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



Navneet Jha v/s Branch Manager, Magma Shrachi Finance Limited, Branch Bhilai


Company & Directors' Information:- NAVNEET (INDIA) PVT LTD [Strike Off] CIN = U17219WB1976PTC030456

Company & Directors' Information:- MAGMA LIMITED [Dissolved] CIN = U99999MH1943PTC004057

    Appeal No. FA/12 of 441

    Decided On, 20 January 2014

    At, Chhatisgarh State Consumer Disputes Redressal Commission Raipur

    By, THE HONOURABLE MR. JUSTICE R.S. SHARMA
    By, PRESIDENT & THE HONOURABLE MS. HEENA THAKKAR
    By, MEMBER

    For the Appellant: R.K. Bhawnani, Advocate. For the Respondent: Rakesh Puri, Advocate.



Judgment Text

(Order)

R.S. Sharma, President:

1. This appeal is directed against order dated 27.07.2012, passed by District Consumer Disputes Redressal Forum, Kabirdham / Kawardha (C.G.) (henceforth District Forum") in Complaint Case No.04/2012. By the impugned judgment, the learned District Forum, has dismissed the complaint of the complainant/appellant and awarded a sum of Rs.2,000/- to the O.P./respondent as cost of litigation and advocate fees from the complainant/appellant.

2. Briefly stated, the facts of the case of the complainant/appellant before the District Forum are as under:-

3. That the complainant/appellant is owner of a vehicle Tata Truck LPT 2515 CEX bearing registration No. C.G.04-J.A.-3730. The complainant/appellant purchased the said vehicle with the help of financial assistance by obtaining loan from the O.P./respondent to the tune of Rs.11,25,000/- and the instalments of the loan were to be repaid in 56 monthly instalments. The agreement was effective from 20.07.2007 to 20.02.2012. The first two instalments were of Rs.10,000/- each and rest 54 were of Rs.28,350/-. The complainant/appellant deposited a sum of Rs.14,13,120/- with the O.P./Insurance Company till November, 2011, but the O.P./respondent forcibly took possession of the vehicle on 04.12.2011 and thus O.P./respondent committed robbery. At the time of repossession of the vehicle by the O.P./respondent, the value of the vehicle was Rs.11,00,000/- and the complainant/appellant had already deposited near about Rs.14,13,120/- with the O.P./respondent till 20th November, 2011 and the O.P./respondent was entitled for Rs.14,65,850/- only, therefore, only a sum of Rs. 52,730/- was due against the complainant/appellant and the complainant/appellant was ready to pay the said amount, but inspite of receiving amount of instalments, the O.P./respondent looted the vehicle illegally. The complainant/appellant sent written report with Superintendent of Police, Kawardha, District Kabirdham (C.G.) on 14.12.2011 and sent legal notice to the O.P. / respondent, but O.P./respondent did not respond the legal notice and illegally sold the vehicle, therefore, the complainant/appellant filed complaint before the District Forum.

4. O.P./respondent filed his written version before the District Forum and denied the allegations levelled by the complainant/appellant in the complaint and averred that the O.P./respondent is a financer and according to Hire Purchase Agreement the financer/O.P. has become owner of the vehicle and purchaser is simply a bailee ( mifugfr ) of the vehicle. The O.P. / respondent sent notice to the complainant/appellant before referring the matter to the Arbitrator and the matter was referred to the Arbitrator and award was passed on 16.07.2011 by the Arbitrator. Copy of the award has also been sent to the complainant/appellant by regd. post. After receiving copy of the award, the complainant/appellant did not comply the award passed by the Arbitrator and the complainant/appellant filed complaint before the District Forum after passing the award by the Arbitrator, therefore, the District Forum, has no jurisdiction to decide the case.

5. Learned District Forum, after appreciation of the materials available before it, has dismissed the complaint of the complainant/appellant and awarded a sum of Rs.2,000/- to the O.P./respondent as cost of litigation and advocate fees from the complainant/appellant.

