(Order)
R.S. Sharma, President:
1. This order will govern disposal of Appeal No. FA/12/298 as well as Appeal No. FA/12/307, which have been preferred respectively by the OPs and complainant of Complaint Case No.43/2010 against the order dated 22.05.2012 of District Consumer Disputes Redressal Forum, Surguja, Ambikapur (C.G.) (henceforth called œDistrict Forum?), whereby the complaint filed by the complainant, has been allowed in part, and learned District Forum has directed the OPs to pay the complainant a sum of Rs.4,30,000/- along with interest @ 6% p.a. from the date of filing of the complaint i.e. 09.04.2010 and also pay a sum of Rs.3,000/- as compensation for physical and mental agony and inconvenience suffered by the complainant and Rs.1,000/- as advocate fee. The District Forum has further directed that if the complainant has received the amount of Rs.56,497/- which was sent by the OPs to him after sale of the vehicle bearing registration no.C.G.15-B-4029 vide bank draft No.188087, the aforesaid amount be adjusted and the remaining amount of Rs.3,73,503/- would be payable by the OPs to the complainant. For the purpose of convenience, hereinafter in this order, the parties will be referred as per their original nomenclature in the complaint case. The original of this order be retained in the file of Appeal No.FA/12/298 and its copy be placed in the file of Appeal No.FA/12/307.
2. Briefly stated, the facts of the case are that, a motor vehicle Tata Safari, bearing No.C.G.15/B-4029 was purchased by the complainant with the help of finance provided by the s, on 30.09.2008. As per his case, he was continuously paying the EMIs, but the said vehicle, was forcefully repossessed by the Financer and even after requests, it was not returned to him. Then, alleging deficiency in service on the part of the OPs, a consumer complaint was filed before the District Forum.
3. The contentions of the OPs before District Forum was that vehicle in question, was not forcefully repossessed by them, but it was repossessed as per terms of the finance agreement. It has also been averred that there was default in payment of EMIs, so, the vehicle was repossessed. It has also been stated in the reply that Finance Company has referred the matter to the Arbitrator, who has passed an award and, therefore, the complaint case is not maintainable before District Forum.
4. Learned District Forum, after appreciation of the materials available before it, allowed the complaint of the complainant in part and awarded compensation, as mentioned in para 1 of this judgment.
5. Shri Mukesh Sharma, learned counsel for the complainant argued that the complainant had already deposited near about Rs.6,42,443/- till 01.03.2010 with the OPs and the complainant was ready to pay the remaining amount but the OPs forcibly took the possession of the vehicle with the help of muscleman and illegally sold the vehicle. Before auction or sale of the vehicle, the OPs did not send notice to the complainant and thus OPs violated the provisions of the Hire Purchase Agreement and recovery process was effected by the OPs with use of force, which is not in accordance with law. Even no notice was served upon the complainant before referring the matter to the Arbitrator, therefore, the arbitral award was not binding on the complainant and learned District Forum has jurisdiction to decide the matter. He further argued that the complainant made down payment to the tune of Rs.2,12,443/- but the District Forum, has not discussed regarding the payment of above amount to the OPs and the complainant is entitled for total sum of Rs.6,42,443/-, but learned District Forum has only awarded the complainant compensation of Rs.4,30,000/- which is on lower side.
6. Shri Sunil Otwani, learned counsel for the OPs argued that matter was referred to the Arbitrator and the Arbitrator passed award on 29.06.2010 and copy of the award is annexed in the record of the District Forum. Therefore, the District Forum, has no jurisdiction to try the case. He further argued that OPs are owner of the said vehicle and the complainant defaulted in making payment of instalments, therefore, the OPs have repossessed the vehicle and the OPs never took possession of the vehicle by use of force. The OPs sent notice to the complainant, but the complainant failed to comply the provisions of Hire Purchase Agreement executed between the parties. He further argued that the matter was referred to the Arbitrator and notice was duly served upon the complainant and award was passed by the Arbitrator on 29.06.2010, He further argued OPs/Magma Finance Corporation Ltd. is a financer and according to Hire Purchase Agreement the financer/OPs have become owner of the vehicle and purchaser is simply a bailee (mifugfr) of the vehicle. The OPs sent notice to the complainant before referring the matter to the Arbitrator and the matter was referred to the Arbitrator and award was passed on 29.06.2010 by the Arbitrator. Copy of the award has also been sent to the complainant by regd. post. After receiving copy of the award, the complainant did not comply the award passed by the Arbitrator and the complainant continued prosecuting the complaint before the District Forum, after passing the award by the Arbitrator, therefore, the District Forum, has no jurisdiction to decide the case. The award passed by the Arbitrator can be set aside only under Section 34 of the Arbitration and Reconciliation Act, 1996 by the competent Court, but the complainant did not file application under Section 34 of the Arbitration and Reconciliation Act, 1996 before the competent Court for setting aside the award passed by the Arbitrator, therefore, the award passed by the Arbitrator attended finality and is binding on the complainant. He placed reliance on judgment of Hon'ble National Commission in the case of Shriram Transport Finance Co. Ltd. and Anr. v. Mr. Chaman Lal, 2012 (4) CPR 75 (NC); Magma Fincorp Limited v. Sh. Subhankar Singh, I (2013) CPJ 27 (NC).
