1. This Revision Petition has been filed under Section 21(b) of The Consumer Protection Act, 1986, hereinafter referred to as the ‘Act’, challenging the Order dated 25.09.2019 passed by The West Bengal State Consumer Disputes Redressal Commission, hereinafter referred to as the ‘State Commission’, in F.A. No. 1177 of 2017 arising out of the Order dated 22.09.2017 in C.C. No. 161 of 2015 passed by The District Consumer Disputes Redressal Forum, Birbhum, hereinafter referred to as the ‘District Forum’.
The Petitioner herein, IndusInd Bank Ltd., was the Opposite Party before the District Forum, and is hereinafter being referred to as the ‘Bank’.
The Respondent herein, Mr. Abdul Rajek Khan, was the Complainant before the District Forum, and is hereinafter being referred to as the ‘Complainant’.
2. Heard arguments at length from learned Counsel for the Bank.
Perused the entire material on record including inter alia the Order dated 22.09.2017 of the District Forum, the impugned Order dated 25.09.2019 of the State Commission and the Petition.
3. The short point relates to the Bank re-possessing the Complainant’s hypothecated vehicle and conducting its auction without notice to the Complainant and without public notice by way of publication in newspaper(s) etc.
4. The District Forum vide its Order dated 22.09.2017 allowed the Complaint on contest.
The Award made by the District Forum is quoted below:
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that C.F case No. 161/2015 be and the same is allowed on contest against the O.P with cost of Rs. 2000/-.
The O.P IndusInd Bank Ltd. is directed to pay Rs. 10,51,904/- to the complainant as due amount to the complainant with 8% interest from the date of filing of this case i.e. 28/12/2015 till realization. No other compensation is awarded.
The O.P/ Bank is also directed to issue no dues certificate in favour of the complainant in respect of vehicle in question after adjustment.
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5. The Bank filed Appeal under Section 15 of the Act before the State Commission.
The State Commission vide its Order dated 25.09.2019 modified the Award made by the District Forum.
The Award made by the State Commission is quoted below:
Hence, ordered, that the Appeal be and the same stands allowed in part. The Appellant / O.P. Bank is hereby directed to issue a no objection certificate in respect of the subject loan to the Respondent / Complainant. It is also directed to pay Rs. 2,60,000/- being the amount to margin money along with compensation and cost of Rs. 1,00,000/- and 10,000/- respectively to the Respondent / Complainant within 45 days from the date of the instant order. Failing which, simple interest @9 % per annum shall accrue to Rs. 2,60,000/-, being the total of the amount payable as margin money and compensation, from the date of default till the entire amount is fully realized. - - -.
6. The District Forum, in its appraisal of the case, determined that, one, the Bank re-possessed the vehicle illegally (“O.P. / Bank repossessed the vehicle in question illegally”), and, two, it sold the vehicle at a very nominal price by an illegal auction (“and also sold to the same at very nominal price by illegal auction sale”). It determined both ‘deficiency in service’ and ‘unfair trade practice’ on the part of the Bank (“which amounts to illegal trade practice and deficiency in service”).
7. The State Commission, in its appraisal, observed that it did not find any evidence that coercive measures were adopted by the Bank in re-possessing the vehicle. However, it agreed with the District Forum that the vehicle was sold in auction without notice to the Complainant and without any public notice. It determined ‘deficiency in service’ on the part of the Bank on this count.
8. Extracts from the appraisal made by the State Commission are reproduced below:
Perused the papers on record. Considered the submissions of Ld. Advocates appearing on behalf of both sides.
We have no doubt that there was default in making repayment of loan by the Respondent/Complainant. The record also revealed that the Respondent/Complainant was cautioned about adverse action likely to be taken in the immediate repayment of the overdue amount was not made by the Respondent/Complainant. The Appellant/O.P., in the given circumstances, had enough reasons to take lawful step for repossessing the vehicle which he did. We did not find in the record any indication or evidence that coercive measure were adopted by the Appellant/O.P. in repossessing the subject vehicle.
We are concerned about the process adopted for repossessing the vehicle and sale it off for recovery of the overdue amount. The Appellant/O.P. claimed that a pre-sale notice was served upon the Respondent/Complainant. The receipt of the Indian Post imprinted on the body of the copy of the sale notice was emphasized upon to be treated as a conclusive evidence of service of notice upon the Respondent/Complainant.
The record, however, was devoid of any receipt of acknowledgement from the Respondent/Complainant, nor the record was supported with postal track report confirmatory to the service of the said pre-sale notice upon the Respondent/Complainant, as claimed.
We did not find in the record any newspaper advertisement towards sale of the subject vehicle through open auction. It was, therefore, an obvious corollary that the Respondent/Complainant was deprived of the information of sale of the vehicle and thereby participating in the auction sale for repurchasing the said vehicle.
A vehicle which was of a purchase value of Rs.17,60,000/- two years back, was sold away at a cost of Rs.7,00,000/- only. The Learned District Forum had rightly appreciated that the sale value, even on applying depreciation @ 10% per annum should not have been so less an amount.
Keeping in view the facts and circumstances narrated above, we have no hesitation to hold that there was gross deficiency in rendering services by the Appellant/O.P. financing Bank - - -.
9. In respect of the first issue, whether the due procedure was adopted in re-possessing the vehicle, it is noted that the State Commission has determined that there is nothing on record to indicate that coercive measures were adopted by the Bank in re-possessing the vehicle.
