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

Srei Infrastructure Finance Ltd., & Others v/s S.Natarajan

    F.A.No.589/2008 [Against order in C.C.No.11/2007 on the file of the DCDRF, Salem]
    Decided On, 01 April 2011
    At, Tamil Nadu State Consumer Disputes Redressal Commission Chennai
    By, M.A.
    By, M.L.
    By, M.PHIL.
    By, M.A.
    By, B.L.
    By, MEMBER
    For the Appellant : M/s.M.K.Kannan, V.Santhanam, Advocates. For the Respondent : N.A.Nissar Ahmed, Advocate.

Judgment Text
The Respondent as complainant filed a complaint before the District Forum, Salem, alleging deficiency against the opposite parties jointly and severally to pay a sum of Rs.10,00,000/- which the complainant invest the equipment with interest at 12% p.a from the date of purchase of the equipment till date of realization, to pay Rs.5,00,000/- as compensation for loss incurred for taking of equipment, to pay Rs.1,00,000/- for mental agony and cost. The District Forum, allowed the complaint against the opposite parties. Against the said order, this appeal is preferred by the opposite parties, praying to set aside the order of the District Forum, Salem, dated 29.05.2008 in C.C.No.11/2007.

This appeal coming before us for hearing finally on 17.3.2011, on the basis of .written arguments and perused the documents, written submissions as well as the order of the District Forum, this Commission made the following order :-


1. The complainant filed a complaint against the opposite parties praying for the direction for the opposite parties to pay Rs.10,00,000/- which the complainant invested in the equipment along with interest at the rate of 12% and from the date of purchase and Rs.5,00,000/- towards the compensation for the loss incurred for taking of equipment and Rs.1,00,000/- for mental agony and for costs.

2. The brief details of the complainant case as per the complaint is as follows :- The complainant who purchased a brand new Tata Hitachi Excavator equipment from the opposite parties for Rs.19,00,000/- by paying Rs.1,00,000/- as margin money to the 1st opposite party by obtaining finance from opposite parties 1 to 3 and on 12.3.04 again paid a margin money of Rs.2,00,000/- and an advance amount of Rs.66,665/- to the 1st opposite party and the 1st opposite party obtained many signatures in blank papers 36 cheques and also received as securities on the immovable properties. The 1st opposite party does not give statement of accounts or repayment schedule or terms and conditions of loan to the complainant which are violation of law and deficiency of service. The complainant paid around Rs.10,00,000/- towards loan and on 16.6.05 also he paid Rs.66,665/- towards the due to the 1st opposite party. But within 3 days the equipment was taken away in an unlawful manner by ?Reliance recovery team?. When the 1st opposite party was approached there was no proper response and evasive reply was given by the 1st and 2nd opposite parties and they have no right to take the vehicle without Court directions in an unlawful manner and thereby the complainant has to be compensated for Rs.10,00,000/- for the loss and a legal notice was issued on 15.11.2005 for which the reply was sent on 19.11.05 without any statement of accounts and a rejoinder notice on 1.12.05 calling for damages was issued. The complainant entered an agreement regarding the equipment in Kerala and since the opposite parties took away the equipment there was a loss of Rs.10,00,000/- and still paying interest for the above said loss. Hence the complaint was filed signature for the reliefs as stated in supra.

3. The opposite parties filed their written versions by denying the allegations of the complainant further stated the issues involved are purely contractual nature under arbitration agreement dated 12.3.04 entered in to between the parties and the District Forum has no jurisdiction and the complainant is not a consumer and the right to seize the equipment derived from the agreement entered into between the parties and the complainant was habitual defaulter and the cheques issued by him for the discharge of the monthly liability were dishonored for want of funds. After forewarning the vehicle was taken by the opposite party. The complainant yet to pay a sum of Rs.18,17,336/-. The reply notice and statement of account were also sent to the complainant and thereby the complaint to be dismissed.

4. Based on the materials placed before the District Forum, after an enquiry it allowed the complaint by directing the opposite parties to pay Rs.7,00,000/- along with interest at 9% and to pay Rs.50,000/- towards compensation for mental agony and directed to pay a cost of Rs.5,000/-.

5. Aggrieved by the order of the District Forum, the opposite parties have come forward with this appeal and in the grounds of appeal among other grounds it is contended that the District Forum failed to appreciate that the present complaint filed by the complainant is not maintainable as the complainant is not a consumer within the meaning of Sec.2(1)(d) of the Consumer Protection Act. The District Forum failed to appreciate that the case of the appellant and the transaction between the complainant and the appellants is purely a contract of hire purchase and any dispute that arise under the contract which is referred to arbitration. Under the hire purchase agreement, the hirer has no right in rem rights on hirer until the condition of the transfer of the property to him have been fulfilled and it would not amount to deficiency of service in repossessing the vehicle and that Exhibit B5 confirming voluntary surrender of the equipment was not at all considered by the District Forum and awarding of Rs.7,00,000/- with interest at 9% and further Rs.50,000/- for mental agony are all without any basis and reasons.

