UNION TOOLS AND ENGG. STORES vs BANK OF AMERICA NT AND SA

THE case of the complainant is that based on the assurances given in the advertisement appeared in the newspaper for car finance, they approached the opposite party-Bank of America for a loan of two vehicles i.e. Tata Sumo and Maruti 800 ACTG. THE application for the loan was submitted on 1.11.1996. THE complainant paid an extra premium of Rs. 8,500/- and Rs. 28,000/- respectively for the purchase of Maruti 800 and Tata Sumo for the purpose of immediate delivery. On or about 10th December, 1996, only Tata Sumo car was delivered and Maruti 800 was not delivered. THEy approached Ford Brothers for the delivery of Ocean Blue Maruti 800 ACTG car by completing all the formalities as per Exhibits ''B'' and ''B1'', which are the letters dated 12.12.1996 and 13.12.1996. THE complainant sent another letter on 19.4.1997 vide Exhibit ''C'' to the complaint. THE opposite party, however, failed and neglected to deliver Ocean Blue Maruti 800 ACTG to the complainant. On the other hand, they wrote letters which are at Exhibits ''D'' and ''D1''. Upto July, 1997, the Maruti car was not delivered. In the meanwhile, the repayment of the car loan had started and the complainant had paid instalments upto July, 1997. It is contended that the complainants were required to pay the instalments without getting the vehicle at all. Ultimately, the vehicle was delivered on 27.9.1997. THE opposite party sent a letter on 16th January, 1998 for the payment of instalments. THE complainant gave them post dated cheques to avoid seizure of the vehicle which was delivered to them after about 9 months delay. According to the complainant, they suffered humiliation in the society and mental torture because of the forceful seizure of the Maruti car in January, 1998. However, the situation was saved by giving post dated cheques and the vehicle was released. On 3.3.1999, the opposite party sent a letter asking the complainant to pay the entire amount by foreclosing their accounts. THE complainant gave a reply on 6.3.1999, which is placed before us. At that time, admittedly only two instalments were payable by the complainants and in spite of that the opposite party forcefully seized the vehicle and sold it on 10.3.1999 without following any procedure and offered a balance amount of Rs. 18,838/- after adjusting their entire accounts. In the meanwhile, the complainants had sent letters on 6.3.1999, 16.3.1999 and Advocate''s notice on 17.3.1999 with a request to the opposite party not to dispose of the vehicle and return the same as only two instalments were due and payable to the opposite parties. On 23.3.1999, the complainants assured the opposite parties to pay the remaining instalments regularly as per Exhibit ''H'', but the opposite party did not reply. On 27.3.1999, they informed that the car had already been sold out. THE complainants have, therefore, claimed an amount of Rs. 55,499/- as per their letter of 19.4.1997 alongwith Rs. 7,29,907/- towards the loss/damages on account of the sale of the vehicle.

THE opposite parties had initially remained absent and we had decided to proceed ex parte. However, on their persuasion, we have allowed them to submit their written version, affidavit and also the written notes of arguments alongwith the documents, which have been admitted on record. THErefore, their Misc. Application No. 151/99 has accordingly been allowed and stands disposed of. The case of the opposite party is that as per the agreement, repayment of Maruti car loan was to be made in 36 equal monthly instalments of Rs. 8,953/- and in respect of the Tata Sumo vehicle, it was to be paid in 36 equal monthly instalments of Rs. 11,710/-. In para 18 of their written statement, the opposite parties have agreed that as on 3.3.1999, only two instalments were due and payable by the complainants, but due to their previous persistent defaults, they seized the vehicle, gave a 7 days'' notice and sold out the vehicle, which according to them is perfectly in order. It is further contended that after adjusting the sale proceeds of the vehicle, the balance amount of Rs. 18,838/- was offered to the complainants. It is specifically denied by the opposite parties that they have recovered Rs. 8,500/- and Rs. 28,000/- for the immediate delivery of the Maruti car and the Tata Sumo vehicle. But they have not given any explanation as to on what account these amounts were recovered from the complainant. They have denied all the remaining contentions of the complainant and had submitted that there is nothing payable by the opposite party to the complainant and that this Commission has no jurisdiction to entertain such complaint and the same deserves to be dismissed. In support of their submissions, the opposite parties have placed before us the copy of the agreement made on 16th November, 1996, the irrevocable power of attorney of 16.11.1996, demand promissory note of 16.11.1996, statement of accounts in respect of both the vehicles, notice dated 3.3.1999 and the xerox copy of the cheque for Rs. 18,838/-.

