State Consumer Disputes Redressal Commission
Shri Ram Transport Finance Co. vs Gian Singh on 7 March, 2017
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.593 of 2015
Date of Institution: 08.06.2015
Order reserved on:06.03.2017
Date of Decision : 07.03.2017
Shri Ram Transport Finance Company Limited SCF No.101-102, 2nd
Floor, Phase II, SAS Nagar Mohali through its Branch Manager.
.....Appellant/opposite party no.1
Versus
1. Gian Singh son of Sh. Ronaki Ram resident of Village
Navagram, PO Jhajra, Tehsil Nalagarh, District Solan (HP).
.....Respondent no.1/complainant
2. Kotak Mahindra Bank Ltd. SCO No.153-54, Sector 9-C,
Madhya Marg, Chandigarh through its authorized
signatory/Manager.
.....Respondent no.2/opposite party no.2
First appeal against order dated
28.04.2015 passed by the District
Consumer Disputes Redressal
Forum, SAS Nagar, Mohali.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member
Smt. Surinder Pal Kaur, Member Present:-
For the appellant : Sh. Munish Kumar, Advocate
For respondent no.1 : Sh. N.S. Vashisht, Advocate
For respondent no.2 : Sh. Vinay Phogat, Advocate
.................................................
AND 2) First Appeal No.749 of 2015 Date of Institution: 10.07.2015 Order reserved on:06.03.2017 Date of Decision : 07.03.2017 Kotak Mahindra Bank Ltd., SCO 153-154, Sector 9-C, Madhya Marg, Chandigarh (UT) through its authorized signatory/Manager. First Appeal No.593 of 2015 2
.....Appellant/opposite party no.2 Versus
1. Gian Singh son of Ronaki Ram, resident of Village Navagram, P.O. Jhajra, Tehsil Nalagarh, District Solan (HP).
.....Respondent no.1/complainant
2. Sri Ram Transport Finance Co. Ltd., SCF No.101-102, 2nd Floor, Phase II, SAS Nagar, Mohali, through its Branch Manager.
.....Respondent no.2/opposite party no.1 First appeal against order dated 28.04.2015 passed by the District Consumer Disputes Redressal Forum, SAS Nagar, Mohali.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member Smt. Surinder Pal Kaur, Member Present:-
For the appellant : Sh. Vinay Phogat, Advocate For respondent no.1 : Sh. N.S. Vashisht, Advocate For respondent no.2 : Sh. Munish Kumar, Advocate ................................................. J.S KLAR, PRESIDING JUDICIAL MEMBER :-
By this common order, we intend to dispose of the above referred two first appeals, as they have arisen out of the same order dated 28.02.2015 of the District Consumer Disputes Redressal Forum, S.A.S. Nagar, Mohali (in short the 'District Forum), as such they can be disposed of together. The order shall be pronounced by us in main first appeal no.593 of 2015, which has been filed by opposite party no.1 against above order, vide which, the complaint of complainant was allowed by directing OP no.1 to handover the JCB machine in question in a good and working condition, to the First Appeal No.593 of 2015 3 satisfaction of the complainant or in the alternative to pay Rs.11,50,000/- towards asset value of the vehicle, as per Ex.C-1, with interest thereon @9% per annum w.e.f. 21.11.2009 i.e. the date of handing over the vehicle to OP no.1 by the complainant, till actual payment, besides Rs.5 lakhs on account of loss of his livelihood in the absence of the vehicle and to pay Rs.1 lakh in lump sum as compensation for mental harassment and costs of litigation. The District Forum directed OP no.2 to pay a lump sum compensation of Rs.50,000/- to the complainant on account of not providing the insurance policy of the vehicle during the currency of the loan period availed from it by him. The appellant of this appeal is OP no.1, respondent no.1 of this appeal is complainant and respondent no.2 is OP no.2 in the complaint before the District Forum and they be referred as such hereinafter for the sake of convenience.
2. First appeal no.749 of 2015 has been filed by OP no.2 now appellant against order dated 28.02.2015 of the District Forum, allowing the complaint of the complainant, as referred to above. The appellant of this appeal is OP no.2, respondent no.1 of this appeal is complainant and respondent no.2 is OP no.1 in the complaint before the District Forum and they be referred as such hereinafter for the sake of convenience.
