National consumer disputes redressalcommission new delhi

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O R D E R 


          The complainant/respondent Razia Khatoon purchased a truck for a total price of Rs. 6,97,418/-.  Out of the sale consideration, Rs. 38,534/- was contributed by her and the balance amount of Rs. 6,58,884/- was got financed from the petitioner under a Hire Purchase Agreement.  The loan taken by the complainant from the petitioner was payable in equated monthly instalments.  The complainant did commit default in payment of the loan taken by her and several instalments were not paid on time.  Vide notice dated 18.04.2006, the petitioner required the complainant to pay an outstanding amount of 

Rs. 4,61,354/- and informed her that legal action shall be initiated in the event of her failure to pay the aforesaid outstanding amount.  The complainant did not comply with the said notice, though she made some small payments.  As a result, the petitioner took possession of the truck financed by it, exercising its right given to it under the Hire Purchase Agreement.  The said seizure took place on 11.05.2006.  The complainant made payment of Rs. 58,000/- to the petitioner and the vehicle was thereafter released.

(2)     Since, there was an arbitration clause contained in the Hypothecation agreement, the petitioner initiated arbitration proceedings against the complainant at Kolkata.  The complainant did not appear before the Arbitrator, who is stated to have passed the award on 29.07.2006, directing the complainant to pay the sum of Rs. 4,61,354/- to the petitioner.

(3)     The case of the complainant is that there was a One Time Settlement(OTS) between the parties, whereby the total dues payable by her to the petitioner were settled at Rs. 2,38,460.31/-. However, without giving any time to the complainant to pay the aforesaid dues, the petitioner again seized the truck on 25.05.2007 itself.  The truck was later sold by the petitioner for a total sum of Rs. 3,35,000/- on 11.07.2007.  The case of the complainant is that  the market value of the truck, at the time it was seized on 25.05.2007 was about Rs. 6 lakhs and therefore after adjusting the amount payable by her, she was entitled to refund of amount of Rs. 3,59,122.27/- from the petitioner.  Alternatively, she claimed a sum of Rs. 3,29,132.33/- in case, the total dues were taken at Rs. 2,70,867.58/-. 

          Being aggrieved from the alleged sale of the truck for a consideration of Rs. 3,35,000/-, complainant preferred a complaint before the District Forum.

(4)     The complaint was resisted by the petitioner by filing objections, seeking its dismissal.  In the objections/reply filed by it, the petitioner relied upon the arbitration award passed in favour of the petitioner company.  However, on merits, the petitioner/opposite party did not refute the allegations of the complainant as regards the One Time Settlement or as to the market value of the truck on the date it was seized.

(5)     The District Forum, vide its order dated 13.09.2013, held that there was a One Time Settlement between the parties, which superseded the award in favour of the petitioner.  It was also noticed that the vehicle had been insured by National Insurance Company at Rs. 5,95,000/- for a period from 31.02.2006 to 20.02.2007.  The District Forum, therefore, felt that the market value of the truck, on the date it was seized should be amounting to Rs. 5.5 lakhs.  Deducting the OTS amount of RS. 2,70,867.58/-, as per the calculations made in annexure 10 of the complaint, the District Forum was of the view that a sum of Rs. 2,79,132.42/- was refundable by the petitioner to the complainant.  The said forum accordingly directed the petitioner to refund the aforesaid amount of Rs. 2,79,132.42/- alongwith cost of Rs. 20,000/- for the Maurang and interest at the rate 12% per annum w.e.f. the date on which the truck was seized till the final payment.  The petitioner was also directed to pay Rs. 1 lakh towards compensation and Rs. 10,000/- towards cost of litigation to the complainant.

(6)     The learned counsel for the petitioner submits that in fact there was no One Time Settlement between the parties and the word “OTS” used on the computer generated statement dated 25.05.2007 stands for “On Top Securitisation”.  The attention in this regard is drawn to clause (c) of the Hire Purchase Agreement, which reads as under:-

  “(c)    The Borrower/s has acknowledged and agreed that the Lender may, at its sole discretion and without any consent of / intimation to the Borrower/s sell, assign, securities, transfer its rights, title and interest under this agreement including receivables payable by the Borrower/s to the Lender hereunder to ICICI Bank and on their refusal, to any other Bank/Financial Institution/entity (hereinafter individually and collectively referred to as the ‘Bank/FI’.”