As against this, the complainant has submitted copies of the letters sent to the opposite parties on 5.12.1996, 12.12.1996, 13.12.1996, 19.4.1997, 23.4.1997, 2.5.1997, 16.1.1998, 6.3.1999, 16.3.1999, 17.3.1999, 25.3.1999 and the calculation of their claims. The learned Counsel for the complainant has submitted a rejoinder to the written version filed by the opposite parties. By this rejoinder, the complainant has rebutted the various contentions made by the opposite parties and has also explained the delay caused by the opposite parties in the delivery of the Maruti car. On perusal of the rival contentions submitted before us, the following points emerge for our consideration and decision : (1) Whether the opposite parties recovered premium of Rs. 8,500/- and Rs. 28,000/- for immediate delivery of the vehicles ? (2) Whether there was unreasonable delay in the delivery of the Maruti 800 ACTG car ? (3) Whether the action of the opposite party in the seizure and subsequent sale of the Tata Sumo vehicle was warranted ? And (4) Whether the complainant is entitled to the claims made in the complaint ?

ISSUE Nos. 1 and 2 : Although it is denied by the opposite parties that they did not receive extra premium of Rs. 8,500/- and Rs. 28,000/- for immediate delivery of the vehicles, from the documentary evidence placed before us, it is proved that the opposite parties had recovered these amounts as a special consideration for affecting immediate delivery of the two vehicles. The Tata Sumo vehicle was delivered within a reasonable time, which can be taken as a prompt delivery and there was no delay in it. However, in respect of the delivery of Maruti 800 car, there is definitely a delay of about 9 months. The position regarding the colour of the vehicle has been amply explained by the complainant in his various letters addressed to the opposite parties. On perusal of these letters addressed to the dealer and also to the opposite parties, we have really no doubt that the opposite party and their associate dealers were very casual and callous in dealing with the matter. In the meanwhile, the opposite party Bank had already started receiving instalments of the loans sanctioned by it. The opposite party Bank did not make any serious efforts to use its good offices to arrange immediate delivery, although they had received a consideration of Rs. 8,500/- for prompt delivery of Maruti car. The various submissions made by the opposite parties in this respect are not supported by any documentary evidence and we are not at all satisfied with their clarification about the unreasonable delay. The opposite parties have the audacity to submit before us that they had not charged any extra consideration of Rs. 8,500/- for arranging prompt delivery. The opposite parties have not come with clean hands in this respect before us. The delay of 9 months in the delivery of the Maruti 800 car in spite of premium of Rs. 8,500/-, is definitely a deficiency on the part of the opposite parties. In this connection the submissions made in the written statement by the learned Counsel on behalf of the opposite parties are not at all convincing and, therefore, they are not acceptable. We, therefore, give our findings on the first two issues in the affirmative. Issue No. 3 : Regarding the seizure and sale of the vehicle-Tata Sumo, the learned Counsel for the opposite parties has relied upon the judgment of the Madras High Court in the case of Sri Rama Machinery Corporation Ltd. v. Standard Chartered Bank, decided on 26th October, 1998. In this case, there were defaults and the cheques given by the petitioner were dishonoured and the petitioner was informed to close the Loan Account and 7 days'' notice was granted. In that case, the offer received was also communicated to the petitioner by the Bank and the petitioner was again given 24 hours'' time to repay the entire loan.

