER For the Appellant : Mr. Shashank Garg, Mr. Apar Gupta and Mr. Animesh Sinha, Advocates Pronounced on : 5th July, 2012 ORDER
PER JUSTICE V.B. GUPTA, PRESIDING MEMBER In these appeals facts are similar and common question of law is involved, hence the same are being disposed of by this common order.
2. Aggrieved by order dated 18.8.2011, passed by State Consumer Disputes Redressal Commission, Maharashtra (for short State Commission), appellant/opposite party has filed present appeals. Vide impugned order, State Commission has allowed the complaints of the respondents.
3. Brief facts are that respondents purchased tankers for Rs.5,70,673/- which were financed by the appellant.
The loan amount was to be payable in 35 monthly installments from October 1994 to August, 1997. There was no term in the agreement to seize or repossess the vehicle, if installments were not paid or to sell the vehicle without due process of law. Appellant did not inform the respondents about the sale or transfer of the vehicles to third party and to whom it was sold illegally. The vehicles were repossessed in September, 1997. Accordingly, respondents filed complaints seeking return of vehicle in good condition and on failure to do so, to refund the amount of compensation.
4. Appellant in its written version admitted that respondent had entered into Hire Purchase Agreement. However, they were guilty of non-payment. It is further stated that respondents had paid the hire purchase amount upto 29.8.1997. Thereafter, they have failed to pay the remaining dues and thus, committed breach of terms and conditions of the agreement. Since, respondents have not paid the balance amount, the appellant was entitled without prior notice to terminate the agreement and forthwith retake possession of the vehicle. As per conditions of the Hire Purchase Agreement, after taking repossession of the vehicle, the appellant shall have absolute right to dispose of the vehicles by sale, without any notice to the hirer. Under these circumstances, there is no deficiency on the part of the appellant.
5. It is contended by learned counsel for the appellant that in the complaints, it is nowhere stated that repossession of the vehicles were taken forcibly. Since, respondents were defaulter, in view of the terms of agreement made between the parties, appellant was fully justified to repossess the vehicles and sell the same.
6. Learned counsel has relied upon clause 16 and 18 of the agreement executed between the parties. In support, learned counsel has relied upon following judgments ;
1. Citicorp Maruti Finance Limited Vs. S.Vijayalaxmi, (2012) I SCC 1;
2. Charanjit Singh Chadha & Ors. Vs. Sudhir Mehra, (2001) 7 SCC 417 and
3. Managing Director, Orix Auto Finance (India) Ltd. Vs. Jagmander Singh and Anr., Civil Appeal no. 1070 of 2006, decided on 10th February, 2006 by Honble Supreme Court.
7. Respondents in their complaints, have categorically stated that, there is no term in the agreement to seize/repossesses the vehicles, if installments fall due or to sell the vehicle without due process of law, i.e., without obtaining orders from the court.
Appellant, in its written statement have not made any specific denial to the above averments made in the complaint.
8. It is an admitted fact that appellant has seized the vehicles of the respondent and have sold them, without giving any notice to the respondent. During the course of arguments, we put a specific query to the learned counsel as to how the vehicles came into possession of the appellant ; whether these vehicles were handed over voluntarily by the respondents or the same was seized by force by the appellant. However, learned counsel for the appellant, did not respond to these queries.
9. State Commission, while allowing the complaint had observed ;
7. All the financial institutions like Indian Seamless Financial Services Ltd. Opponent herein are not doing their duty to inform the person who had taken loan after repossession as to within which period the defaulting person should make whole of the payment till the date to revive contract and to restart payment of monthly installments and to inform him the date of sale on which date the financial company was going to sell the vehicle by public auction and notice of this must be given to the party who committed default in paying monthly installments. He has got right to get an opportunity in bidding in public auction being held by the financial institution. He has got also right to bring some more persons of his acquaintance at the site of sale, so that they can also participate and/or defaulting person would be entitled to ensure that the vehicle that is being sold by financial institution for default committed by him was being sold at the highest bid in the public auction so held. All these opportunities were denied to the complainant in the instant case.
