Mahindra And Mahindra Finance Co Ltd vs Sankatha Prasad

PETITIONER which was the Opposite Party before the District Forum, has filed this Revision Petition against the order dated 15.2.2007 passed by the Madhya Pradesh State Consumer Disputes Redressal Commission, Bhopal (in short, ''the State Commission'') in appeal No. 399/05 whereby the State Commission reversing the order of the District Forum has directed the Petitioner to return the sum of Rs. 1,60,400 which had been deposited by the Respondent as instalments along with Rs. 59,885 deposited as margin money.

BRIEFLY stated the facts of the case are that the Complainant/Respondent purchased a vehicle for Rs. 3,40,000 on 17.5.2002 after getting it financed from the Petitioner Finance Company. Loan amount was to be repaid in equated monthly installments. Due to non-payment of dues, the vehicle was seized by the Petitioner on 12.1.2004. Complainant/Respondent filed the complaint before the District Forum alleging that the Petitioner had re-possessed the vehicle without issuing any prior notice to him. It was also alleged that Rs. 45,000 kept in the vehicle were taken by the Petitioner while repossessing the vehicle.

PETITIONER being served, entered appearance and filed its written statement. Petitioner took the plea that the Respondent was a chronicle defaulter and the vehicle was repossessed after issuing prior notice in terms of the agreement entered into between the parties. It was denied that Rs. 40,500 allegedly kept in the vehicle at the time of seizure, were taken by the Petitioner. It was averred that no such money was found in the car. It was stated that the car was sold by the Petitioner after one year of the repossession on 14.1.2005 with prior notice to the Respondent as he had committed default in paying the loan amount. That the amount collected through the sale was adjusted against the loan amount due from the Respondent.

DISTRICT Forum dismissed the complaint aggrieved by which the Respondent filed the appeal before the State Commission. State Commission allowed the complaint by recording the finding that the Petitioner had seized the vehicle in violation of the terms and conditions of the agreement without issuing any prior notice to the Respondent. Seizure of the vehicle forcibly without prior notice to the borrower constituted deficiency in service. Accordingly, the appeal was allowed and the Petitioner was directed to refund the sum of Rs. 1,60,400 deposited by the Respondent towards repayment of loan and Rs. 59,885 deposited by him as margin money within a period of 45 days from the date of receipt of the impugned order failing which the awarded sum was to carry interest @ 9% p.a. from the date of order till realization.

PETITIONER being aggrieved filed the Revision Petition. Counsel for the Petitioner contends that the Respondent had committed default in paying the instalments and the Petitioner was within its right to re-possess the vehicle in terms of the agreement entered into between the parties. The State Commission committed factual error in recording the finding that the vehicle was re-possessed without issuing prior notice to the Respondent. That the vehicle was re-possessed after giving three notices dated 10.3.2003, 10.9.2003 and 28.11.2003. The vehicle was sold on 14.1.2005 after issuing a pre-sale notice dated 1.2.2004 to the Respondent. Notices issued to the Respondent prior to the re-possession and re-sale of the vehicle, have been placed on record. Counsel for the Complainant/Respondent was unable to deny that the Respondent committed default in making the payment as per schedule. He also could not deny that notices prior to re-possession and pre-sale notice, had been issued to the Respondent.

WE have gone through the notices dated 10.3.2003, 10.9.2003 and 28.11.2003 issued to the Respondent prior to re-possession of the vehicle. By these notices, the Respondent was directed to pay the arrears within 7 days of the receipt of the notice failing which it was to be presumed that the Respondent did not want to pay the arrears and the Petitioner would be at liberty to re-possess the vehicle in terms of the agreement entered into between the parties. The vehicle was re-possessed on 12.1.2004. Petitioner issued pre-sale notice on 1.2.2004 requiring the Respondent to pay the loan amount within seven days failing which the vehicle was to be sold and the sale proceed adjusted against the loan amount. The vehicle was sold on 14.1.2005, i.e., after one year of its seizure. Respondent failed to pay the loan amount in spite of the sufficient time given to him.

IT is not disputed before us that as per agreement entered into between the parties, in case of default in paying the loan amount as per agreement, Petitioner was authorized to re-possess the vehicle after notice to the borrower and sell the same. Petitioner had re-possessed the vehicle after issuing three prior notices to the Respondent and sold the same after issuing the pre-sale notice to the Respondent. The State Commission has committed factual error in coming to the conclusion that the Petitioner had re- possessed the vehicle without issuing prior notice to the Respondent. The finding recorded by the State Commission being contrary to the evidence, is set aside. Respondent was admittedly a defaulter and the Petitioner had re-possessed the vehicle in terms of the agreement entered into between the parties. For the reasons stated above, Revision Petition is allowed, order of the State Commission is set aside and the complaint is dismissed with no order as to costs. Revision Petition allowed.