IN this case the High Court further held that in view of the execution of the documents by both the parties, the question of principle of natural justice did not arise and the action taken by the Bank was upheld. As against this, the learned Counsel for the complainant has cited the case reported in AIR 1966 Supreme Court 1178 (V 53 C 228) and the order passed by this Commission in Complaint No. 2 of 1994 on 4.6.1994. The learned Counsel for the complainant has argued that the case decided by the Madras High Court is not applicable to the facts of this case, as that case does not deal with compensation and deficiency in service on the part of the Bank. We have carefully perused the entire judgment, which is placed before us and also the judgment of the Supreme Court and the order passed by this Commission in 1994. In fact, the facts of the present complaint before us are similar to the facts in Complaint No. 2/94 decided by this Commission. In nutshell, admittedly there were only two instalments due from the complainant and the vehicle was forcefully seized, it was sold without the knowledge of the complainant. It is not known what procedure was adopted by the Bank. In the judgment of the Madras High Court, the offer received by the Bank was communicated to the defaulter. In this case, the complainants were kept in dark and on 27.3.1999, the cheque was quietly sent by ignoring their letters of 6.3.1999 and 16.3.1999 and their Advocate''s notice of 17.3.1999. Although it is a fact that all the necessary documents were executed by the complainant and the Bank had the rights to lay its hand on the vehicle, from perusal of the record and the post dated cheques given by the complainant, we do not have any doubt about the bona fides of the complainant, although initially he had committed some defaults. We do not find any good reason for foreclosing the account abruptly and snatching away the vehicle and selling out quietly. We find that the complainant had paid a substantial amount and only two instalments were due. The post dated cheques were not properly accounted by the opposite party and without any good reasons, they hold that the complainant was a persistent defaulter. This decision by itself is not based on the facts and circumstances of the case. For a paltry sum of two instalments, a vehicle worth more than Rs. 4,50,000/- ought not to have been taken away and amount of sale proceeds of the vehicle also appears to be unreasonably low inasmuch as the complainant was to pay only an amount of Rs. 1,20,000/- which was adjusted by the Bank and the balance amount of Rs. 18,838/- was paid to the complainant, which means that the resale value of the vehicle was less than Rs. 1,40,000/-, which by itself shows that the Bank did not act bona fidely. We, therefore, hold that the action taken by the Bank in selling out the vehicle and depriving the use of the same by the complainant amounts to deficiency in service and we give our finding on issue No. 3 in the negative and hold that their action was not warranted. Issue No. 4 : The complainants have claimed the original cost as per the invoice of the Tata Sumo at Rs. 4,45,107/-. This vehicle was delivered to the complainant on 10th December, 1996 and has been sold on 10.3.1999, which means the vehicle was used by the complainant for about 2 years and and 3 months. It is necessary to allow the necessary depreciation in the cost of the vehicle and, therefore, we think it proper and reasonable if the cost of the vehicle Tata Sumo is fixed at Rs. 3 lakhs. The complainant has further requested the Commission to award the compensation of Rs. 2,50,000/- on account of business loss, mental torture, agony and expenses incurred. In this connection, the complainant has not produced any convincing evidence regarding the loss in business. However, there is a lot of correspondence regarding the delay in the delivery of Maruti 800 vehicle and abrupt sale of the Tata Sumo by the opposite party also must have caused them a lot of inconvenience. As regards the delay in the delivery of the Maruti 800 vehicle we award Rs. 25,000/- and for the seizure of Tata Sumo abruptly and causing inconvenience in their routine business, we award an amount of Rs. 25,000/- by way of compensation. We deduct the amount of Rs. 18,838/- paid by the opposite party to the complainant. The next claim is on account of fixing of Air-conditioner at the cost of Rs. 34,000/- in the Tata Sumo vehicle. This is definitely an admissible claim, because in the original cost of the Tata Sumo as brought before us, it has not included the cost of the air-conditioner. We, therefore, allow this amount of Rs. 30,000/- on account of the Air-conditioner.

THE next claim is on account of financial loss of Rs. 55,499/- as per the complainant''s letter of 19.4.1997. This claim cannot be considered, because we have already granted a relief of Rs. 25,000/- for the delay in the delivery of the Maruti vehicle.

AFTER careful consideration of the respective contentions, documentary evidence, written notes of arguments and the authorities placed before us and the findings given by us on the four issues framed by us, we pass the following oreder : Order "The complaint is allowed. The opposite party Bank of America-N.T. and S.A. is directed to pay the following amounts with 18% interest from the date of filing of this complaint till realisation : (a) Rs. 2,81,162/- on account of cost of Tata Sumo vehicle. (b) Rs. 50,000/- on account of delay in delivery of Maruti 800 ACTG car and abrupt seizure and sale of Tata Sumo causing harassment, inconvenience and loss to the complainant. (c) Rs. 30,000/- on account of the Air-conditioner.

The opposite party is directed to pay this total amount of Rs. 3,61,162/- within a period of one month from the date of receipt of this order alongwith 18% interest from the date of filing of this complaint till the date of realization." Complaint allowed.