TATA MOTORS LTD. vs Indrasen Choubey And Ors.

IN this case there was a hire -purchase agreement between the complainant and the revision petitioner. It is the case of the complainant that his vehicle was seized and auctioned without intimation to him. Therefore, he had filed a complaint seeking relief from the District Forum.

IN its written version the petitioner had submitted that the said vehicle was seized from the possession of the complainant Indrasen Chaubey and it was informed to the P.S. Jaitpura, Varanasi accordingly on 18.2.1999. Therefore, there was no question of information on 24.2.1999 and 5.4.1999 and it was auctioned on 23.4.1999. The complainant did not pay any instalment till then and filed the complaint with altogether false and frivolous facts as such it is liable to be rejected. It is clear from the terms and conditions of the agreement that the vehicle shall be seized in case the purchaser fails to deposit even one instalment or so within the scheduled time and the vehicle shall be auctioned in case the instalment is not paid even on that occasion as it has happened in this case. Hence the petition is liable to be rejected.

DISTRICT Forum had dismissed the complaint. Aggrieved by the order of the District Forum the complainant had filed an appeal before the State Commission. The State Commission on re -appraisal of the evidence and the facts of the case, awarded a sum of Rs. 2,29,126 to be paid within two months failing which 9% interest will be payable by the petitioner to the complainant/respondent. Dissatisfied by the order of the State Commission the revision petitioner has filed this revision petition before us. His arguments are summarized below: (1) The Consumer District Forum at Gazipur did not have territorial jurisdiction to hear the complaint as the hire -purchase vehicle was sold at Varanasi and the vehicle was seized at Varanasi and the Varanasi police was intimated.

(2) The re -possessing of the vehicle was strictly as per the terms and conditions of the contract i.e., the hire -purchase agreement which is sacrosanct hence only in compliance of this agreement vehicle has been seized and police have also been intimated prior to and subsequent to the date of re -possession. Once it is re -possessed there is no need to separately intimate the complainant about the auction etc. as the vehicle no longer belongs to him.

LASTLY , he relied upon the judgment of the Hon''ble Apex Court in Manager, ICICI Bank Ltd. v. Prakash Kaur and Ors., III (2007) SLT 1=138 (2007) DLT 248 (SC)=I (2007) CCR 538 (SC)=I (2007) DLT (Crl.) 865 (SC)=(2007) 2 SCC 711 and he also quoted the judgment Orix Auto Finance (India) Ltd. v. Jagmander Singh and Anr., II (2007) CPJ 45 (SC)=II (2006) SLT 166=127 (2006) DLT 278 (SC)=II (2006) BC 108 (SC)=2006 (2) SCC 598.

AS against this learned Counsel for the Respondent submitted that the memo of parties listed before the District Forum would indicate that Auto Sales, Branch Rojra, Gazipur which is an agent of the petitioner is located at Gazipur and the whole transaction took place with the agent. We asked learned Counsel for the petitioner to submit proof of seizure of vehicle at Varanasi and not at Gazipur. He could not show any proof. Further there is no proof of having given a complaint to the Police Station at Varanasi. Accordingly, learned Counsel for the respondent strongly urged that there was territorial jurisdiction of the District Forum, Gazipur and accordingly it was filed there.

LEARNED Counsel for the respondent also relied upon judgments of the Supreme Court quoted supra. As per the judgment in Orix Finance (India) quoted supra the petitioner can avail statutory remedies as may be available. This is in connection with the re -possession which means that before re -possession he has to take recourse to statutory remedies and which cannot be focible re -possession but by following rule of law by approaching the Civil Court. In Citycorp Maruti Finance Ltd. v. S. Vijayalaxmi, the following cases were relied upon: 1. AIR 1966 SC 1178.(Referred)

Orix Auto Finance(lndia) Ltd. v. Jagmander Singh and Anr. (supra).

ICICI Bank v. Prakash Kaur and Ors. (supra).