 (7)    In our opinion, the contention advanced by the learned counsel for the petitioner can not be accepted, for two reasons.  Firstly, OTS is well known abbreviated form for the One Time Settlement and used in the computer generated expression used in the statement which the petitioner had generated on its system and provided to the complainant on 25.05.2007.  On the other hand, there is no known terminology such as “On Top Securitisation”.  More importantly, as noted earlier by us, in the petition filed by the petitioner before the District Forum, neither the one time settlement was denied nor did the petitioner claim that the expression “OTS” used in the computer generated system dated 25.05.2007 stood for “On Top Securitisation”. 

(8)     Since, the complainant had specifically pleaded one time settlement and had also claimed that the amount due from her to the petitioner did not exceed the amount of Rs. 2,70,867.58/- as per the calculation made in annexure 10 of the complaint, it was obligatory for the petitioner to controvert the aforesaid averment and file its own statement of account indicating the amount which according to the petitioner was due to it from the complainant as on 25.05.2007.  In the absence of any dispute having been raised by the petitioner in this regard, the District Forum, in our view, was fully justified in relying upon the averment made in the complaint in this regard and concluding that the amount due to the petitioner from the complainant on 25.05.2007 was Rs. 2,70,867.58/-.  We are also of the view that in the absence of any dispute having been raised in this regard, the District Forum was also justified in concluding that there was actually a one time settlement between the parties on or before 25.05.2007 and that is why the expression OTS was used in the statement of account which the petitioner provided to the complainant on that date.

(9)     It can hardly be disputed that having aggrieved from the one time settlement on 25.05.2007, the petitioner ought to have given some reasonable time to the complainant to make payment in terms of the settlement.  That however having not done and the vehicle was seized on the very same day on which the statement of account was generated and provided to the complainant. The act and conduct of the petitioner exhibits a total disregard to the settlement which it had agreed with the complainant and the gross high handedness on its part in dealing with the consumer.

(10)  The vehicle in question was sold by the petitioner on 11.07.2007 for a consideration of Rs. 3,35,000/-.  The learned counsel for the petitioner submits that price for which the truck was sold was its fair market value at the time it was sold.  He relied upon the valuation, which the petitioner company obtained from a Government approved valuer.  The District Forum, on the other hand, relied upon the valuation accepted by the National Insurance Company.  It was noted that while insuring the vehicle for the period from 31.02.2006 to 20.02.2007, the Insurance Company had accepted its market value to be of Rs. 5,95,000/-.  The vehicle was repossessed just three months after the said policy expired.  Therefore, the District Forum in our view was justified in assuming its market value on the date it was seized at Rs. 5.5 lakhs.  During the course of arguments, we asked the learned counsel for the petitioner as to whether the sale of the truck was advertised in a newspaper.  The learned counsel fairly states that it was a private sale.  No material was placed by the petitioner before the District Forum, which would show that any notice was given to the complainant, before selling the truck, informing her that the petitioner company was going to sell the truck for a consideration of Rs. 3,35,000/-.  In these circumstances, we find no fault with the view taken by the District Forum.

(11)  Since, we are not inclined to interfere with the order of the District Forum on merits, we are not inclined to remit the matter back to the State Commission, which has dismissed the appeal filed by the petitioner on account of delay in filing the said appeal.  Accordingly, the revision petition as well as the applications are dismissed. 












(From the order dated 16.09.2013 in First Appeal No. 1278/2009 of Punjab State Consumer Disputes Redressal Commission)

WITH I.A. No. 2650 & 2651 /2014



Improvement Trust, Ludhiana Through its Executive Officer, Administrator, Improvement Trust, Ludhiana

                                                                         ...  Petitioner


1.   Neeraj Chug, w/o Sh. Rakesh Chugh, House No. 379-G, Bhai Randhir Singh Nagar, Ludhiana 

2.   The Adarsh Colony Co-op House Building Society, Ludhiana, 570/1 National Road, Near Bhaiwala Chowk, Ludhiana Through its Authorised Signatory. 

3.   Department of Local Government, Punjab through its Principal Secretary, SCO No. 131 – 132, Juneja Building, Sector – 17 C, Chandigarh





 For the Petitioner


Mr. R.S. Modi, Advocate


DATED 23rd JULY 2014

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