Consumer Wins Battle Against Finance Company Over Illegal Vehicle Repossession.


18 November 2024 Civil Revision >> Civil & Consumer Law   |   Consumer Law >> Civil & Consumer Law  

In a significant ruling upholding consumer rights, the National Consumer Disputes Redressal Commission in M/s. Ashok Leyland Finance Ltd., (Now Indusind Bank Limited) Through Its Authorised Officer, Maharashtra Vs Deepak Kushwaha has dismissed a revision petition filed by a finance company, thereby affirming the orders of the District Consumer Disputes Redressal Commission, Aligarh, and the State Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow. The case revolved around the allegedly illegal repossession of a Tata Indica vehicle and the subsequent damage it sustained while in the finance company's custody.

The initial complaint, CC/151/2004, was filed by a consumer with the Aligarh District Commission, alleging that the finance company had forcibly repossessed his vehicle without adhering to legal procedures and without providing any prior notice. The complainant sought compensation for the repossessed vehicle.


 

 

The District Commission, after examining the evidence presented, sided with the complainant. It noted that the finance company had admitted to taking possession of the vehicle on September 16, 2003, citing non-payment of three installments due in July, August, and September of the same year. However, the Commission found discrepancies and lack of credible evidence to support the finance company's claims.

Crucially, the District Commission highlighted a letter produced by the finance company, purportedly an intimation to the police about the intended repossession. While the company claimed this was merely an intimation, they failed to adequately explain the circumstances surrounding its issuance. Furthermore, the finance company alleged that the vehicle was being driven by the complainant's driver, Mr. Rajkumar, when it met with an accident. This was vehemently denied by the complainant, who stated he had no driver. The onus to prove this claim lay with the finance company, which the District Commission found they had "miserably failed" to do.

The District Commission also noted the finance company's claim that the complainant had filed a police complaint regarding the accident. However, the complainant denied this, alleging that the finance company had forged a letter to the police. The finance company again failed to provide convincing evidence to support their assertion.

A significant point of contention was the admitted fact that the vehicle met with an accident on September 16, 2003, the same day the finance company informed the police of their intention to repossess. It was also undisputed that the damaged vehicle remained in the finance company's possession after the accident. The District Commission reasoned that if the complainant had damaged the vehicle, the police would not have released it into the finance company's custody. Moreover, despite the alleged default in installments, the finance company had not issued any prior notice or taken any legal action for recovery.

Based on these observations, the District Commission concluded that the vehicle was taken into possession by the finance company on September 16, 2003, and was damaged while in their custody. Consequently, the complaint was allowed, and the finance company was directed to pay the complainant Rs. 2,00,000/- as compensation for the vehicle, Rs. 14,500/- as margin money, along with interest at 6% per annum from June 10, 2003, until the date of actual payment, and Rs. 1,000/- towards litigation costs.

Aggrieved by this order, the finance company filed an appeal before the State Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow. However, the State Commission upheld the findings of the District Commission, concurring that there was no evidence to support the claim that Mr. Rajkumar was the complainant's driver. It also questioned why the finance company took custody of the damaged vehicle without proper formalities or police permission. The State Commission agreed with the District Forum's conclusion that the accident likely occurred while the vehicle was in the finance company's possession. It further cited the Supreme Court's judgment in ICICI Bank Ltd. v. Prakash Kaur (2007) 2 SCC 711 to support its decision. The State Commission concluded that the finance company had engaged in deficiency in service and unfair trade practices by forcibly taking the vehicle without notice and allowing it to be damaged in their custody.

Undeterred, the finance company filed the present revision petition before the National Consumer Disputes Redressal Commission. The petitioner argued that the repossession was justified due to the complainant's default in payments and that the vehicle had met with an accident while being driven by the complainant's driver.

However, the National Commission found no merit in the revision petition. It reiterated that the onus was on the petitioner to prove their case, which they had failed to do. The Commission emphasized the limited scope of a revision petition, citing the Supreme Court's rulings in Rubi (Chandra) Dutta Vs. United India Insurance Company, (2011) 11 SCC 269, Sunil Kumar Maity v. SBI, 2022 SCC OnLine SC 77, and Rajiv Shukla vs. Gold Rush Sales and Services Ltd. and Ors., (2022) 9 SCC 31. These judgments underscore that revisional jurisdiction is not to be exercised as a first appellate jurisdiction, and the findings of fact recorded by the lower fora should not be interfered with unless there is evidence of perversity or illegality.

Finding no such perversity or illegality in the concurrent findings of the District and State Commissions, the National Commission dismissed the revision petition. This judgment serves as a strong reminder to finance companies to adhere strictly to legal procedures when repossessing vehicles and to be responsible for the safety and condition of assets in their custody. It also reinforces the commitment of consumer fora to protect the rights of consumers against unfair practices.