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HDFC Bank Limited v/s Nilesh Mangaldas Shah & Others


Company & Directors' Information:- HDFC BANK LIMITED [Active] CIN = L65920MH1994PLC080618

Company & Directors' Information:- BANK OF INDIA LIMITED [Active] CIN = U99999MH1906PLC000243

Company & Directors' Information:- R J SHAH AND COMPANY LIMITED [Active] CIN = L45202MH1957PLC010986

Company & Directors' Information:- SHAH INDIA PVT LTD [Active] CIN = U51909WB1960PTC024535

Company & Directors' Information:- B. B. SHAH PRIVATE LIMITED [Active] CIN = U17117RJ1984PTC002922

Company & Directors' Information:- D M SHAH & COMPANY PVT LTD [Active] CIN = U29244WB1988PTC045183

Company & Directors' Information:- C. M. SHAH AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U74140MH1971PTC015107

Company & Directors' Information:- T M SHAH PRIVATE LIMITED [Strike Off] CIN = U10101UP1966PTC003139

Company & Directors' Information:- S B SHAH AND COMPANY PRIVATE LIMITED [Active] CIN = U51496DL1991PTC045040

Company & Directors' Information:- H B SHAH PRIVATE LIMITED [Active] CIN = U36100MH1947PTC005536

Company & Directors' Information:- M M SHAH PRIVATE LIMITED [Strike Off] CIN = U51311MH1962PTC012293

Company & Directors' Information:- D J SHAH AND CO PRIVATE LIMITED [Active] CIN = U74899DL1987PTC030169

Company & Directors' Information:- N BANK LTD [Strike Off] CIN = U65191WB1924PLC000442

Company & Directors' Information:- C C SHAH LTD. [Strike Off] CIN = U15421WB2000PLC007659

Company & Directors' Information:- P N N BANK LIMITED [Strike Off] CIN = U65921TZ1948PLC000153

Company & Directors' Information:- A H SHAH AND CO PVT LTD [Active] CIN = U51311MH1949PTC007019

Company & Directors' Information:- SHAH AND SHAH PVT LTD [Strike Off] CIN = U33112WB1980PTC032838

Company & Directors' Information:- A D SHAH PVT LTD [Strike Off] CIN = U51909MH1972PTC015715

Company & Directors' Information:- CORPORATION BANK LTD [Dissolved] CIN = U99999KA1901PLC000893

Company & Directors' Information:- CORPORATION BANK LIMITED [Strike Off] CIN = U99999KA1972PLC001067

Company & Directors' Information:- K AND C BANK LIMITED [Dissolved] CIN = U65191KL1928PLC000529

Company & Directors' Information:- CORPORATION BANK LIMITED [Not available for efiling] CIN = U99999MH1936PTC002552

Company & Directors' Information:- B. SHAH AND COMPANY LIMITED [Dissolved] CIN = U99999MH1952PLC008789

    Revision Petition No. 1185 of 2013

    Decided On, 05 October 2020

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. JUSTICE V.K. JAIN
    By, PRESIDING MEMBER

    For the Petitioner: Varshal M. Pancholi, Advocate. For the Respondent: Priank Adhyaru, Advocate.



