State Consumer Disputes Redressal Commission
Anandmay Engineers &Consultants; Pvt. ... vs Citi Bank N.A on 14 January, 2008
IN THE STATE COMMISSION:DELHI IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 14.01.2008 Appeal No. A-789/05 (Arising out of Order dated 25.01.2005 passed by the District Consumer Forum( New Delhi), Barracks Kasturba Gandhi Mard, Delhi in Case No.381/98) Anandmay Engineers & Appellant Consultants Pvt. Ltd., E-227, Greater Kailash-II, New Delhi-110048. Versus Citi Bank N.A. Respondent Jeevan Bharti Building, Through 124, Connaught Circus, Ms. Kajal Sharma, New Delhi. Advocate CORAM: Justice J.D. Kapoor President Ms. Rumnita Mittal Member
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor, President (Oral)
1. Feeling dissatisfied with the amount of compensation of Rs. 50,000/- for illegal and forcible re-possession of the vehicle due to non-payment of 4-5 instalments and resale of the vehicle after 20 months at a throw away price, appellant has preferred this appeal.
2. The allegations of the appellant leading to the impugned order, in brief, were that a finance of Rs. 51,450/- was obtained from respondent in respect of Omni Maruti Car bearing registration number DL 3C 6929 for a period of 36 months and it was to be repaid in 36 instalments with EMI of Rs. 1867/- w.e.f. 25.06.90 which included interest @ 17% p.a. and the balance cost price of the car was provided by appellant-company itself.
That 17 instalments were paid by appellant-company and there was no complaint for the same and thereafter due to financial crisis 4-5 instalments were not paid and respondent-bank forcibly repossessed the financed vehicle on 13.05.92 with the help of 4-5 musclemen who also obtained the signatures of the Managing Director through whom the present complaint has been filed on blank papers.
That on 17.06.92 a No Objection Certificate was also issued by respondent wherein it is specifically mentioned that nothing is due from appellant-company to respondent.
That appellant-company informed respondent many a times for rescheduling the payment and also to hand over the vehicle and to take the amount or to intimate when the public auction is going to take place with regard to the said repossessed vehicle but respondent has not intimated anything regarding the same. Appellant made several visits and also wrote many letters to respondent and also personally delivered letter dated 24.03.94 which has been duly acknowledged by respondent but no positive result came out.
That the value of the vehicle on the date of repossession by respondent was around Rs. 1.30 lacs as the vehicle was only 1 year 10 months old and it has done only 21,796 kms. That a legal notice was also served on respondent dated 24.10.94 to intimate the position of the account of the appellant but respondent has not replied the same.
That it transpired that respondent had sold out the said vehicle on 25.02.94 for a sum of Rs. 60,000/- and no details of the same were provided to the appellant by respondent and manipulated to sell the vehicle for a sum of Rs. 60,000/- and for which no advertisement was given in any newspaper nor any tenders were called for the same.
That respondent be directed to pay the market price of the vehicle calculating at Rs. 1,20,000/- by depreciating it 10% together with interest @ 17% p.a. as the same rate has been charged by respondent together with compensation of Rs. 50,000/-.
3. As against this the version of the respondent was that till 01.11.91, appellant paid Rs. 31,739/- and expressed his inability to pay the instalments thereafter and surrendered the hypothecated vehicle to respondent and the letter surrendering the vehicle by th4e appellant is Annexure-A. That respondent repossessed the vehicle as per clause 7(g) of the loan agreement and a sum of Rs. 42,806/- was due from the appellant on the date of surrender of the vehicle. A break-up of Rs. 42,806/-
is also provided as follows :-
Rs.
1867 x 18 instalments Rs. 33,606/-
Penalty Rs. 1200/-
Repossession charges Rs. 8,000/-
That on failure of appellant to clear the aforesaid dues inspite of several requests respondent was compelled to sell the said repossessed vehicle in auction on 25.02.94 to the highest bidder at the price of Rs. 60,000/- and the sale proceeds were credited to the loan account of appellant.
That initially appellant filed a complaint claiming compensation of Rs. 10 lacs and suo moto amended the same reducing the compensation amount to Rs. 50,000/- to bring it within the jurisdiction of the Honble Forum.
That appellant moved an application for settlement but the same did not materialize due to appellants steadfast adherence to his calculations which were neither cogent nor pragmatic.
That the present complaint is time barred as the vehicle was surrendered by appellant on 13.05.92 and the claim has been filed on 29.12.94 i.e. beyond the period of limitation of 2 years.
4. In identical cases we have taken a view which has been conformed by the National Commission in Citi Corp. Maruti Fin. Ltd. Vs Vijaya Laxmi and by Supreme Court in ICICI Bank Vs Prakash Kaur 2007 SCC that no service provider or no bank or financier can use force in re-possessing the vehicle against which the loan has been advanced for non-payment of few instalments as such an act is illegal, arbitrary and not permissible in democratic set up governed by rule of law. Merely because the respondent had a right to repossess the vehicle by virtue of clause 7/97 of the agreement does not mean that it can use the force to take the possession. This clause gives a right to get the order from the court for re-possessing the vehicle as no such action was permissible without intervention of the court.
5. We have also taken a view that the financer or bank cannot sell the vehicle at its whims at a throw away price. Once it repossesses the vehicle it has to assess the value by way of depreciated value of 5% for the passenger vehicle and 10% for the commercial vehicle for the purpose of assessing the cost of the vehicle at the relevant time per year.
6. We have also taken a view that whenever a bank or financer indulges in such an act and chooses to sell the vehicle the contract stands terminated as the goods or the vehicle against which the loan was advanced is no more in possession of the consumer as consumer has not enjoyed the fruit and therefore the bank has to return all the post-dated cheques from the date of the seizure of the vehicle as the possession of vehicle itself discharges the bank loan and bank is obligated to refund the margin money contributed by the consumer.
7. Supreme Court has in Lucknow Development Authority Vs M.K. Gupta (1994) 1 SCC 243 held that the District Forum, Consumer Commission should compensate the consumer adequately for the malafide, oppressive arbitrary and illegal act of the service provider as to the mental agony, harassment, humiliation, emotional suffering and the physical discomfort suffered by a consumer. Some of the observations are noteworthy and are as under :-
It is, therefore, necessary that the Commission when it is satisfied that a complainant is entitled to compensation for harassment or mental agony or oppression, which finding of course should be recorded carefully on material and convincing circumstances and not lightly, then it should further direct the department concerned to pay the amount to the complainant from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries.
8. Proceeding on the aforesaid premise of the view taken by us, we enhance the amount of compensation from Rs. 50,000/- to Rs. 75,000/- as this amount includes the margin money contributed/paid by the appellant & cost of the vehicle also.
9. Payment already made shall stand adjusted in the compensation amount and the balance shall be made within one month from the date of receipt of this order.
10. The impugned order shall be complied with within one month from the date of receipt of this order.
11. Bank Guarantee/FDR, if any furnished by the appellant, be returned forthwith.
12. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record room.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member ysc