8. The counsel for the opponent could not satisfy us that auction made by the company was in the normal course of procedure.
The opponent could not point out the date on which the vehicle was sold. They have not produced on record any document to show that vehicle was sold to the particular person who was highest bidder in the auction.
Therefore, we are of the view that we cannot even accept so called statement of account of loan transaction produced on record by the opponent. Whole documents whatever opponent have produced are not worthy of any reliance and we are satisfied that just to deprive the complainant of her tanker, the opponent by resorting to arm twisting tactics repossessed the vehicle illegally from the possession of the complainant and without giving any opportunity to the complainant to repay the outstanding dues, they sold the said vehicle clandestinely to unknown person as is revealed from the record. So, everything done by the opponent financial institution is shrouded in mystery and we have got every reason to hold that there was no transparency in the acts and omissions made by the opponent and therefore, we hold that they were surely guilty of deficiency in service of highest order while dealing with the case of the complainant. The sale of vehicle without intimation to the complainant is per se bad in law. The sale was contrary to the clause 16 of the Hire Purchase Agreement. The complainant was neither given opportunity of paying all the overdue monthly installments and to repossess the vehicle nor she was permitted to take part in the sale proceeding. If she would have been informed about the sale proceeding she would have repossessed the vehicle by paying the highest bidding amount. Everything done by the opponent was contrary to the normal business procedure adopted in any financial institution. Therefore, we hold that opponent was guilty of deficiency in service and for this purpose opponent will have to be asked to pay some good amount of compensation to the complainant by along with this complaint partly.
10. None of the judgments cited by learned counsel support its case. On the other hand, Citicorp Maruti Finance Ltd. (supra), goes against the appellant. Honble Supreme Court in this judgment has observed ;
26. Since during the pendency of the special leave petitions before this Court, the appellant had complied with the orders of the District Forum and the National Commission had already set aside the punitive damages imposed by the State Commission, the reliefs prayed for on behalf of the appellant had been rendered ineffective and the submissions were, therefore channelled towards the question of whether the fora below were right in holding that the vehicles had been illegally and/or wrongfully recovered by use of force from the loanees.
The aforesaid question has since been settled by several decisions of this Court and in particular in the decision rendered in ICICI Bank Ltd. Vs. Prakash Kaur. 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 by due process of law and not by use of force.
27. 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 possession of the vehicle by use of force. The guidelines which had been laid down by 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.
11. Admittedly, in the present case, no notice for repossession was given to the respondents before seizing their vehicles. Thus, it is to presumed that the vehicles were seized forcibly and was sold without knowledge of the respondents, which is against the provision of law. In this regard, State Commission has categorically held ;
The complainant was neither given opportunity of paying all the overdue monthly installments and to repossess the vehicle nor she was permitted to take part in the sale proceeding. If she would have been informed about the sale proceeding she would have repossessed the vehicle by paying the highest bidding amount.
12. Thus, act of the appellant in seizing the vehicles forcibly and selling the same without giving any notice to the respondents is totally illegal and against the law. We are governed by rule of law in this country and our law does not permit forcible seizure of vehicles in a high-handedness manner, which has been done by appellant in these cases. Hence, we do not find any illegality or infirmity in the impugned order of the State Commission. There is no merit in these appeals and same have been filed without any legal basis just to deprive the respondents of their legal rights.
13. Accordingly, both these appeals are hereby dismissed with punitive costs of Rs.20,000/- each. Appellant is directed to deposit the costs by way of cross cheque in the name of Consumer Legal Aid Account within four weeks from today.
14. In case, appellant fails to deposit the said costs within the prescribed period, it shall also be liable to pay interest @ 9% p.a., till realization.
15. List the matter for compliance on 17.8.2012.
J. (V.B. GUPTA) PRESIDING MEMBER ...
(VINAY KUMAR) MEMBER Sonia/