w w w . L a w y e r S e r v i c e s . i n



Manager, M/s Mahindra & Mahindra Financial Services Ltd. & Another v/s Sunil Kumar Jaiswal

    Appeal No. FA/12/306

    Decided On, 07 January 2013

    At, Chhatisgarh State Consumer Disputes Redressal Commission Raipur

    By, THE HONOURABLE MR. JUSTICE S.C. VYAS
    By, PRESIDENT

    For the Appellants: B. Gopa Kumar, Advocate. For the Respondent: Anurag Thaker, Advocate.



Judgment Text

1. This appeal is directed against order dated 08.05.2012 of District Consumer Disputes Redressal Forum, Durg (C.G.), (hereinafter called 'District Forum' for short) in Complaint Case No.152/2011, whereby the appellants / Finance Company, has been directed to pay Rs.1,50,000/‐to the respondent/complainant along with interest @ 7% p.a. w.e.f. 15.12.2009 till date of payment and also to pay Rs.1,000/‐as compensation for mental agony and Rs.1,000/‐as cost of litigation.

2. Undisputedly, vehicle Maruti Van, bearing registration No.C.G.07‐M‐8357, was purchased by the respondent/complainant with the help of finance provided by the appellant No.1. At the time of purchase, Rs.94,637/‐was deposited by the respondent/complainant as down payment and the amount of finance was Rs.2,43,928/‐, which was to be repaid in 47 monthly installments of Rs.4,809/‐each. The grievance of the respondent/complainant before the District Forum was that out of amount of loan, he deposited 11 installments, but thereafter he was required to go to Uttar Pradesh to attend his ailing mother and therefore 2‐3 installments could not be paid by him. In the month of November, 2009, the employees of the appellant no.1 forcefully taken possession of the questioned vehicle from the possession of the driver, Shri Monu Sahu. When complainant came to know about it, then he immediately contacted the branch office of the appellant no.1, where he was informed that only after deposit of Rs.25,000/‐, the vehicle may be delivered to him. He deposited Rs.25,000/‐on 28.12.2009 in the branch office of appellant no.1. Receipt was also duly provided, then he was asked to come after two day. When he attended the branch office of appellant no.1 after two days, then also the vehicle was not given to him and again Rs.1,88,000/‐were demanded including parking charges of the vehicle, repossession charges and old balance etc. In the meantime, the appellant No.1 handed over the vehicle to someone else for use and ultimately sold it. Alleging deficiency in service on the part of the appellants – financer, the consumer complaint was filed before the District Forum, which was contested by the appellants on the defence that an agreement was executed between the parties and respondent/complainant was defaulter, so, under the terms of the agreement, which was executed between the parties, the vehicle in question was repossessed. It has also been stated that as complainant was defaulter, so members of his family themselves have handed over the vehicle to the appellant no1 financer. Thereafter the appellant company gave information to the complainant to pay the remaining amount of finance and to take back the vehicle, but complainant deposited only Rs.25,000/‐and remaining amount was not paid for quite long time. After intimation, all dues were also not paid, therefore, the vehicle was sold on 16.09.2010 to a third person under intimation to the complainant and thus the financer has not committed any deficiency in service.

3. Learned District Forum, after having considered the material placed before it by both parties did not agree with the defence taken by the appellants and has found the appellants deficient in providing service and in collecting extra payment from the respondent/complainant. On the basis of these findings, by the impugned order, the appellant company has been directed to pay compensation to the respondent/complainant along with compensation for mental agony and cost of litigation.

4. We have heard arguments advanced by both parties and perused record of the District Forum.

5. Counsel for the appellants has argued before us that admittedly the complainant committed default in payment of EMIs and therefore finance company was having a right under the terms of agreement executed between the parties to take back possession of the vehicle in question. In these circumstances, the possession of the vehicle was taken and in doing so, no deficiency in service, has been committed by it. Learned counsel for the appellants has also drawn our attention towards statement of account submitted by the finance company before the District Forum and pointed out that there were certain defaults in payment of installments, as per this statement of account. It has also been submitted by him that after repossession of the vehicle, parking charges and repossession charges were also to be paid by the respondent/complainant, but no amount was paid by him in that regard also.

6. Learned District Forum, has taken into consideration the statement of accounts submitted by both the parties and after considering these statement of accounts, has recorded finding that after repossession of the vehicle, an amount of Rs.25,000/‐was deposited by the respondent/complainant with appellant No.1 and including that amount, the total payment was in excess of the amount of EMIs, to be paid by that date and therefore after payment of a sum of Rs.25,000/‐, the vehicle in question was required to be handed over to the respondent/complainant, which has not been done by the finance company. Upto some extent, this reasoning, appears convincing.