Judgment Text

Oral:1. The complainant/respondent got a vehicle financed from the petitioner bank to the extent of Rs. 5,05,000/-. The loan taken by the complainant/respondent was re-payable in instalments. The complainant having defaulted in payment of the instalments the vehicle was re-possessed by the petitioner bank on 01.06.2009. The vehicle was later sold on 10.06.2009 for Rs. 381500/-. Being aggrieved from the act of the petitioner the complainant approached the concerned District Forum by way of a consumer complaint.2. The complaint was resisted by the petitioner bank which inter alia stated in its reply that the complainant having defaulted in re-payment of the loan the vehicle was re-possessed after notice to him as per the terms and conditions of the agreement executed between the parties and that the driver of the complainant had surrendered the vehicle when required by the agent of the petitioner bank.3. The District Forum vide its order dated 18.05.2020 directed as under:-(2) The complainant has prayed for that the respondent should pay to the complainant an amount of Rs.7,50,000/- (Rupees seven lakhs fifty thousand only) towards the cost of the vehicle in question having No. GJ-22-A-9929. The said amount be paid by the respondent in the present case to the complainant with 9% p.a. simple rate of interest from the date of the complaint till the recovery of the said amount.(3) The respondent in the present should pay to the complainant an amount of Rs.10,000/- (Rupees ten thousand only) towards mental harassment and the cost of the complaint.(4) A say order is passed against the respondents that the cheques that have been given by the complainant in the present case to the respondent the said cheques are not presented by the respondent in the present case into the bank by filling up the date and amount on the said cheques and does not use the same.”4. Being aggrieved from the order passed by the District Forum the petitioner bank approached the concerned State Commission by way of an appeal. Vide its order dated 29.11.2012 the State Commission directed as under:-“(2) As stated vide Para No.2 of the order of the Learned Forum, the complainant becomes entitled to get an amount of Rs.3,02,340/- (Rupees three lakhs two thousand three hundred forty only) from the respondent and this amount is to be paid by the respondent to the complainant with 9% p.a. simple rate of interest from the date of filing the complaint till the recovery of the said amount.(3) As far as the question of the compensation is concerned, an order is passed that the respondent should pay to the complainant an amount of Rs.10,000/- (Rupees ten thousand only) with 9% p.a. simple rate of interest from the date of filing the complaint till the date of its recovery.(4) Further it is also held that the respondent will not be entitled to recovery any amount from the complainant towards the above loan.(5) Except this, the Para No.3,4,6,7 and 8 of the order remain unchanged.”5. It is not in dispute that there was a default on the part of the complainant in re-payment of the loan which he had taken from the petitioner bank. It is also not in dispute that as per clause 14.2 of the agreement in case of the default in payment of the loan the vehicle could be re-possessed by the petitioner bank through its officers, agents etc. without any notice and without assigning any reason, without intervention of any court. The said clause of the agreement reads as under:-“14.2 any of the ‘Event of Default’ pursuant to the terms of clause 11 arise whether demand for repayment is actually made or not then and in such case and at any time thereafter the bank through its officers agents or nominees shall have the right (without prejudice to the right the clause 7) to take anyone or more than one of the following actions without the specific intervention of a court or any court order:-1. without any notice assigning any reason and at the risk and expense of the borrower and if necessary as attorney for and in the name of borrower take charge and/or possession of seize, recover, appoint receiver of and remove the hypothecated vehicle.The bank will be within its rights to use tow – van to carry away the vehicle and/or2. enter into or upon any place or premises where the hypothecated vehicle may be kept or stored and inspect, value of insure the same at the cost and expenses of the borrower, and/or3. sell, buy auction or any private contract or tender (illegible) realization or otherwise dispose of or (illegible) vehicle in the manner the bank may think.”6. The case of the petitioner bank is that though it was not required to give any notice to the complainant before re-possessing the vehicle such notice was actually given on 04.04.2009. There is a reference of notice in the written version to the consumer complaint though the specific date of the notice is not disclosed. A copy of the said notice is available on page 110 of the paper book. Vide this notice, the complainant was informed that the bank would recover possession of the vehicle if complainant failed to pay an amount of Rs.454,611.39 within 15 days of the notice. He was also informed that the vehicle will be sold and disposed of seven days after taking of the possession. The petitioner had also placed on record the copy of the bulk registry whereby several documents including the above-referred notice dated 04.04.2009 were sent to the addresses by registered post on 09.04.2009. The notice sent to the complainant is referred at Sl. No. 2263 in the afore-said