At, West Bengal State Consumer Disputes Redressal Commission Kolkata
By, THE HONOURABLE MR. SHYAMAL GUPTA
By, PRESIDING MEMBER & THE HONOURABLE MR. UTPAL KUMAR BHATTACHARYA
For the Appellant: Punam Kumari Choudhury, Advocate. For the Respondent: Debajyoti Basu, Advocate.
Shyamal Gupta, Member
Challenging the Order dated 18-09-2017 of the Ld. District Forum, Purulia, passed in CC/24/2017, this Appeal is moved by M/s Cholamandalam Investment and Finance Co. Ltd.
The subject matter of dispute in this Appeal is a vehicle which was auctioned by the Appellants over non-clearance of outstanding due by the Respondent.
Ld. Advocates for the parties were heard and documents on record perused.
Undisputedly, the Respondent did not liquidate the subject loan in time resulting which, exercising their right under the Loan Agreement, the Appellants repossessed the hypothecated vehicle. Thereafter, two notices were sent to the Respondent to clear the outstanding due which too went in deaf ears. So, the subject vehicle was sold out through auction.
The short question needs to be dealt with in this Appeal, however is, whether the entire exercise was carried out in accordance with law.
The Governor, Reserve Bank of India on 01.07.2006 issued the policy known as "The Code of Bank's Commitments to Customers", and the said Code is applicable to the banks and financial companies. In the said Code, the procedure for the recovery of loan is mentioned as follows:
"3. Giving notice to borrowers:
While written communications, telephonic reminders or visits by the bank's representatives to your place or residence will be used as loan follow up measures, the bank will not initiate any legal or other recovery measures including repossession of the security without giving due notice in writing. Minimum 60 days time will be given to you to pay the debt failing which the bank will proceed to take possession of the asset. The notice shall be given by Registered Post with Acknowledgement Due. However, where the Bank has reasons to believe that you are avoiding acknowledgement, it will follow all such procedures as required under law for recovery/ repossession of security.
1. Repossession of Security:
Repossession of security is aimed at recovery of dues and not to deprive you of the property. The recovery process through repossession of security will involve repossession, valuation of security and realization of security through appropriate means. All these would be carried out in a fair and transparent manner. Repossession will be done only after issuing the notice as detailed above. Due process of law will be followed while taking repossession of the property. The bank will take all reasonable care for ensuring the safety and security of the property after taking custody, in the ordinary course of the business.
5. Valuation and sale of Property:
Valuation and sale of property repossessed by the bank will be carried out as per law and in a fair and transparent manner. Before effecting sale (save and except in case of moveable property subject to speedy or natural decay or expenses for custody exceeds its value), you shall be given 30 days' notice for the intended sale. If sale is to be effected either by inviting tenders from the public or by holding public auction, copy of public notice shall also be sent to you. The bank will have right to recovery from you the balance due if any, after sale of property. Excess amount if any, obtained on sale of property will be returned to you after meeting all the related expenses provided the bank is not having any other claims against you.
6. Opportunity for the borrower to take back the security: As indicated earlier in the policy document, the bank will resort to repossession of security only for purpose of realization of its dues as the last resort and not with intention of depriving you of the property. Accordingly the bank will be willing to consider handing over possession of property to you any time after repossession and before concluding sale transaction of the property, provided the bank dues are cleared in full. If satisfied with the genuineness of your inability to pay the loan instalments as per the schedule which resulted in the repossession of security, the bank may consider handing over the property after receiving the instalments in arrears. However, this would be subject to the bank being convinced of the arrangement made by you to ensure timely repayment of remaining instalments in future. In such cases possession of asset will be returned to you/person concerned immediately maximum within 10 days, on payment of defaulted amount and/or execution of supplementary agreement/consent and confirmation of guarantors as the case may be."
No such documentary proof is adduced from the side of the Appellants to show that they scrupulously adhered to the
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above Regulatory code. No one denies the right of the Appellants to realize their legitimate due from the defaulter. However, rights cannot be acquired through subversion of the law of the land. The repossession and subsequent auction of the hypothecated vehicle by the Appellants was anything but legal; hence not acceptable. In view of this, we found no reason to interfere with the impugned order of the Ld. District Forum. There is no merit in this Appeal. As such, we dismiss it with a cost of Rs. 20,000/-.