IMPORTANT POINT
(1) Consumer – A self-employed individual purchasing a commercial vehicle (like a goods carrier/lorry) for the purpose of earning a livelihood is a “Consumer” under the Act. The mere generation of profit does not exclude them from the Act’s purview unless they are engaged in a large-scale transport business.
(2) Seizure during Moratorium and Waiver of Interest – It is a deficiency in service to seize a hypothecated vehicle by strictly calculating defaults during a global pandemic (COVID-19), while ignoring the RBI moratorium benefits. If a financier unjustly retains a seized vehicle for a prolonged period, they cannot charge interest for that specific duration, and they must return the vehicle in a road-worthy condition with a valid fitness certificate.

JUDGMENT :

Meena Ramanathan, Member, Non-Judicial.—These appeals are filed under Section 41 of Consumer Protection Act, 2019, against the order dated 30.11.2022 passed in CC.No.02 of 2022 on the file of District Consumer Commission, Khammam. The Opposite Parties filed FA.No.132/2023 and the Complainant filed FA.No.334/2023. As both these appeals arise out of the same order, they are being disposed of by this common order.

2. For the sake of convenience, the parties are described as arrayed in the complaint.

3. Briefly stated, the facts are that - the Complainant purchased Tata Motors Make goods carrying vehicle bearing registration No.TS 04 UC 5690 under hypothecation agreement with Indusind Bank Limited, Kothagudem on 31.03.2018 and on the same day, the Indusind Bank Ltd., sanctioned the loan in favour of the Complainant. The cost of the vehicle is Rs.29,85,000/- and the Complainant paid a sum of Rs.2,50,000/- towards down payment and remaining amount was loan to an extent of Rs.27,35,000/-. As per the agreement, the outstanding loan amount with interest was Rs.36,13,400/- which was divided into 58 EMIs to an extent of Rs.62,300/- per month and the EMI was started from 05.06.2018. The said vehicle was used for transportation of sand and hire transportation of goods to various places. It is submitted that the Complainant paid the EMIs periodically without any default since the date of hypothecation agreement. Since March, 2020, the Complainant could not pay the EMIs due to global pandemic Covid-19 as a result of which his business was hit severally.

4. It is submitted that on 21.03.2021, a group of bank recovery agents had publicly taken the hypothecated vehicle in their custody at around 8.00 P.M. against the consent of the Complainant and under protest. The vehicle was seized by the bank officials though the Complainant tried to pay the EMIs as and when he could. The Opposite Parties issued a final notice on 01.04.2021 demanding Rs.24,84,476/- towards settlement failing which the vehicle will be disposed of. This is highly arbitrary and unreasonable.

5. It is further submitted that on 08.07.2021, the Opposite Parties gave an advertisement in the newspaper to auction the said vehicle. The Complainant requested for restructuring of monthly instalments for release of the vehicle spontaneously as he was ready for settlement and willing to pay reasonable amount immediately. Hence, the complaint with a prayer to direct the Opposite Parties to release the vehicle and not to proceed for auction sale of the said vehicle.

6. The Opposite Parties No.1 to 4 filed their written version denying the allegations made by the Complainants. It is stated that the Complainant does not come under the definition of “Consumer” as he availed the vehicle for commercial purpose. The contractual terms between the Complainant and the Opposite Parties are purely commercial in nature, hence there is no jurisdiction to entertain the complaint.

7. It is admitted that the Complainant approached Opposite Party No.1 for purchase of Tata 3118 - 2018 model vehicle bearing registration No.TS04UC5690 and the said vehicle was purchased for commercial purpose on loan advanced by the Opposite Party No.1. As per the definition of “Consumer” under section 2(d) of the Consumer Protection Act, Complainant is not a consumer. Further, the Complainant failed to pay the installments promptly, instead he paid the installments at his whims and fancies without adhering to the loan repayment schedule. The Opposite Parties issued overdue reminders to the Complainant on different dates.

8. It is further stated that the Complainant obtained loan facility from Opposite Party No.1 agreeing to pay the same in 73 installments, but the Complainant failed to repay the installments, as a result, the loan account fell in NPA. The Complainant failed to follow the terms and conditions of the loan agreement. Right from the first installment, the Complainant was a defaulter. There is a sheer negligenc