State Consumer Disputes Redressal Commission
Mr. Jowett D'Souza, vs 1. I. C. I. C.I. Bank Ltd., on 9 April, 2010
THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA Present: Hon'ble Justice D.G. Deshpande .. President Smt. Sandra Vaz e Correia .. MemberComplaint No. 9/2007
Mr. Jowett D'Souza, inhabitant of India, Age 38 years R/o House No.139, Ambeaxir, Sernabatim, Colva, Salcete, Goa.
. . . Complainant Versus
1. I. C. I. C.I. Bank Ltd., Through its Collection Manager, 3rd Floor, Shiv Towers, Patto Plaza, Panaji-Goa.
. . . 2 /-
: 2 :2. Managing Director, I. C. I. C. I. Bank Ltd., Bandra Kurla Complex, Mumbai 400
051.
3. I. C. I. C. I. Bank Limited, Opp. Benelix Building, Margao, Goa. .
. . Opposite Parties For the Complainant ... Shri Arun Bras DSa, Adv.
For the Opposite Parties ... Shri Amit Palekar, Adv.
Dated: 09-04-2010.
O R D E R [Per Smt Sandra Vaz e Correia, Member]
1. The sale of a seized vehicle by the bank allegedly in breach of the hypothecation agreement forms the crux of the dispute before us. The complainant is the consumer who availed of vehicle loan disbursed by the opposite party no. 1 - bank. The opposite party no. 2 is the Managing Director of the opposite party no. 1 and the opposite party no. 3 is its Margao Goa branch.
Case of the complainant in brief.
2. In a nutshell, the facts of the complaint relevant to the issue in dispute can be narrated as follows:
The complainant purchased a vehicle Hyundai Accent Model GLS from the dealer M/s Goa Motors Pvt. Ltd., Verna after availing of car loan through the opposite party no. 1 for a sum of Rs.5,70,000/-. The . . . 3 /-: 3 :
complainant signed the vehicle loan agreement and delivered 36 post dated blank cheques. The complainant took possession of the vehicle on 30-03-2002. Thereafter, the next twenty-four post dated cheques were presented by the bank and encashed. But the complainant defaulted on the payment of two instalments of June/July 2004. On 06-08-2004, without any prior notice, the complainant was forcibly dispossessed of the vehicle by four muscle men allegedly engaged by the recovery manager of the opposite party no. 1 and was physically manhandled/ assaulted in public. The complainant was asked to meet one Mr. Amar Talwadkar, recovery manager of the opposite party no. 1. The complainant immediately sought assistance from the emergency police help line no. 100 and later lodged a police complaint at the Colva Police Station which was subsequently transferred to Maina Curtorim Police Station upon registration of FIR. The complainant inspected the vehicle at the yard on three occasions between August 2004 and January 2005. The complainant informed the recovery manager that he would issue fresh cheques so as to effect payment and release the vehicle but was told that a recall notice would first be issued and the payment would be made thereafter, but no such recall letter was ever issued.
3. The complainant suspected some mischief which caused him to write a letter to the RTO office at Margao on 05-11-2004 calling upon the said office not to transfer the said vehicle. The complainant made frequent visits to the office of the opposite party no. 1, and on each occasion he was asked to handover the original RC book together with balance payment in cash. Thereafter, the complainant purchased four demand drafts to the tune of Rs.1,50,000/- and, alongwith cash of Rs.70,000/- approached the said recovery manager on 12-01-2005, but the latter refused to accept the demand drafts nor was willing to issue receipt for the cash payment. After some more interaction with the said recovery manager of the opposite party no.1 between February to May 2005, the complainant caused a legal notice to be issued to the opposite party no. 3 on 15-06-2005 inter-alia stating that the vehicle had been illegally seized and that no recall notice had been received by the complainant to enable payment of the outstanding amount and take custody of the vehicle. But it evoked no response from the said opposite party. The complainant visited the RTO office at Margao on 11-07-2005 and was asked to make a written application to inspect the documents, which he did. The complainant then visited the said office on 09-08-2005 and was shocked and surprised to notice that his signatures had been forged, endorsement not to transfer was cancelled, duplicate RC book was issued inspite of . . . 4 /-
: 4 :the original being with the complainant and the vehicle sold/transferred to one Mr. Unni Mohammad Ashraf from Kerala.
