(Smt. M. Shreesha, Honble Incharge President)
Aggrieved by the order in CC 12/2010 on the file of District Forum, Nizamabad, the opposite party preferred this appeal.
The brief facts as stated in the complaint are that the complainant is a driver and owner of Ashok Leyland Lorry make of 2002 bearing No.AP-24âU-8379 and he invested Rs.5,00,000/- and the balance of Rs.5,00,000/-was financed by the opposite party and the said lorry was delivered to him in 2006. The amount was to be repaid in 60 monthly instalments and the personnel of the opposite party received the amount but for some of the instalments, they did not issue receipts on the pretext of issuing them later. The complainant submitted that he was paying the monthly instalments regularly and paid Rs.6,00,000/-. The complainant submitted that though there were no dues, the opposite party seized the vehicle illegally at Nellore by detaining the goods in it and at the time of seizure received Rs.40,000/- without passing any receipt. The complainant submitted that the payments received by the opposite party had been adjusted towards heavily charged penal interest, over due charges which were not mentioned in the agreement. The complainant submitted that he approached the accountant of the opposite party and enquired about the dues and he replied that the loan was rescheduled long back for adjusting interest and penal charges and refused to issue an account statement. The complainant submitted that taking advantage of his illiteracy, the opposite party cheated him. The complainant submitted that he again approached the opposite party company and demanded for clearance certificate but they illegally demanded that he pay a further amount as the earlier amount was adjusted towards penal interest. The complainant submitted that the opposite party had obtained signatures on blank cheques and proformas which are used for harassing him and making illegal gains. The complainant submitted that 4 months back without issuing any notice, the opposite party seized the lorry and the accountant of the opposite party after checking the ledger informed the complainant that the account was cleared by the complainant but the opposite party misusing the signed papers and blank cheques, to extract huge amounts from him. The complainant submitted that the opposite party gave notice on 07-11-2009 to pay Rs.1,03,292/- for clearance of dues but they later demanded that the complainant pay Rs.5,00,000/- for clearance. The complainant submitted that the opposite party also stated that they refinanced the lorry without intimation to the complainant which is illegal and submitted that how the dues of Rs.1,03,292/- had become Rs.5 lakhs within 3 months without any valid reason and the act of the opposite party in seizing the vehicle is illegal. Hence the complaint for a direction to the opposite party to issue loan clearance certificate and also re-endorse the vehicle in the complainants favour and award damages, costs, future interest etc.,
Opposite party filed counter resisting the complaint. It denied that the complainant invested Rs.5,00,000/- for purchasing the lorry and was regular in payments. It also denied that the complainant repaid Rs.6,00,000/- and that for some of the payments made by the complainant receipts were not issued. Opposite party denied that it heavily charged interest and demanded the complainant to pay Rs.5,00,000/- for total clearance of the loan and seized the lorry and used the signed blank cheques. Opposite party submitted that the post dated cheques were issued by the complainant for clearance of the outstanding dues.
Opposite party admitted that the complainant obtained loan of Rs.5,00,000/- along with interest of Rs.2,50,000/- and insurance deposit of Rs.18,000/- accrues to an amount of Rs.7,68,000/- and the said amount was divided into 45 monthly instalments @ Rs.17,666/- for first 36 instalments and Rs.14,669/- for remaining 9 months. Out of the said amount, an amount of Rs.4,80,395/- was paid towards EMIs and the complainant has not deliberately disclosed the obtaining of personal loan, tyre loan and other loans which were issued to him. Opposite party submitted that they accorded personal loan on 28-6-2008 which has to be repaid in 20 monthly instalments @ Rs.30,133/- and at the request of the complainant for purpose of purchasing of tyres for the lorry an amount of Rs.18,000/- was accorded to him to be repaid in 4 monthly instalments. The opposite party paid an amount of Rs.23,233/- towards insurance premium on the request of the complainant in addition to the main hypothecation loan as supplementary loans. Opposite party submitted that the complainant fell due an amount of Rs.9,39,336/- and a penal interest of Rs.34,689/- was charged and the complainant fell due an amount of Rs.9,74,055/- by January, 2009 and paid an amount of Rs.4,80,395/- till date and has to pay Rs.4,93,660/- and voluntarily requested the opposite party to refinance the same as he was unable to pay the EMIs and at his request, a new HP agreement dated 29-1-2009 was executed for Rs.5,00,000/-. Opposite party submitted that as per the new agreement, the loan of Rs.5,00,000/- has to be repaid with interest of 3,00,000/- in 45 instalments @ Rs.17,778/- but again the complainant fell due and committed default and paid only 3 instalments to a tune of Rs.56,710/- and failed to pay the balance amount. Opposite party submitted that a notice was sent to the complainant on 02-7-2009 for Rs.52,080/- and on 7-9-2009 for Rs.67,736/- towards outstanding loan amounts and the complainant failed to pay the due amounts and the opposite party after due prior intimation to the complainant repossessed the lorry on 07-10-2009 and telegraphic intimation was made on 8-10-2009 for both hirer and guarantor and again reminders were sent to the complainant but the complainant failed to clear the due amounts. A publication was also made in a daily newspaper on 01-12-2009 for sale of the lorry and accordingly on 19-1-2010 the said lorry was sold in a public auction for Rs.3,50,000/- and as on the date of auction, the complainant was due an amount of Rs.5,78,425/- and after adjusting the auction amount of Rs.3,50,000/-, the complainant is still due an amount of Rs.2,28,415/- and many times, they approached the complainant for payment of the amount and submitted that there is no deficiency in service and prayed for dismissal of the complaint with costs.
Based on the evidence adduced i.e. Exs.A1 to A10 and B1 to B10 and the pleadings put forward, the District Forum allowed the complaint alternatively directing the opposite party to pay Rs.1,00,000/- compensation for illegal seizure and sale of lorry of the complainant together with costs of Rs.1,000/- within one month and in default to pay the same with interest at 9% p.a. from the date of order till realization.
Aggrieved by the said order, the opposite party preferred this appeal.
It is the complainants case that he is a driver and owner of a lorry purchased in the month of June, 2006 and financed by the opposite party for Rs.5,00,000/- to be repaid in 60 instalments and the complainant was paying the monthly instalments regularly. It is the complainants case that he paid an amount of Rs.6,00,000/- to the opposite party but admits that he does not have receipts for the entire amount but only for amounts evidenced under Exs.A3 to A9. The opposite party charged heavy penal interest, over-due charges and when he approached the opposite party about the due amounts, he was informed that the loan account was rescheduled long back. The account copy was not furnished to him. The complainant submits that he had cleared the dues of the opposite party but still they had issued a notice to him on 7-11-2009 evidenced under Ex.A2 for Rs.1,03,292/- and thereafter demanded him to pay Rs.5,00,000/- within three months. It is the complainants case that the opposite party has to issue clearance certificate but instead illegally seized the lorry keeping with them the blank signed cheques and the sudden seizure of the lorry led to starvation of his family members.
Exs.B3, B4 and B5 are letters written by the complainant to the opposite party on 23-1-2009, 27-6-2008 and 24-7-2008 respectively stating that an amount of Rs.4,93,650/- and credit charges of Rs.850/- and DC and SC charges of Rs.5,500/- be adjusted towards the agreement. He even sought for a personal loan of Rs.1,00,000/- on the ground that he could not pay the instalments. We observe from Ex.B9 that a public notice was also given towards auction of the said vehicle. The vehicle was sold in an open auction admittedly for an amount of Rs.3,50,000/- and it is the opposite partys case that the complainant is still due a sum of Rs.2,28,413/-. We rely on the decision of the apex court in Suryapal Singh v. Siddha Vinayak Motors and Anr. Reported in III (2012) CPJ 4 SC wherein the apex court held as follows:
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.
The Court vide its judgmenet in Trilok Singh and Ors. v. Satya Deo Tripathi, AIR 1979 SC 850, has categorically held that under the Hire Purchase Agreement, the financier is the 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 and Ors. v. Sudhir Mehra, VI (2001) SLT 883-III (2001) CCR 232 (SC)-2001 (7) SCC 417, following the earlier judgement of this court in Sundaram Finance Ltd., v. the State of Kerala and Anr. AIR 1966 SC 1178; Smt.Lalmuni Devi V. State of Bihar and Ors., I (2001) SLT26-1 (2001) CCR 9(SC)-2001 (2) SCC 17 and Balwinder Singh v. Assistant Commissioner V (20050 SLT 195-III (2005) CCR 8 (SC)-CCE 2005(4) SCC 146â.
The complainant has admitted that the opposite party had issued notice vide Ex.A2 on 7-11-2009 and thereafter the vehicle was sold after publication in the newspaper on 01-12-2009 for Rs.3,50,000/-. Keeping in view the aforementioned judgement and the notice issued by the opposite party, we are of the considered view that no deficiency can be attributed to the opposite party. We also observe from the record that there are no substantial grounds as to how the District Forum has arrived at the value of the vehicle and awarded compensation of Rs.1,00,000/-.  Keeping in view the aforementioned judgement the seizure and sale of the said vehicle by the opposite party is justified
In the result this appeal is allowed and the order of the District Forum is set aside and consequently the complaint is dismissed. There shall be no order as to costs.