6. Shri R.K. Bhawnani, learned counsel for the appellant/complainant argued that the appellant/complainant had already deposited near about Rs.14,13,120/- with the O.P./respondent till 20th November, 2011 and the appellant/complainant was ready to pay the balance amount but the respondent/O.P. 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 respondent/O.P. did not send notice to the appellant/complainant and thus respondent/O.P. violated the provisions of the Hire Purchase Agreement and recovery process was effected by the O.P./respondent with use of force which is not in accordance with law. Even no notice was served upon the appellant/complainant before referring the matter to the Arbitrator, therefore, the arbitral award was not binding on the appellant/complainant and learned District Forum has jurisdiction to decide the matter. Hence the order passed by the learned District Forum is illegal and is not sustainable in eye of law and is liable to be set aside. He placed reliance on judgment of Hon'ble Supreme Court in case of Citicorp. Maruti Finance Ltd. v. S. Vijayalaxmi, AIR 2012 Supreme Court 509, and judgement of Orissa State Consumer Disputes Redressal Commission, Cuttack in case of Prasan Mohapatra v. Magma Leasing Limited & Ors., III (2007) CPJ 108.

7. Shri Rakesh Puri, learned counsel for the O.P./respondent argued that matter was referred to the Arbitrator and the Arbitrator passed award on 16.07.2011 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 in merit also, the complainant/appellant completely has not been able to prove his case, hence, the finding recorded by the District Forum does not suffer from any infirmity, illegality or irregularity and does not call for any interference by this Commission. He further argued that respondent/O.P. is owner of the said vehicle and the appellant/complainant defaulted in making payment of instalments, therefore, the respondent/O.P. has repossessed the vehicle, hence the respondent/O.P. did not commit any offence and the respondent/O.P. never took possession of the vehicle by use of force. The respondent/O.P. sent notice to the appellant/complainant, but the appellant/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 appellant/complainant and award was passed by the Arbitrator on 16.07.2011, whereas the appellant/complainant filed complaint before the District Forum on 12.01.2012 i.e. after passing of the award by the Arbitrator, therefore, the District Forum, has no jurisdiction to decide the case.

8. We have heard learned counsel for both the parties and have also perused the record of the District Forum.

9. From bare perusal of the record of the District Forum, it is apparent that the appellant/complainant filed complaint on 12.01.2012 before the District Forum and Shri Suresh Tiwari, counsel for the respondent/O.P. appeared before the District Forum on 04.04.2012 and filed it's written version. In written version, respondent/O.P. specifically pleaded that notice regarding arbitral proceeding was sent to the appellant/complainant by regd. post and despite of service of notice, the appellant/complainant failed to appear before the Arbitrator, then Arbitrator passed ex-parte award on 16.07.2011.

10. Respondent/O.P. filed award dated 16.07.2011 passed by Shri Partha Sarathi Ghosh, Sole Arbitrator. In paragraph No.1 of the said award, it is mentioned that he was appointed as Arbitrator vide letter dated 31.01.2011 by the Claimant Magma Fincorp Limited. (respondent/O.P. of this case). In paragraph no.2 of the award, it is mentioned that on 18.02.2011 he called Mr. R.K. Jalan, Advocate for the claimant. In paragraph no.3, it is mentioned that he duly entered upon the reference by his letter dated 19.02.2011 and called upon the parties to file their pleadings. In paragraph no.4 it is mentioned that inspite of notices which were duly served upon the respondents through registered post with acknowledgement, but the respondents (Navneet Jha, appellant in this case, Nishant Jha and Bhushan Mani Jha) failed to either enter appearance in the reference or to file their pleadings therein. In paragraph No.5, it is mentioned that notices of the arbitration proceedings were sent by the Arbitrator to the respondents by registered post with acknowledgement due, thereafter the award was passed on 16.07.2011, whereas the complaint was filed by the complainant/appellant before the District Forum on 12.01.2012.

11. 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."

12. In the case of Instalment Supply Ltd. vs. Kangra Ex-Serviceman Transport Co. & 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."

13. In the case of Suryapal Singh v. Siddha Vinayak Motors & Anr., III (2012) CPJ 4 (SC), Hon'ble Supreme Court, has observed thus :-

"2. This Court vide its judgment in Trilok Singh & 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 & Anr. v. Kora Bibbikutty & 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 & 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 & Anr., AIR 1966 SC 1178; Smt. Lalmuni Devi v. State of Bihar & 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."

14. In the case of Pramod Kumar Rai v. Shriram Transport Finance Co. Ltd., III (2012) CPJ 553 (NC), Hon'ble National Commission has observed that Finance Company is well within its right to seize the vehicle as per the agreement.

15. In the instant case the appellant/complainant had not produced any document to indicate that the respondent/O.P. forcibly took possession of the vehicle or respondent/O.P. took possession of the vehicle by using muscle force.

