1. THE Revision Petitioner, M/s. IndusInd Bank has prayed for setting aside the order of Jharkhand, State Consumer Disputes Redressal Commission in FA No.147 of 2008. In the impugned order the State Commission has dismissed the appeal filed by the Revision Petitioner/OP against the order of the District Forum, Dhanbad, holding it to be an appeal without merit.
2. FACTS of the case on record of the fora below are that the Complainant, Birendra Kumar Sinha had purchased a Tata truck with a loan from the RP/OP in 2006. The loan was required to be repaid in 48 EMIs of Rs.27,500/- each. In July, 2007 the vehicle was forcibly repossessed by the RP/OP. When the Complainant/Respondent requested for its release, he was asked to pay the entire outstanding balance of the loan. The Complainant therefore, invoked the jurisdiction of the District Consumer Forum. District Forum has held that by 10.07.2007, when the vehicle was repossessed by the RP/OP, the Complainant/Respondent had already paid Rs.1,23,000/-and therefore, repossession for the remaining over dues of Rs.43,495/- was not proper and amounted to a deficiency in service on the part of the Bank/OP.
In the petition before us, the Revision Petitioner has repeatedly claimed that repossession was in exercise of its right under Clause 15.2 of the loan agreement. This appears to be an attempt to obfuscate the issue. The question is not of its right to repossess but of the manner in which it was done. The State Commission has made the following observations in this regard:- From the above facts and circumstances it is evident that the forceful possession of the vehicle actually for dues under loan agreement. It is also apparent that the appellant-Bank having appeared before the lower Forum, took unauthorized steps for auction and sale proceed without seeking permission of the Forum. We have been shocked to find that the appellant having filed this appeal initiated the process of Arbitration also, that too without seeking permission of the Commission and after protest by the complainant.
We have heard the counsel for the Revision Petitioner at length, at the admission stage itself. Though no notice had been issued to the Respondent, he was also present in the course of this hearing. The counsel for the Revision Petitioner has not been able to explain why the vehicle was sold on 20.02.2008 without permission of the District Forum when the jurisdiction of District Forum had already been invoked on 01.10.2007.
3. THE Revision Petitioner has drawn our attention to the ruling of Honble Supreme Court of India in Orix Auto Finance (India) Ltd. Vs. Jagmander Singh and another, (2006) 2 SCC 598. It is claimed by the Petitioner that in terms of this ruling there cannot be any generalization in holding each and every action of repossession of the vehicle as arbitrary. THE modes of determination of disputes and the relief to be granted would have to depend on financiers fundamental right to take possession under the Hire Purchase agreement and on the facts of each and every case.
The facts, in the case cited above, related to hire purchase of a truck under a financing agreement. As per the terms, the hire purchaser was to repay the lone Rs. 9.24 lacs in 33 installments. The first installment was payable on 25.10.2000 and the last on 25.06.2003. The financier repossess the vehicle 20.07.2002, when the hirer/borrow was in arrears of Rs.1,34,000/- on account of monthly installments, excluding other charges payable on account of delay. Honble Supreme Court has disposed of this case without expressing any opinion on its merits and with the direction that the hirer should be given an opportunity to pay an amount of Rs,1,50,000/-, in addition to the amount already deposited, within ten days after which the vehicle shall be released to him. The Court also directed the respondent to file an undertaking before the trial court that in the event of non-success, the vehicle shall be returned to the financier, unless the trial court fixes some other terms. Honble Supreme Court has also observed that:- There cannot be any generalization in such matters. It would depend upon facts of each case. It would not be, therefore, proper for the High Courts to lay down any guideline which would I essence amount to variation of the agreed terms of the agreement.
4. EVIDENTLY, the facts of the case before us are very different from those of the case cited above. In the present case, the financier i.e. RP/OP has not stopped at repossession of the truck. It has proceeded to sell the vehicle when the matter was already taken cognizance of by the District Consumer Forum Dhanbad. This too has been done for an over due of Rs.43,495/- despite the payment of Rs.1,23,000/-, already made by the Complainant, as observed by the District Forum.
The present case, as observed by the State Commission, is a case of forcible repossession of the financed vehicle. The question, therefore, is not one of the rights of the RP/OP to repossess the vehicle, but the manner in which the repossession was done. In a similar matter that arose before the National Commission in Citicorp Maruti Finance Ltd. Vs. S.Vijayalaxmi, III (2007) CPJ (NC), it was argued on behalf of the Finance Company that functioning of the banking sector is governed by the Reserve Bank of India which does not disapprove of repossession done in consonance with the terms and conditions of the agreement between the parties. But the National Commission held that:- In our view, the aforesaid submissions do not hold water in view of the fact that we are a democratic country having well established independent judiciary and having various laws, where musclemen are not to be encouraged for repossessing the hypothecated goods or vehicle for which hire purchase agreement is executed. If musclemen are encouraged to repossess the property it will create lawlessness and the loanee who himself is in financial crisis would be helpless. In a number of cases it is alleged that the vehicle of the musclemen follows the vehicle of the loanee to repossess the same by use of force. In one case, it is alleged that gunman was also accompanying such musclemen. In any case, it is impermissible for the money lender/financier/banker to take possession of the vehicle for which loan is given, by use of force. This unlawful and unethical procedure, in our view, at the outset, can be said to be against public policy and also against the protection of public interest.
In another matter in ICICI Bank Limited Vs. Prakash Kaur and others, (2007) 2 SCC, 711, the matter before Honble Supreme Court of India was regarding finance of a truck by ICICI Bank. The purchaser defaulted in payment of installments. In terms of agreement between the parties, the truck was taken possession by use of force. The High Court of Allahabad, on the application of the borrower, directed the police authority to register a case against those responsible for forcible repossession. In appeal against this order, Honble Supreme Court accepted the offer of the Bank to compromise the matter by forgoing interest payable on outstanding dues and to set aside the direction of the High Court. However, the Bank was directed to release the vehicle upon deposit of Rs.50,000/-. But the Supreme Court has clearly recorded its disapproval of the method adopted in repossession of the vehicle in the following terms:-
16. Before we part with this matter, we wish to make it clear that we do not appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents, who are musclemen, is deprecated and needs to be discouraged. The Bank should resort to procedure recognized by law to take possession of vehicles in cases where the borrower may have committed default in payment of the instalments instead of taking resort to strong-arm tactics.
In the case before us, the findings of the fora below show that the truck was forcibly repossessed. This was in clear violation of the law as laid down in the decisions cited above. We therefore, do not find any merit in this Revision Petition and the same is dismissed. The matter accordingly stands disposed of at the admission stage itself with no orders as to costs.