7. We have heard learned counsel for both the parties at length and have also perused the record of the District Forum.
8. From bare perusal of the record of the District Forum, it is apparent that the complainant filed complaint on 09.04.2010 before the District Forum and Shri Rajesh Gupta, counsel for the OPs appeared before the District Forum on 09.06.2010 and filed written version. In the written version in first instance there is no averment regarding the arbitration proceedings and OPs / Magma Finance Corporation Limited amended their pleadings in the written statement and thereby pleaded regarding the arbitration award. The OPs have filed copy of award dated 29.06.2010, passed by Mr. Ram Pravesh Singh, Arbitrator.
9. Award dated 29.06.2010 has been passed by Shri Ram Pravesh Singh, Sole Arbitrator. In paragraph No.1 of the said award, it is mentioned that he was informed of his appointment as arbitrator in accordance with the arbitration agreement dated 13.10.2008. In para no.3 and 4 of the said award, it is mentioned thus :-
"3. By a letter dated 30/04/2010 addressed by me to the all the parties I fixed the 1st sitting of the reference on 20/05/2010. Notice of the said sitting was issued to all the parties by the registered post with acknowledgement due.
4. By reason of the failure of the Respondent to appear at the above sitting held on 20/05/2010 the Respondent was given yet another opportunity to participate in the arbitral proceedings by appearing before me at the sitting fixed on 18/06/2010. The notice convening the said sitting to was sent by the registered post with acknowledgement.
10. In the case of M/s National Seeds Corporation Ltd. vs. M. Madhusudhan Reddy, 2013 (4) CPR 345 (SC), Hon'ble Supreme Court has observed thus :-
"29. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, filed complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In Fair Air Engineers (P) Ltd. v. N.K. Modi (supra), the 2 “ Judge Bench interpreted that section and held as under :-
"the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri Suri, that the words "in derogation of the provisions of any other law for the time being in force" would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.
It would, therefore, be clear that the legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer in automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act."
11. In the case of Suryapal Singh v. Siddha Vinayak Motors and Anr., III (2012) CPJ 4 (SC), Hon'ble Supreme Court, has observed thus :-
"2. This Court vide its judgment 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 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 and Anr. v. Kora Bibbikutty and 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 judgment 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) 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."
12. In the instant case, OPs/Magma Finance Corporation Limited in the first instance did not plead regarding arbitration proceedings in its written statement and no documents were filed by the OPs which indicate that before referring the matter to the arbitrator, notice was sent to the complainant. Even notice sent by the arbitrator to the complainant, was not produced by the OPs, therefore, it appears that no notice was served upon the complainant and award was passed by the arbitrator ex-parte without giving notice to the complainant. It appears that the complaint was filed by the complainant before the District Forum before passing the above award by the Arbitrator and OPs filed copy of the award at the subsequent stage in the case. Although complainant did not file application under Section 34 of the Arbitration and Reconciliation Act, 1996 before the competent Court for setting aside the award passed by the Arbitrator and continued to prosecute the complaint case.
13. In the case of Fair Air Engineers Pvt. Ltd. And Another v. N.K. Modi, (1996) Supreme Court Cases 385, Hon'ble Supreme Court has observed thus :-
"16. It, would therefore, be clear that the legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer an automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act".
