DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BOLANGIR
Present:-
1. Sri. D.K.Tripathy, President.
2. Smt. K.Rath, Member.
3. Sri. N.P.Joshi, Member.
Dated, Bolangir the 23rd day of December 2009.
C.D.C.No.35 of 2009
Lokanath Behera son of late Krushna Behera.
Resident of village-Sibtala P.O: Sibtala,
Via- Chudapali, Dist- Bolangir.
Complainant
-Versus-
Branch Manager, ICICI Bank, Ainthapali,
P.O: Bhudharaja, Dist- Sambalpur.
Opp. Party
23.12.2009 ORDER
Sri. D.K. Tripathy, President
1. This is a complaint filed by one Lokanath Behera, against the Branch Manager, I.C.I.C.I. Bank, for redelivery of the two wheeler vide Regd. No. OR-03D-5816, compensation of Rs 10,000/-, towards loss of business, Rs 5,000/- for mental agony along with cost of the litigation.
2. Complainant’s case in short is that in persuasion to the approach of the agent of the O.P. Bank, complainant purchased a C.D. Deluxe Motor cycle of Hero Honda, Company on execution of a loan cum hypothecation agreement vide no. LTBLN-00010076887 and other documents in favour of the O.P financier and availed a loan of Rs 33,500/-. As per the terms of the agreement the two wheeler was hypothecated as a security for repayment of the loan and such security is enforceable by the O.P. in case of any default or violation of condition by the complainant. Further case of the complainant is that he has paid Rs 12,000/- as down payment, Rs 3,800/- for registration, insurance and Rs 1,500/- towards Saree guard at the time of delving the bike. He has also agreed to pay Rs 1,639/- P.M. as installment along with interest to O.P. The complainant has given 20 numbers of blank post dated cheque of United bank of India, Bolangir, in favour of the O.P at the time of the agreement for the repayment of loan. The complainant has already paid Rs 14,741/- and Rs 3,278/- as installment till October 2008. But surprisingly, he received a notice from the Advocate of the O.P demanding a sum of Rs 14,751/-. Although he is ready and willing to pay the installment, but on 10.2.2009 while he along with his son Susanta were returning at evening to their village, some strangers claiming to be agents of the O.P. forcibly took away the motor cycle from him, through their hired goondas which amounts to robbery. The complainant could not know where they kept the motor cycle. However, he received a notice on 16.3.2009, demanding a sum of Rs 30,711/- and termination of the agreement. Again the O.P. issued a notice on 18.3.2009 stating that due to default of installment, the motor cycle was sold at Rs 21,450/-, the money was adjusted to the lone account of complainant, leaving an arrear of Rs 9,221/- to be paid by the complainant to the O.P. In case the complainant again defaulter in paying the same, the O.P will use the cheques for encashment and in case of insufficient balance then, he will take legal action against the complainant for bouncing the cheque. In view of such arbitrary and illegal act in snatching away the vehicle through hired goondas and to pay the undue arrears, the complainant being a contractor lost his business and suffered from mental agony for which he sought for the aforesaid reliefs.
3. O.P appeared and filed his version, wherein he has admitted the loan transaction, taking possession of the vehicle. However, he has formally denied recovery of vehicle by force and stated that the possession of the vehicle was retained under the procedure under law and as per terms and conditions of the agreement. Although the O.P has formally denied regarding payment of money by complainant and alleged that the complainant is a chronic defaulter but the Xerox copy of statement of account filed by the O.P shows that the complainant has paid a sum of Rs 32,780/- out of which the principal amount is Rs 26,944/- and rest amount towards the interest. In short, the O.P submits that as the complainant is a chronic defaulter and violated the terms and conditions of the agreement, possession of the two wheeler was taken by the O.P under due process of law, therefore the case may be dismissed.
4. On perusal of the pleadings of the parties it is found that the dispute between the parties rest in a narrow compass i.e whether taking possession of the vehicle by the O.P Bank, was illegal or not even in case of default by the complainant. O.P admits that he took possession of vehicle from the complainant. Once the possession was transferred from the complainant to the O.P which the O.P alleged to be under proper procedure the complainant alleged the same to be under force. In view of the possession of the two wheeler shifting from the complaint to the O.P, the burden lies on the O.P to prove as to how he came into possession of the two wheeler which was in possession of the complainant, at the absence of which the plea of the O.P that he took it legally is not true. O.P failed in his duty to prove the same. So it is concluded that while complainant was going with his son at evening, O.P took the motor cycle forcibly with the help of goondas.
5. Therefore the question arises whether the financier can use force by engaging hired goondas to recover the loan. In the case of standard Chartered Bank-versus-H.S.Saini, 2009(@) CPR 283 NC , the Hon’ble Presiding Member of the National Commission has observed that bank taking possession of the vehicle by force when consumer committed default in payment of loan installment, constitute deficiency in service.
6. In case of Mahindra and Mahindra Financial Services Ltd. And others-versus-Nashib Chand and another, 2009(4) CPR 388, the Honorable Member of the State Commission, Shimla, has observed:-
“Merely because there was default in repayment of installments does not operate as a license in favour of the appellants to commit such acts which are either contrary to law or are not warranted by law”.