3. Complainant Gian Singh filed complaint under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that he purchased a second hand JCB machine for earning his livelihood, bearing registration no.HP-51B- First Appeal No.593 of 2015 4
9815, which was got financed by him from OP no.2 to the tune of Rs.9 lakhs, vide agreement dated 28.06.2008. The loan amount was re-payable in 48 equal monthly installments of Rs.30,400/- per month each. OP no.2 showed financed amount as Rs.9,37,488/-, instead of Rs.9 lakhs and it fraudulently debited/charged Rs.37,488/- from the loan account of the complainant, which was an unfair trade practice on the part of OP no.2. The complainant paid monthly instalments regularly to OP no.2 and paid total amount of Rs.4,50,200/- as installments towards the loan repayment. Due to some unavoidable circumstances, he could not make payment of two instalments to OP no.2. OP no.2 threatened complainant to take possession of the vehicle. The complainant was forced to get re- financed his JCB machine from OP no.1. On 18.11.2009, OP no.1 re-financed the said JCB machine by executing loan agreement. The detail of loan given by OP no.1 is as under:
i) Loan Amount Rs.9,00,000/-
ii) Advance instalment Rs.30,000/-
iii) File Charges Rs.1500/-
iv) Insurance of complainant Rs.15,489/-
v) Insurance of vehicle Rs.13,000/-
vi) Service charges Rs.5000/-
vii) Amount paid to OP no.2 Rs.8,35,011/-
OP no.1 took possession of JCB machine of complainant prior to advancement of above loan. OP no.1 illegally and arbitrarily debited First Appeal No.593 of 2015 5 the insurance charges of the complainant to the tune of Rs.15,489/- and service charges Rs.5000/- without his consent and permission. At the time of advancement of loan, OP no.1 told him for debiting two instalments in advance, but it showed one instalment in the loan account of the complainant, which was unfair trade practice on its part. It was further averred that OP nos.1 and 2 discussed the re- financing of machine of the complainant and agreed that after a payment of Rs.8,35,011/- by OP no.1 to OP no.2, NOC would be issued by OP no.2 in favour of complainant. On 18.11.2009, the amount of Rs.8,35,011/- was sanctioned by OP no.1 and paid to OP no.2 towards the entire outstanding loan amount of complainant, vide cheque no.653078 dated 18.11.2009 drawn from Axis Bank Ltd. OP no.2 issued NOC in favour of complainant on 10.12.2009. OP no.1 issued receipt showing possession of the vehicle on 21.11.2009. The complainant got the hypothecation of the above machine with OP no.1 on 19.01.2010. OP no.1 did not deliver the possession of the machine to complainant, inspite of hypothecation of the vehicle in their favour and asked for the payment of the loan instalments, whereas it already deducted two advance instalments from the loan of the complainant. OP no.1 got the signatures of complainant on various blank papers including stamp papers at the time of financing the said machine. Despite repeated requests of complainant, OP no.1 did not hand over the possession of the above said machine to complainant. OP no.1 sold the said machine at a meager throw away price of Rs.6,80,000/- only, whereas the value First Appeal No.593 of 2015 6 assessed by OP no.2 of the machine at the time of financing of machine was Rs.11,50,000/- as asset value assessed by OP no.1. The complainant suffered loss of income to the extent of Rs.50,000/- per month. The complainant prayed that OP no.1 be directed to pay Rs.5 lakhs as loss in his income and Rs.2,50,000/- as compensation for mental harassment and for unfair trade practice on the part of OP no.1, besides to pay Rs.20,489/- fraudulently charged for insurance and to pay Rs.11,50,000/- as costs of the JCB machine. OP no.2 be also directed to pay Rs.37,488/- and to pay Rs.15,000/- as litigation expenses.
