SHRIRAM TRANSPORT FINANCE CO LTD vs Bapu Appa Suryawanshi

THIS order shall decide the above said two revision petitions which are filed by both the OPs, separately, against the same order of the State Commission, dated 13.11.2009. The case of Sh. Bapu Appa Suryawanshi, the complainant, is as follows. The complainant had availed loan of Rs.4,00,000/ - from Citicorp Finance (I) Ltd., on 02.02.2003 for purchase of a Tata Tempo. He was to repay the same in 45 equal instalments @ Rs.12,669/ - p.m. The complainant deposited a sum of Rs.1,06,700/ - with the Citicorp Finance (I) Ltd, OP1 and Shriram Transport Finance Co. Ltd., OP2. He had agreed to pay the said amount up to 23.12.2006, in 45 equal monthly instalments. However, on 23.06.2004, the OPs issued notice dated 23.06.2004 demanding the amount of Rs.85,000/ - within eight days from the receipt of the notice. The said notice was replied and the OPs were aware of the fact that a sum of Rs.2,66,000/ - had already been paid. It is surprising to note that Shriram Transport Finance Co. Ltd., OP2, had forcibly obtained the possession of the Tempo on 21.06.2004, i.e., prior to sending of the notice. After re -possession of the vehicle, the same was sold without giving further notice to the complainant.

THE OPs have contested this case. It is explained that the complainant was holding the vehicle as bailee under Hire Purchase Agreement. He has no proprietary right or interest as purchaser of the vehicle. He is the hirer of the vehicle in question. There was no deficiency on the part of the OPs in repossessing the vehicle due to non -payment of the installments by the complainant. Again, the complainant purchased this vehicle for commercial purposes. Jurisdiction of this Commission has also been called into question. It is contended that the petitioner has included initial hire marginal amount as payment is to be made in installments. Initial hire has no relevance. Installments had to be made based on the total contractual value divided by no. of installments. The complainant waddled out of the commitments and did not make the payments, on time. OP2 contended that Citicorp Finance (I) Ltd., had the right to repossess the vehicle on default of installments. It is acting as per instructions of Citicopr Finance (I) Ltd., OP1.

THE District Forum allowed the complaint and directed the OPs, jointly and severally, to pay Rs.2,66,000/ - with interest @ 12% p.a., from the date of complaint. They were also directed to pay Rs.10,000/ - towards mental agony and Rs.3,000/ - towards costs. Appeals were filed by the OPs before the State Commission, which dismissed the appeals and imposed further costs in the sum of Rs.1,000/ - on each of the OPs, to be paid to the complainant.

WE have heard the counsel for the parties. Both the counsel for the petitioners vehemently argued that there is no deficiency on the part of the petitioners. They contended that the complainant is a defaulter and did not pay the amount as per the installments. They have relied upon the judgment of Suryapal Singh Vs. Siddha Vinayak Motors and Anr., 2012 2 CPJ 8 (Supreme Court), wherein it was held that a defaulter, who failed to honour his commitment, under a hire purchase agreement, is not entitled to any compensation. Reliance was also placed on an authority of the Hon''ble Apex Court in SLP (Crl.) No. 8907 of 2009, titled Anup Sarmah Vs. Bhola Nath Sharma and Ors., dated 30.10.2012.

IT was also argued that Shriram Transport Finance Co. Ltd., is the agent of principal, Citicorp Finance (I) Ltd. and the hire purchase agreement was executed by the complainant, and OP1, hirer, in favour of Citicorp Finance (I) Ltd. It was urged that the petitioner, being an agent of Citicorp Finance (I) Ltd., cannot be saddled with the liability, as alleged by the complainant.

ATTENTION of this Commission was invited towards the undertaking given by the complainant. The said undertaking runs as follows : - "I, Suryawanshi Bapu Appa, R/o. Chanda Tq. Karjat Dist., Ahmednagar, assure in writing that on 23.01.2003, I have taken loan of Rs.4,00,000/ - from Citicorp Finance (I) Ltd., through you, for the vehicle MH -16Q -944. That as per the Agreement, along with all other necessary documents, signed between us, I agreed to repay the loan amount along with the interest accrued thereon in 45 monthly instalments of Rs.12,669/ -. But I could not repay and I could not complete the RTO passing and other documentation in time, therefore, on 21.03.2003, you had taken the possession of the vehicle. Though you had requested me repeatedly before and after repossession of the vehicle, about the repayment, I made payment irregularly. Therefore and due to the arrears of amount on 22.06.2003, you had repossessed the vehicle. Therefore, today on 08.09.2003, I assure you, in writing, and before the witness Mr. Tanaji Vijayrao Patil that till the expiry of this month, I shall clear the arrears and shall regularly repay the further balance amount as per the Agreement between us. In case I could not repay, I shall have no grievance about the legal action you would have taken as per rules. You can recover the loan through the cheques I had given to you or by other means. After giving this statement to you on 08.09.2003, I am taking back the vehicle by making payment of Rs.5,000/ - to you. Yours truly, Sd/ - Bapu Appa Suryawanshi Witness Patil Tanaji Vijayrao".