Dr. Amitabh Varma v. Commissioner of Police and Ors., 100 (2002) DLT 581 (DB)=I (2003) CCR 226 (DB)

5.Tarun Bhargava v. State of Haryana and Anr., AIR 2003 P and H 98.

Sundaram Finance Ltd. v. State of Kerala and Ors., AIR 1966 SC 1178.

The National Commission observed as follows:

"Hire Purchase Agreement:

A. 1. When a vehicle is purchased by a person (consumer) by borrowing money from the money lender/financier/banker, the consumer is the owner of the vehicle and not the money lender/financier/banker, unless the ownership is transferred.

In a democratic country having well established independent judiciary and having various laws it is impermissible for the money lender/financier/banker to take possession of the vehicle for which loan is advanced, by use of force.

Legal or judicial process may be slow but it is no excuse for employing muscleman to repossess the vehicle for which loan is given. Such type of instant justice'' cannot be permitted in a civilized society where there is effective rule of law. Otherwise, it would result in anarchy that too when the borrower retorts and uses the force.

B.1. A hire -purchase agreement is a normal one under which owner hires goods to another party called the hirer and further agrees that the hirer shall have an option to purchase the chattel when he has paid a certain sum, or when the hire -rental payments have reached the hire -purchased price stipulated in the agreement.

As against this, when a person desires to purchase vehicle/goods and not having sufficient money on hand, borrows the amount needed from a money lender/financier/banker and pays it over to the vendor of the vehicle, the transaction between the consumer and the money lender will unquestionably be a loan transaction. In such a case the vehicle purchased by the consumer is registered in the name of the consumer and remains at all material times so registered in his name. The consumer remains qua the world at large the owner and remains in possession of the vehicle. By an agreement the vehicle can be given as security for the loan advanced. In such a case, the right to seize the vehicle is merely a licence to ensure compliance with the terms of the so -called hire purchase agreement (Re. AIR 1966 SC 1178).

C.1. It is to be stated that many financiers/banks are in race for giving loan for purchase of vehicles or various articles. After giving loan and taking interest in advance, the polite behaviour changes because of the documents which are signed on the dotted lines by the borrower. On occasions, borrower suffers harassment, torture, or abuses at the hands of the muscleman of the money lender. Such a behaviour is required to be prohibited and the process of repossession is required to be streamlined so as to fit in cultural civilized society. Let the rule of law prevail and not that of jungle where might is right.

In such cases, even the Police does not register the FIR or help the aggrieved consumer. In the present case, nothing has been done by the Police for years despite the complaint. In any case, taking of pound of flesh is required to be discouraged."

IN a case when the vehicle was repossessed by use of force and, thereafter, sold without informing the complainant, in our view, it would be unjust to direct the consumer to pay the balance amount, as alleged by the financier to be outstanding. If such a relief is given to the money lender/financier, it would be unjust enrichment to the money lender and against equity. The question may arise for consideration only if the complainant willingly surrenders the vehicle for sale and for recovery of the outstanding amount. Then, in such cases, consumer disputes would not arise."

THE Apex Court in ICICI Bank v. Prakash Kaur and Ors. (supra), has held as under: "Now the bank is the aggressor and the public is the victim. The first step to recover of the money due is through the so -called recovery/collection agents. A very dignified terms used for paid recovery agents who are individual and independent contractors hired by the banks both to trace the defaulters and to physically, mentally and emotionally torture and force them into submitting their dues.

A man''s self -respect, stature in society are immaterial to the agent who is only primed at recovery. This is the modernized version of Shylock''s pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner."

THE ratio of the above quoted judgments is squarely applicable to the case on hand. Accordingly, we do not see any merit in this revision petition. We are astonished to see that a reputed Bank like the petitioner has resorted to this illegal and unjust method either directly or through its agent for forcibly repossessing the vehicle. Therefore, we dismiss this revision petition and direct the petitioner to pay Rs. 20,000 as cost. R.P. dismissed.