Vehicle Repossession and Consumer Disputes: A Case of Chronic Default.


24 July 2025 Civil Revision >> Civil & Consumer Law  

This case revolves around a dispute between a vehicle purchaser, T. Chinthanaikumar (respondent no. 1), and the vehicle dealer, ABT Industries Ltd. (petitioner), along with the vehicle manufacturer, Tata Motors Ltd. (respondent no. 2), and its finance division, TATA Engineering & Locomotive Co. Ltd. (respondent no. 3).

The respondent no. 1 purchased a TATA 207 PICK UPS vehicle in 2003, financed by a hire-purchase agreement with respondent no. 3. The total contract value was Rs. 4,14,700, to be paid in 47 monthly installments (EMIs). The vehicle was repossessed by respondent no. 2 on July 14, 2007, just before the final EMI was due, on the grounds that the respondent no. 1 was a "chronic defaulter" with significant arrears.


 

 

The respondent no. 1 disputed this, claiming that payments made to the petitioner (ABT Industries Ltd.) were not promptly remitted to the financier (respondent no. 3), leading to an incorrect account statement and the illegal seizure of the vehicle. The respondent no. 1 filed a complaint with the District Consumer Disputes Redressal Forum, which ruled in his favor, finding that the petitioner and respondents no. 2 & 3 had committed a "deficiency of service." The District Forum ordered them to pay Rs. 4,95,640 (the amount remitted by the complainant), Rs. 1,00,000 in compensation for mental agony, and Rs. 3,000 for costs.

The petitioner appealed to the State Consumer Disputes Redressal Commission, which upheld the District Forum's decision. The State Commission noted that the petitioner's delay in remitting payments to the financier was a form of "negligence and deficiency."

The petitioner then filed a revision petition with a higher commission. In its final ruling, the commission reviewed the case and found "grave and material irregularities" in the previous decisions. It was determined that the respondent no. 1's statement of account showed he was, in fact, a "chronic defaulter" and that the amount allegedly not credited had been remitted by the petitioner, albeit belatedly. The court also rejected the argument that the transaction was for "commercial purposes" and therefore outside the scope of the Consumer Protection Act, stating that this was a "bald allegation" without sufficient evidence.

Ultimately, the revision petition was allowed. The court set aside the orders of both the District Forum and the State Commission, dismissing the original complaint. It concluded that the repossession of the vehicle was justified due to the respondent no. 1's consistent failure to make timely payments.


  Consumer Protection Act, 1986