bulk register and the name and address of the complainant as well as the date of letter find mention in the register. The register also bears the stamp of the concerned post office. In the consumer complaint there is no specific averment that the vehicle was re-possessed without any notice to the complainant. Therefore, I have no hesitation in holding that the letter dated 04.04.2009 was duly sent to the complainant before the vehicle was re-possessed on 09.06.2009.7. The case of the complainant is that the vehicle was re-possessed by the petitioner bank by use of force while was it being driven by his driver. The case of the petitioner bank that the vehicle was surrendered by the driver when approached by the agent of the petitioner bank. The petitioner bank has placed on record the surrender letter purporting to be executed by the driver of the complainant. Though the case of the complainant is that the vehicle, was re-possessed by use of force, no affidavit of the driver was filed to prove that the vehicle was re-possessed by use of force. The driver was not produced as a witness before the District Forum. Since the surrender letter purporting to be executed by the driver of the complainant was filed before the District Forum it was necessary for the complainant to counter the stand of the petitioner in this regard by examining the driver as a witness or at least by filing his affidavit. No such course having been adopted by the complainant the obvious inference would be that the driver had peacefully surrendered the vehicle to the petitioner.8. The issue involved in this petition recently came up before the Hon’ble Supreme Court in CIVIL APPEAL NO. 5622 OF 2019 M/s Megma Fincorp Ltd. Vs. Rajesh Kumar Tiwari and the following view was taken:-“81. Whether the transaction between a Financier and a purchaser/hirer is a hire purchase transaction, or a loan transaction,might be determined from the terms of the agreement, considered in the light of surrounding circumstances. However, even a loan transaction, secured by right of seizure of a financed vehicle, confers licence to the Financier to seize the vehicle.90. In a case where the requirement to serve notice before repossession is implicit in the hire purchase agreement, non service of proper notice would tantamount to deficiency of service for breach of the hire purchase agreement giving rise to a claim in damages. The Complainant consumer would be entitled to compensatory damages, based on an assessment of the loss caused to the complainant by reason of the omission to give notice. Where there is no evidence of any loss to the hirer by reason of omission to give notice, nominal damages may be awarded.91. A forum constituted under the Consumer Protection Act has,as observed above, the power to award punitive damages. Punitive damages should, however, be granted only in exceptional circumstances, where the action of the Financier is so reprehensible that punishment is warranted. To cite an example, where a Financier erroneously and/or wrongfully invokes the power to repossess without notice to the hirer, causing thereby extensive pecuniary loss to the hirer or loss of goodwill and repute, a forum constituted under the Consumer Protection Act may award punitive damages.94. The District Forum was not justified in directing the Financier to pay the Complainant Rs.2,23,335/- being the entire amount paid by the Complainant to the Financier from the inception as well as the payment of Rs.1,04,000/- made by the Complainant to the dealer along with damage of Rs.10,000/- and litigation costs of Rs.1,000/- after the Complainant had held and used the vehicle for almost a year. The Complainant, admittedly a defaulter, has in effect, been allowed free use of the vehicle for about a year, plus damages, for an error in the notice of repossession, without considering the prejudice,if any, caused to the complainant by the error and consequential non receipt of the notice, and without making any assessment of the loss, if at all, to the Complainant by reason of the error/omission.”9. In the present case, the evidence placed on record shows not only the issue of notice dated 04.04.2009 to the complainant before re-possessing the vehicle on 01.06.2009 the complainant has also failed to prove that the vehicle was re-possessed by use of force. Th

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e agreement between the parties authorized the petitioner to re-possess the vehicle without giving any notice to the borrower. Though, in view of the decision of the Hon’ble Supreme Court in M/s Megma Fincorp Ltd. (supra) a notice could be inferred from the conduct of the parties, the petitioner itself having claimed that a notice dated 04.04.2009 was given to the complainant before re-possessing the vehicle, the dispatch of such a notice has been duly proved and this is not the case of the complainant anywhere in the consumer complaint that no notice before re-possessing the vehicle was given to him. Therefore, the petitioner bank cannot be said to be deficient in rendering services to the complainant.10. For the reasons stated hereinabove the impugned order cannot be sustained and the same is accordingly set aside. The consumer complaint is consequently dismissed with no order as to costs. The amount, if any, deposited by the petitioner, pursuant to the interim order of this Commission shall be released to the petitioner along-with the interest which may have accrued on that amount.
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