10. In respect of the second issue, whether notice to the Complainant and whether public notice by way of publication in newspaper(s) etc. were duly ensured before conducting the auction of the re-possessed vehicle, it is noted that both the Fora below, the District Forum as well as the State Commission, have determined that neither was notice of the auction conclusively served on the Complainant and nor was any public notice issued by way of publication in newspaper(s) etc.
11. Nowhere in the Petition is there any mention, implicitly or explicitly, in respect of conclusive service of notice on the Complainant and / or in respect of any public notice by way of publication in newspaper(s) etc. regarding the said auction. Nor is there any elucidation of the processes and procedures adopted by the Bank in conducting the auction.
12. The Complainant was in default. Consequently, his hypothecated vehicle was re-possessed. Auction of the thus re-possessed vehicle was required to be undertaken to fetch its fair open price, to apportion the proceeds towards the amount due in default, and to pay the excess if any to the Complainant.
13. It is well evinced that no fundamental principle of conducting auction was adopted. No valuation of the vehicle was undertaken, no reserve price was fixed, no information was given to the Complainant, no information was given to the general public. Non-adherence to the fundamental requirements of auction is an infarction of basic financial as well as vigilance tenets.
14. It needs no elaboration that a bonafide valuation and a bonafide reserve price are pre-requisites to achieve a fair open price, the Complainant is deprived of opportunity to protect his interest if he is not duly informed, a fair open price is not realised if the general public is not duly informed of the auction.
15. Arguments were heard in part on 07.02.2020, then on 28.02.2020, and concluded on 05.03.2020. Learned counsel for the Bank could not produce a single document, or make a single submission from the bar, in support of conclusive information of auction to the Complainant and / or in support of any information to the general public by publication in newspaper(s) etc.
16. An auction done in such manner is to the disadvantage of the borrower, it puts him to pecuniary loss. It is also to the disadvantage of the bank, it does not realise a fair open price as to enable optimal realisation of the amount due in default.
17. This is a plain case of auction of a re-possessed vehicle having been conducted in violation of elementary financial and vigilance tenets, conducted in a cloud of opacity. The case, though simple, is serious, it has a bad air.
18. Ingredients of both ‘deficiency in service’ within the meaning of Section 2(1)(g) & (o) and ‘unfair trade practice’ within the meaning of Section 2(1)(r) of the Act are well and truly evident.
In respect of ‘unfair trade practice’ it may be noted that it is a specific provision unique to The Consumer Protection Act, 1986.
Section 2(1)(r) says of “a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-”.
The list provided in Section 2(1)(r) is illustrative and not comprehensive.
That is to say, an unfair method or unfair or deceptive practice, as is judiciously determined, on facts and reasons, on fair and objective appraisal of the evidence and material on record, would qualify as ‘unfair trade practice’ within the meaning of Section 2(1)(r).
In the instant case, not undertaking valuation, not fixing reserve price, not intimating the Complainant (who was the principal affected person), not informing the general public by way of publication in newspaper(s) etc. (which is a basic requirement to obtain a fair open price), are decidedly unfair and deceptive within the meaning of Section 2(1)(r).
19. There is nothing on record to show that the Bank undertook fact-finding / inquiry to fix responsibility or undertook any action to imbibe systemic improvements for future. It, albeit mechanically, agitated before one, then two, and now three, Consumer Protection Fora, unnecessarily wasting public time and monies.
20. The Bank’s position is difficult to understand, or appreciate.
When, ex facie, it did not undertake a valuation, did not fix a reserve price, did not intimate the Complainant, did not inform the general public, did not adhere to the basic financial and vigilance tenets in conducting the said auction, it (still) did not deem it necessary to conduct inquiry to fix responsibility and to undertake systemic improvements for future.
It, rather, deemed it apt to contest the case before the District Forum, deemed it apt to appeal before the State Commission, deemed it apt to prefer revision before this Commission (where, too, its case fails miserably on admission itself).
21. All this is not viewed favourably.
22. On the basis of the examination made hereinabove, the State Commission’s impugned Order is modified to the extent that the Bank is unequivocally held liable for both ‘deficiency in service’ and ‘unfair trade practice’.
The Award made by the State Commission in respect of ‘deficiency in service’ is confirmed, which shall be complied with within four weeks of the pronouncement of this Order.
For the ‘unfair trade practice’, cost of Rs. 1 lakh is imposed on the Bank, which shall be deposited in the Consumer Legal Aid Account of the District Forum within four weeks of the pronouncement of this Order.
The Bank, through its Chief Executive, is advised to conduct inquiry to fix res
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ponsibility for the auction conducted in violation of fundamental financial and vigilance principles. It will be open to the Bank to realise the amount of the Award made by the State Commission, and the amount of the cost imposed herein, as also any other pecuniary loss caused to the Bank, from its functionaries responsible, as per the due procedure. The Bank, through its Chief Executive, is ordered under Section 14(1)(f) of the Act to forthwith discontinue such unfair trade practice and inculcate and imbibe systemic improvements to avert such unfair and deceptive auction(s) in future qua ‘consumer(s)’ in general. It shall ensure the appropriate directions to all its offices / branches and file a report-in-compliance before the District Forum within eight weeks of the pronouncement of this Order. 23. The Bank, through its Chief Executive, shall ensure compliance of the directions contained in para 22 above within the respective stipulated period. 24. In case of failure or omission in compliance, the District Forum shall undertake execution, for ‘Enforcement’ under Section 25(3) and for ‘Penalties’ under Section 27 of the Act, as per the law. 25. A copy each of this Order be sent by the Registry to the District Forum, to the Chief Executive of the Bank and to the Complainant, within three days of its pronouncement.