Proper Legal Procedure for Loan Recovery & Vehicle Seizure to be followed: NCDRC

Indiabulls Housing Finance Ltd. Vs Sandeep Kumar & Anr. (NCDRC Delhi)

Conclusion:  In present facts of the case, the NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI (NCDRC) have agreed to the decisions of the State Commission wherein it was observed that OPs have took the vehicle forcefully from the possession of the Complainant and as per the Judgment of ICICI Bank Ltd. Vs. Prakash Kaur and Ors ( 2007) 2 SCC 711, proper legal procedure have to be followed pertaining to recovery of loans of seizure of vehicles.

Facts: In present facts of the case, the Revision Petition (RP) has been filed by the Petitioner against Respondents under section 21 (b) of Consumer Protection Act 1986, against the order dated 14.12.2017 of the State Consumer Disputes Redressal Commission Uttar Pradesh (hereinafter referred to as the ‘State Commission’).

Brief facts of the case, were that Complainant purchased Sonalika Tractor on 23 .01.2007 from OP No.3. OP No.2 (before the District Forum) had provided financial support through its branch at Allahabad and for this purpose loan was provided amount to the tune of Rs.2,01,753/- to the complainant and for this purpose an agreement to sale was also executed on 30.11.2007. The loan was to be repaid in 30 monthly installments and each monthly installment was of 9025/-. Complainant continued paying the monthly installment of the loan amount taken but due to some reason, certain instalments were not paid. IBHF took the tractor of the complainant on 01.04.2009 forcibly in their possession from its driver Rakesh Pasi. On being approached by the cousin brother of the complainant, it was informed that few installments of tractor has not been paid due to which tractor has been taken into possession and employees of the IBHF scolded his cousin and made him to go away. According to the complainant, tractor was taken by the OP without any prior intimation forcibly due to which he suffered a lot mentally as well as economically. Being aggrieved of the said act of the OP, complainant filed a Complaint before the District Forum which partly allowed the Complaint. Aggrieved by the decision of the District Forum, both Complainant and OPs filed Appeal No 2296 of 2013 and 272 of 2014 before State Commission. The State Commission vide common order dated 14.12.2017 dismissed both the appeals. The OP No.1 and 2 being aggrieved of the decision of the State Commission has filed RP before this Commission.

The National Commission observed that both State Commission and District Forum have given a well reasoned order and given a concurrent findings about deficiency in service on the part of the OPs. District Forum has observed that OP has not filed copy of the legal notice dated 11.02.2009. The vehicle was taken over on 01.04.2009, intimation to police was sent on 05.04.2009 and notice to the complainant on 02.04.2009 i.e. after the possession was taken. Both Fora Below have given concurrent findings about the possession taken by the OPs being forceful. In this regard, State Commission has relied upon the judgment of the Hon’ble Supreme Court in the matter of ICICI Bank Ltd. Vs. Prakash Kaur and Ors ( 2007) 2 SCC 711, relevant extract of which is given below:

“28. In conclusion, we say that we are governed by a rule of law in the country. The recovery of loans of seizure of vehicles could be done only through the legal means. The banks cannot employ goondas to take possession by force.”

District Forum has also clearly observed after taking note of the documents produced on record before it that complainant has defaulted in repayment of three instalments. District Forum further observes that in case of default of repayment, the financer has a right to take over the possession of the vehicle but the contract agreement does not give authority to the financer to take over the possession of the vehicle forcefully. Both District Forum and State Commission have duly taken note of the various contentions raised by the OPs.

Further, keeping in view the observations made in the Judgment of the Hon’ble Supreme Court in ICICI Bank Ltd. (supra), the National Commission agree with the concurrent findings of both the Fora below.

In view of the above, Revision Petition was dismissed.

FULL TEXT OF THE JUDGMENT/ORDER OF NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

1. The present Revision Petition (RP) has been filed by the Petitioner against Respondents as detailed above, under section 21 (b) of Consumer Protection Act 1986, against the order dated 14.12.2017 of the State Consumer Disputes Redressal Commission Uttar Pradesh (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) Nos. 2296 of 2013 and 272 of 2014, in which order dated 10.09.2013 of District Consumer Disputes Redressal Commission Allahabad hereinafter referred to as District Forum) in Consumer Complaint (CC) no. 657 of 2009 was challenged, inter alia praying for setting aside the order dated 14.12.2017 of the State Commission and order dated 10.09.2013 of the District Forum.