4. Upon notice, OP no.1 appeared and filed written reply and contested the complaint of the complainant vehemently. It was averred in preliminary objections in the written version by OP no.1 that complaint is not maintainable. The complainant is not the consumer of OP no.1. The complainant has so many vehicles and is a transporter by business and used the JCB machine for commercial purposes and not for domestic purposes. Prior to sanctioning of the loan amount, a tele verification was conducted by the authorized representative of the OP company and it is clear from the tele verification report that he was running the business of transport and he has already two tipper and one JCB machine. The complainant concealed material facts from the Forum. The complainant firstly got financed his machine from OP no.2, where he failed to abide by the financial discipline and failed to pay the regular instalments of the machine got financed by him. To clear the debt of OP no.2 due to his First Appeal No.593 of 2015 7 own financial irregularity, he approached OP no.1 to refinance the loan of his machine. The complainant signed the loan cum hypothecation agreement on 18.11.2009 assuring to maintain the financial discipline. OP no.1 agreed to refinance the machine to complainant. The amount was disbursed by OP no.1 to OP no.2 on behalf of complainant, vide cheque no.653078 dated 18.11.2009. The complainant agreed to hypothecate the machine in favour of OP no.1 company to secure the loan amount. The said JCB machine was surrendered to OP no.1 without any documents and without tyre, as the same has been removed by the complainant himself on 21.11.2009 in the company yard at the branch office of OP no.1 situated at Una and he signed the surrender letter on 21.11.2009. It was vehemently denied that any force or other tactics were used to get the surrender letter from the complainant. He voluntarily executed surrender letter dated 21.11.2009 of the machine in favour of OP no.1. The complainant showed his inability to pay the instalments to OP no.1 of the loan. The complainant admitted violation of terms, which was settled between the parties at the time of sanctioning the loan. The complainant admitted the fact of failure to pay regular four instalments due to losses in his transport business, vide Annexure R-7. The complainant gave right to OP no.1 to dispose of the vehicle for his default, vide Annexure R-7 and even annexed form 29 and form 30 duly signed by him. The machine was sold in open auction by OP no.1 to the highest bidder by giving information to the complainant on 12.08.2010. The amount received First Appeal No.593 of 2015 8 towards price of the machine in the above auction, was adjusted towards loan amount of complainant, as per settlement of account prepared and maintained by it. After adjustment of the sale consideration received from the vehicle in question, an amount of Rs.2,80,118.72 paise is still due from the complainant payable to OP no.1. Even arbitration proceedings are pending before Sh. B.R. Bansal, Sole Arbitrator at Chandigarh of this dispute. It was denied that OP got the signatures of complainant on various blank papers including stamp papers. On merits, on the above averments, it was pleaded by OP no.1 that machine was sold to highest bidder in open auction without any documents, as the same was retained by the complainant till date. Any deficiency in service or unfair trade practice was denied by OP no.1 on its part and it prayed for dismissal of the complaint.
5. Upon notice, OP no.2 filed separate written reply and contested the complaint of the complainant. It was averred in written reply by OP no.2 that complaint is barred by time. OP no.2 sanctioned and disbursed the loan of Rs.9,37,488/- in favour of complainant for purchasing second hand JCB machine on 28.06.2008. The complainant got the loan taken over by OP no.1 on 18.11.2009 and adjusted the loan account of complainant with OP no.2 and it issued NOC for removal of hypothecation. The complainant earlier filed complaint no.45 dated 06.05.2011 against OPs before the District Forum Solan and the said complaint was returned by the said Forum to him for want of territorial jurisdiction. First Appeal No.593 of 2015 9 The present complaint is, thus, barred by time. The complaint is without cause of action against OP no.2. Any deficiency in service was stoutly denied by OP no.2 on its part. The complaint was contested even on merits by OP no.2. It was averred that loan amount of Rs.9,37,488/- was sanctioned in favour of complainant by it. After deducting the legally recoverable charges of Rs.47,488/-, the amount of Rs.8,89,600 was disbursed to complainant on 28.06.2008. The complainant defaulted in repayment of loan amount to OP no.2. The complainant got the fresh loan from OP no.1 and paid the entire outstanding loan amount to OP no.2. The loan account of complainant with OP no.2 was adjusted in full and final settlement. OP no.2 issued NOC in this regard as well to complainant of the machine. The answering OP prayed for dismissal of the complaint by contending that complaint is barred by time.
6. The complainant tendered in evidence affidavits Ex.CW- 1/1 and Ex.CW-1/2 with documents Ex.C-1 to C-28. As against it, OP no.1 tendered in evidence affidavits Ex.OP-1/1 and Ex.OP-1/2 with documents Ex.OP-3 to Ex.OP-11 and closed the evidence. OP no.2 tendered in evidence affidavit Ex.OP-2/1 with documents Ex.OP-1 and Ex.OP-2 and closed the evidence. On conclusion of evidence and arguments, the District Forum allowed the complaint of the complainant, as referred to above. Aggrieved by the order of District Forum, the above referred separate two first appeal have been directed by OP no.1 and OP no.2.
First Appeal No.593 of 2015 10
7. We have heard the learned counsel for the parties and have also examined the record of the case. The first point raised by the appellants before us is that Gian Singh is not consumer of OPs now appellants because he purchased the JCB machine for commercial purposes to earn profits. We dispose of this point in these appeals before proceeding further with it. The complainant has pleaded this fact in the complaint that he purchased second hand JCB machine for earning his livelihood. The OPs have averred in their written replies that complainant suppressed the material facts, whereas he purchased the second hand JCB machine for commercial purposes. The affidavit of complainant is Ex.CW-1/1 on the record wherein he stated this fact on oath that he purchased the machine for earning his livelihood. The initial onus stands discharged by complainant, now it is for the OPs to disprove this fact. Affidavit of Deepak Kumar authorized representative of OP no.1 is Ex.OP-1/1 on the record. He testified that this fact was duly verified that complainant has been running the business of transport and this witness has no direct knowledge of this fact and OPs have also not adduced on record any evidence to prove this fact on the record. In the absence of any such rebuttal evidence by OPs, we agree with the finding of the District Forum on this point holding the complainant to be consumer, because he pleaded and testified this fact on oath that he purchased the second hand JCB machine to earn his livelihood. The OPs have not obtested any witness or any other First Appeal No.593 of 2015 11 documentary evidence on the file to rebut the above evidence of complainant.
