Shriram Finance Company Ltd. vs Somdhar Diwan

ABOVE revision petitions arise out of common order dated 22.7.2011, passed by Chhattisgarh State Consumer Disputes Redressal Commission, Raipur (short, "State Commission") vide which it disposed of (Appeals Nos. 90 and 126 of 2011) preferred by respondent/complainant as well as petitioner/O.P. in (Complaint Case No. 332 of 2009) decided by District Consumer Disputes Redressal Forum, Bilaspur (short, "District Forum") by order dated 21.1.2011, directing the petitioner to pay a sum of Rs. 35,000 as compensation to the respondent and to provide registration book of Vehicle No. CG 13 -A -4031 for transferring the same in the name of respondent and also to pay cost of Rs. 1,000. Brief facts are that Vehicle No. CG. 13 -A -4031 (Trailer) was earlier financed by petitioner to one Kamal Kumar Sahu, who defaulted in payment of installments of finance. Thus, the vehicle was repossessed by the petitioner from that person and was put for resale. Respondent agreed to purchase that vehicle for which finance was provided by the petitioner. The amount of finance was Rs. 8,50,000, which was to be repaid by the respondent in 35 installments.

IT is alleged by respondent that vehicle was delivered to him by the petitioner on payment of Rs. 1,00,000 in cash at the time of purchase of the vehicle. Remaining amount of finance was to be paid by him in the installments. It had been agreed by the petitioner that registration book and other papers of the vehicle, will be provided him shortly. In spite of repeated requests made by the respondent, those documents were not provided by the petitioner. In the meantime, installments were being regularly paid. In all a sum of Rs. 2,61,000 were paid by the respondent. Petitioner in spite of receiving the above payment did not provide the necessary documents to him. However, petitioner repossessed the vehicle on the pretext that respondent was defaulter. The vehicle could not be plied by the respondent on road, as necessary papers of the vehicle were not provided by the petitioner. Thus, respondent was not in a position to deposit the installments. The petitioner repossessed the vehicle without any previous notice to the respondent. Hence, consumer complaint was filed before the District Forum, alleging deficiency in service and praying for the following reliefs: 1. That, non -applicant be ordered to supply valid document of vehicle No. CG 13 -A/4031 (Trailer) like road tax, fitness permit and R.C. book in name of applicant.

That, in alternative non -applicant be directed to refund Rs. 2,61,400 deposited by applicant.

That, applicant be awarded compensation from non -applicant in tune of Rupees 50,000 for his financial and mental harassment.

COST of case be awarded from non -applicant.

ANY other relief which this Hon''ble Court deem fit and proper looking to the facts and circumstances of the case, be granted. 3. Petitioner in its written statement denied the allegations levelled by the respondent. It is averred that it was a second hand vehicle which was sold by the petitioner to the respondent under an agreement and amount of finance was to be repaid by him regularly in 35 installments. First seven installments were of Rs. 40,350 each, then next 27 installments were of Rs. 32,650 each and last installment was of Rs. 2,612. However, respondent defaulted in payment of the installments. Inspite of giving notice, he failed to deposit the amount of installments in time as per agreement executed between the parties. The petitioner was having right to repossess the vehicle in the event of default in payment of installments by the respondent. This right was exercised by the petitioner and in doing so, it had not committed any deficiency in service.

District Forum held that deficiency in service has been committed by the petitioner and passed the following directions:

(a) Opposite party would satiate payment of Rs. 35,000 (Rs. Thirty five thousand only) to complainant party as compensation amount within the period of two months from the date of order and would get the name of complainant recorded in the Registration Book of Vehicle No. CG 13 -A -4031 as registered owner and would hand over the registration book, to complainant.

(b) Opposite party would pay a sum of Rs. 1,000 (Rs. one thousand only) to complainant as cost of litigation.

Being aggrieved by the order of the District Forum, both parties filed separate appeal before the State Commission. Appeal of the respondent was allowed, whereas appeal filed by the petitioner was dismissed.

Now, petitioner has challenged the impugned order.

WE have heard learned Counsel for the parties and gone through the record.