4. The complainant then registered an FIR against the officials of the opposite party no. 1 and the Assistant Director of Transport, Margao. Thereafter, the complainant started receiving threatening phone calls from Mr. Amar Talwadkar the recovery manager of the opposite party no. 1 to withdraw the criminal complaint, following which a complaint came to be lodged with SP South Goa. According to the complainant, the complainants wife was distressed with these threatening phone calls which subsequently lead her to commit suicide. In July 2007, the complainant came to know that the opposite party had dismissed Mr. Amar Talwadkar from service and had filed a private criminal complaint against him in the Court of JMFC at Panaji.
5. The complainant claims recovery of a sum of Rs.6,37,152/- being the cost of the car together with interest @ 24% p.a. from the date of the illegal seizure till payment and for aggregate compensation of Rs.30,00,000/- on various counts set out in paragraphs 38 and 39 of the complaint. The cause of action arose on 09-07-2005 when the complainant learnt of the sale/transfer of his vehicle upon inspection of the documents at the RTO office at Margao.
Case of the opposite parties, in brief.
6. Per contra, the opposite party nos. 1 & 2 contested the complaint and entered their written version. Preliminary objections as regards maintainability of the complaint were raised. It was submitted that the complainant had suppressed information in respect of default committed by him in payment of dues and dishonour of cheques issued by him; the complainant was a chronic defaulter. Considering the averments made in the complaint, the issue involved was of civil and criminal nature and hence could not be entertained by this Commission. There was no deficiency in services on the part of the opposite party. The complainant could not be termed as a consumer. There was no grievance in respect of finance availed by the complainant, rather it is a dispute concerning non payment of dues by the complainant and consequent utilization of contractual rights by the opposite parties. The complainant was disputing the bankers right to take possession of the vehicle in case of . . . 5 /-
: 5 :default by the borrower.
The complaint was barred by limitation since the vehicle was taken into custody on 06-08-2004, and the complaint was filed three years later on 08-08-2007.
7. On merits, succinctly, the defence of the opposite party to the allegations relevant to the issue in dispute are that the loan agreement was signed by the complainant on 21-03-2002 and alongwith the said agreement, the complainant signed irrevocable power of attorney, demand promissory note and schedule of payment. Pursuant to the execution of the said document, the opposite party disbursed an amount of Rs.5,70,000/- to the complainant. The complainant issued 36 post dated cheques each amounting to Rs.18,679/-. It was denied that signatures were obtained on blank cheques. The complainant was irregular in payment of monthly dues. It was denied that it was mandatory on the part of the opposite party to issue loan recall notice under the loan agreement and specific clauses of the said agreement were cited which allegedly enabled the bank to take possession of the loan vehicle irrespective of the fact whether the loan had been recalled or not. Besides, the complainant had issued irrevocable power of attorney in favour of the opposite party to do certain acts including taking back possession of the financed vehicle.
8. The allegations regarding the seizure of the vehicle by the musclemen of the opposite party was a cock and bull story only to defraud the opposite party bank. A termination notice dated 28-07-2004 was issued to the complainant calling upon him to pay outstanding dues of Rs.2,60,196/- that was delivered by an executive of the bank with a request to pay the outstanding dues on or before 03-08-2004. Thereafter, on 06-08-2004, the complainant himself signed the surrender letter whereby custody of the vehicle was handed over by the opposite party. Thus the vehicle was handed over voluntarily by the complainant to the opposite party. The complainant was having a tainted image and a case has been registered against him by Colva Police under IPC. The opposite parties authorised valuer M/s B. A. Balgi valued the vehicle for a sum of Rs.3,00,000/- as per their valuation report dated 07-08-2004. It was routine process of the bank to issue authority letter to any person who wished to visit the authorised stock yards of the bank. While issuance of the inspection letters to enter the stock yard was admitted, the opposite parties stated that there was no proof of the complainant having visited the same to inspect the vehicle. As regards the loan recall notice, it was . . . 6 /-
: 6 :submitted that the said notice was duly handed over to the complainant on 25-08-2004 to pay a sum of Rs.2,60,196/- within 7 days. Since the complainant failed and neglected to pay the outstanding dues, the bank initiated the process of selling the vehicles by private treaties.
