JAWAHAR LAL JAIN-/ vs Citi Bank N.A.

IN its complaint filed before the Commission, the complainant has stated that he raised a loan of Rs. 1,35,460/- from the City Bank, Jeevan Bharti Building, New Delhi to finance a Maruti Gypsy. The loan so raised constituted 85% of the total cost of the vehicle as intimated to him by the dealer. The sanctioned amount of loan was payable with interest in 60 equal monthly instalments of Rs. 3,592/- each commencing from March, 1991 to Februry, 1996, for which post-dated cheques were given to the respondent. A sum of Rs. 1,00,576/- stood paid to Citi Bank in respect of 28 instalments till July, 1993. The next three instalments from July, 1993 to September, 1993 amounting to Rs. 10,776/- were paid on 9.12.1993 duly acknowledged by the Citi Bank. The time for payment of next three instalments from October, 1993 to December, 1993 was allowed till 27.12.1993 by two officials of respondent No. 2 namely, Shri K.P. Singh and Mr. C. Chailani when he met them on 17.12.1993 in their office. On 22.12.1993, to its surprise, the complainant was visited by certain persons from the office of respondent No. 2 regarding non-payment of six monthly instalments for the period from July, 1993 to December, 1993. Despite its statement that the payment of three instalments from July, 1993 to September, 1993 had been made, it was asked to accompany them to the office of the respondent No. 2 for discussion regarding the payments already made. On reaching the office, the complainant''s driver was asked to handover the keys of the Gypsy at pistol point and the complainant was handed over the Statement of Accounts wherein the payments already made for the months of July, August and September, 1993 in cash were not reflected.

IN view of the deceptive method adopted by the respondents to take the possession of the vehicle, the respondents are stated to have indulged in an unfair trade practice within the meaning of Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (in short, the Act). It is thus prayed that for such unfair trade practice adopted by the respondents, the enquiry be instituted and cease and desist order with heavy cost be passed against them. In response to the notice issued to the respondents, a reply was filed. The respective parties were heard on issuance of Notice of Enquiry. The Commission vide its order dated 26th September, 1995 held that on the facts of the case, the matter needs to be enquired into and accordingly Notice of Enquiry was issued.

In their joint reply, the respondents contended that for default of three monthly instalments i.e., for the months of October, November, and December, 1993, respondents were within their rights to recover the vehicle in terms of the agreement executed between the parties. No force was, however, used as contended by the complainant. Non-reflection of payment for three monthly instalments i.e., from July, 1993 to September, 1993 in the Statement of Accounts was on account of belated payment made in cash which was to be transmitted to Chennai Office where the central accounting is done. As despite its assurance, the complainant could not abide by the committed date for payment of the instalments, the complainant itself surrendered the vehicle voluntarily. The charge of unfair trade practices as levelled by the complainant having been not established, the Notice of Enquiry needs to be discharged as contended by the respondents.

AFTER completion of pleadings, the following issues were framed : (i) Whether the respondents have been indulging in or have indulged in unfair trade practices alleged in the NOE ? (ii) Whether the alleged unfair trade practices are prejudicial to public interest, to any consumer or the consumers in general ?

Both the parties led their evidence by way of affidavits duly supported by their respective documents. The witness Shri Jawahar Lal Jain, who is the complainant himself, in his statement confirmed that the vehicle in question was taken away forcibly by the employees of the second respondent, amongst whom one is stated to be a former DCP employed by it. Reference was also made to the advertisement issued by the Classified Financers on behalf of the respondents.

BOTH the parties were represented by their respective Advocates who addressed the arguments at length. Rival submissions made on both sides were considered in the light of the documentary as well as the oral evidence brought on record. It appears that post-dated cheques for all the instalments payable by the complainant were taken from it at the time of financing the loan by the respondents. The respondents have not disputed the payment of Rs. 1,00,576/- towards 28 instalments. The belated payment of next three instalments from July, 1993 to September, 1993 made in cash has also not been objected to by the respondents. It is also not disputed that the next three instalments from October, 1993 to December, 1993 were not paid in time. What is disputed is the time allowed for making payment by the complainant. The complainant''s visit to the office of second respondent in response to a telegram dated 17.11.1993 and extension of time allowed by the officials of respondents namely, Shri K.P. Singh and C. Chailani, have not been specifically denied by the respondents. Despatch of legal notice dated 27.12.1993, though dated 17.12.1993, is enough proof to show that the time for payment of instalments stood extended till 27.12.1993 as is the contention of the complainant. Recovery of the vehicle in question on 22.12.1993 i.e., before the expiry of the extended time and that too by adopting deceptive method is not only a breach of a promise but an unfair trade practice adopted by the respondents. Respondents are well within their rights to take recourse to action in case of default on the part of the other party, but the same is to be within the scope of terms and conditions of the agreement to which both the parties are the signatories. Bank has sufficiently secured interest by providing for a guarantor whose liability is co-extensive with that of the borrower and is considered to be a principal debtor. The Bank has also provided for the recovery of flat charges in respect of the delay in making payment and also in case of dishonour of cheques. The forcible possession of vehicle and that too in a deceitful manner on the pretext of discussion in the office, is certainly beyond terms of agreement. No law permits the use of force, much less, in the manner it has been applied.

EVEN otherwise, principles of natural justice require that the party is to be given an opportunity of being heard before contemplating any coercive measures against it. Action taken before the committed date being a breach of promise is squarely covered within the meaning of unfair trade practice as defined under Section 36A of the Act.

EVEN on facts, under no circumstance, action taken for alleged non-payment of three instalments from July, 1993 to September, 1993 can be justified. Explanation for the lapse on the part of the respondents in reflecting the payment in the Statement of Accounts is not palatable, under any principle of accounting specifically coming from a foreign Bank where system of accounting is stated to be in a perfect order. Non-reflection of payment in the Statement of Accounts is certainly deficiency in service on the part of the respondents. It is true that the simple representation that "You''ve got a friend who will give you a loan for a car....Repayable in easy equal monthy instalments" given by the Classified Financiers on behalf of the Citi Bank in itself is not misleading. However, the message conceals more than it reveals. By its conduct, the respondents have neither proved a friend nor there were easy equal monthly instalments when reckoned with the terms and conditions as laid down in the agreement. The practices as adopted and indulged in by the respondents have proved to be prejudicial to the interest of the consumer i.e., the complainant and would be so to the consumers in general. Therefore, the charge of unfair trade practices having been established on the part of the respondents, they are directed to cease from carrying on such practices and also desist from following the same in future. As to the exemplary cost to be awarded to the complainant, it has not been shown that the defence on the part of the respondents was false or vexatious to its knowledge and as such the same is not allowed under Section 35A of the Code of Civil Procedure, 1908.

The decision rendered in the case of K.A. Mathai @ Babu & Anr. v. Kora Bibbikutty & Anr., reported in (1996) 7 Supeme Court Cases 212, cited by the learned Advocate for the respondent is distinguishable on facts. There is no dispute with the preposition that for default of payment, the respondent has a right to recover the vehicle. Dispute is in regard to the manner in which the vehicle was recovered. In the cited case the charge against the respondent was for theft under Section 379 of the Indian Penal Code, 1860 while in the present case the charge relates to the forcible recovery of vehicle that too in a deceitful manner.

ON the facts and in the circumstances of the case, the respondents are directed to comply with the order as given in para No. 12 above and submit the compliance report by way of an affidavit within four weeks from the receipt of the order. Complaint disposed of.