M/S. MAGMA FINCORP LIMITED vs RAVI RANJAN KUMAR

This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 24.01.2014, passed by the Chhattisgarh State Consumer Disputes Redressal Commission (hereinafter referred to as ''the State Commission'') in Appeal No. 402/2009, vide which, while dismissing the said appeal, the order dated 22.07.2009, passed by the District Forum Korba, allowing the consumer complaint No. 30/2007, filed by the present respondent, allowing the said complaint, was upheld.

The facts of the case are that the petitioner Magma Fincorp Ltd., entered into a hire-purchase agreement dated 28.02.2005 with the complainant/respondent who wanted to avail the facility of finance for the purchase of Ashok Leyland commercial vehicle, bearing registration No. CG12C 1256. The petitioner granted a loan of 9,74,000/- to him, as against the total cost of the vehicle quoted as 10,26,313/-. It is stated that a sum of 3 lakh was paid by the complainant himself, covering the balance cost of the vehicle as well as the charges for registration, insurance etc. It is further stated that the said loan was payable in 45 instalments of 25,740/- each between the period 1.03.2005 to 01.12.2008. As per the case of the petitioner, the complainant/respondent failed to repay the instalments as per the time schedule laid down. The petitioner sent a legal notice on 01.07.2006 to the complainant, asking him to adhere to the payment schedule and to pay the equated monthly instalments. However, the vehicle in question was repossessed by the petitioner on 11.07.2006. It is stated in the revision petition that at that time, a sum of 9,08,60/- was due and payable by the complainant. The petitioner duly informed the concerned police station before and after the repossession of the vehicle. They also prepared the inventory of items in the vehicle on the spot, which was countersigned by the person, who was in possession of the vehicle at that time. The company, thereafter, issued a pre-sale legal notice to the complainant dated 13.07.2006, saying that the total outstanding dues against the complainant were 8,01,400/-. He was asked to clear the said dues within 7 days failing which, the vehicle would be sold. As stated by the petitioner, the vehicle was sold on 12.10.2006 for 6,25,000/- and the complainant was also informed to that effect. Thereafter, the petitioner instituted arbitration proceedings against the complainant, who did not appear despite notice having been sent to him. An award was passed in arbitration proceedings on 04.01.2008 for a sum of 1,11,796/- after adjusting the sale proceeds of the vehicle.

On the other hand, the complainant filed the consumer complaint in question, saying that he had been making payments of instalments to the petitioner from time to time. The action of the petitioner in repossessing the vehicle forcibly was totally uncalled for. Even after the vehicle was repossessed, the petitioner informed him that the outstanding dues were 20,000/-. The complainant made the payment of the said 20,000/- on 26.08.2006, but despite that, the petitioner refused to return the vehicle. The complainant stated that he had incurred an expenditure of 6.5 lakh till date, including the initial amount of 3 lakh spent at the time of purchase of the vehicle. The complainant filed the consumer complaint, seeking directions to the petitioner to pay a sum of 6,50,000/- to him, alongwith 2,50,000/- as compensation for mental agony and 1,000/- as cost of litigation.

The District Forum, after considering the averments of the parties, allowed the complaint on 28.09.2007 and directed that either the truck of the complainant be returned to him, or a sum of 6.5 lakh be paid to him alongwith litigation cost of 1,000/-. Being aggrieved against the order of the District Forum, the petitioner challenged the same by way of an appeal before the State Commission and the said appeal having been dismissed vide impugned order, the petitioner is before this Commission by way of the present revision petition.

During arguments before us, the learned counsel for the petitioner stated that the vehicle had been rightly repossessed by the petitioner, since the complainant defaulted in making payment of instalments of loan advanced to him. The learned counsel pointed out that after repossession, a pre-sale notice dated 13.07.2006 was sent to the complainant, indicating that the total outstanding dues against him as 8,01,400/-. It was stated that he should pay the said amount within 7 days of the issue of the letter, failing which the vehicle would be sold. The learned counsel pointed out that as per the detailed calculations made, while passing the award by the Arbitrator, a sum of 1,11,796/- was the outstanding amount against the complainant, after adjusting the sale proceeds of 6,25,000/- for the said vehicle.

Per contra, the learned counsel for the complainant/respondent stated that the complainant was not a party in the Arbitration proceedings and hence, he had no knowledge about the said award. As stated by the petitioner, the award was made on 04.01.2008, but till date, the petitioner had not taken any steps to get the award executed. The learned counsel has drawn attention to the order of the State Commission in which the details of the payments made by the complainant have been given. A payment of 80,000/- was made by the complainant on 26.08.2006. According to the learned counsel, the action of the OP/petitioner in repossessing the vehicle was illegal. Even after the repossession, the complainant had gone to them to repay the balance outstanding amount, but the petitioner refused to release the vehicle. The learned counsel further stated that as per the notice dated 01.07.2006 issued by the petitioner, a sum of 85,960/- had been shown payable by the complainant. It was therefore, not understood as to how the notice dated 13.07.2006 had mentioned the amount as 8,01,400/-. The learned counsel stated that the orders passed by the Fora below were in accordance with law and should be upheld.

We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

From a perusal of the material on record, it is clear that the complainant/respondent had defaulted in making payments of the equated monthly instalments to the petitioner and on the date of repossession of the vehicle also, certain amount was outstanding against him, although this amount included the sum of 25,740/- as instalment for the month of July 2006. It is evident that the overdue instalments as on 30.06.2006 was 60,220/-. The notice dated 13.07.2006 which is a pre-sale notice indicates that the total outstanding amount payable by the complainant as on that date was 8,01,400/-. Although the details of the payments made by the complainant have been given in the order of the State Commission, the complainant has not been able to explain as to why he made default in the payment of such instalments.

In the consumer complaint, the complainant stated that he had incurred an expenditure of 6,50,000/- and the OPs were liable to refund that amount to him alongwith compensation of 2,50,000/-. The complainant has not given any exact details from which it could be deciphered how he had spent a sum of 6,50,000/-. The orders passed by the District Forum duly confirmed by the State Commission also do not indicate how a sum of 6,50,000/- is payable to the complainant. On the other hand, it is clear that once a loan is advanced by any financial institution to a borrower, it is their legal right to recover their money in accordance with the terms and conditions, governing the grant of the loan. The copy of the arbitration award filed by the petitioner on record takes into account the exact calculations made for payment of interest on the loan amount and realisation from his sale-proceeds etc. The complainant has not been able to point out in any manner whether the petitioner owes any amount to him after the settlement of the accounts between the petitioner and the complainant in terms of the loan agreement between the parties, whereas on the other hand, the petitioner has given the exact amount, which is still payable by the complainant to them.

In the light of the foregoing discussion, we do not find any reason to agree with the orders passed by the State Commission as well as the District Forum, which are perverse in the eyes of law in the absence of any objective assessment about the amount directed to be paid to the complainant. The present revision petition is, therefore, allowed. The orders passed by the State Commission and the District Forum are set aside. The consumer complaint is ordered to be dismissed. There shall be no order as to costs.