14. Section 3 of the Consumer Protection Act, 1986 makes the position clear. It reads thus :-
"3. Act not in derogation of any other law. - The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
15. Although the award was passed by the Arbitrator and after passing of the arbitral award, the District Forum, has passed the impugned order dated 22.05.2012. Looking to the facts and circumstances of the case and provisions of Section 3 of the Consumer Protection Act, 1986, the District Forum, has jurisdiction to take cognizance in the matter and it has jurisdiction to decide the case according to provisions of the Consumer Protection Act, 1986.
16. Now, we shall consider whether the OPs/ Magma Finance Corporation Ltd. has repossessed the vehicle forcibly or by using muscle power and committed deficiency in service.
17. In the case of Instalment Supply Ltd. vs. Kangra Ex-Serviceman Transport Co. and Anr., I (2007) CPJ 34 (NC), Hon'ble National Commission, has observed thus :-
"3. Dissatisfied with the order of State Commission, the petitioner has filed the revision. It was contended by the Counsel of the petitioner that an arbitration award has been passed in this case which is binding on the parties. He further submitted that the complaint was barred by res judicata inasmuch as respondent No.1 concealed from this Commission that all disputes between the petitioner and respondent No.1 had already been settled by arbitration in accordance with Arbitration Agreement contained in the said Hire Purchase Agreement (HPA). The award dated 5.9.2000 of the Arbitrator Mr. K.L. Bhendwal had already been published and delivered and the award takes into account all the payments made or due. In terms of said award, the respondent No.1 owes the petitioner a sum of Rs.58,114 towards arrears of hire money, interest and other charges under the said agreement. Though, this fact was brought to the notice of District Forum in the reply but was ignored.
"..........The said award had taken into account all payments made or due under the said agreement, and has held that the respondent No.1 owed the appellant a sum of Rs.58,114 towards arrears of hire money, interest and other charges under the said agreement."
18. In the case of Pramod Kumar Rai v. Shriram Transport Finance Co. Ltd., III (2012) CPJ 553 (NC), Hon'ble National Commission has observed thus :
"3. Learned Counsel for the petitioner argued that the petitioner is a poor person. When we asked whether he was ready to deposit the instalments in three months, he wanted another one month to deposit the above said three instalments. It is, thus, clear that the petitioner has no intention to pay off the loan. The but and ben stand set up by the petitioner cannot produce the desired result.
4. Again, it is well settled that as per agreement, the respondent, finance company is well within its right to seize the said truck. This view is supported by National Commission in the case of Surendra Kumar Agrawal v. Telco Finance Limited and Anr., II (2010) CPJ 163 (NC)."
19. In the case of Shriram Transport Finance Co. Ltd. and Anr. v. Mr. Chaman Lal., 2012 (4) CPR 75 (NC), Hon'ble National Commission has observed thus :
"6. .........Hon'ble Supreme Court has recently in Suryapal Singh v. Siddha Vinayak Motors and Anr., II (2012) CPJ 8 (SC) held :
"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 and 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 and Anr. v. Kora Bibbikutty and 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 judgment 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) 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."
20. In the case of Magma Fincorp Ltd. v. Sh. Subhankar Singh (Supra), Hon'ble National Commission observed that :
"9. It is apparent that the learned Counsel for the respondent has raised copious objections merely for the sake of cavil. Notice dated 16.6.2009 has been placed on record. It is clear that he did not pay the instalments for the months of April, May and June. He also did not pay delay payment charges, total being Rs.59,246/-. Notice dated 11.7.2009, reveals that the said amount stood enhanced to Rs.80,050/-. Payment of one instalment in the month of July is no compliance of the terms and conditions of the agreement, placed before this Commission. There was no need to give the notice. The petitioner Company could have no moto taken the possession of the vehicle. The relevant extracts of the agreement reads, as under :-
"14. Events of default rights and remedies Thereon : (i) in case the Hirer/s shall during the continuance of this Agreement do or suffer one or more of the following :
Fail to pay in time any of the hire instalments or part thereof herein reserved or any other sum of money payable under this agreement.
To (p) xxxxxxxxx (ii). (a) xxxxx (b) MAGMA SHRACHI shall be entitled to take possession of the said assets(s)/vehicle(s) and sell and/or cause to be sold or otherwise dispose of all or any part of the said asset(s)/vehicle(s) or any fittings thereof in such manner and/or made as prescribed more fully and particularly in appendix "A" hereto and apply the net sale proceeds of such sale in or towards liquidation of the amount outstanding due to MAGMA SHRACHI from the said hirer(s) as on the date of such sale. It, therefore means that there was no need to give notice, however, the petitioner gave two notices in this respect".
