Magma Fincorp Ltd vs Samarendra Nath Roy

HEARD Counsel for the petitioner on condonation of delay in filing revision as also on admission. In view of the reasons given in paragraphs 3 and 4 of the condonation application, delay of 41 days in filing the revision is condoned.

LEARNED Counsel for the petitioner, after placing reliance on the judgments of this Commission in Parameswari W/o Ramakrishnan v. The General Manager, V.S.T. Service Station, The Branch Manager, Tata Finance Ltd. and The United India Insurance Company, II (2010) CPJ 45 (NC), decided on 11.2.2010 and Surendra Kumar Agarwal v. Telco Finance Ltd. and Anr., II (2010) CPJ 163 (NC), has submitted that the possession of the vehicle was taken since the complainant had defaulted in paying the instalments and the vehicle was not forcibly possessed. It was further submitted that the possession of the vehicle as taken on 27.8.2009 and was sold in the month of October, 2009 after due notice to the complainant. It is, therefore, contended that the impugned orders are liable to be set aside.

THE District Forum directed the petitioner to return the truck in question and also directed the petitioner to pay the instalments in terms of Hire Purchase Agreement from the month of February, 2010 along with Rs. 10,100 p.m. towards the outstanding dues of Rs. 2,23,647 till the same is liquidated. This order was challenged by the present petitioner before the State Commission.

THE State Commission held that the petitioner after taking possession of the vehicle in question by use of force sold the same to the third party without intimation to the borrower/complainant; that the petitioner did not disclose the fact of sale of the said vehicle in the month of October, 2009 in its written version to the complaint which was filed much after October, 2009 before the District Forum; that the petitioner did not disclose before the Forum below at what price the vehicle was sold to the third party; and that the Petitioner-Company had received a sum of Rs. 5,60,558 towards instalments and delayed payment charges till 30th June, 2009. Accordingly, the State Commission directed the petitioner to refund the said amount of Rs. 5,60,558 with 9% interest from the date of filing of the complaint till full and final payment as also Rs. 10,000 towards harassment and cost of litigation. This order is subject matter of challenge in this revision.

THE District Forum in its order has accepted the version of the Complainant and held that forcible possession of the truck in question was taken by the petitioner-Company from the road when the truck was returning from Islampur without giving notice to the complainant. The inventory of the vehicle which is at page 103 shows that possession was taken from the drivers and not from the Complainant. The petitioner has filed notice dated 27.8.2009 to the complainant which is at page 108 of the record of the revision. Admittedly, the vehicle was repossessed by the petitioner on 27.8.2009. In notice dated 27.8.2009, the petitioner has stated that the complainant had surrendered the truck. This plea has been rightly disbelieved by the Fora below who have come to the conclusion that the possession of the truck was forcibly taken by the petitioner. In this notice it is stated that the outstanding dues are to the tune of Rs. 2,03,979 and if the same are not paid within 7 days, the vehicle will be sold without further notice to the complainant. Along with this notice, no statement showing the details of amount due was sent. Along with this notice break up details relating to the payment sought were not given and this cannot be treated as proper notice for the purpose of sale of the vehicle. The State Commission has noted that the Petitioner-Company did not disclose the fact of the sale of the vehicle in the month of October, 2009 in its written version to the complaint which was filed much after October, 2009 before the District Forum. It is further observed by the State Commission that the petitioner did not even disclose before the Forum below at what price the vehicle was sold to the third party. There is nothing to show as to how the vehicle was sold, that is to say whether the tenders were called or notices were published in the newspaper so as to ensure the best possible price of the vehicle.

IN the case before us Clause 14 of the Hire Purchase Agreement deals with Events of Default Rights and Remedies thereon. Clause 14(1)(a) deals with failure to pay in time any of the hire instalments or part thereof or any other sum of money payable under the agreement. Clause 14(ii)(iii) and (iv) deals with the taking up possession of the vehicle, which read as under: "(ii) MAGMA shall have the right to sue the Hirer/s for all outstanding due and payable hereunder without prejudice to MAGMA''s right of obtaining and recovering possession of the said Asset(s)Vehicle(s) in any other manner. (iii) In the event of the Agreement determined as AFORESAID regardless whether MAGMA has chosen to exercise any of its rights hereinabove contained. The Hire/s shall on demand(s) forthwith deliver to MAGMA the said Asset(s)/Vehicle(s) along with all certificates and policies of insurance and all other documents relating to the said Asset(s)/Vehicle(s) for the purpose of sale thereof as if the same had been repossessed: (b) Forthwith pay and discharge to MAGMA all outstanding due and payable hereunder, (c) Pay all costs incurred or payable in putting the said Asset(s) Vehicle (s) in a proper state of repair. It is expressly agreed that in no event will any sum already paid under the provisions of this Agreement be refundable by MAGMA to the Hirer/s (iv) Refusal of the Hirer/s or his men, agents or assigns or obstruction or delay in handing over to MAGMA the physical possession of the said Asset(s)/Vehicle(s) together with all documents/certificates relating thereto shall be deemed to be an unlawful detention and wrongful possession of the said Asset(s)/Vehicle(s) by the Hirer/s and shall constitute an offence under the provision of the Indian Penal Code".