9. The alleged letter dated 05-11-2004 written by the complainant to the RTO was another attempt of the complainant to prevent the sale process initiated by the opposite parties. It was pointed out that in the said letter, the complainant himself admitted that the said vehicle was in possession of the opposite party-Bank due to some dispute; in short the contents of the letter show that the complainant was duly aware of the possession of the vehicle taken by the bank which was in process of selling the vehicle. The contents of paragraph 21 of the complaint were denied and it was submitted that the complainant had to just visit any of the opposite parties branches and make payment across the counter; in fact on two or three occasions when the complainants cheques towards EMI were dishonoured, the complainant paid the same in cash in the same manner.
10. As regards the legal notice purportedly issued by the complainant, it was submitted that no such legal notice was ever received by the opposite party. The opposite party specifically denied that the signatures of the complainant on the forms submitted to the RTO office at Margao had been forged. Since the complainant failed to comply with the requisitions in the opposite parties notice dated 25-08-2004 issued by the opposite parties, the latter initiated the process of selling the vehicle and during the process received two separate quotations from Mr. Raj Singh for Rs.2,00,000/- in October 2004 and Mr. Shaikh Rauf for Rs.3,00000/- in March 2005. The higher bid of Rs.3,00,000/- was accepted by the opposite party and the amount was credited to the loan account of the complainant. As regards the FIR registered on10-08-2005 against the opposite party and the Margao RTO, it was submitted that the complainant had malafidely annexed only the first two pages of the statement of the complainant duly recorded by the police officer in connection with the same were not produced before this Commission so as to achieve his illegal motive. It was denied that any unsolicited threatening phone calls were made by the opposite parties or any of its officials including Mr. Amar Talwadkar. The opposite parties denied any involvement or role in the suicide committed by the complainants wife. The opposite party denied that any of his actions amounted to . . . 7 /-
: 7 :unfair trade practice or restrictive trade practice or deficiency in service. The balance amount of the loan after adjusting the dues is still with the bank and the complainant has not come forward to collect the said amount and refused to accept the amount.
11. The opposite party was permitted to file additional written version. The opposite party stated therein that they obtained information under RTI Act regarding criminal case filed against the complainant by Colva Police. The information revealed that the complainant is an accused in a case involved in a dowry death and abetment to suicide while he was malafidely trying to attribute the cause of death of his wife to the opposite parties Evidence led by the parties.
12. Parties entered their affidavit in evidence. The complainant examined himself while the opposite party examined its Collection Manager Kum. Nora Fernandes. Both parties essentially reiterated the stand taken in the pleadings in their respective affidavits. The witnesses were extensively cross-examined by the other side overseen by Commissioners appointed by this Commission.
Submissions and points for consideration.
13. We heard Ld. Adv Shri Arun Bras DSa on behalf of the complainant and Ld. Adv. Shri Amit Palekar who advanced arguments on behalf of the opposite parties. Counsel also filed notes of argument. We perused the records in detail and gave our anxious consideration to the submissions advanced by learned Counsel. In view of the rival contentions, the following issues crystallize for our consideration for determination of this dispute:
I. Whether the complainant is a consumer?
II.
Whether the complaint is barred by limitation?
III.
Whether the opposite party is guilty of deficiency of services rendered to the complainant in its action of sale/transfer of the seized vehicle?
. . . 8 /-: 8 :
IV.
Whether the complainant is entitled to the reliefs prayed for in the complaint?
Findings.
Point no. I
14. The opposite party raised two noteworthy preliminary objections, namely, that the complainant is not a consumer and that the complaint is barred by limitation. We shall first deal with the objection as regards maintainability of the complaint on the grounds that the complainant is not a consumer and that the dispute is not a consumer dispute. The opposite party has relied on a plethora of judgments in support which we list below; however, none of the cited judgments assist their case a.
Ram Deshlahara v/s Magna Leasing Ltd. reported in III (2006) CPJ 247 at page 248 (NC).
b.
Sushil Kumar Deo v/s BCL Financial Services Ltd. and another, reported in III (2006) CPJ 250 (NC).
c.
Amarjit Singh Chauhan v/s M.D./Manager, ICICI Bank Ltd. (unreported).
d.
M/s Gullar Enterprises Pvt. Ltd. v/s Punjab National Bank Ltd., reported in 1993 (2) CPR 652.
e.
Canara Bank v/s C. Appu I (1999) CPJ 130.
f.
Arif Pasha v/s Enfield Business Financiers Leasing Limited, reported in 1995 (3) CPR 128.
g.
Manager, St. Mary's Hire Purchase (Pvt) Ltd., v/s N.A. Jose, reported in 1995 (3) CPR 293 (NC).
h.
Orix Auto Finance ( India) Ltd., v/s Shri Jagmander Singh and another, reported in 2006 (2) SCC 598.
i.
Shankar Hegde v/s Chief Manager, Punjab National Bank reported in 1996 (1) CPR 666.
j.
Ferry Gold ( India) Limited v/s National Insurance Company Limited reported in III (2002) CPJ 59.
k.
Deccan Enterprises Pvt. Ltd. v/s National Insurance Company Ltd., reported in III (2002) CPJ 68 (NC).
l.
Sheo Mangal Giri v/s Ghanashyam Verma, II (2000) CPJ 20.
m.
Prem G's International v/s Irequet Airways, 1996(2) CPR 23 (NC).
n.
Chimanbhai Patel v/s New India Assurance Company Limited, 1994 (3) CPR 332.
o.
Jaichandra Kumar v/s Chairman, State Bank of India, 2(1992) CPJ 517;
.
. . 9 /-
:
9 :
p.
Badekrishnavani v/s Canara Bank, 2000(3) CPR 24 (Kerala).
q.
Indian Overseas Bank v/s Mathura Mohan De, 1997 (2) CPR 1 (NC).
15. The facts in Ram Deshlaharas case supra can be differentiated from the facts of the case before us. The basic difference being the hire-purchase transaction between the complainant and the leasing company as against a hypothecation/vehicle loan transaction between the parties before us. The remaining judgments do not lay down any law that loan agreements between financial institutions and their customers do not come within the ambit of the Consumer Protection Act. In fact, the Honble National Commission, considering the facts of the specific cases, held that re-possession of the vehicle did not constitute deficiency in service. On the other hand, the complainant cited Viswalakshmi Sasidharan vs. Branch Manager Syndicate Bank SLP (C) No. 4077 of 1997 wherein Honble Supreme Court held that mere filing of suit for recovery of amount by the bank may not be an absolute bar on the consumer forum to go into the question on any deficiency in service on the part of the bank unless that is specifically raised as a defence in the suit.
16. Coming to the facts of the case, it is not in dispute that the opposite party is a private bank offering various financial services to the public including vehicle loans. It is not in dispute that the complainant availed of the services offered by the opposite party. There is enough material on record in this direction. There is no doubt in our minds that the complainant is a consumer, the opposite party is a service provider and consequently the dispute between them is a consumer dispute.
Point no. II
17. The opposite parties next preliminary objection is that the complaint is barred by limitation. It is their case that that the cause of action if at all, can be said to have arisen on 06-08-2004 i.e. the date on which possession of the vehicle was taken. The complaint came to be filed on 09-08-2007 much after the expiry of the limitation period. Reliance was placed on Shankar Hegde Vs Chief Manager, Punjab National Bank 1996(1) CPR 666. However, a careful perusal of the complaint indicates that the complainants grievance concerns the sale/transfer of the ceased . . . 10 /-
: 10 :vehicle by the opposite party in breach of contract. It is the complainants case that he learnt of the sale of his vehicle on 09-08-2005 when he inspected the documents pertaining to his vehicle in the RTO office at Margao. Per contra, other then denying the allegations in paragraph 21 of the written version, the opposite party has not brought anything on record that would indicate that the complainant learnt of the sale/transfer of his vehicle at any time prior to 09-08-2005. It also on record that the complainant filed an FIR against the official of the opposite party and the Assistant Director of Transport on the very next day i.e. on 10-08-2005, a copy whereof is placed on record. In the light of the foregoing, the complaint is well within the limitation period prescribed under the Act.