2. While the Revision Petitioners (hereinafter also referred to as OPs) were Appellant in Appeal No. 2296 of 2013 and Respondent in First Appeal No. 272 of 2014 and the Respondent no.1 (hereinafter also referred to as Complainant) was Respondent no.1 in FA No. 2296 of 2013 and Appellant in Appeal No. 272 of 2014 before the State Commission, the Revision Petitioner were OP No. 1 and 2, Respondent No.1 was Complainant and Respondent No.2 was OP No.3 before the District Forum in CC No. 657 of 2009.

3. Notice was issued to the Respondents on 06.06.2018. Parties filed Written Arguments/Synopsis on 17.05.2023 and 20.4.2023 respectively.

4. Brief facts of the case, as emerged from the RP, Order of the State Commission, Order of the District Forum and other case records are that Complainant purchased Sonalika Tractor UP 35D1 number UP 70 AS-0682 on 23 .01.2007 from M/s Maurya Auto Sales Allahabad (OP No.3). India Bulls Housing Financial Services Ltd. ( IBHF) ( OP No.2 before the District Forum) had provided financial support through its branch at Allahabad and for this purpose IBHF provided loan amount to the tune of Rs.2,01,753/- to the complainant and for this purpose an agreement to sale was also executed on 30.11.2007. The loan was to be repaid in 30 monthly installments and each monthly installment was of 9025/-. Complainant continued paying the monthly installment of the loan amount taken but due to some reason, certain instalments were not paid. IBHF took the tractor of the complainant on 01.04.2009 forcibly in their possession from its driver Rakesh Pasi. On being approached by the cousin brother of the complainant, it was informed that few installments of tractor has not been paid due to which tractor has been taken into possession and employees of the IBHF scolded his cousin and made him to go away. According to the complainant, tractor was taken by the OP without any prior intimation forcibly due to which he suffered a lot mentally as well as economically. Being aggrieved of the said act of the OP, complainant filed a Complaint before the District Forum which partly allowed the Complaint. Aggrieved by the decision of the District Forum, both Complainant and OPs filed Appeal No 2296 of 2013 and 272 of 2014 before State Commission. The State Commission vide common order dated 14.12.2017 dismissed both the appeals. The OP No.1 and 2 being aggrieved of the decision of the State Commission has filed RP before this Commission.

5. Petitioner has challenged the said Order dated 14.12.20 17 of the State Commission mainly/inter alia on following grounds:

i.  The order of the Fora below is a non speaking order.

ii. The impugned order has travelled beyond the provisions of Loan Agreement dated 11.2007 by imposing illegal directions upon the Petitioner.

iii. The respondent no.1 having signed the agreement, ought not to be allowed to run away from the obligations cast upon it.

iv. Petitioner had brought on record the valuation report dated 04.04.2009 by R.K.Singh, Surveyor, repossession inventory dated 01.04.2009, police intimation dated 05.04.2009 and release letter of possessed vehicle dated 18.05.2009, which according to State Commission Petitioner has not relied on these documents.

v. Impugned order is passed against the guidelines issued by the RBI with respect to repossession of hypothecated vehicles.

vi. Petitioner has acted as per the terms and conditions of the Loan agreement.

vii. State Commission did not consider that order passed by District Forum is contrary to the rights and liabilities contained in the Loan Agreement.

viii. Complaint before the District Forum ought to have been rejected as Bailee /Trust falls within the exceptions laid down in Section 2 (1) (d) of the Act i.e. hire of services / goods for commercial purpose.

ix. Respondent no.1 had breached the terms of the Contract and defaulted in timely

x. Respondent no.1 suppressed material documents i.e. loan application.

xi. Respondent no.1 used the tractor for commercial purpose as his driver was driving the vehicle when it was repossessed peacefully and legally by the Petitioner.

6. Both sides were initially heard on IA No. 20498 of 2018 and it was decided as follows:

“3. Heard both sides on the IA No. 20498 of 2018. As per Order dated 06.06.2018, it is stated “Issue notice to the complainants/respondents limited to the quantum of compensation, for 04.09.2018, subject to the petitioner remitting a sum of Rs.10,000/- as conveyance charges and miscellaneous expenses to the complainants/respondents within two weeks from today”.

