National Consumer Disputes Redressal
M/S. Magma Fincorp Ltd. vs Deepak Kumar Parida on 10 September, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 415 OF 2010 (Against the Order dated 17/09/2010 in Complaint No. 55/2010 of the State Commission None) 1. M/S. MAGMA FINCORP LTD. (Formerly Magma Leasing Limited)having its Zonal Office at: A-193 ,Okhla industrial Area ,Phase -I, Opposite Okhla Police station New Delhi -110065 2. M/S. MAGMA FINCORP LIMITED, 8 SANT NAGAR, EAST OF KAILASH, NEW DELHI-110065 ...........Appellant(s) Versus 1. DEEPAK KUMAR PARIDA S/o. Shri Subhash Chand Parida, R/o. At-Samadhipatna,P.O.- College Square, P.S.Malgodown cuttack orissa ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HON'BLE DR. S.M. KANTIKAR, MEMBER For the Appellant : Mr. Arun Kumar, Advocate For the Respondent : Mr. Shakti K. Pattanaik, Advocate Dated : 10 Sep 2015 ORDER JUSTICE J.M. MALIK
1. Smt. Kanaklata Panda, since deceased mother of complainant and Shri Deepak Kumar Parida, the complainant, entered into a Hire Purchase Agreement with M/s. Magna Magma Fincorp Ltd., the OP1, on 16.07.2008. The complainant stood Guarantor and availed the finance facility for purchasing a Tata Truck. The OP advanced a loan in the sum of Rs.8,60,000/- and disbursed to the respondent/ complainant and his mother. The said loan amount was to be repaid by the complainant and his mother in 47 equal monthly instalments @ Rs.26,600/-, each.
2. It is an admitted fact that the respondent/ complainant waddled out of the commitments and did not pay the instalments regularly. The Appellant/OP sent legal notices dated 06.11.2009 and 14.12.2009 to the complainant and his mother asking them to adhere to the payment schedule and pay the outstanding amount towards the equated monthly hire charges for a sum of Rs.35,600/- and subsequently, vide notice dated 14.12.2009, the respondent/complainant was called upon to make the entire loan amount of Rs.8,51,571/-, after terminating the agreement. The Borrower, Smt. Kanaklata Panda, unfortunately, passed away in the year 2009.
3. The said notice dated 14.12.2009 was also served upon Smt.Kanaklata Panda. The postal track report has been attached. The Appellant placed on record the notices dated 06.11.2009 and 14.12.2009. The record reveals that the same were served upon the complainant at Sl.No.528, vide postal Track Report dated 21.11.2009. The said notice dated 14.12.2009 was also served upon Smt. Kanaklata Panda. The postal track report has been attached.
4. On 08.05.2010, the vehicle was forcibly repossessed by the Appellant/OP. The respondent/complainant filed a complaint before the State Commission, wherein the complainant claimed costs of the vehicle in the sum of Rs.10,12,768/-, loss of business in the sum of Rs.7,00,000/- compensation for mental agony in the sum of Rs.5,00,000/- and costs of litigation in the sum of Rs.5,000/-, totalling to Rs.22,17,768/-. The State Commission partly allowed the complaint and passed the following order :-
"9. All these actions of opposite party No.1 in the matter of repossession of the vehicle without notice and sale of the same, a few days after repossession to deprive the loanee/complainant of the asset, which was acquired for earning livelihood, manifest the mode in which opposite party No.1 carries on business being in an advantageous position, which we hold to be nothing but adoption of unfair trade practice and sheer deficiency in service. We, therefore, allow the complaint in part and direct opposite party no.1 to pay a compensation of Rs.7,00,000/- and litigation cost of Rs.5,000/- to the complainant within two months from the date of receipt of this order".
5. Notice dated 06.11.2009 clearly goes to show that the complainant and his mother did not honour their commitments. He was asked to pay the amount due, in lieu of instalment in the sum of Rs.35,600/-, excluding current month delay and other charges and Smt. Kanaklata Panda was called upon to pay the same within 7 days, but there was no response. Thereafter, the agreement was cancelled vide notice dated 14.12.2009.
6. Counsel for the respondent/complainant vehemently argued that the respondent did not receive these notices. However, there are Track reports which clearly go to show that notices were delivered upon the Borrower. There is no objection that the address of the Borrower was not correct.