Point no. III
18. The vehicle loan cum hypothecation agreement forms the basis of the contract between the parties. The document is seen at exhibit CW1 C having been shown to the complainant in the course of his cross examination. Under the said contract, under the heading (F) Event Of Defaults the following is provided:
Without prejudice to ICICIs other rights, if:
1.
The Borrower/s fails to pay any amount here under on or before the due date or commits breach of any of the terms, covenants or conditions herein contained; or
2. . . .
3. . . .
4. . . .
5. . . .
6. The Borrower/s commit/s any default under any other agreement with ICICI or any of its group companies, then ICICI shall be entitled to demand immediate repayment of the Borrower/s outstandings and take such action as it is entitled to under this Agreement. (Underlining is ours).
What follows is the heading (G) Rights And Remedies of ICICI under which the contract inter alia stipulates that if the borrower fails to pay any amount within 15 days of demand or of such amount becoming due . . . 11 /-
: 11 :etc., ICICI shall be entitled to forthwith take physical possession of the vehicle and sell or otherwise deal with the vehicle to enforce ICICIs security and recover the borrowers outstanding dues. Sub-clause 4 entitles ICICI to take possession of the vehicle irrespective of whether the loan has been recalled whenever it is of the opinion that there is apprehension of any money not being paid or ICICIs security being jeopardised.
19. The question that arises is whether the opposite party-bank complied with its obligations before selling the complainants vehicle. Assuming that there was a default, did the opposite party demand repayment of the borrowers outstandings? At para 9 of the written version, the opposite party claimed to have issued a termination notice dated 28-07-2004 whereunder the complainant was called upon to pay outstanding dues of Rs. 2,60,196/- and that the said notice was handed over to the customer by the executive of the bank. However, no copy of the said termination notice has been exhibited in evidence. But a copy thereof surfaced during cross examination of the witness of the opposite party. A bare perusal of the document indicates that the name and address of the addressee is blank and the document is captioned Draft of Loan Recall Notice. This has been admitted by the witness in cross. The witness has further admitted that she was not in a position to clarify as to how the letter was dispatched and could not produce any proof of dispatch. The witness further stated that she could not even produce notices of cheque bouncing sent to the complainant. On being questioned regarding her statement made at paragraph 20 of her affidavit (which may be read with paragraph 9 of the written version) wherein it was stated that an executive of the bank had handed over the termination notice dated 28-07-2004, the opposite partys witness could not state the name of the executive nor the date, place and time where it was handed over. It is thus crystal clear that the actions of the opposite party-Bank were arbitrary and in total breach of the contract right from the root. No recall notice was issued even after the vehicle was seized or prior to its sale. Though the opposite parties witness filed a pre-sale notice dated 25-08-2004, the witness has admitted that the said letter did not contain the address of the complainant nor did it contain any endorsement made by the complainant acknowledging its receipt and neither did it state the mode of dispatch.
20. A cursory glance at the deposition of the opposite partys witness in cross examination raises questions about the credibility of the witness . . . 12 /-
: 12 :and shows her in a rather poor light. Although the said witness has sworn the affidavit in evidence and at paragraph 40 thereof verified that the contents are based on information received from the records, the witness time and again conveyed her ignorance on important facts connected with the case. We do not wish to go into the minute details of the deposition on account of constraints of space and time, but, suffice to say that the deposition in cross speaks for itself. It can be safely assumed that the opposite partys witness was blissfully unaware of the facts of the case. She lost her bearings. Interestingly, the complainant confronted the opposite partys witness with a letter written by ICICI Bank dated 05-07-2007 addressed to Police Inspector, Canacona Police Station wherein it was stated that the documents connected with the complainants vehicle have been misplaced; although the witness stated that she would have to verify, she admitted that the letter mentions that the documents of the complainant could not be traced. The opposite partys witness further stated in cross that it was correct that after repossession, and prior to the sale a notice is issued to the defaulter and in the present case too the same was done, however in the question that followed she was unable to state whether the letter was dispatched by registered AD or under certificate of posting. No proof of delivery of such purported notice was placed on record.