THEREAFTER , another statement of the complainant, dated 25.02.2004, reads as under : - "Today, on 25.02.2004 Mr. Bapu Appa Suryawanshi R/o. Chandekhurd Tq. Karjat Dist. Ahmednagar Statement Giver. Give the following statement in writing that I have purchased the TATA 407 double tire, six wheeler vehicle through financial help of Citi Corp Finance (I) Ltd. In Feb, 2004, the Citi Copr Finance (I) Ltd., had repossessed the vehicle due to no payment of the agreed instalments. Today, I deposited amount of Rs.20,000/ - (Rs. Twenty Thousand only) with the company. And as per that, I am taking back the vehicle. The complaint about to repossession of my vehicle was not given to any police station or to anywhere. Today, I am taking back the vehicle. I am ready to pay all the future instalments, as per rules. No dues shall be remained. Today, at Ahmednagar, I am giving the above said statement with my wish and free will. Date : 25/2/2004 Signature of Bapu Appa Suryawanshi Notary''s Attestation".

THEREAFTER , notice dated 23.06.2004 was given. Its para Nos. 4 and 5 are reproduced here, as under : - "4) In spite of that you had not acted as per the Agreement and our client''s loan amount of Rs.4,00,000/ - (Rs. Four Lakh only) plus penalty and interest stand due towards you. As it is seen that you are not repaying the same as agreed, my client compelled to give you this Notice. As such, you had cheated my client by not repaying the agreed amount.

5) That for the said Loan, Noticee No.2 is the Guarantor and the Guarantor is equally responsible with the borrower to repay the loan amount. That you agreed at the time of taking loan that the borrower shall repay the loan timely. But as this is not happened, my client had constrained to decide to legal action against Noticee No.1 as borrower and Noticee No.2 guarantor.

Therefore, by way of last chance, you are informed by this notice that you should pay amount of Rs.85,000/ - (Rs. Eighty Five thousand only) plus interest and other expenses to my client within eight days of the receipt of this notice and shall take the receipt of it from my client and get regularised the loan account. In case of failure on your part, my client shall take appropriate civil and criminal legal action against you and then you shall be responsible for all expenses and consequences of the same. Xxxxxxxxxxxxxxx Place : Ahmednagar Date : 23/6/2004 Sd/ - Advocate".

SH . Shantanu, who is working with M/s. Shriram Transport Finance Co. Ltd., as a Field Officer, for the last 3 -4 years, filed his affidavit, before the District Forum, which carries infinite significance. It is stated that the price of the said Tempo was Rs.4,45,816/ -. The complainant obtained loan in the sum of Rs.4,00,000/ - and the complainant was to pay the margin amount of Rs.45,816/ -, from his pocket. Consequently, the loan in the sum of Rs.4,00,000/ - was sanctioned. The complainant was required to pay the installments in the sum of Rs.12,669/ - per month, which commenced from 23.03.2003. The said vehicle was delivered to the complainant on 22.06.2003/ 08.09.2003. As the complainant was in arrears of installments, therefore, notice dated 05.04.2004 was issued to him and the vehicle was seized from the complainant. On 25.06.2004, the said vehicle was again given to the complainant. Outstanding amount at that time was Rs.1,77,366/ -, out of which, the complainant had paid Rs.1,01,600/ - and a sum of Rs.66,666/ - was yet outstanding with him. It is further stated on oath, that on 17.02.2004, the complainant approached the company for giving the account of his loan. However, the Field Officer gave a chit prepared in handwritten, showing the amount as Rs.1,06,000/ -, as paid out of the loan and he signed the said chit paper. Though the hand written chit mentions the date, it is written as 17.02.2003 instead of 17.02.2004. This unrebuttal evidence also goes to show that as a matter of fact, the amount of Rs.1,06,700/ - was not paid, separately.

THE contention raised by the complainant appears to be false. The complainant has to show that he has paid the installments up to date. It is the complainant and nobody else who has to carry the ball in proving his case. The record goes to show that he did not deposit the amount as per the agreement. His admission, cited above, proves this case.

SECONDLY , the agreement produced before this Commission goes to show that instalments amounts were to be paid in the sum of Rs.12,527/ - (Rs.12,669/ -) p.m. This agreement came into force on the day of its execution, i.e., on 23.01.2003. Although, the case of the OPs is vague, evasive and difficult to understand, yet, there is no inkling that a sum of Rs.1,06,700/ - was a part and parcel of the loan agreement. The complainant was to deposit 45 equal monthly instalments up to 23.10.2006 from 22.03.2003 to 23.06.2004. There is a gap of about 15 months. If the amount of Rs.12,527/ - is multiplied by 15 months, it comes to Rs.1,87,905/ -. Rs.1,06,700/ - is not to be included in this amount. If the instalment is Rs.12,669/ - and multiplied by 15 months'', it comes to Rs.1,90,035/ -. It appears that both the fora below have made wrong calculations. The complainant was to pay Rs.1,06,700/ - + Rs.1,87,905/ - i.e. Rs.2,94,605/ -. It is thus clear that the complainant had waddled out of the commitment. Another notice was sent on 01.07.2004 to pay the arrears, otherwise, the vehicle would be sold.

