State Consumer Disputes Redressal Commission
M/S.Muthoot Capital Services vs R.Vijayakumar, on 25 February, 2014
Daily Order
Kerala State Consumer Disputes Redressal Commission Vazhuthacaud,Thiruvananthapuram First Appeal No. A/12/260 (Arisen out of Order Dated 30/06/2006 in Case No. CC/06/182 of District Thiruvananthapuram) 1. R.VIJAYA KUMAR BIBIN BHAVAN,STADIUM,AYAMCODE,NARUVAMMODU TRIVANDRUM KERALA ...........Appellant(s) Versus 1. M/S MUTHOOT CAPITAL SERVICE MUTHOOT TOWERS ,M.G.ROAD ERNAKULAM KERALA ...........Respondent(s) BEFORE: HON'ABLE MR. SRI.K.CHANDRADAS NADAR PRESIDING MEMBER SRI. V. V. JOSE MEMBER PRESENT: ORDER
KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION SISUVIHARLANE VAZHUTHACADU THIRUVANANTHAPURAM
APPEAL NUMBERS.436/2012 & 260/2012
COMMON JUDGMENT DATED :25.02.2014
( Appeal filed against the order in CC.No.182/2006 on the file of CDRF, Thiruvananthapuram order dated : 31.10.2011)
PRESENT
SRI.K.CHANDRADAS NADAR : JUDICIAL MEMBER
SMT.SANTHAMMA THOMAS : MEMBER
M/s.Muthoot Capital Services
Ltd, Muthoot Towers,
M.G.Road, Ernakulam,
Cochin - 35
(By Adv.Sri.C.M.Stephen) : APPELLANT
Vs.
1.R.Vijayakumar,
S/o.Rajappan,
Vibin Bhavan,
Stadium,
Ayamcode,
Naruvamoodu,
Thiruvananthapuram
2. Muthoot Motors Millaneum,
Associates,
Thiruvananthapuram
(By Adv.Sri.K.N.Justin, TVPM) : RESPONDENTS
JUDGMENT
SRI.K.CHANDRADAS NADAR : JUDICIAL MEMBER These appeals are respectively filed by the first opposite party and the complainant in CC.No.182/2006 in the CDRF, Thiruvananthapuram. They challenge the order of the Forum dated 31.10.2011. The complainant alleged that on 04.12.2002 he had purchased a new Yamaha Crux Motor bike at a cost of Rs.46, 175/- as per hire purchase agreement entered into with the opposite parties. At the time of execution of the hire purchase agreement the first opposite party obtained from the complainant 48 blank signed cheque leaves towards the future hire instalments. The EMI to be remitted was Rs.1500/-. The complainant got the vehicle registered in his name with Reg.No.KL-01-Z-2994. He was regularly paying the instalments. But due to some family problems he had to face financial difficulties and there by committed default in payment of three instalments. The first opposite party did not utilize the cheques entrusted as security to realize the instalments that fell due. The complainant subsequently cleared the arrears of instalments. Instead of utilizing the cheques to realize the defaulted instalments, the opposite parties repossessed the vehicle violating the terms and conditions in the agreement. Thereby the agreement ceased to exist. Hence the opposite parties are not entitled to claim any future instalments. At the same time irreparable injury, mental agony, physical strain and monetory loss were caused to the complainant. The complainant repeatedly requested the opposite parties to return the vehicle along with the valuable personal documents that were kept in the vehicle. The opposite parties committed unfair trade practice causing financial loss to the complainant. Immediately after repossessing the vehicle the first opposite party lodged a private complaint before the Additional Chief Judicial Magistrate Ernakulam Under Section 138 of the Negotiable Instruments Act as CC.No.529/2004 using one of the entrusted cheque leaves. Thus they violated the sanctity of the agreement. Hence the complaint.
2. The first opposite party filed version before the District Forum raising the following contentions. The complainant has no locusstandi to file the complaint as complaint is pending before the Economic Offences Court, Ernakulam regarding the very same subject matter. The complainant was a defaulter in remitting monthly instalments and huge amount was in arrears. The complainant did not pay any attention to the reminders sent by the first opposite party. Hence the first opposite party was constrained to repossess the vehicle for which the financier has every right. The financier has also the right to sell the vehicle for the best available price. The complainant's liability to repay the entire amount due will not be terminated by repossession of the vehicle or by the sale of the vehicle. The repossession of the vehicle was not forceful as alleged .The first opposite party used no criminal force to repossess the vehicle. They have filed complaint before the Economic Offences Court, Ernakulam Under Section 138 of the Negotiable Instruments Act against the complainant and the case is pending before that court. Before the Consumer Forum the sanctity or the validity of a hire purchase agreement can not be challenged.
3. Before the District Forum the complainant gave oral evidence as PW1 and Exts.P1 to P6 were marked on his side. The opposite parties adduced no oral or documentary evidence. As per the impugned order the District Forum held that the first opposite party was not entitled to take forcible possession of the vehicle and as such they were bound to compensate the complainant. Since the complainant had paid Rs.14, 000/- to the first opposite party in 10 instalments and used the vehicle only for one year and six months, the District Forum directed refund of Rs.7, 300/- being the proportionate amount towards the non used period of the vehicle. In addition the Forum directed payment of compensation of Rs.5000/- for the mental agony caused to the complainant due to the forcible possession of the vehicle. Cost of Rs.2000/- was also allowed. In Appeal No.436/2012 the first opposite party is challenging the correctness of the order of the Forum. Appeal 260/2012 is filed by the complainant dissatisfied with the amount of compensation awarded to him.