21. Undoubtedly, in view of the material before us, the complainant has proved by preponderance of probability that no demand/re-call notice was issued to him prior to taking possession of the vehicle or its sale as envisaged under the contract dated 21-03-2002 between the parties.
22. The role of the opposite partys then recovery manager Mr. Amar Talwadkar came in close scrutiny. The complainant has consistently taken exception to the acts of the said officer. In fact, the complainant has placed on record a letter issued by the opposite party to Mr. Amar Talwadkar conveying his termination from services of the bank; a handwritten confessional statement made by said officer and copy of the private criminal complaint filed by the opposite party against the said Mr. Amar Talwadkar. The said documents vindicate the complainants claim. From the contradictions of the opposite parties witness exposed in cross examination, it leaves one with a feeling that while the opposite party was prosecuting the said officer on one hand, it was bent on suppressing his role in the complainants case on the other. The witness, . . . 13 /-
: 13 :to a question whether Amar Talwadkar had repossessed the complainants car and disposed it off answered in the negative and stated that the vehicle was surrendered at Colva. However, the statement of the witness is contradicted by the ICICI Banks letter dated 05-07-2007 addressed to Police Inspector Canacona Police Station, wherein it is admitted that that Mr. Amar Talwadkar was the concerned manager who had repossessed the vehicle and disposed off the same. Admittedly, the said Amar Talwadkar was the recovery manager of the opposite party, and the latter would be vicariously liable for all acts of its officers done in the course of its business.
23. In the light of the foregoing we arrive at an inescapable conclusion that the opposite party-bank conducted its affairs with respect to the complainant in total breach of its contract and the sale/transfer of the complainants vehicle was done in circumstances that were highly unlawful and irregular. We found the opposite partys conduct to be arbitrary high-handed and with scant respect for the rule of law.
Point no. IV
24. That brings us to the issue of the relief that the complainant would be entitled to in view of our aforesaid findings. The complainant has claimed a sum of Rs.6,37,152/- being the cost of the car together with interest @ 24% from the date of the illegal seizure. Admittedly, the vehicle was purchased in March 2002, was seized by the opposite party in August 2004 and was finally sold in March 2005. It is apparent that the complainant used and enjoyed the vehicle for about two-and-half years prior to its seizure by the opposite party. In the facts and under the circumstances we are of the considered opinion that compensation of Rs.5,00,000/- would be fair and reasonable on this count. Considering the bank rate prevailing at the relevant time, the amount would have to be paid along with interest @10% p.a. from the date of filing of the complaint i.e. 09-08-2007 till full payment.
25. The complainant further claimed an aggregate amount of Rs.30,00,000/- being Rs.15,00,000/- on the grounds set out in para 38 and another Rs.15,00,000/- on the grounds set out in para 39 of the complaint. We have already recorded out findings on the aspect of the . . . 14 /-
: 14 :conduct of the opposite party towards the complainant which, invariably, must have caused considerable mental agony and harassment to the complainant; though, we hasten to clarify that we are not convinced of the opposite partys role in the suicide committed by the complainants wife in view of the material on record. Nonetheless, this is a case where a multinational corporate entity has abused its status as such and virtually exploited the hapless consumer into submitting to its unlawful demands. All things considered, we award a nominal compensation of Rs.1,00,000/- on this count. The complainant would also be entitled to reasonable costs of this litigation.
Order
26. In the light of the foregoing, we partly allow the complaint and proceed to make the following order:
(i) The opposite parties, jointly and severally, are directed to pay to the complainant a sum of Rs.5,00,000/- ( Rupees Five Lakh only) alongwith interest @ 10% p.a. from 09-08-2007 till full payment within 30 days from the date of receipt of this order.
(ii) The opposite parties, jointly and severally, are directed to pay to the complainant a sum of Rs.1,00,000/- (Rupees One Lakh only) as compensation within 30 days from the receipt of this order, in default whereof the same shall carry interest @ 12% p.a. thereafter.
(iii) The opposite parties, jointly and severally, are directed to pay to the complainant a sum of Rs.5,000/- (Rupees Five Thousand only) as costs of this litigation.
Order accordingly. Communication to the parties as per rules.
Justice D G Deshpande President Sandra Vaz e Correia Member