THE other side of the coin ought not to be overlooked. Instead of touching the heart of the problem, the learned counsel for the petitioner just skirted it. The case of Citicorp Finance (I) Ltd., bristles with a number of question marks. As per the agreement, the OPs were to give notice before having repossession of the vehicle. Counsel for the OPs did not deny this fact. No notice was given before the vehicle was repossessed. It is surprising to note that, first of all, the vehicle was repossessed and the notice was given subsequently, i.e., the repossession was made on 21.06.2004 and the notice was sent on 23.06.2004. It is just like putting the cart before the horse. This is merely an eye wash. The fault of the complainant will come into play when, and if he does not pay the amount, within the prescribed period. Notice dated 23.06.2004 is misleading and an attempt has been made to pull the wool in the eyes of law. There is no inkling that the vehicle had already been seized/repossessed.

FIRST of all, the hire purchase agreement is vague, evasive and leads this Commission, nowhere. Copy of the same is produced on record, which is in a very small font, which is in English, is hardly legible/readable. Counsel for the petitioners have not prepared the case properly. They also did not make an attempt to dispel the doubts. The request made by the counsel for Shriram Transport Finance (I) Ltd., was accepted and he was directed to file written arguments but the written arguments did not throw light on the contentious issues. Although, it is argued that the complainant is a defaulter, yet, no reason has been given, as to why he is a defaulter. The agreement does not mention how much is the amount, what are the amounts of instalments, etc. Their plea is that the amount of instalment is Rs.12,669/ -. However, the requisition slip for stamping, reveals that the instalment amount is Rs.12,527/ -, p.m. The OPs have left no stone unturned in misleading the complainant / borrower by one way or the other. The terms and conditions were not specifically mentioned. The important terms and conditions were not highlighted. Such like hire purchase agreements are made with ulterior motive.

THE next deficiency noted by this Commission is this. The relevant extract of notice dated 01.07.2004, sent by Shriram Transport Finance, runs as follows : - "That on 23/06/2004, my client previously informed you by sending notice through RPAD that to pay the arrears amount of Rs.85,000/ - (Rs. Eighty Five thousand only) plus interest and other expenses to my client and take the receipt of the same. But you had not taken note of the said notice and not acted as per the notice. Therefore by way of last chance you are informed that to pay the arrears amount pending towards you along with the penalty and interest to my client within eight days of the receipt of the notice and take the receipt of the payment of the amount. In case you failed to act as per the notice, my client shall have no option but to sell the vehicle. Please note that in case you had not paid the arrears amount along with the interest and penalty amount and in case of sale of the vehicle, no complaint shall be entertained thereafter".

THIS is not proper notice for sale of vehicle. The OPs are required to inform the complainant that they are going to sell the vehicle on such -and -such date, at such -and -such place and that the complainant could also take part in the auction, if he feels so. This notice does not comply with these conditions and cannot be considered to be a valid notice. From the record, it appears that the vehicle was sold for a sum of Rs.3,00,000/ - on 09.07.2004. The OPs have made the following calculations : - "Shriram Transport Finance Co. Ltd. Form 014/Rev 2/93 Sale Value - Rs. 3,00,000/ - (As on 9.7.04) Agreement value (A) - Rs. 5,70,105/ - Amt. received inclu. Sale value -Rs.4,32,200/ - Arrears (A -B) - Rs. 1,37,905/ - (+) OD interest - Rs. 5,998/ - (+) Legal expenses - Rs. 36,450/ - (+) seizing expenses - Rs. 6,500/ - (+) RTO/Valuation expenses - Rs. 7,600/ - (+) Total amount to be recovered Rs. 1,94,453/ -".

Thus, according to the OPs, they had to recover from the complainant, a sum of Rs.1,94,453/ -. Why, all these proceedings took place hurriedly, and in a haphazard manner? Does not it smack of malafide intention?

IT is thus clear that the total amount of the vehicle was Rs.4,45,816/ -. The complainant was not a party to the resale. The sale was not effected in his presence. Although the complainant was a defaulter, yet, the other proceedings were not done in accordance with law. It appears that the OPs had given the Tempo for a period of 9 months or so. Keeping in view the highhandedness, arbitrariness and arrogance on the part of the OPs, we, however, modify the above said impugned order. Citicorp Finance (I) Ltd. is directed to pay an amount of Rs.2,66,000/ - back to the complainant, without any interest or payment of costs. The complainant had utilized the vehicle in question for a period of 9 months, therefore, he is not entitled to any costs or interest.

THE revision petition filed by Shriram Transport Finance (I) Ltd., which is an agent of the Company, is hereby accepted. The Citicorp Finance Ltd., is saddled with the entire liability. The said amount be paid to the complainant, within 45 days'' from the date of receipt of copy of this order, otherwise, it will carry interest at the rate of 10% p.a., from the expiry of above said 45 days, till its realization. The petitioners can withdraw the amount already deposited with the fora below after the expiry of 90 days. The revision petition filed by Citicorp Finance Ltd., stands disposed of.