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Judgment
Revision Petition Nos.1754-1755 of 2009 and 1886 of 2009 have been filed by the Opposite Party and the Complainant respectively, against the concurrent orders of the Fora below. These Revision Petitions under Section 21(b) of the Consumer Protection Act, 1986, (for short the ''Act'') are directed against the common order dated 18.2.2009 of the Karnataka State Consumer Disputes Redressal Commission (in short the ''State Commission'') in Appeal Nos.1737 and 2138 of 2008. Vide the impugned order, the State Commission modified the order of the District Forum and allowed in part the Appeal preferred by the Complainant and enhanced the amount to be paid from 60,000/- to 6 lakhs with interest @ 12% p.a. from 24.01.2005, till realization, together with costs of 5,000/-.
Appeal No.2138 of 2008 preferred by the Opposite Party was dismissed.
As a common issue is involved in these Revision Petitions, they are being disposed of by this common order.
Briefly put, the facts material to the case filed by the Complainant are that he purchased an Eicher Truck on 03.12.2003 by raising a loan of 8,58,500/- with the Opposite Party Bank and got it insured with United India Insurance Company. While so, the said vehicle met with an accident on 4.12.2004 and the Insurance Company settled the claim on ''cash loss, repair basis'' and issued a cheque for 1,77,000/- to the Complainant. The Complainant presented the said cheque with the Opposite Party Bank, which adjusted a sum of 1,45,542/- to the Complainant''s Loan Account No. HP 141 and the balance amount was adjusted towards another loan account, without intimating the said fact to the Complainant. The Complainant pleaded that the garage owner intimated him vide letter dated 24.1.2005 stating that the vehicle was ready for delivery, and that the repair charges were 1,36,000/-. As there was a shortfall of 35,000/-, the Complainant requested the Opposite Party Bank to release 35,000/- to the garage owner but they refused to do so on the ground that the amount paid by the Insurance Company was adjusted towards the loan accounts of the Complainant. The Complainant pleaded that he was deprived of the usage of the vehicle and thereby suffered a loss to the extent of 2,500/- per day, for about 601 days, as he was not able to get the vehicle released from the garage.
The Complainant further stated that the Opposite Party Bank seized the vehicle and issued a notice in the newspaper that the auction date would be 18.5.2006. As per the notice, the participants were required to deposit a sum of 5,000/- as earnest money , but on the said auction date, the vehicle could not be sold. Once again, the Opposite Party Bank notified in the newspaper that the auction date would be 3.10.2006. Though, there was an offer for 2,20,000/-, the same was not accepted and the vehicle could not be sold even on 3.10.2006. Thereafter, he was informed that one, Mr. Satish Ganapati Naik had come forward to purchase the said vehicle for 1,90,000/- and the same was sold to him in an auction held on 8.1.2007. The Complainant averred that the vehicle in question was purchased by raising a loan of 8,58,500/- which is 75% of the sale price of the vehicle and the Insurance Company had valued the vehicle at 5,50,000/- before issuing the insurance, but the vehicle was sold for a paltry sum of 1,90,000/-. Had the Insurance Company paid the shortfall of 35,000/- out of 1,77,000/-, the Complainant would have got the vehicle released from the garage and utilised it for earning his livelihood. Therefore, the Complainant filed a Complaint before the District Forum seeking compensation of 19,87,500/- for loss of income and for the mental agony suffered.
The Opposite Party filed a written version admitting the issuance of loan to the Complainant for the purchase of the said vehicle and also the deposit of 1,77,000/- to the Complainant''s account and the adjustment of the balance amount against Complainant''s other loan accounts. Opposite Party Bank denied that the vehicle was of the value of 6,00,000/- and was sold for 1,90,000/- in an auction. On 31.10.2006 the auction was cancelled as the Complainant did not accept the bargain of 2,20,000/-, therefore, another auction was held on 8.1.2007. One Mr. Satish Ganapati Naik purchased the vehicle for 1,90,000/- of which the Opposite Party paid 1,10,000/- towards repair charges and adjusted 80,000/- to the loan account of the Complainant. The Insurance Company had released the amount on ''cash loss basis'' but not for payment of repair charges. The Opposite Party had given the Complainant sufficient time to pay the dues of the loan account. An Execution case under 126 of 2007 was filed before Civil Judge (Sr. Dvsn) Kumta for recovery of money. The Opposite Party denied that the Complainant had suffered any loss and stated that there was no deficiency of service on their behalf.
