The central legal point established in the judgment is that banks or financial companies are entitled to recover only defaulted installments on the date of possession of the vehicle and refund the cost contributed by the consumer by way of depreciated value of 10% per year, preventing them from retaining the amount contributed by the consumer and recovering unpaid installments after repossessing and selling the vehicle at an arbitrary price.

Mr. Justice J.D. Kapoor, President—Complainant is a Public Limited Company who purchased a car after taking a loan from O.P. No. 1. The present complaint has been filed as the said car was forcibly taken by O.P. No. 2 and was not returned to the complainant.

2. Case of the complainant, in brief, is that on or about 5th of (sic.) the complainant applied a loan for the purchase of a Premier Padmini Car. The O.Ps. advanced a loan of Rs. 97,243 to be paid by the complainant in 60 equal monthly instalments of Rs. 2,525 each and the first instalment for the same was to fall due on 1st of November, 1990. The complainant regularly paid 46 instalments failing due till August, 1994 by 24th August, 1994. The O.P. No. 2 with the help of some unauthorised local police officer in police uniform physically snatched the car keys from the said Driver and seized the said vehicle No. DL-3CB-0175. O.P. No. 2 fled along with the said vehicle to an unknown destination. That the said vehicle was allegedly seized for the non-payment of an amount of Rs. 82,318.63p. which inter alia, included Rs. 50,467.10p. on account of the principal besides other charges. The said amount of Rs. 50,467.10 p. included the unpaid and outstanding instalments which have yet to fall due being 14 insalments of Rs. 2,525 each. The complainant had already paid on amount of Rs. 1,16,150 on account of the said instalments. Seven cheques issued by the complainant on the Bareilly Corporation Bank Ltd. which were duly encashed to the credit of the O.P. No. 1 did not find place in the statement of the account as was prepared by the O.P. No. 1. Similarly, the complainant had issued a cheque No. 805835 dated 5th of October, 1993 for Rs. 11,850 drawn on State Bank of India, Patiala Faridabad which was duly paid to the O.P. No. 1. The complainant called upon the O.Ps. to return the said vehicle.

3. Further besides a number of documents which were lying in the said car, there was an amount of Rs. 1,800 in cash lying in the said vehicle at the time when the same was forcibly taken away by the O.Ps. and as such, the complainant is entitled to the refund of the said amount of Rs. 5.00 lacs also along with the car.

4. As against this, the version of the O.P. is that the complainant had defaulted in making the payments of the due equated monthly instalments and, therefore, they were well within their contractual right to repossess the vehicles. As per the said agreement, the complainant agreed to strictly adhere to the repayment schedule. Under the agreement, the vehicles stand hypothecated in favour of the Bank and endorsement of the same was made on the registration certificate. The complainant had specifically authorised the Bank or any of its authorised persons to repossess the vehicle in case of default by the borrower in making timely payments.

5. That the complainant paid 42 instalments till April, 1994 and thereafter defaulted, though repeated requests were made to the complainant by telephone and by other means but of no avail. Thereafter a legal notice dated 3.6.1994 was sent to complainant and the complainant was directed to make payment, failing which the entire loan would be recalled and the vehicle would be repossessed in consonance with the terms of the agreement. It was further stated that in case the payments had been made, then they should get in touch with the authorised agency at the address mentioned in the legal notice. As the complainant did not make the payments and no intimation was received regarding the payments, therefore, on 24.8.1994 the vehicle was repossessed. O.P. denied that a sum of Rs. 1,800 was lying in cash in the car.

6. The respondent is willing to release the car subject to the payment of the balance outstanding amount of Rs. 81,957.55 (as on 14.12.1994). The statement of account annexed hereto as Annexure ‘A’.

7. Even if we accept the version of the O.P. that the complainant defaulted in making payments of instalments towards the loan, the vehicle in