7. Moreover, the agreement itself states that sending notice will not be necessary. Now, it is well settled that notice is not necessary. In Suryapal Singh Vs. Siddha Vinayak Motors Ltd., & Anr., III (2012) CPJ 4 (SC), the Hon'ble Apex court was pleased to hold, as under :-
"Under the Hire Purchase Agreement, it is the financier who is the owner of the vehicle and the person who takes the loan retain the vehicle only as a bailee / trustee, therefore, taking possession of the vehicle on the ground of non-payment of instalment has always been upheld to be a legal right of the financier. This Court vide its judgment in Trilok Singh & Ors. v. Satya Deo Tripathi, AIR 1979 SC 850, has categorically held that under the Hire Purchase Agreement, the financier is real owner of the vehicle, therefore, there cannot be any allegation against him for having the possession of the vehicle. This view was again reiterated in K.A. Mathai @ Babu & Anr. v. Kora Bibbikutty & Anr., 1996 (7) SCC 212; Jagdish Chandra Nijhawan v. S.K. Saraf, IX (1998) SLT 477 = IV (1998) CCR 118 (SC) = 1999 (1) SCC 119; Charanjit Singh Chadha & Ors. v. Sudhir Mehra, VI (2001) SLT 883 = III (2001) CCR 232 (SC) = 2001 (7) SCC 417, following the earlier judgment of this Court in Sundaram Finance Ltd. v. The State of Kerala & Anr., AIR 1966 SC 1178; Smt. Lalmuni Devi v. State of Bihar & Ors., I (2001) SLT 26 = I (2001) CCR 9 (SC) = 2001 (2) SCC 17 and Balwinder Singh v. Asstt. Commissioner, V (2005) SLT 195 = III (2005) CCR 8 (SC) = CCE 2005 (4) SCC 146."
8. Before resale, the OP sent another notice dated 12.05.2010, vide which the complainant was informed, as under :-
"The total outstanding payable by you as on date stands as Rs.7,58,236/- and we hereby call upon you to pay the said sum forthwith, but not later than seven days from the date of receipt of this letter. Please note that we shall claim interest on the aforesaid outstanding amount payable by you at the rate of 3% per month on and from 22.05.2010 till payment and / or realisation as the case may be, of the entire dues. If, however, you fail to pay the aforesaid dues, within the stipulated period, as above, the said vehicle will be sold by us with no further notice to you and the sale proceeds thereof will be adjusted towards protanto satisfaction of the aforesaid dues. In case of any shortfall in the sale proceeds of the said vehicle, to satisfy the entire dues as demanded hereunder, you shall be liable to pay the same on demand, failing which, we reserve the right to initiate appropriate legal action against you for recovery of the balance outstanding from you, which may please be note".
9. Thereafter, the vehicle was sold. The Appellant/OP has placed on record, two Quotations, both dated 28.05.2010, for purchase of repossessed vehicle in the sum of Rs.4,20,000/- and Rs.4,00,000/-, respectively. The vehicle was ultimately sold for a sum of Rs.4,20,000/-.
10. Learned counsel for the Appellant/OP vehemently argued that the award given by the State Commission is on the higher side. It should have considered the Quotations for sale of repossessed vehicle which were placed on the record. He contended that the Appellant/OP has advanced the amount and demanded an amount of Rs.7,58,236/- which was still outstanding against the complainant. After adjustment of Rs.4,20,000/- the Appellant was entitled to recover the said amount from the complainant.
11. We find some force in his arguments. First of all, the Appellant has mentioned about the proceedings before the Arbitrator. Those proceedings or the Award passed by the Arbitrator did not see the light of the day. It is the OP and nobody else who is to carry the ball in proving the case before the Arbitrator. It is well settled that if the Award has been passed earlier to the filing of the complaint, in that event, the complaint to the consumer court will not lie.
12. Secondly, it stands proved that no notice of sale as such, was ever given to the complainant. The vehicle was sold away, in his absence. He could not participate in the Bidding. The State Commission, in para No.8 of its judgment, rightly held as follows :-
"8. Here in this case, we are satisfied from the very factual aspect of the matter that by selling the repossessed vehicle, opposite party No.1 did not get its demanded amount of more than Rs.7 lakhs inasmuch the vehicle was sold for Rs.4,20,000/- only, if at all the documents filed are genuine and not manufactured to suit to their purpose, if it was decided to sell away the asset and the date of bidding was fixed to 28.05.2010, the complainant should have been intimated about the same, and when he came to the opposite party, the opposite party could have disclosed it to him, so that he could have participated in the bidding. But, as it appears, everything was done clandestinely and on 01.06.2010, the vehicle was sold away. On the very same day, it was also released from the stockyard in favour of the new purchaser Abhisek Pani".
13. The above said Quotations are not reliable. Those are biased ones. The complainant purchased the vehicle for a sum of Rs.10,12,768/-. He also spent more than Rs.2,00,000/- for body building, insurance, registration, etc. He used the said vehicle for less than two years. It is unfortunate that no evidence was produced regarding the IDV of Truck's insurance policy. Consequently, the selling of the vehicle at a meagre amount of Rs.4,20,000/- is on the lower side. The order passed by the State Commission granting the complainant total amount in the sum of Rs.7,05,000/- does not suffer from any illegality or infirmity. But, it is made clear that the OP will also be entitled to adjust the sum of Rs.7,58,236/-, meaning thereby, the complaint stands dismissed and the OP can recover the rest of the amount, i.e., Rs.53,236/-, from the complainant, as per law. The complainant is not permitted to have the benefits of both the worlds, i.e., first loan amount and then, huge compensation, plus driving of the vehicle, for 22 months, free of charge. The appeal stands disposed of.
14. Stay granted by this Commission, vide order dated 03.02.2011, stands vacated.
......................J J.M. MALIK PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER