S. Kiran Kumar Vs. Centurion Bank of Punjab Limited

Mrs. M. Shreesha, Member:

Oral:

1. Aggrieved by the order in C.D. No. 577 of 2006 on the file of District Forum-III, Hyderabad, the complainant preferred this appeal.

2. The brief facts as set out in the complaint are that the complainant purchased a Hero Honda Motor Cycle by availing vehicle loan from the opposite party bank in August 2004 for an amount of Rs. 38,000 and paid the following EMI amounts.

4. Opposite party filed counter admitting that they have released the loan of Rs. 38,000 which was to be repaid in 36 EMI of Rs. 1,360 each. Opposite party contends that most of the cheques issued towards repayment were dishonoured and, therefore, they were constrained to cease the vehicle. They contended that the customer being satisfied executed the agreement and they have made several requests to the complainant of clearing the outstanding dues and the opposite party is the de jure owner of the vehicle, being the financier, they issued two letters dated 16.3.2006 and 12.4.2006 to the complainant calling upon him to pay the outstanding dues within 3 days failing which the seized vehicle would be sold to the third parties. After receiving the said letters the complainant neither replied nor repaid the amount and, therefore, opposite party was constrained to sell the vehicle to the third parties as per the terms of the agreement and, therefore, there is no deficiency of service on their behalf.

5. The District Forum based on the evidence i.e. Exs. A1 to A6 and Exs. B1 to B4 and the pleadings put forward directed the opposite party to pay Rs. 10,000 towards compensation and costs of Rs. 1,000 and to close the loan account BQ4765.

6. Aggrieved by the said order the complainant preferred this appeal.

7. The party in person was present and submitted that in the month of August 2004 he purchased a two-wheeler by making a down payment of Rs. 11,279 and issued 36 post-dated cheques each for Rs. 1,360 and paid a total amount of Rs. 22,460. The complainant submits that due to financial problems he requested his banker to honour the cheque presented by the opposite party on 3.2.2006 and opposite party was to present the cheque on 5.2.2006 but this cheque was dishonoured despite the complainant having informed the banker and, therefore, the complainant submitted that he would pay the instalments amount by cash on 20.3.2006 along with February payment. On 14.3.2006 the complainant found his vehicle missing which was seized by the opposite party without prior notice in spite of the fact that he had agreed to pay the full payment. He submits that the vehicle was seized along with helmet and contends that hte opposite party collected Rs. 61,546 whereas the loan is only Rs. 38,000 and that the additional amount of Rs. 23,546 was collected. He submitted the details as follows:

A. Excess Amount Collected-Loan amount is Rs. 38,000 whereas the total amount recovered is Rs. 61,546 that is additional amount collected is Rs. 23,546 which is an exorbitant amount.

Amounts Recovered by opposite party

Amount Spent on vehicle by Complainant

9. The learned Counsel for the respondent/opposite party submitted that an amount of Rs. 11,000 was taken by way of D.D. in compliance with the order of the District Forum and they also refunded 5 EMI cheque amount of Rs. 6,800 which have been encashed. The appellant had accepted the same and now states that he was always ready and willing to clear the loan amount. The learned Counsel submitted that in accordance with Clause 20 of the agreement they have rightly seized the vehicle and granted sufficient time to the appellant to clear the dues and, therefore, there is no deficiency in service on their behalf.

10. On perusal of the material on record we observe that the facts not in dispute are that the complainant had taken a loan of Rs. 38,000 from the opposite party and made a down payment of Rs. 5,124. He also paid an amount of Rs. 6,155 towards life tax, insurance and other charges and issued 36 post-dated cheques for a sum of Rs. 1,360 each. Ex. A5 shows that the cheque issued on 5.4.2005 was dishonoured and this attracted penal charges which was later paid by the complainant along with EMI. This dishonouring of the cheques continued from 7th to 16th instalments which were ultimately paid by the complainant at a later date. However, the instalments of February and March were unpaid. It is not in dispute that the complainant was due two unpaid. It is not in dispute that the complainant was due two instalments and the vehicel was seized. The opposite party sent a letter dated 16.3.2006 to the complainant which states that the vehicle had been repossessed for defaulting of monthly instalments. It is pertinent to note that no notice was issued prior to repossession when there were only two instalments which were due before seizure. Ex. B1 which is the statement of account dated 12.4.2006 reflects that the vehicle was disposed of for a sum of Rs. 31,526, the value being Rs. 33,530 and states that the complainant is due Rs. 2,004. We observe from the record that the opposite party had presented the post-dated cheques issued by the complainant even after repossession of the vehicle that is after the month of March 2006 thereby attracting cheque bouncing charges to the complainants account. We find the act of the opposite party in seizing the vehicle without prior notice and also in presenting the post-dated cheques after the repossession of the vehicle an act of deficiency of service and also unfair trade practice. The District Forum has rightly observed that the opposite party committed an act of deficiency of service but awarded only Rs. 10,000 towards compensation and Rs. 1,000 towards costs and directed it to close the account BQ 4765. While agreeing that the order of the District Forum we rely on the judgment of the National Commission reported in III (2007) CPJ 161 (NC) between Citicorp Maruti Finance Ltd. v. S. Vijayalaxmi, wherein it was held that it is unjust to direct the consumer to pay an outstanding balance amount when vehicle is repossessd by force and sold without prior notice.

It is also observed in this judgment that:

Permitting hypothecate to physically repossess hypothecated goods against wishes of hypothecator enables hypothecate to take law in his own hands, deprive hypothecator of his defence by depriving him of use of goods.

11. It is not in dispute that the complainant paid a total amount of Rs. 33,700. The opposite party filed a memo stating that as the D.D. for an amount of Rs. 11,000 was not realized and the statement was not obtained by the complainant their computer system showed it as a live account and due to inadvertence the cheques of the complainant for the months of August 2006 to December 2006 were cleared for an amount of Rs. 6,800 at Rs. 1,360 for 5 months and that they are ready and willing to pay an amount of Rs. 11,000 as directed by the District Forum and also return Rs. 6,800 which they have taken for the months of August 2006 to December 2006 and also the cancelled cheques given by the complainant towards the balance of EMI. Apart from the above, we are of the considered view that for the deficiency of service of the opposite parties and also taking into consideration that as late as on 29.1.2007 when the appeal was pending before this Commission another letter was addressed to the complainant by the opposite party once again demanding Rs. 1360 + 400 towards EMI and keeping in view that the vehicle was seized without prior notice, we are of the considered opinion that the amount can be enhanced by another Rs. 20,000 and hence the order of the District Forum is modified directing the opposite party to pay an additional amount of Rs. 20,000 apart from what was decreed by the District Forum. The contention of the complainant to award entire amount paid by him is unsustainable on the ground that he has purchased the vehicle on August 2004 and the vehicle was seized only in March 2006 and, therefore, he has used the vehicle for 1½ years and, therefore, we find it fit to award an additional amount of Rs. 20,000 towards compensation for the arbitrary action of the respondent in humiliating and harassing the complainant.

12. In the result this appeal is allowed in part modifying the order of the District Forum increasing the compensation amount of Rs. 10,000 to Rs. 30,000 while confirming the other aspects of the order of the District Forum i.e., with respect to closing of his account. Time for compliance six weeks.

Appeal partly allowed.