8. Now, we proceed to examine this point whether any deficiency in service or unfair trade practice has been proved on record on the part of OPs in this case or not. The complainant pleaded and stated this fact on oath in his affidavit that he got financed the machine with OP no.2 and OP no.2 threatened him to take possession of the vehicle. He was then obliged to get it financed from OP no.1 to avoid the coercion of OP no.2. OP no.1 refinanced the said JCB machine on 18.11.2009. OP no.1 paid the amount of Rs.8,35,011/- to OP no.2 on behalf of complainant, vide Ex.C-5 to C-7 and took over the possession of the said JCB machine, vide Ex.C-4. The grievance of the complainant is that OP no.1 unduly debited the amount of insurance charges of Rs.15,489/- and Rs.5000/- as service charges. The complainant paid two instalments to OP no.1 in advance and it showed only one loan instalment in the loan account of the complainant, which act is an unfair trade practice on its part. OP no.1 issued possession letter Ex.C-4. OP no.2 received full and final payment from OP no.1, vide C-8 and C-9. OP no.2 issued NOC to complainant, vide Ex.C-10. The complainant get hypothecation of the machine with OP no.1 on 19.01.2010 and this fact is recorded in the registration certificate of machine, vide C-11. OP no.1 got signatures of complainant on blank papers including stamp papers, when it refinanced the said machine and it had not delivered the possession of the JCB machine to First Appeal No.593 of 2015 12 complainant without any fault on his part. OP no.1 sold the machine without any intimation to complainant in a secretive manner at throw away price of Rs.6,80,000/-. The value of the machine was reflected in Ex.C-1 as Rs.11,50,000/-. The machine was forcibly and illegally taken by OP no.1 from complainant causing loss of income of Rs.50,000/- per month to him. The OPs also led evidence consisting of statement of account Ex.OP-1 maintained by OP no.2 of complainant. Ex.OP-2 is the asset details dated 21.04.2014. Certificate of incorporation is Ex.OP-4. Ex.OP-5 is the power of attorney. Ex.OP-6 is the tele verification format. Ex.OP-7 is the loan cum hypothecation agreement. The possession of the machine was hander over to OP no.1 by complainant, vide Ex.OP-8. Ex.OP-9 is the consent letter by complainant for signing form no.29 and form no.30 in favour of OP no.1.
9. From perusal of above referred evidence on the record and hearing the respective submissions of counsel for the parties, we find that OP no.1 took the possession of the vehicle and sold it without any intimation to complainant or to public for fetching highest amount in the bid thereof. The complainant averred that the letters were obtained from him under coercion by OP no.1 and possession of the hypothecated machine was never delivered to him. The point for adjudication before us is whether the loaner can take the possession of the hypothecated machine forcibly or not. The Apex Court has held in "Citicorp. Maruti Finance Ltd. Versus S. Vijayalaxmi" IV(2011)CPJ-67(SC) that even in case of mortgaged First Appeal No.593 of 2015 13 goods subject to hire purchase agreements, recovery process has to be effected in due process of law and not by use of force. The Apex Court has held that till the ownership is not transferred to purchaser, the hirer normally continues to be the owner of goods but that does not entitle him on strength of agreement to take back possession by force. This observation was recorded in para no.21 of the judgment by the Apex Court that 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. The National Commission has held in case "ABN Amro Bank Vs. Sangeet Srivastava" II(2007) CPJ 269 (NC) that where vehicle is sold without any notice to complainant for default of payment of three months instalments. Possession of vehicle forcibly taken despite complainant was ready to pay the amount. The National Commission directed OP to refund margin money paid by the complainant for purchase of vehicle. This authority is directly applicable to the facts of the case in this case. No such notice was ever served on the complainant when the machine was sold nor any public notice was issued by OP for selling the machine to general public nor complainant was given any such notice thereof. The Supreme Court has also held in "ICICI Bank Vs. Shanti Devi Sharma and others" 2008 CTJ 677 (Supreme Court) (CP) that RBI guidelines on non payment of loan amount. The Apex Court has held that recovery has to be proceeded in accordance with law since we reside in civilized society and are governed by the rule First Appeal No.593 of 2015 14 of law. Banks and financial institutions should make recovery of loans or seizure of vehicles only through legal means. Their attention drawn to the guidelines promulgated by the Reserve Bank of India. Keeping in view above observation of the Apex Court, we find that OP no.1 took the possession of the vehicle from complainant, when it advances the loan, it is not in accordance with the principle of law. Recovery has not been processed by OP no.1 in accordance with law for repossessing the machine. The alleged letter Ex.OP-8 and OP-9 are inconsequential in our view appearing to be arising in terrorim, because machine was never handed over to complainant after repossessing from complainant by OP no.1.
