BY SMT. SUNITA CHANNABASAPPA BAGEWADI, MEMBER
1. The appellant/Opposite Party has preferred this appeal being aggrieved by the Order dt.03.09.2011 passed in CC.No.232/2010 on the file of District Consumer Disputes Redressal Forum, Kolar.
2. We shall refer to the parties as per the ranking before the District Forum.
3. The facts leading to the appeal are as hereunder; It is the case of the complainant that she is the owner of tractor and trailer bearing registration No. KA-07-T-7375-76 purchased in the year 2006 by raising loan from the appellant to the tune of Rs.3,00,000/- for the tractor and Rs.75,000/- for the trailer and agreed to repay the same in fixed 16 monthly installments of Rs.27,375/- per month for the tractor and Rs.6,900/- per month for the trailer. In view of the failure of loan and due to loss in agriculture, she could not pay the installments. The complainant further submitted that without issuing notice to the complainant, the Opposite Party has Appeal No. 3296/2011 forcibly taken the tractor and trailer on 02.11.2010 through their Commission and clearing agents M/s Balaji Clearing Private Limited and in this regard notice was issued on 08.11.2010 by the Opposite Party threatening to sell the seized tractor and trailer. Therefore, the complaint was lodged by the complainant seeking damages and other reliefs.
4. The Opposite Party appeared through his counsel and filed version denying the allegations made by the complainant and contended that the complainant is not a Consumer and the complainant was not regularly paying the installments and she is liable to pay a sum of Rs.1,13,325/- and also penal interest of Rs.73,809/-. Out of which, a sum of Rs.1,700/- was paid towards finance charges and regarding trailer also and the complainant is liable to pay a sum of Rs.20,600/- and penal interest of Rs.12,235/- as per the terms and conditions of the loan agreement. The Opposite Party further contended that in pursuance to the surrender of possession of vehicle, the Opposite Party is liable to sell the same and the tractor and trailer is still in the possession of the Appeal No. 3296/2011 Opposite Party. Further contended that the tenure of repayment of loan was expired on 15.08.2010 and prayed to dismiss the complaint.
5. After trial, the District Commission allowed the complaint and directed the Opposite Party to return the tractor and trailer to the complainant and also to pay the damages and compensation at the rate of Rs.17,100/- per month from 02.11.2020, till the delivery of the vehicle to the complainant and also directed to recover the remaining amount at the same rate of the EMI as agreed between the parties and also declare that the Opposite Party is not entitled for Rs.72,109/- as penal interest for tractor and Rs.12,235/- for trailer.
6. Aggrieved by the said order, the appellant/ Opposite Party is in appeal. Heard advocate for respondent. Inspite of sufficient opportunity given to the appellant to argue the matter, the appellant did not argue the matter. Hence, the arguments of the appellant is taken as nil.
7. After perusal of the appeal memo and the order passed by the District Commission, we noticed that it is an Appeal No. 3296/2011 undisputed fact that the respondent/complainant has entered into an agreement with the appellant and purchased a tractor with trailer bearing registration No.KA-07 T-7375-76 in the year 2006 by raising a loan from the appellant to the tune of Rs.3,00,000/- for tractor and Rs.75,000/- for trailer and agreed to repay the same in a fixed 16 monthly installments of Rs.27,375/- for tractor and Rs.6,900/- for trailer per month. The respondent has also spent a sum of Rs.25,000/- for registration of the said vehicle in his favour by hypothecating with appellant. Due to loss in agriculture, the respondent could not pay the installments. In such circumstances, the appellant seized the vehicle without prior notice to the respondent on 02.11.2010 and in this regard notice was issued by the appellant on 08.11.2010 threatening to sell the seized vehicle. However, the notice is disputed by the respondent because after taking the possession of the vehicle, the appellant issued a notice to the respondent. Considering the judgement passed by the District Commission, it has held that the agreement entered into between the appellant and respondent is hypothecation in Appeal No. 3296/2011 nature. The appellant forcibly cannot repossess the vehicle though he can enforce the security through the Court and the financier/appellant should follow the procedure recognized by Law to take possession of vehicle where the loan borrower had defaulter in the payment of installments. Even though in the terms and conditions of hypothecation loan agreement that the appellant will be entitled to seize the vehicle, that cannot be seized directly. The hypothecation is done as a form of collateral valuable item against a loan that you take. You can either hypothecate the item that you already own on an item that still has to come into your possession. In this case, the ownership of the vehicle (tractor & trailer) is with respondent/ complainant and the respondent spent Rs.25,001/- for registration of the vehicle in her name and the same was hypothecated to the appellant for loan. The District Commission perused the agreement that the heading of the agreement itself shows that it was an hypothecation loan agreement and not hire purchased agreement. Hence, the conclusion of the District Commission that the agreement Appeal No. 3296/2011 between the appellant and respondent is an hypothecation loan agreement is true and believable. Moreover, the appellant could not place any document on record to substantiate that before repossession, any notice was served on respondent regarding the possession of the vehicle. Moreover, it is an undisputed fact that on account of financial problem, the respondent could not pay the installments. However, the respondent had been to the appellant and paid Rs. 20,000/- to release the vehicle, but, the appellant insisted to pay full amount. Hence, in our opinion, the finding of the District Commission that the seizure of vehicle is illegal is just and proper. Now the question is whether the financier/appellant directed to return the tractor with trailer including damages only because of the appellant took the possession of vehicle without a notice prior to the seizure is justified? In our opinion the answer is NO. We found that there is no any sentence mentioned in the appeal that still the tractor and trailer are with the appellant. Even though there is no any document produced by the appellant/ Opposite Party before this Commission means the vehicle is not Appeal No. 3296/2011 with the appellant and the appellant sold it without giving notice to the respondent/complainant, then, when it was sold and amount for which the vehicle had been sold; whether such amount was more or less than the amount due from the respondents to the appellant. Observing the silence on the part of the appellant is not disclosing anything about the sale was conducted that the appellant had sold the vehicle without the knowledge of the respondent without notice and without disclosing the details of sale and keep mum up to 10 years from the District Commission order and dragging the matter unnecessarily amounts to deficiency in service on the part of the appellant. Hence, the District Commission constituted under the Consumer Protection Act, 2019 as quasi judicial body to observe the principles of natural justice and awarded relief of specific nature and to award whatever appropriate and compensation to the consumers. However, the respondent used the vehicle about 4 years from the date of purchase and respondent admittedly a chronic defaulter, hence, in our opinion the respondent is entitled only for compensation based Appeal No. 3296/2011 on assessment of loss caused to respondent by the appellant forcibly seized the vehicle without prior notice. Moreover, the appellant is not disclosed the details about the tractor with trailer. Hence, there is no question of recovery of EMIs as agreed between the parties which were not paid by the respondent. Hence, the following; ORDER The appeal is allowed in part. The order dt.03.09.2011 passed in CC.No.232/2010 on the file of District Consumer Disputes Redressal Commission, Kolar is hereby set aside and modified as under; The complaint is allowed in part. The Opposite Party is directed to pay a compensation of Rs.1,00,000/- to the complainant with interest at 6% p.a. from the date of this Order, till realization and a sum of Rs.25,000/- towards cost of this litigation. The Opposite Party is granted 60 days time from the date of receipt of the copy of this Order to comply the abovesaid order. The amount in deposit shall be transmitted to the District Commission for needful action. Sd/- Sd/- MEMBER JUDICIAL MEMBER KCS*