The District Forum observed as follows: "In the instant case the OP had to pay the repair charges because the Insurance Co., has paid the said amount for the purpose of getting repaired the vehicle. But not for the purpose of adjusting the loan amount. In our view, the adjusting of loan amount without the knowledge of the complainant and without paying to a garage owner for the repairs of the vehicle is deficiency of service and the OP is liable."
While holding that there was deficiency of service on behalf of the Opposite Party, the District Forum directed the Opposite party Bank to pay an amount of 60,000/- towards compensation for loss of daily income of 100/-, for 601 days, together with costs of 2,000/-, to be paid, within one month from the date of receipt of the order, failing which, the amounts shall carry interest @ 9% p.a.
Aggrieved by the said order, the Complainant preferred Appeal No.1737 of 2008 and the Opposite Party Bank preferred Appeal No.2138 of 2008. The State Commission observed as follows:- "The Complainant has produced Xerox copy of Certificate of Registration (RC) which discloses that the vehicle was transferred in the name of the Manager of the OP Bank though it was sold in favour of Sri Satish Ganapati Naik in public auction. When the auction purchaser is one Mr. Satish Ganapati Naik, it is not known how the vehicle could be transferred to the name of the Manager of the OP Bank. This clearly shows that there is a collusion and the above said Mr. Satish Ganapati Naik is only the name lender and this collusion has made the Complainant to suffer heavy loss as it was sold for paltry sum of Rs.1,90,000/- even though the value of the said vehicle was more than Rs.5,00,000/-. The above said facts clearly show that there is a collusion and it should be deprecated as it resulted in customer of the Bank to put to great hardship. Therefore, we are of the considered view that the District Forum was not right in awarding a compensation of paltry sum of Rs.60,000/- in favour of the Complainant. Hence, under this head, the Complainant is entitled for compensation of Rs.3,00,000/- towards difference of value of the vehicle, i.e., the value of the vehicle as per the I.D. value declared to the Insurance Company minus the amount realized by sale in the public auction. In addition, the Complainant is entitled for compensation of Rs.3,00,000/- as he was made to suffer loss having deprived on use of the vehicle for the reasons stated above. Hence, we hold that the Respondent/OP is to be directed to pay Rs.6,00,000/- to the Complainant with interest @ 12 P.A. from 24.01.2005 i.e., the date of the letter written by garage owner stating that the vehicle ready for delivery till realization."
The brief points that fall for consideration are: - a. Whether, the Petitioner Bank was justified in not releasing 35,000/- to the garage owner towards repair charges?
b.Whether, the Bank had followed the due procedure in auctioning the said vehicle and also if the said vehicle was auctioned for the right price?
It is the case of the Petitioner Bank that they had adjusted a sum of 1,45,542/- to the H.P. loan account No.141, as there were outstanding dues of the Respondent. Even after the said adjustment, an amount of 1,53,140/- was due, together with interest of 7,373/-, as on 30.6.2005. Hence the amount of 1,77,000/- was adjusted to loan account No.141, with the consent of the Respondent and the balance was adjusted to loan account No.128, as he was due 1,71,518/- to this account.
Learned counsel for the Petitioner Bank submitted that the vehicle in question was sold in an auction held on 8.1.2007 for 1,90,000/- in favour of Mr. Satish Ganapathy Naik, who was the highest bidder. On 30.10.2006 with the consent of the Respondent, an amount of 1,00,000/- was deposited by the said Ganapath Naik, under suspense account and 60,000/- was paid to the garage owner out of 1,90,000/-, which includes deposit of 1,00,000/- balance of 80,000/-, which was adjusted to the loan account.
Learned counsel for the Petitioner Bank further contended that the State Commission had not considered the actual instalment due by the Complainant towards the loan account. The total outstanding was 1,85,400/-, after adjustment of the insurance amount, but the State Commission had observed that there was ''no dues'' as on 18.5.2005, the date of adjustment of the cheque amount to the loan account.
Learned counsel for the Respondent/Complainant submitted that the value of the vehicle was more than 5 lakhs as is evidenced under the Insured Declared Value (IDV), stated in the insurance policy. It is the case of the Respondent/Complainant that the Bank Manager, in collusion with Mr. Satish Ganapath Naik had sold the vehicle for a paltry sum of 1,90,000/- and that the name of the Manager, figures in the said insurance policy. Learned counsel further submitted that the photocopy of the certificate of registration, filed before the State Commission, discloses that the vehicle was transferred in the name of the Manager of the Petitioner Bank, though it was sold in favour of Mr. Satish Ganapath Naik.
