MAGMA FINCORP LTD Vs. TIKESWAR BARIK

JUDGEMENT

(1.) The complainant/respondent purchased a Tipper and got the same financed from petitioner company to the extent of Rs.8,25,519/-, contributing the balance amount of Rs.1,03,142/- from his own pocket as down payment. The said loan was payable in equated monthly instalments comprising first instalment of Rs.21,551/- and the remaining instalments of Rs.23,700/-. The complainant paid a total sum of Rs.6,26,450/- to the petitioner company. Since there was some default in regular payment of the equated monthly instalments, the vehicle was repossessed by the petitioner company on 9.11.2009, when it was on the road loaded with iron ore. The vehicle was repossessed through an agency appointed by the petitioner company for such purpose. The vehicle was later sold by the petitioner company on 1.12.2009 for a consideration of Rs.3,10,000/-. According to the petitioner company despite receiving Rs.6,26,450/- from complainant by way of equated monthly instalments and selling the vehicle for Rs.3,10,000/-, there was still an outstanding balance of Rs.7,44,160/- against the complainant, though the total finance granted by the petitioner company was only Rs.8,25,519/-, the down payment of Rs.1,03,142/- having been made by the complainant. Being aggrieved from the aforesaid acts of petitioner company, the complainant approached the concerned District Forum seeking the following reliefs;

(2.) The complaint was registered by the petitioner company primarily on the ground that the complainant was in default to the extent of Rs.1,65,400/- towards rental besides Delayed Payment Charges (DPC) of Rs.33,139/-. It was also pointed out in reply that an award had already been passed against the complainant by an Arbitrator appointed in terms of the arbitration agreement between the parties.

(3.) The District Forum noted that the complainant having already paid a sum of Rs.6,26,450/- out of the financed amount of Rs.8,25,519/-, there was an outstanding principal amount of Rs.1,29,801/- as in November, 2009. It was further noticed by the District Forum that a vehicle which was acquired worth for more than Rs.10,00,000/- had been sold by the petitioner company for an amount of Rs.3,10,000/- in a hasty manner. The District Forum did not find any justification for adding the delay payment charges to the interest debited in the account of the complainant, considering that a flat rate of interest had been charged. It was also noticed that the vehicle was repossessed without any order from a Competent Court. Taking the value of the vehicle at the time of its re-sale to be Rs.8,00,000/- and considering that the outstanding EMIs at the time of repossession of the vehicle came to Rs.1,29,801/- whereas subsequent EMIs amounted to Rs.3,55,500/- thereby making a total sum of Rs.4,85,301/-, the District Forum awarded a sum of Rs.3,00,000/- as compensation to the complainant being the difference between the estimated value of the vehicle at the time of its repossession and the amount which was found payable by the complainant including the EMIs which were outstanding at that time. A sum of Rs.20,000/- was also awarded as compensation on account of harassment and mental agony of the complainant, whereas another sum of Rs.5,000/- was awarded towards the cost of litigation.