11. The National Commission, in case reported in Surendra Kumar Agrawal v. Telco Finance Ltd. and Anr., II (2010) CPJ 163 (NC), Hon'ble Mr. Justice Ashok Bhan, President, was pleased to hold as under :-
6. Aggrieved by the order passed by the District Forum petitioner filed the Appeal before the State Commission. The State Commission relying upon the judgment of Hon'ble Supreme Court of India in Managing Director Orix Auto Finance (India) Ltd. Vs. Sh. Jagmandar Singh and Anr. reported in 127 (2006) DLT 278 (SC) = II (2006) BC 108 (SC) = II (2006) SLT 166 = II (2007) CPJ 45 (SC) = (2006) 1 SCC 708, dismissed the Appeal. It was held that no settlement of account showing details of repayment of loan installments is filed by the petitioner/complainant. That the petitioner had defaulted several times. That the said judgment of the Apex Court has clearly endorsed the rights of the finance in respect of repossessing the vehicles in case of default by the hirer.
7. xxxxx
8. xxxxx
9. It is not disputed before us that the petitioner had raised a loan of Rs.6,15,000/- to purchase the truck. No statement of account showing repayment of loan instalments has been filed by the petitioner. It was admitted before the State Commission that the petitioner had defaulted several times in making the payment on the date when it was due. Further it is not disputed that as per Hire Purchase Agreement the financier was authorized to repossess the vehicle in case of default in repayment of loan instalments. Supreme Court of India in Managing Director Orix Auto Finance (India) Limited case (supra) has held that the financier can repossess the vehicle if the agreement permits the financier to take possession of financed vehicle. There is nothing to show that the vehicle was repossessed forcibly. Mere fact that possession was taken by the respondents cannot be the ground to contend that the hirer is prejudiced. We agree with the view taken by the State Commission".
21. In the instant case, the complainant pleaded in para 2 of his complaint that employees of OPs / Magma Finance Corporation Ltd. and took the vehicle in question. In para 3 of the complaint, it has been pleaded by the complainant that he contacted with the OPs and requested for returning the vehicle, but the OPs did not respond his request. In complaint, there is no specific averment by the complainant that on which date the OPs took the possession of the vehicle forcibly and when he contacted with the OPs. Had the OPs took possession of the vehicle forcibly, the driver of the vehicle would have lodged report immediately before Police Station. If the driver failed to lodge report, the complainant would have lodged report regarding illegal possession of the vehicle by the OPs, but the complainant did not submit or file any document regarding forceful possession of the vehicle by the OPs/ Magma Finance Corporation Ltd. Even he did not file copy of the report lodged with Police Station.
22. OPs filed document D-15 which is post intimation to local police station, City Kotwali, Ambikapur, Surguja (C.G.) sent by OPs/Magma Fincorp Ltd. dated 10.03.2010 and document D-12 is Pre-Sale Notice to Hirer sent by OPs/Magma Fincorp Ltd. 12.03.2010, but the complainant did not file any document regarding lodging complaint against the OPs. Even in legal notice dated 17.03.2010 no specific averment was made regarding illegal possession of the vehicle by the OPs.
23. It is undisputed fact that the complainant Jugal Kishore Singh, purchased the vehicle in question in the year 2008. The complainant and OPs entered into an agreement on 30.09.2008 and OPs provided loan to the complainant. OPs specifically mentioned in their written version that a sum of Rs.7,00,000/- was sanctioned as loan including finance charge and total amount of Rs.8,41,750/- was to be paid in 36 installments. The OPs further pleaded that till 01.03.2010, the complainant instead of paying Rs.5,38,000/- had paid only Rs.4,30,000/-. It appears that the complainant used the vehicle for near about 1 year and 5 months and had committed default in making payment. The complainant utterly failed to prove that vehicle in question was forcibly repossessed by the OPs. Pleading advanced by the complainant is not reliable and is not acceptable, therefore, the order passed by the District Forum suffers from irregularity and illegality and is not sustainable in eye of law and is liable to be set aside.
24. Hence, the appeal No.FA/12/307 filed by the complainant is liable to be and is hereby dismissed. The appeal No.FA/12/298 filed by the OPs, is allowed and the order dated 22.05.2012 passed by the District Forum is set aside. Consequently, the complaint filed by the complainant before the District Forum also stands dismissed. No order as to the costs of these appeals.