7. Quoting the view of Punjab and Harayana High Court, reported in AIR 2003 AT page-98, Tarun Bhargava-versus-State of Haryana and another, the State Commission (Supra 388) has observed:-
“Rights of creditor like the appellant before us, were held akin to those hypothecate who cannot be allowed to take possession of security without intervention of court. Clause authorizing a financier like appellants, in the appeal before us to repossess the vehicle in case of default was held to be void and the financier was held to be liable for being criminally prosecuted”.
8. The Orissa State Commission in case of Birabhadra Sahoo-versus-Managing Director, Shriram City Union Financial Ltd. and another, 2004 CPJ 306, (388 Supra) has held that in such a situation, this was a case of clear cut unfair trade practice on the part of the financier”.
9. That National Commission in case of Shriram Transport Finance Co. Ltd.-versus-Surekha Khemnar, 2006(I) CLT 379, has observed while dealing with taking ever of the hypothecated vehicle in case of hire purchase agreement, as has been held by us, has held that the hypothecate could not take possession of the security without intervention of the court and direction given regarding release of vehicle to the complainant by the State Commission and to pay the monthly installments to the Bank were upheld.
10. The view of the Appex Court in a land mark judgment (where this O.P was the complainant) ICICI Bank Ltd-versus-Prakash Kaur and others, 2007 (2) SCC 771, quoted in Mahindra and Mahindra Financial Services Ltd. and others-versus-Nashib Chand and another, has observed “Before we pert with this matter we wish to make it clear that we don’t appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents who are musclemen, it deprecated and needs to be discouraged. The Bank should resort to procedure recognized by law to take possession of vehicles in cases where the borrower may have committed default in payment of the installments, instead of taking resort to strong arm tactics”.
11. In view of the pronouncement of the Hon’ble Supreme Court, National Commission and other State Commissions, above, applying the aforesaid ratios to this case, taking possession of the vehicle from complainant by O.P even on violating condition of agreement and default in payment of loan is a clear deficiency in service.
12. So, question arises if at all complainant volunteered or handed ever the two wheeler to the O.P. as O.P says that he took it legally. Such defense can be safely rejected because by paying such an amount more than the actual price, the complainant would not have volunteered to give it, rather he could not resist the force utilized by the O.P. Even in that case the O.P would have obtained writing from the complainant to prove his beneficences.
13. Both the parties have not clearly sated about the installments paid by the complainant or received by the O.P in their pleadings, but on a plain reading of statement of account filed by O.P shows that the complainant has paid Rs 32,780/- as against the loan amount of Rs 33,500/-. In addition to Rs 32,780/- he has paid down payment of Rs 12,000/-, Rs 3,800/- towards registration, insurance papers and Rs 1,500/- towards saree guard which comes to (total expenditure by complainant) Rs 50,080/- for a motor cycle, though its price was (Rs 32,500/- plus Rs 12,000/-) Rs 44,500/-. The matter did not rest there. That after payment of such amount, the O.P took away the vehicle forcibly when hardly the complainant had used the vehicle for loss than two years. Then also O.P. did not inform the complainant, where he kept the vehicle nor intimated him to take part in the auction sale, if any rather sold it in a concern manner at a price of Rs 21,450/-, adjusted the money and again demanded Rs 9,221/- to the complainant and in case of default of the same, threatened him for legal consequences for encasing the cheques and in case of bouncing, resorting to legal action against complainant. Hence the total gain of the O.P reach to Rs79,251/- but the complainant lost the vehicle by repossession of the same on the way by the O.P by force with the goondas and thereby the complainant was not only insulted but also sustained loss and inconvenience and suffer from mental agony.
14. In this regard view of the Appex court in case of ICICI Bank Ltd.-versus-Prakash Kaur and others, AIR 2007 SC1349, is that “A man’s self-respect statute in society are all 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 Hon’ble Supreme Court has further observed:-
“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 signified 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”.
15. Applying the aforesaid dictum of the Appex Court, other verdicts of the National Commission and State Commissions it is not that ICICI Bank is always resorting to such practice though it has (this bank-O.P.) reprimanded by the highest Court of the country in the Case cited above, as back in the year 2007, (ICICI Bank vs. Prakas Kaur vs. Supra). This Bank has wider network and financing the poor people in India and taking recourse to such type for recovery of loan, which is not only illegal but also an unfair trade practice. It is not refraining from using such tactic time and again. Hence it is concluded that despite the default, the O.P has no authority to recourse to such illegal mode of recovery by using force as above and as it has done in this case, as seen it is a clean case of deficiency and service which the O.P is to compensate.
Hence ordered:
The O.P is directed to replace the two wheeler or to pay the present market value of the same of the same nature and to pay compensation of Rs 15,000/- towards mental agony and loss of business and Rs 1,000/- towards cost of litigations and refund all the post dated cheques. The O.P shall comply the above order within one month of receipt of this order, failing which the complainant to take shelter for execution of the order under process of law.
I Agree I Agree
Sd/- N.P. Joshi Sd/-K. Rath Sd/-D. K Tripathy
MEMBER MEMBER PRESIDENT
Tags: ICICI Bank