7. We have gone through the terms & conditions of the agreement executed between the parties, which has been filed by the appellant company itself before the District Forum. Clause 11 of this Agreement describes the event of default and in Clause 12 of the Agreement, the consequences upon event of default have been described. Clause 12.1 of the Agreement reads as under :‐

'12.1. Upon the occurrence of any event of default and any time thereafter, the Lenders shall without prejudice to its rights in law, be entitled to declare all sums due and to become due hereunder for the full term of the agreement as immediately due and payable including that the Borrower shall be liable to pay to the Lender foreclosure charges calculated as at the percentage (as per Schedule 1) of the balance principal outstanding along with other dues including unpaid installments, service taxes, late charges etc., due as on date of such declaration and upon the Borrower failing to make the said payment in full within 7 days thereof, the Lender may, at its sole discretion, do any one or more of the following :

i) Upon notice to the Borrower terminate this agreement;

ii) Demand that the Borrower should return the Product to the Lenders at the risk and expense of the borrower, in the same condition it was delivered to him (Ordinary wear and Tear Excepted) at such Location as the lender may designate and upon failure of the borrower to do so within the period of demand the lender / agents /allies as agent and constituted attorney of the Borrower can enter upon premises where the product is located and take immediate possession of and remove the same without liability to the lenders or their agents of such entry or for damage to property or otherwise. Upon such return of the product or upon the lender taking possession of the product as herein before stated the loan agreement can be foreclosed or terminated by the lender at its discretion and provided however the remedies available to the lender as herein given shall survive such foreclosure and termination of loan and the lender shall be entitled and authorised to exercise its rights herein including in connection with the product to recover its dues under this Agreement.

iii) Of such terms and conditions and for such consideration as the Lender may deem fit with or without any notice to the Borrower sell the Product at a public or private sale, otherwise dispose of upon such return of the Product or use, or operate, lease to others or keep idle such Product, all free and clear of any rights to the Borrower and without any duty to account to the Borrower for such action or inaction or for any proceeds in respect thereof.

iv) By written notice to the Borrower, require the Borrower to pay to the Lender (as liquidated damages or loss of bargain and not as a penalty) on the date specified in such notice an amount (plus interest at the rate of 3% per month) for the period until receipt of the said amount) equal to all unpaid periodical installment payments and all other payments which, in the absence of a default, would have been payable by the Borrower hereunder for the full term thereof, or

v) Exercise any other right or remedy which may be available to them under the applicable law.

vi) It being agreed and understood by the Borrower that the right to of the Lender to recover the amount payable and/or repayable or reimbursable to the satisfaction of the Lender shall survive any such Cancellation of Loan and/or termination if attached and the Lender’s rights wherever given in connection with initiating of action for enforcing its right to recover the amount shall also survive the Cancellation of the Loan or the termination of the agreement as the case may be and the Lender shall be entitled to take all or any of the steps therefore and the Borrower shall not take defense of such termination or cancellation of Loan under this agreement.'

Thus, sub clause (i) of the aforesaid clause again says that upon notice to the Borrower the Lender has a right to terminate this agreement and sub clause (ii) further says that the Lender has a right to demand that the Borrower should return the Product to the Lenders at the risk and expense of the borrower, in the same condition it was delivered to him (Ordinary wear and Tear Excepted) at such Location as the lender may designate and upon failure of the borrower to do so within the period of demand the lender / agents /allies as agent and constituted attorney of the Borrower can enter upon premises where the product is located and take immediate possession of and remove the same without liability to the lenders or their agents of such entry or for damage to property or otherwise. Upon such return of the product or upon the lender taking possession of the product as herein before stated the loan agreement can be foreclosed or terminated by the lender at its discretion and provided however the remedies available to the lender as herein given shall survive such foreclosure and termination of loan and the lender shall be entitled and authorised to exercise its rights herein including in connection with the product to recover its dues under this Agreement.

8. Thus, under Clause 12 of the Agreement executed between the parties, which has been duly signed by the authorized signatory of the Lender, borrower and guarantor, it appears that the duty of the lender financer was to declare due amount payable by the borrower in the event of default and on such declaration the borrower was required to be called upon to pay that amount and only on his failure to pay that amount within the period of 7 days, the Lender has got right to terminate the Agreement of loan upon notice and then to demand the borrower to return the product or to repossess it. Thus, the action of repossession is required to be taken by the Lender after giving notice to call upon the borrower to pay the amount mentioned in the notice within 7 days and after termination of this agreement by notice. Such notice has not been given by the Lender – financer to the borrower and without notice straightway the vehicle in question was repossessed by the financer, which was not only contrary to the terms of the agreement, but also comes in the category of use of muscleman for the purpose of taking possession of the vehicle [as held by Hon’ble Supreme Court in the case of Citicorp Maruti Finance Ltd. Vs. S. Vijayalaxmi, II (2009) CPJ 368 (SC)], because no notice was earlier given and no intimation was given to the bor

Please Login To View The Full Judgment!

rower that financer will repossess the vehicle if a particular amount is not paid. Not only this, but after repossession of the vehicle, when borrower had paid Rs.25,000/‐to the financer, as per demand, even then, accepting that payment as per demand, the financer again failed to return the product to the borrower. 9. The District Forum, has considered that including that amount, the EMIs payable upto that date have been paid in full by the complainant and some amount was also available, in excess, which could have been utilized by the financer for other heads on which the amount of was demanded. 10. Thus, in the facts and circumstances of the case, we find that action of repossession of the vehicle in question by the financer was not in terms of the agreement executed between the parties and therefore was not legal and when action of repossession of the vehicle was not legal and demanded amount was paid by the complainant, then order passed by the District Forum against the financer, cannot be called into question by the financer by filing this appeal, because the deficiency in service is apparent and awarded amount of compensation is just and proper. 11. In view of aforesaid, the appeal fails and is hereby dismissed. No order as to the cost of this appeal.
O R