IT has been contended by learned Counsel for the petitioner that as per terms of the hire -purchase agreement executed between the parties, it has been specifically agreed by the respondent that he will be exclusively responsible for the transfer of the vehicle, meaning thereby that all the payments including taxes and documentations shall be paid by him. In view of the hire -purchase agreement, petitioner cannot be saddled with the liability of getting the vehicle transferred in the name of respondent. Since, respondent was a defaulter in making the payment of loan installments, petitioner rightly seized the vehicle. In support, learned Counsel has relied upon decision of Apex Court, Suryapal Singh v. Siddha Vinayak Motors & Anr., II : (2012) CPJ 8 (SC). On the other hand, it is argued by learned Counsel for the respondent, that once petitioner sold the vehicle to the respondent, it was the duty of the petitioner to have got the documents transferred in the name of the respondent. Moreover, respondent without having the documents transferred in his name, could not ply the vehicle. Hence, there is no illegality in the impugned order.

DISTRICT Forum in its order held: 15. As becomes evident from the facts, vehicle in question, was registered in the name of Kamal Kumar Sahu, the said vehicle had been purchased by Kamal Kumar Sahu on making available loan by the opposite party and thus, Kamal Kumar Sahu happened to be registered owner. Vehicle had been hypothecated with the opposite party. On account of non -payment of loan installments by the previous owner of vehicle and despite having been the condition in the loan agreement, vehicle could not come under the registered ownership of opposite party who made available loan to Kamal Kumar Sahu unless and until, name of Kamal Kumar Sahu is not removed from the papers of R.T.O. as registered owner. Loan providing company can become absolute owner of the mortgaged property only after satiating legal procedure. Whether opposite party had satiated such legal procedure, is not lying mentioned in their reply. On violation of the conditions, it was necessary to get the name of Kamal Kumar Sahu removed from the papers of RTO/Registration Book even after holding the right to hold possession and right to transfer under the agreement (agreement not produced). Opposite party were supposed to initiate this proceedings through R.T.O.

Opposite party was supposed to complete this process either earlier to sale of vehicle or immediately after sale of vehicle in the name of complainant, but opposite party has not acted upon it.

STATE Commission, while dismissing the appeal, observed: 11. The case of the complainant from very beginning was that at the time of sale of the vehicle, the O.P./Finance Company had agreed to deliver the Registration Book, fitness certificate and other relevant documents to the complainant shortly, but thereafter those papers were not provided inspite of repeated requests. Counsel for the O.P./Finance Company submitted that all terms, which were agreed between the parties, have already been embodied in the agreement executed between the parties and apart from those terms nothing was agreed between them.

So far as providing all papers of the second hand vehicle, which was sold by the seller, is concerned, there is no requirement, of having any separate written agreement in this regard. It is duty of the seller to provide papers of the second hand vehicle to the purchaser, so that he can apply before competent authority for transfer of his name in the registration book at the place of the previous owner and may be in a position to pay road tax and to ply the vehicle on road. The provisions of Sections 50, 56 and 66 of the Motor Vehicles Act, 1988 (hereinafter called "Act" for short) clearly provide that unless there is fitness certificate, unless there is permit and unless vehicle is registered in the name of the owner, it cannot be plied on road. The vehicle in question also could not have been insured by the complainant, unless he has got his name transferred in the registration book as per Section 50 of the Act. Thus, it was necessary for the O.P./Finance Company to have delivered all those papers to the complainant at the time of sale of the vehicle or immediately thereafter. In not providing those papers in time to the complainant, the O.P./Finance Company committed deficiency in service.

AS the vehicle in question, could not be plied by the complainant on road for want of all necessary papers, so if there were certain default in making payment to O.P./Finance Company on his part, then such defaults may not create any right in favour of the O.P./Finance Company to repossess the vehicle, because initial fault was that of the O.P./Finance Company itself, which had not provided necessary papers to the complainant.

APART from this, we have taken note of the fact that complainant, in his complaint and other document as well as in the agreement executed between the parties had put his signatures in Hindi. There appears no material to show that the Agreement of Sale, which was only in English language was explained to the complainant at the time of its execution and it was informed to him that in the event of default in payment of installments, the O.P./Finance Company was having right to repossess the vehicle and to sale it. In all fairness, it was necessary for the O.P./Finance Company to have either the agreement in a language, which was language of the complainant or to have explained him terms of the agreement in the language of the complainant. Nevertheless, as now O.P./Finance Company has ultimately repossessed the vehicle in question and sold it to a third person, and it was also deficient in providing all necessary papers of the sold vehicle, the amount which was paid by the complainant to the O.P./Finance Company for purchase of the vehicle, which could not be plied by him on road for want of necessary papers, is required to be refunded by the O.P./Finance Company in toto along with interest @ 6% p.a.

