IMPORTANT POINT
Repossessed vehicle cannot be sold without notice to owner.

J.M. Malik, Presiding Member—Sh. Ramdas Raghunath Patil, the complainant, purchased a Tractor for a total consideration of Rs.6,24,000/-. He availed a loan of Rs.5,00,000/- in the month of October, 2010. The said loan was to be repayable in 36 EMIs of Rs.19,650/- each. It was stipulated in the agreement that if there was any default on the part of the complainant, the OP could re-possess the said vehicle. The complainant paid four installments. Thereafter, there was default in repayment of monthly installments. The vehicle was forcibly taken into possession on 04.06.2011. According to the OP, due to over-sight the asset verification notice dated 15.06.2011 was issued by it, to the complainant. It was made clear in the notice that the loan had been recalled because of non-payment of installments and total outstanding amount of Rs.5,69,536/- was there in the account. He was asked to pay the amount, within seven days from the date of the notice, failing which, the petitioner/OP would sell the vehicle. In response to the said notice, the complainant sent a cheque in the name of A.U. Financiers (India) Pvt. Ltd., Branch, Kolhapur. However, it transpired that the name written in the cheque was incorrect. The petitioner could not encash the same. It also transpired that the address mentioned in the letter was incorrect. However, the postal receipt goes to show that the cheque was received by the petitioner on 08.09.2011, but the OP sold the vehicle on 09.09.2011, for a sum of Rs.5,71,500/-.

2. The District Forum allowed the complaint and passed the following orders :-

“1) The complaint application of the complainant is allowed with costs.

2) The Respondents No. 1 & 2 should jointly and severally pay an amount of Rs.18,000/- towards Insurance, Rs.79,800/- towards four EMIs, Rs.1,24,000/- towards margin money, total amount of Rs.2,21,800/- along with an interest @ 9% p.a., from 09.09.2011 on said amount.

3) The Respondents No. 1 & 2 should jointly and severally pay an amount of Rs.10,000/- towards mental harassment, Rs.25,000/- towards financial loss as complainant was deprived from using said vehicle.

4) The Respondents No. 1 & 2 should pay jointly and severally an amount of Rs.2,000/- towards expenses for the complaint.

5) The Respondents No. 1 & 2 have to comply with the said order, within 45 days from the date of the order”.

3. An appeal was preferred by the OP-1. The State Commission dismissed the appeal and further imposed costs of Rs.25,000/- upon it.

4. The respondent/complainant did not appear despite service. Proof of payment of litigation charges to the respondent has been placed on record by the petitioner.

5. We have heard the counsel for the petitioner. A bare perusal of the record clearly goes to show that the fora below are, too, harsh on the OPs. However, it must be borne in mind that the complainant has waddled out of the commitments made by him in the agreement. He is a defaulter. Consequently, the OP was well within its right to seize the vehicle without issuing any notice.

6. The Hon’ble Apex court in the case of Suryapal Singh v. Siddha Vinayak Motors and Anr., 2012(1) CPR 323 (SC) : II (2012) CPJ 8 (SC) held as under :

“Under the Hire Purchase Agreement, it is the financier who is the owner of the vehicle and the person who takes the loan retain the vehicle only as a bailee / trustee, therefore, taking possession of the vehicle on the ground of non-payment of instalment has always been upheld to be a legal right of the financier. This Court vide its judgment in Trilok Singh & Ors. v. Satya Deo Tripathi, AIR 1979 SC 850, has categorically held that under the Hire Purchase Agreement, the financier is real owner of the vehicle, therefore, there cannot be any allegation against him for having the possession of the vehicle. This view was again reiterated in K.A. Mathai @ Babu & Anr. v. Kora Bibbikutty & Anr., 1996 (7) SCC 212; Jagdish Chandra Nijhawan v. S.K. Saraf, IX (1998) SLT 477 = IV (1998) CCR 118 (SC) = 1999