Repossession of vehicles financed by non-banking finance companies must adhere to the agreement and should not involve the use of force, as established by legal precedents and the circular of the Reserve Bank of India.

Dr. P.D. Shenoy, Member: This is another case of forcible repossession of the vehicle by a non-banking finance company without following the rule of law.

2. This revision is filed against the concurrent judgments and orders of the Fora below. The facts of the case, in brief, are that the truck bearing registration No. HR-4 7 -8469 was purchased by the complainant Sri Vijay Kumar after 'availing financial assistance from the opposite parties. He has deposited the instalments towards repayment of the loan and the last instalment was deposited by him during May, 2007. On 2.7.2007 when the truck was being plied in the area of Balwara (Jaipur), some musclemen of the opposite parties forcibly took possession of the vehicle. Subsequently when the complainant visited the office of the opposite parties, they refused to return the vehicle on the ground that there were irregularities in repayment of the loan amount. Therefore, a complaint was filed before the District Forum stating that forcible repossession of the vehicle caused financial loss to the tune of Rs. 1,25,000. He has also claimed towards mental agony and other expenses. In total he claimed Rs. 2 lakh along with 12% interest to be paid to him apart from delivery of the vehicle in question. This case was contested by the opposite parties. It was pleaded that the complainant was informed before taking repossession of the vehicle oh 6.7.2007, which was as per terms and conditions of the agreement and the legal notice was also issued on the same day and the complainant was asked to pay outstanding amount within seven days. Therefore, .the vehicle was auctioned on 31.7.2007. The District Forum after hearing the parties allowed the complaint and directed the opposite parties as follows :

"Respondents are directed to deliver the vehicle in question to the com-plainant within a period of 30 days from the receipt of the copy of this order and re-schedule the installments. Depreciation, on account of wear and tear after assessment by a Surveyor, be adjusted in the loan account. The respondents shall not be entitled to interest for the period, vehicle remained in their possession. Complainant after the demise of his father (who was the sole bread earner of the family) has been virtually rendered unemployed by the act of the respondents. Thus, he is entitled to damage to the tune of Rs.10,000 and litigation expenses to the tune• of Rs. 2,000."

3. Aggrieved by the order of the District Forum, the opposite parties filed appeal before the State Commission with the delay of 112 days along with an application for condonation of delay. The application for condonation of delay was rejected by the State Commission quoting the judgment of the Hontile Apex Court in Bikram Doss v. Financial Commissioner & Ors., AIR 197'l(SC) 1221. The State Commission observed that musclemen of the opposite parties had forcibly taken the possession of the vehicle by taking law in their hands. Therefore, the appeal was dismissed in limine both on the ground of limitation as well as on merits.

4. Hence this revision.

5. Learned Counsel for the petitioner vehemently argued that repossession of the vehicle was taken as per terms and conditions of the agreement as the finance agreement. We hasten to point out in this connection that the agreement does not say that the petitioners can forcibly repossess the vehicle.

6. At this juncture, learned Counsel for the petitioner quoted the circular of the Reserve Bank of India dated 24th April, 2009 which clarifies the position regarding repossession of the vehicle financed by the NBFCs, which reads as follows :

"Please refer to ONBS (PO) CC No. 80/03.10.042/2005-06 dated September 28, 2006, advising NBFCs to put in place a Fair Practices Code with the approval of their Boards, which, inter alia, covers recovery of loans.

In this connection; it is further clarified that, with particular reference to queries raised regarding repossession of vehicles, NBFCs must have a built in re-po