4. A perusal of the Order of the District Forum shows that the Petitioner herein have been directed to pay the price of the tractor paid in cash by the Complainant himself (Respondent No.1 herein) (to the seller/dealer) and total instalments of Rs. 1,09,200/- paid by the Complainant to the Petitioner herein, with a further order that the Petitioner herein will not be entitled to recover any amount/interest from the Complainant. As per this order, the Petitioner herein was ordered to pay damages/compensation of Rs. 5,000/- along with litigation expenses of Rs. 2,000/-.

5. On careful consideration of the above Order of the District Forum and the Order dated 06.06.2018, I am of the view that the intention does not appear to restrict the whole Revision Petition only to the issue of damages/compensation of Rs. 5,000/- awarded by the District Forum, as otherwise, no party would like to pay Rs. 10,000/- towards conveyance charges and miscellaneous expenses etc. for the sake of contesting compensation of 5, 000/-. Accordingly, I find merit in IA No. 20498 of 2018, filed by the Petitioner, seeking to modify the Order dated 06.06.2018, to the extent of the direction limiting the quantum of compensation, thereby hearing the Revision Petition on all grounds.

6. Accordingly, the IA is allowed. The Parties will be free to argue the matter on all permissible issues on merits ”.

7. Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

7.1. Counsel for the Petitioner repeated the points which are stated in para 5, grounds for challenging the order of the State Commission, hence the same are not being repeated here.

7.2. Counsel for Respondent no.1 argued that merits of the matter has already been appreciated and rejected by this Commission on 06.06.2018 when it only issued the notice restricted to quantum of compensation. The Petitioner took a different stand on 04.09.2018 and sought to file clarification of order dated 06.06.2018 Order dated 06.06.2018 has attained finality and it has not been challenged as of now and there is no occasion or provision for review of the said order. Counsel further argued that application for clarification of the order is basically a review in the garb of modification / clarification and nothing on merits is left to be decided after order dated 06.06.2018.

8. We have carefully gone through the facts and circumstances of the case, orders of the State Commission and District Forum, various case laws relied upon by the parties / referred to in the orders of the State Commission / District Forum, rival contentions of the parties. Both State Commission and District Forum have given a well reasoned order and given a concurrent findings about deficiency in service on the part of the OPs. District Forum has observed that OP has not filed copy of the legal notice dated 11.02.2009. The vehicle was taken over on 01.04.2009, intimation to police was sent on 05.04.2009 and notice to the complainant on 02.04.2009 i.e. after the possession was taken. Both Fora Below have given concurrent findings about the possession taken by the OPs being forceful. In this regard, State Commission has relied upon the judgment of the Hon’ble Supreme Court in the matter of ICICI Bank Ltd. Vs. Prakash Kaur and Ors ( 2007) 2 SCC 711, relevant extract of which is given below:

“28. In conclusion, we say that we are governed by a rule of law in the country. The recovery of loans of seizure of vehicles could be done only through the legal means. The banks cannot employ goondas to take possession by force.”

9. District Forum has also clearly observed after taking note of the documents produced on record before it that complainant has defaulted in repayment of three instalments. District Forum further observes that in case of default of repayment, the financer has a right to take over the possession of the vehicle but the contract agreement does not give authority to the financer to take over the possession of the vehicle forcefully. Both District Forum and State Commission have duly taken note of the various contentions raised by the OPs.

10. Keeping in view the judgment of the Hon’ble Supreme Court in ICICI Bank Ltd. ( supra), we tend to agree with the concurrent findings of both the Fora below. No new law points have been raised in the Revision Petition. As was held by the Hon’ble Supreme Court in Rubi Chandra Dutta Vs. United India Insurance Co. Ltd. [(2011) 11 SCC 269], the scope in a Revision Petition is limited. Such powers can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order. In Sunil Kumar Maity Vs. State Bank of India & Ors. [AIR (2022) SC 577], the Hon’ble Supreme Court held that “the revisional jurisdiction of the National Commission under Section 21(b of the said Act is extremely limited. It should be exercised only in case as contemplated within the parameters speci fied in the said provision, namely when it appears to the National Commission that the State Commission had exercised a jurisdiction not vested in it by law, or had failed to exercise jurisdiction so vested, or had acted in the exercise of its jurisdiction illegally or with material irregularity.”

11. In view of the above, we do not find any illegality or material irregularity or jurisdictional error in the order of the State Commission, hence the same is upheld. Accordingly, Revision Petition is dismissed.

12. The pending IAs in the case, if any, also stand disposed off.