10. OP no.1 paid the loan amount on behalf of complainant to OP no.2. OP no.2 deducted the amount of Rs.37,488/- fraudulently on the pretext of insurance of the machine. No such insurance policy was ever provided to complainant by OP no.2. The District Forum has correctly found the deficiency of OP no.2 in this regard for deducting this amount without any proof of insurance of machine. This is sheer unfair trade practice on the part of OP no.2 and it is bound to recompense the complainant in this regard. The finding of the District Forum on this point awarding the compensation of Rs.50,000/- by OP no.2 to complainant for this deficiency in service of not providing the insurance policy is found to be correct and is affirmed in these appeals by us.
11. As far as the liability of OP no.1 is concerned, it never delivered the possession of machine to complainant after refinancing First Appeal No.593 of 2015 15 the loan. It took the possession of the machine after refinancing the machine to clear the loan of OP no.2. It got signatures of complainant on Ex.OP-8 and Ex.OP-9 only at that very time without delivering the possession of the machine to him. No notice was given to complainant for the auction of the machine, which was conducted by it in a hush-hush manner without public notice. The machine was sold without any notice to complainant at his back and it was sold at a throwaway price only. OP no.1 was entitled to take possession of the machine in accordance with law and not forcibly. The machine was kept in possession by OP no.1 without giving an opportunity to complainant to clear the instalments. Even in Ex.OP-9, which has been taken as shelter by OP no.1, the registration number of the machine does not tally with each other. We raise this inference that signatures of complainant were taken on blank papers at the time of refinancing of this machine by OP no.1. OP no.1 subsequently used the blank signed papers of complainant by converting it into Ex.OP-9. Similarly, number of machine does not match with each other in Ex.OP-8. We are unable to place any reliance on Ex.OP-8 and Ex.OP-9 in proving free consent of complainant in surrendering the machine to OP no.1. Consequently, we hold that due to deficiency of OP no.1, as held by the National Commission in case ABN Amro Bank (Supra), it is liable to pay the amount of Rs.75,000/- to complainant for deficiency in service or unfair trade practice by directing it to delete the outstanding loan amount as shown against complainant as it not entitled to recover First Appeal No.593 of 2015 16 any such outstanding amount from the complainant for the above reasons.
12. As a result of our above discussion, we find no merit in first appeal no.749 of 2015 and same is hereby dismissed. We partly accept first appeal no.593 of 2015 by modifying the order of the District Forum by holding that OP no.1 will pay the amount of Rs.75,000/- to complainant for mental harassment and Rs.20,000/- as costs of litigation and is not entitled to recover any outstanding loan amount from complaiannt.
13. In First Appeal No.593 of 2015, the appellant had deposited an amount of Rs.25,000/- in this Commission at the time of filing the appeal and further deposited the amount of Rs.14,06,900/- in compliance with order of this Commission. Out of this amount, Rs.95,000/- be remitted by the registry to the respondent no.1 of this appeal, being complainant, by way of crossed cheque/demand draft after 45 days from receipt of certified copy of this order. Remaining amount be remitted by the registry to the appellant of this appeal.
14. In First Appeal No.749 of 2015, the appellant had deposited an amount of Rs.25,000/- in this Commission at the time of filing the appeal. This amount alongwith interest accrued thereon, if any, be remitted by the registry to the respondent no.1 of this appeal, being complainant, by way of crossed cheque/demand draft after 45 days from receipt of certified copy of this order. Remaining First Appeal No.593 of 2015 17 amount shall be paid by OP no.2 to complainant, as per order of the District Forum.
15. Arguments in above referred appeals were heard on 06.03.2017 and the orders were reserved. Certified copies of the orders be communicated to the parties as per rules. 16 The appeals could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (SURINDER PAL KAUR) MEMBER March 07, 2017 (MM)