WE have already come to the conclusion that the vehicle in question was forcibly possessed, which is contrary to the above referred sub-clauses of Clause 14 of the agreement. The theory of surrender of the vehicle by the complainant cannot be accepted and we are of the opinion that the forcibly possession of the vehicle is not in accordance with the agreement in question. The agreement does not have any clause relating to sale of the vehicle of which forcible possession is taken in terms of Clause (ii) (iii) and (iv). The provision of sale contemplated in Clause 14(p) which reads as under is not attracted to the facts and circumstances of the case in question. "(p) MAGMA coming to know that any information submitted by the Hirer(s)/Guarantor(s). Of importance to MAGMA under this Agreement is false or misleading, or if the Hirers//Guarantor(s) fails to submit within time the information he/they/is/are liable to furnish to MAGMA. Then and on the occurrence of any such event the rights of the Hirer/s under this Agreement shall forthwith stand determined ''IPSO FACTO'' without any notice to the Hirer/s and further all arrear instalments and other dues and the instalments due for the balance of the said term shall without any abatement thereupon become due and payable immediately by the Hirer/s and it shall be lawful to MAGMA or Bank/FI and/or its agent without prejudice to its any other right including right of suit without notice to be Hirer/s to enter into any premises of the Hirer/s to enter into any premises of the Hirer/s or at such other place the said Asset(s)/Vehicle(s) may be lying and to remove and take possession of the said Asset(s)/Vehicle(s) without being liable to any quarter for trespass or otherwise to sell or cause to be sold or otherwise dispose of all or any part of the said Asset(s)/Vehicle(s) or any fittings thereof either by public auction or private treaty and at such times and places, either in one for or several lots and in such manner as MAGMA may think fit without responsibility on MAGMA for default of any persons employed by MAGMA or otherwise and after deducting the commission to which MAGMA is entitled and all charges and expenses paid or incurred to apply the net proceeds of such sale in or forwards the liquidation of all outstanding then due to MAGMA FROM THE hirer/s under the said hire purchase facility including interest and other charges and expenses as between attorney and client and if the sum realized be such sale should be insufficient to cover the outstanding amount due to MAGMA the Hirer/s agrees and undertakes to pay to MAGMA by cash on demand any balance then due by him all account of sales rendered to the Hirer/s by MAGMA shall be conclusive evidence both in an out of Court or all matters therein stated. Provided always that MAGMA may at its sole option give back the possession of the Asset(s)/Vehicle(s) whose possession has been retaken by it to the Hirer/s without affecting any of its rights hereunder and on giving back the possession of the Asset(s)/Vehicle(s) this Hire Purchase Finance Agreement shall stand revived and all the terms and conditions shall be binding on the parties hereto."

IN fact, the Hire Purchase Finance Agreement in question provides for post dated cheques for the instalments as also replacement of the cheques by issuing fresh cheques in case the cheques are not presented besides the remedy under Negotiable Instruments Act. It is not known whether such post-dated cheques were taken and if so, whether the same were presented for payment or not and whether the same were dishonoured after presentation and whether any proceedings under Negotiable Instruments Act were initiated as contemplated under the said Agreement.

IN the given circumstances, we are of the view that the orders of the Fora below do not suffer from jurisdictional error, illegality or material irregularity so as to interfere with the same in exercise of revisional powers under Clause (b) of Section 21 of the Consumer Protection Act, 1986.

THE rulings of this Commission upon which reliance has been placed are not attracted to the facts and circumstances of the case before us. In para 9 of the judgment in Suenra Kumar Agarwal v. Telco Finance Ltd. and Anr. (supra), it was found that there was nothing to show that the vehicle was repossessed forcibly and mere fact that possession was taken by the respondents cannot be the ground to contend that the hirer is prejudiced. The facts and circumstances in the case of Parameswari W/o Ramakrishnan v. The General Manager, V.S.T. Service Station, The Branch Manager, Tata Finance Ltd. and The United India Insurance Company (supra), are altogether different. In that case the vehicle had met with an accident and was taken to the garage of the OP, but OP did not handed over the vehicle to the complainant as she had failed to pay repair charges and the vehicle was subsequently sold. For the aforesaid reasons, the revision is hereby dismissed with no order as to costs. Revision Petition dismissed.