16. According to the appellant/complainant, the respondent/O.P. forcibly took possession of the vehicle on 04.12.2011 and the appellant/complainant lodge report on 14.12.2011 with Superintendent of Police, Kawardha, District Kabirdham (C.G.). According to the appellant/complainant himself the information in this regard was given to Superintendent of Police, Kawardha, District Kabirdham (C.G.) after 10 days of the incident. Looking to the documents filed by the appellant/complainant, it appears that the appellant/complainant only made written complaint to the Superintendent of Police, Kawardha, District Kabirdham (C.G.) on 13.12.2011 which was received in the office on 14.12.2011. It further appears that the appellant/complainant did not lodge any report in the concerned Police Station regarding the loot or robbery. If the respondent/O.P. looted the vehicle or used criminal force for taking repossession of the vehicle, the appellant/complainant immediately lodged report to the concerned Police Station regarding the robbery or loot of the vehicle, but the appellant/complainant was silent for near about 9 days and thereafter he directly sent letter to the Superintendent of Police, Kawardha, District Kabirdham (C.G.) instead of lodging F.I.R. in the concerned Police Station. It indicates that the respondent/O.P. did not repossess the vehicle by using force.

17. Looking to the documents filed by both the parties, it appears that the vehicle in question was purchased by the appellant/complainant after obtaining financial assistance from the O.P./respondent/Financer. One Hire Purchase Agreement was executed between the appellant/complainant and respondent/O.P. on 04.08.2007 and it is also established that appellant/complainant had defaulted in making payment of regular instalments, therefore, the O.P./respondent is entitled to repossess and sale the vehicle.

18. Looking to the law discussed by Hon'ble Supreme Court in M/s National Seeds Corporation Ltd. vs. M. Madhusudhan Reddy (Supra), it appears that remedy of the arbitration is not only the remedy available to the parties. It is optional remedy. Either one of the parties of Hire Purchase Agreement can either seek reference to arbitration or to file a complaint under Consumer Protection Act. If one of the parties opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Protection Act, 1986. If he chooses for arbitration proceedings in the first instance, then he cannot file a complaint before the Consumer Forum.

19. In Instalment Supply Ltd. vs. Kangra Ex-Serviceman Transport Co. & Anr. (Supra), Hon'ble National Commission observed that if arbitration award already passed – all disputes between complainant and O.P. settled by arbitration in accordance with arbitration agreement - award passed before filing of the complaint - Former will govern dispute between the parties and decision of the Arbitrator is binding upon the parties.

20. In the instant case, the O.P./respondent referred the matter to Arbitrator and the Arbitrator sent notices to the appellant/complainant. According to arbitral award, it appears that these notices were duly served on complainant/appellant. It further appears that the complainant/appellant was having knowledge regarding the arbitration proceedings and after commencement of arbitration proceedings the complainant/appellant filed complaint before the District Forum on 12.01.2012 after 5 months and Arbitrator passed order on 16.07.2011 The District Forum passed order on 27.07.2012 i.e. after passing of the arbitral award.

21. If once award is passed by the Arbitrator then only remedy available to an aggrieved party is to file an application under Section 34 of the Arbitration and Reconciliation Act, 1

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996 for setting aside the award. Looking to the record of the District Forum, it appears that the complainant/appellant did not opt to file an application under Section 34 of the Arbitration and Reconciliation Act, 1996 before competent District Judge and instead of filing application under Section 34 of the Arbitration and Reconciliation Act, 1996 the complainant/appellant continued in prosecuting the matter before District Forum. 22. Looking to the facts and circumstances of the we are of the view that once the matter is referred to the Arbitrator and award is passed by the Arbitrator, then the complaint before the District Forum, under Consumer Protection Act, 1986 is not maintainable. 23. So far as merit of the case is concerned, learned District Forum has observed in para no.12 of the impugned order that after consideration of the aforesaid evidence this fact is not proved that the O.P. / Finance Company has obtained the possession of the vehicle in question, illegally or by using criminal force or by violence. As per finance agreement and order of the Arbitrator, the appellant/ complainant is not entitled to get possession of the vehicle in question till such time he will comply the terms of the said agreement and make payment of all the instalments, costs, charges and interest. It appears that the O.P./ Finance Company before and after taking possession of the vehicle gave intimation to the Police Station. In these circumstances the O.P. /respondent did not commit any deficiency in service by repossessing the vehicle from the complainant/appellant. 24. In view of aforesaid discussions, the finding recorded by the District Forum is just and proper and the impugned order is a speaking and well reasoned order. It does not suffer from any infirmity, illegality or irregularity and does not call for interference by this Commission. 25. Therefore, the appeal filed by the complainant/appellant being devoid of any merit, deserves to be and is hereby dismissed. No order as to the cost of this appeal.
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