MUTHOOT LEASING & FINANCE LTD Vs. KARNAIL SINGH

JUDGEMENT

(1.) This first appeal has been filed by Muthoot Leasing & Finance Ltd., Appellant herein and Opposite Party before the Delhi State Consumer Disputes Redressal Commission (hereinafter referred to as the State Commission) being aggrieved by the order of that Commission which had allowed the complaint of Karnail Singh, Respondent herein and Complainant before the State Commission.

(2.) In his complaint before the State Commission, Respondent had contended that in order to enable him to purchase Tata LPT Truck he had taken a loan of Rs.4,25,000/- from the Appellant, which was engaged in the business of financing. He spent approximately Rs.1,00,000/- towards fabrication charges for the body of the vehicle as per the Appellant. The loan amount was to be repaid by him in 36 Equated Monthly Installments (EMIs) of Rs.17,295/- each. Respondent paid 14 EMIs out of 20 that had become due till October, 1998 and he could not repay the remaining EMIs in time as he had suffered some major financial losses due to the vehicle meeting with an accident in July, 1997 and thereafter getting stuck in floodwater for a period of about two months. Since Appellant had threatened that they would forcibly repossess the truck, Respondent himself handed it over to them on 25.08.1998 on the assurance from the Appellant that they would release it after receiving the arrears of EMIs. Respondent, therefore, made arrangements for payment of the remaining amounts but when he approached the Appellant to make the payment with a request to release the truck, Appellant refused to do so, because of which the Respondent was constrained to file a civil suit for injunction. Appellant informed the Civil Court that the truck had already been sold by them on 29.09.2008 for a meager amount of Rs.3,20,000/- whereas the vehicle was in very good condition and could have been sold in the open market for Rs.5,50,000/-. Being aggrieved by the action of the Appellant in selling the truck in this illegal, unjustified and arbitrary manner and without waiting for the Respondent to pay the arrears within the time granted, Respondent filed a complaint before the State Commission and requested that Appellant be directed to pay him a sum of Rs.5,80,000/- as compensation with interest @ 18% per annum as also costs and other reliefs as deemed proper.

(3.) Appellant on being served filed a written rejoinder denying that there was any deficiency in service and unfair trade practice on its part. It was admitted that Respondent had taken a loan of Rs.4,25,000/- for purchase of a Truck and another sum of Rs.1,97,620/- was payable towards financial charges, making the total loan amount Rs.6,22,620/-, which was agreed to be repaid by Respondent in 36 EMIs of Rs.17,295/- commencing from 25.02.1997. However, Respondent failed to keep sufficient balance in his account and some of the cheques were dishonoured right from the beginning. Further, after paying 14 EMIs, Respondent defaulted in paying the remaining EMIs despite written letters and reminders. Therefore, Appellant was well within its right to repossess the vehicle after issuing written letters and reminders informing the Respondent of their intent in terms of Clause-9 of the Hire Purchase Agreement dated 25.02.1997 entered into between the parties. After receiving these letters, Respondent himself, as admitted by him, surrendered the vehicle to the Appellant. Since Respondent still was not ready to pay the arrears, Appellant was constrained to sell the vehicle in open market after informing the Respondent about the intention to do so and giving him another opportunity to settle the claim by paying the full and final amount due. However, after he failed to do so, vehicle was sold for Rs.3,20,000/- . It was denied that there was under-valuation of the vehicle as contended by Respondent and this was the price offered in the market taking into account the depreciation as also the fact that the vehicle had been involved in a major accident.