4. Admittedly, the complainant purchased Motor Vehicle bearing Reg.No.KL 01 Z 2994 at a cost of Rs.46, 175/-as per hire purchase agreement entered into with the first opposite party. It is admitted in the complaint itself that due to financial problems the complainant had committed default in payment of three instalments. According to the first opposite party the complainant was a chronic defaulter and he ignored the repeated reminders sent to him to pay the instalments. Admittedly, when instalments were defaulted the first opposite party repossessed the vehicle invoking the provision in the hire purchase agreement. According to the complainant the vehicle was repossessed forcibly. This is an allegation denied by the first opposite party. According to them in repossessing the vehicle no criminal force was used .But in the version the exact manner in which repossession was made is not narrated. However, there is also no material to show that force was used in repossessing the vehicle. The District Forum assumed that criminal force was used in repossessing the vehicle and applying the decision of the CDRC, Delhi reported in 1 ( 2007) CPJ 200 proceeded to pass the impugned order.
5. It may be mentioned that there is a allegation that there was deficiency in service by forcible repossession of the vehicle. The other allegations are really not material to show whether there was deficiency in service. The repossession of the vehicle was certainly not in violation of the provision in the hire purchase agreement as there was admitted default in payment of monthly instalments. So also no unfair trade practice can be said to have been committed by repossessing the vehicle in terms of the hire purchase agreement. The financial loss if any was the consequence of the default in payment of instalemnts. So also filing of complaint under the Negotiable Instruments Act is legal, if the first opposite party is able to show that by resale of the vehicle the entire amount due to them was not realized. An incidental question may arise whether the resale of the vehicle was made for the best available price as contended by the first opposite party. But that aspect is not raised in the complaint. No evidence is also adduced to show that sale was effected in such a way as to cause loss to the complainant.
6. So the only question that remains to be considered whether repossession of the vehicle was forceful as alleged in the complaint. It is true that the first opposite party / appellant in Appeal.No.436/2012 denies that forcible possession of the vehicle was taken. But they have no contention that the guidelines given by the Reserve Bank of India in its Circular dated 24.04.2009 were followed in taking possession of the vehicle. In Citi corp. Maruti Finance Ltd. Vs. S.Vijayalaxmi, civil appeal No.9711 of 2011the Hon'ble Supreme Court of India held that even in the case of mortgaged goods subject to hire purchase agreement, the recovery process has to be in accordance with law. Till such time as the ownership is not transferred to the purchaser, the hirer normally continues to be the owner of the goods. That does not entitle him on the strength of the agreement to take possession of the vehicle by use of force. If any action is taken for recovery in violation of such guidelines or the principles laid down by the Supreme Court such an action can not but be struck down. The said decision was rendered by a full bench of the Hon'ble Supreme Court (three judges). It may be mentioned that in Anup Sarmah Vs. Bhola Nath Sharma & Others, IV (2012) CPJ 3 (SC) a Division Bench of the Hon'ble Supreme Court of India held that the purchaser remains merely a trustee or bailee on behalf of the financier and no criminal action can be taken against the financier for repossessing the goods owned by him. In Suryapal Singh Vs. Siddha Vinayak Motors & Another, III (2012) CPJ 4 (SC) a Division Bench of the Hon'ble Supreme Court reiterated the same principle and held that consumer court erred in granting compensation to the petitioner when repossession of the vehicle was made by the financier. But in view of the full bench decision of the Hon'ble Supreme Court referred to the first opposite party is bound to follow the procedure prescribed by the RBI in its circular and in the absence of contention and proof that those guidelines were followed by the appellant in Appeal No.436/2012 that part of the order awarding compensation of Rs.5000 to the complainant for the mental agony is only to be sustained. As to the enhancement in compensation sought, we feel that since the complainant was admittedly a defaulter, enhancement in compensation is not warranted. The fact also remains that the first opposite party/ appellant as financier is entitled to realise the balance amount if any due to him even after the sale of the vehicle for the sale of the vehicle need not necessarily wipe out the debt. Therefore the Forum erred in directing refund of Rs.7300/- based on the partial use of the vehicle and the actual amount repaid. That part of the order of the District Forum is liable to be set aside.
In the result, Appeal.No.260/12 is dismissed. Appeal No.436/12 is allowed in part. That part of the order of CDRF, Thiruvananthapuram in CC.152/2006 dated 31.10.2001 directing refund of Rs.7300/-is set aside. The appellant / first opposite party shall pay compensation of Rs,5000/- and the cost ordered by the Forum within one month from the date of this order, failing which the amount will carry interest at the rate of 9% per annum. The parties shall bear their respective costs in these appeals.
K.CHANDRADAS NADAR : JUDICIAL MEMBER
SANTHAMMA THOMAS : MEMBER
[HON'ABLE MR. SRI.K.CHANDRADAS NADAR] PRESIDING MEMBER
[ SRI. V. V. JOSE] MEMBER