We observe from the record that the Bank had not issued any notice to the Complainant, prior to the seizure of the said vehicle nor did they declare that the Petitioner was a defaulter. Admittedly, an amount of 1,77,000/- was paid by the Insurance Company, vide cheque dated 12.5.2005 and the Petitioner Bank had adjusted a sum of 1,45,545/- towards the loan account of the Complainant and balance amount of 31,450/- towards another loan account of the Complainant. The Bank statement Annexure P-2 shows that only an amount of 1,45,545/- is due as on 18.5.2005. It is not understood on what basis the Bank had declared that an amount of
5,82,400/- is due from the Complainant as on June, 2005, which is only one month, subsequent to 18.5.2005.
Keeping in view the facts and circumstances of the case, the State Commission had rightly observed that the vehicle was sold by the Petitioner Bank, in collusion with Mr. Satish Ganapathy Naik and relied on RC book which disclosed that the vehicle was transferred to the Manager and also the fact that an amount of 1 lakh was deposited by the said Mr.Satish Ganapathy Naik, on 30.12.2006, which is much prior to the date of auction.
It is the Respondent/Complainant''s case that despite repeated requests to release 35,000/- towards repair charges, the Petitioner Bank had adjusted the balance amount in some other loan account, without his consent, as a result of which, his vehicle was lying in the garage and he was unable to pay his instalments. We observe from the record that letters were addressed by the Complainant to the Petitioner Bank, on 21.6.2005, 2.7.2005, 8.7.2005 and on 20.12.2005 requesting for release of the repair charges. Another letter was addressed on 31.3.2007 by the Respondent/Complainant to the Bank Manager stating that the vehicle (lorry) in question was his only source of income of livelihood and the vehicle was repossessed and sold for a meagre sum of 1,90,000/-, which amounts to unfair trade practice. Vide letter dated 1.1.2007, the Bank Manger had stated that the said lorry was put in public auction, twice, on 18.5.2006 and on 3.10.2006 but no one had come forward to purchase the vehicle and, therefore, the decision was taken to auction the vehicle again on 8.1.2007. An advertisement was issued in "Karavali Munjavu? daily Newspaper and only after following the due process, the vehicle was sold to Mr. Satish Ganapath Naik, for an amount of 1,90,000/-. We observe from the record that a sum of 1 lakh was paid by Mr. Satish Ganapath Naik, on 30.12.2006, which is prior to 8.1.2007, the date of the auction. On 30.1.2007, the vehicle was transferred in the name of the Manager, Co-operative Bank. There is no substantial reason as to why the said vehicle was sold for 1,90,000/- when IDV of the vehicle in the insurance policy was 5,01,576/-. It is not in dispute that on 14.3.2007, the vehicle was insured with ICICI Lombard in the name of the Manager of the Petitioner Bank showing the value of the vehicle as 5,01,576/- . Thereafter, on 18.5.2007, the vehicle was transferred in the name of Mr. Satish Ganapath Naik.
Now, we address ourselves to the quantum of compensation awarded by the State Commission. We find no infirmity or illegality in the order of the State Commission, awarding compensation of 3 lakhs towards difference in the value of the vehicle. However, we are of the opinion that an additional compensation of 3 lakhs, which was awarded to the Complainant, on the ground that he had suffered loss, having been deprived of the use of the vehicle, is not based on any documentary evidence substantiating his daily income. At this stage, it would neither be possible nor expedient to determine the exact amount of loss, which the Petitioner/Complainant would have suffered by relying on the said facts and figures, particularly when the total amount of compensation claimed by the Complainant is 19,87,500/-. Therefore, taking an overall view of the matter, we are of the considered opinion that ends of justice would be served if the amount of compensation awarded for loss of income, on account of the non-utilization of the lorry in question for 601 days, be a lump sum amount of 1lakh.
For all the afore-mentioned reasons, the order of the State Commission is modified reducing the compensation awarded from 6 lakhs to 4 lakhs. We confirm the rest of the order of the State Commission with respect to awarding of interest @ 12% p.a. and costs of 5,000/-.
In the result, Revision Petition Nos.1754 -1755 of 2009 are allowed in part and the order of the State Commission is modified to the extent indicated above. Revision Petition No.1886 of 2009 preferred by the Complainant is dismissed.