LEARNED Counsel for the complainant submitted that the only desire of the complainant in his appeal is to get that amount back and he does not want to have the vehicle back now.

ON the basis of aforesaid discussion, the Appeal No. 90/2011 preferred by the complainant succeeds and is allowed. The Appeal No. 126/2011 preferred by the O.P./Finance Company, has got no substance and is dismissed. The O.P./Finance Company is directed to pay a sum of Rs. 2,61,000 to the complainant, along with interest @ 6% p.a. from the date of filing of the complaint till the date of payment. Apart from it cost of litigation, which is quantified as Rs. 2,000, will also require to be paid by the O.P./Finance Company to the complainant. With these directions, the appeal is disposed of. 12. Respondent in Para 3 of its complaint has averred:

That, it was assured by the non -applicant; at the time of resale that documents pertaining to vehicle like road tax, fitness permit and transfer papers would be handed over within a period of 15 days to the applicant, and regarding loan of vehicle, it was inform that loan amount has not been deposited by Kamal Sahu, for this reason the finance of balance amount Rupees 8,50,000 will be transfer through mutation. For transfer of finance amount Rupees 7,00,000 and Rupees 1,50,000 in favour of Kamal Sahu and Rameshwar Sahu. An affidavit was taken from applicant and it was assured that the complete document would be supplied to the applicant and company finance Rupees 8,50,000 for said vehicle, thereafter vehicle was handed over to the applicant in the month of August, 2008.

That, in between applicant made many request to the non -applicant to give complete document of the vehicle but only false assurances were given by the non -applicant. As vehicle was registered in the name of Kamal Sahu and other necessary documents were not complete therefore applicant would not used vehicle. In this regard, the applicant made oral and written complaint before non -applicant; there is demanding documents, on which non -applicant inform that process for transfer papers is going on and applicant was directed to deposit sum amount in lieu of vehicle.

In response to above averments, petitioner in its written statement states:

That in the statement of para 3 of the application, only the statement that, the non -applicant company re -saled one trailer vehicle No. CG 13A 4031 to applicant on 8.8.2008 of Rs. 9,50,000 and of the time of re -selling that vehicle was registered in the name of one Kamal Kumar Sahu and due to non -payment of the loan of the said vehicle the said vehicle is being resold. The remaining statement of the paragraph being false and manipulated is specifically denied. The statement in this regard is being mentioned in the last para as additional statement.

Thus, there is no specific denial to these averments,

That, it was assured by the non -applicant; at the time of resale that documents pertaining to vehicle like road tax, fitness permit and transfer papers would be handed over within a period of 15 cays to the applicant.

Once, vehicle has been sold then it was obligatory on the part of the petitioner to hand over the documents to the respondent so that respondent could get the vehicle transferred in his name. Admittedly, it is impossible to run a vehicle without the necessary documents being transferred in the name of the respondent.

Under Section 21(b) of the Consumer Protection Act, 1986, this Commission can interfere with the order of the State Commission where such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity. There is no illegality or material irregularity on the part of the State Commission in this case.

Hon''ble Supreme Court in Mrs. Rubi (Chandra) Dutta v. M/s. United India Insurance Co. Ltd., II : (2011) CPJ 19 (SC) : IV : (2011) SLT 303, has observed:

Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21(b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21(b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two Fora.

Decision of Suryapal Singh (supra), relied upon by Counsel for the petitioner is not at all applicable to the facts of the present case. Thus, no jurisdictional or legal error has been shown to us to call for interference in the exercise of powers under Section 21(b) of the Act. Since, two Fora below have given detailed and reasoned orders which does not call for any interference nor they suffer from any infirmity or erroneous exercise of jurisdiction. Thus, present petition is hereby, dismissed with cost of Rs. 10,000 (Rupees ten thousand only).

COST be paid to the respondent by way of demand draft in his name, within eight weeks from today. In case, petitioner fails to pay the said cost within the prescribed period, then it shall also be liable to pay interest @ 9% p.a., till realization. List on 10.5.2013 for compliance.