A revision petition was preferred in the context of a lender bank's deficiency in service complaint against a borrower. The case of Indusind Bank Vs Ram Prakash was about a loan of Rs. 3.5 lakhs availed by the complainant for buying a second-hand truck costing Rs. 5 lakhs. Even though timely payments were made, the bank seized and auctioned the truck, prompting the borrower's legal grievance. Both the State Commission and the District Forum decided in favor of the complainant and against the bank, and the issue finally came to the superior forum for revision.
Facts of the Case:
The complainant took a loan of Rs. 3.5 lakhs from the bank to purchase a truck. The repayment was to be made in 36 monthly installments of Rs. 15,000 each. According to the complainant, he used to pay the installments regularly up to September 2012.
But on 4 September 2012, the bank sent a notice calling for Rs. 40,249 as overdue dues. The complainant deposited Rs. 20,000 on 23 September 2012 and requested a little time to settle the outstanding amount of Rs. 20,249. The complainant also asked for a loan account statement from the bank, but the bank never gave him the statement.
Even so, the bank repossessed the truck on 9 October 2012 without serving a further notice for the decreased outstanding. The truck, which was approximately Rs. 5 lakhs, was subsequently sold for merely Rs. 1.7 lakhs.
District Forum's Decision:
The District Forum ruled that there had been deficiency in service by the bank. It observed that upon receipt of part-payment, only Rs. 20,249 remained outstanding, and yet the vehicle was disposed of without any new notice. The Forum directed the bank to provide the loan account statement, directed the complainant to pay the delayed amount, directed the truck to be returned, and granted Rs. 15,000 as mental and financial loss compensation as well as Rs. 2,500 as litigation expenses.
Decision of State Commission:
Both the parties appealed. The bank contended that the truck was bought for business purposes, and hence the complainant was not a consumer. It further contended that repossession and sale were allowed under the loan agreement. On the contrary, the complainant contended that he had paid off the loan and there were no dues left.
The State Commission, concurring with the District Forum, blamed the actions of the bank. As the truck had already been sold, it amended the order. Rather than the return of the truck, it ordered the payment of the entire value of the vehicle (Rs. 5 lakhs) to the complainant with interest at the rate of 6% along with Rs. 15,000 as costs of litigation. The appeal of the complainant for further relief was rejected.
Revision Petition and Final Order:
The bank appealed the State Commission's order, stating that the award of Rs. 5 lakhs was excessive, especially where Rs. 2.11 lakhs was sought as due under the loan agreement. It asserted that repossession and sale were legally carried out.
The appellate forum thoroughly reviewed the case. It noted that:
- The repossession, in part payment of dues and without new notice, was wrongful.
- Selling a truck of Rs. 5 lakhs for just Rs. 1.7 lakhs was not fair.
- Failure to give the loan account statement was grave deficiency in service.
But it concurred with the bank that the State Commission's relief should be tempered. Accordingly, it altered the order to read that the bank should pay Rs. 5 lakhs, but subject to the deduction of the loan and interest due as on the date of lodging the complaint. The amount was to be paid along with 6% interest from the date of complaint, in addition to Rs. 15,000 as litigation charges.
Conclusion:
The last order balanced the rights of the borrower and the bank's claims. It upheld deficiency in service of the bank by wrongful repossession and under-value sale, but also set off the borrower's compensation against his true dues. The revision petition was thus partly granted.
Section 15, Consumer Protection Act - 1986
Consumer Protection Act, 1986