6. When the appeal is taken up for final hearing before this Commission on 17.3.11 and even prior to for several hearings from 18.1.2011 onwards. Appellants have not come forward to put forth their case and this Commission was forced to hear the appeal in the absence of appellant and on the basis of written arguments submitted by R1 and upon hearing 1st respondents counsel and on the basis of materials available, the order is being passed on merits.

7. The admitted case of both sides is that the complainant entered into hire purchase agreement with the opposite parties for the purchase of earth mover equipment obtained Rs.19,00,000/- as loan and was paying demand and the last a sum of Rs.66,665/- was paid on 16.6.05 and the vehicle was taken away by the opposite parties within 3 days by 2nd and 3rd opposite parties for non payment of dues. According to the opposite parties it is alleged a sum of Rs.18,17,336/- is due by complaninant to the opposite parties and it was contended by the complainant that the statement of accounts and the terms and conditions of loan agreement etc., were not provided to the complainant and they were furnished only at the time of arguments before the District Forum. Even though the legal notice Exhibit A18 was sent reply in Exhibit A22 was sent in which the no specific details were furnished regarding the actual dues payable by the complainant and simply it is stated the vehicle was taken for repossession as per the terms and conditions of the agreement and the vehicle was also sold. It is very clear from the reply that the vehicle was disposed off without any notice to the complainant under the provisions of hire purchase agreement and there was no mention about the details of sale price, actual amount payable by the complainant, whether there was any excess returnable by the financier or any shortage amount to be paid by the complainant towards the loan etc were all not disclosed. It is contended that with the permission of the complainant as per Exhibit B5 dated 17.6.05 the vehicle was taken possession which was not accepted by the District Forum by stating that when an amount was paid towards the dues on 16.6.05, the complainant could not have come forward to give such a letter for taking delivery of the equipment on 17.6.05 itself within a day of payment was made on 16.6.2005 because of inability to pay dues. The contentions of the complainant that the blank papers with signatures given by him are misused by the opposite parties cannot be brushed aside. In those circumstances and that non discloser of the details of loan instalments how due and how amount of Rs.18,17,336/- was arrived were all not disclosed by the opposite parties which certainly would amount to deficiency of service and the complainant alleged there was a loss to the extent of Rs.10,00,000/- because of the unlawful repossession of the vehicle which cannot be refused or denied by the opposite parties as the complainant was deprived of utilization of his vehicle and the opposite parties failed to act as per the law regarding seizure of vehicle as pointed out in 1 (2007) CPJ page 200

Magma Leasing Limited Vs. Bharat Singh and in another case in , Orix Auto Finance (India) Ltd., Vs. Sri Jagmander Singh & Anr. and in another case in 1996(7) SCC page 212 in which it is stated ? that a license to a financier to take the law in to his own hands and forcible take the possession of vehicle using insult and humiliation to the hirer by employing musclemen and it has observed that financier can take the possession of the vehicle by way of statutory remedy.?

Hence in this case, the complainant has stated that the opposite parties 2 and 3 taken possession of the vehicle by sending the Reliance Recovery Term? and also pointed out the same in the legal notice sent to the opposite parties in Exhibit A22. Regarding other points relating to the jurisdiction etc., the District Forum elaborately considered those points and held in favour of the complainant which we feel that they are all found correct and in the circumstances, the opposite parties are held liable for the deficiency of service for the deprivation of the complainant from utilization of his vehicle by wrongful seizure without adopting sources known to law to implement the contractual obligations between the parties and thereby the complainant is entitled for compensation. As far as the compensation is concerned the District Forum awarded a sum of Rs.7,00,000/- with 9% interest towards the loss caused to the complainant for seizure of the vehicle in a wrongful manner and also a sum of Rs.50,000/- towards mental agony and sufferings. Even though no reasons were stated that how the sum of Rs.7,00,000/- was derived for the loss of compensation since the complainant claimed Rs.10,00,000/- towards compensation for the loss and also he has paid certain amounts towards the discharge of loan for which the opposite parties

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have not given proper statement of accounts and the seized vehicle was sold without the knowledge of the complainant and not giving any chance of preference for purchasing the same by the complainant in case of default selling as per the rules, the award of Rs.7,00,000/- by the District Forum seems to be a reasonable one and in which, we feel no need for interference except for the deletion of interest and compensation for mental agony separately as interest was also awarded for the loss of vehicle. 8. In the result, the appeal is allowed in part with the following modifications in the order of the District Forum, Salem in C.C.No.11/2007, dated 29.05.2008. (a) The opposite parties are directed to pay a sum of Rs.7,00,000/- as compensation for the loss of the business due to the wrongful seizure of the equipment from the complainant with 9% interest from the date of complaint till date of realization. (b) To pay a sum of Rs.5,000/- towards costs. (c) Time for compliance two months from the date of this order, and (d) There will be no order as to costs in this appeal.