M/S. MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD Vs ASLAM SARFARAJ SHAIKH & 2 ORS

This case is received on transfer. Counsel for the petitioner is present. Counsel for respondent No.3 has filed the Vakalatnama but he is absent. Respondent No.1 was served through registered AD but he is absent. They be proceeded against ex parte. Respondent No.2 is RTO Officer. He is not a necessary party. His name is deleted.

Arguments heard.

Shri Aslam Sarfaraj Shaikh, the complainant, purchased Mahindra Max vehicle from Sriram Automobiles, Ahmednagar in the month of July 2005. The complainant obtained loan in the sum of Rs.3,82,000/- from the petitioner-OP No.1, M/s. Mahindra & Mahindra Financial Services Ltd.. The petitioner found some technical problem in the car''s gear box but the District Forum has come to the conclusion that there was no manufacturing defect. This is indisputable fact that the complainant could not make the payment of installments of loan to the above said finance company. The finance company gave notice dated 26-10-2007 demanding the outstanding loan of Rs.51,047/-. Another notice was sent on 05-12-2007 demanding a sum of Rs.76,489/-. The petitioner also gave ultimatum that the said amount be paid within seven days otherwise the vehicle would be seized. The needful was not done. Therefore, the finance company repossessed the vehicle on 07-02-2008. The District Forum allowed the complaint partly and directed the opponent finance company to issue no dues certificate to the complainant and also to pay Rs.10,000/- towards the mental and physical harassment and Rs.1,000/- as costs to the complainant.

Aggrieved by that order, the respondent Mahindra & Mahindra Financial Services preferred an appeal before the State Commission. The State Commission without any material on the record came to the following conclusion:- "There are also no documents on record to show the price at which the said vehicle was sold. Had the opponent finance company given pre-sale notice the complainant could have availed the opportunity to participate in the sale proceeds of the said vehicle. However, though as per the case laws relied upon by the Ld. Counsel Shri Patani, the opponent finance company was empowered to reposses the vehicle it has not followed due procedure of selling of the vehicle which amounts to deficiency in service on the part of the opponent finance company."

The counsel for the petitioner finance company submits that this finding is incorrect, as the vehicle is still lying with the finance company. It is yet to be sold. He further submits that the vehicle is not in a usable condition, therefore, it cannot be sold. However, we are not satisfied with the explanation given by the counsel for the petitioner. It is not understood why the vehicle has not yet been sold even after the expiry of seven years. This must have caused harassment and mental agony to the complainant. It is difficult to understand why after two or three years the truck has become non-usable. This is how the finance company play fraud with their customers. There should be explanation why the vehicle was not sold for a period of seven years.

At this stage, the counsel for the petitioner submits that his statement be recorded to the effect that the counsel has given instructions to his client not to sell the vehicles generally where the litigation is pending. This goes to show that the counsel has more powers than the Act itself. The counsel should not have given such instructions. He should have asked the company to proceed further in accordance with law and Act. The pre-sale notice should have been sent to the complainant and the vehicle should have been sold in accordance with law. The instructions given by the counsel has caused a great harm to the complainant. Now the counsel submits that he has not given any such instructions.

However, since the petitioner has waddled out of his commitments, therefore, the vehicle was repossessed in accordance with law. This view is supported by the Supreme Court authority in Suryapal Singh vs. Siddha Vinayak Motors & Anr. III (2012) CPJ 4 (SC) wherein it was held as under: " Under the Hire Purchase Agreement, it is the financier who is the owner of the vehicle and the person who takes the loan retain the vehicle only as a bailee/trustee, therefore, taking possession of the vehicle on the ground of non-payment of installment has already been upheld to be a legal right of the financier.

T his Court vide its judgment in Trilok Singh and Ors. v. Satya Deo Tripathi : AIR 1979 SC 850 , has categorically held that under the Hire Purchase Agreement, the financier is the real owner of the vehicle, therefore, there cannot be any allegation against him for having the possession of the vehicle. This view was again reiterated in K.A. Mathai @ Babu and Anr. v. Kora Bibbikutty and Anr. : 1996 (7) SCC 212; Jagdish Chandra Nijhawaa v. S.K. Saraf: 1999 (1) SCC 119 and Charanjit Singh Chadha and Ors. v. Sudhir Mehra, : 2001 (7) SCC 417, following the earlier judgment of this Court in Sundaram Finance Ltd. v. State of Kerala and another : AIR 1966 SC 1178; Smt. Lalmuni Devi v. State of Bihar and Ors. : 2001 (2) SCC 17 and Balwinder Singh v. Asstt. Commissioner, C.C.E., : 2005 (4) SCC 146."

Now it has come to our notice that there is a delay of 112 days in filing the present revision petition. The petitioner has moved an application for condonation of delay on the ground that the petitioner could not receive the free copy of the order and applied for the certified copy. There were documents in Marathi language, it took time to translate the same in English. Lastly, there was departmental delay.

We have perused the record. The record shows that the free copy was furnished to the parties on 25-06-2014. The petitioner has made lame excuses. However, there is a huge delay, in the interest of justice we condone the same subject to payment of Rs.50,000/- as costs which be adjusted towards the loan of the complainant.

Consequently, the revision petition is accepted and the complaint is dismissed, orders passed by the fora below are set aside. However, it is observed for the benefit of the other forums, civil court or the arbitrator to note that they have to deduct the remaining loan after taking into account and deducting the price of the vehicle as prevailing on the date when it was repossessed. Unnecessary burden should not be put on the complainant. The fact that the vehicle was not sold for a considerable time which must have caused harassment and mental agony to the complainant must be considered.

The revision petition stands disposed of.