While upholding rulings by fora below, the national consumer disputes redressal commission (NCDRC) directed Axis Bank Ltd to pay Rs5 lakh compensation and Rs50,000 cost of litigation to the borrowers, whose truck was possessed and then sold by the lender.
In an order last week, the NCDRC bench of Dr Inder Jit Singh (presiding member) says, "Both the fora below have given concurrent findings against Axis Bank as regards deficiency in service on the part of the lender is concerned. The contention of Axis Bank that the driver of the complainant peacefully and voluntarily surrendered the vehicle to the Bank does not appeal in the absence of cogent evidence in this case. Both the fora below have given a finding that the vehicle was forcibly possessed by Axis Bank, which is in violation of the law laid down by the Supreme Court."
Sher Singh from the Faridabad district of Haryana obtained a loan of Rs16.55 lakh from Axis Bank to buy an Ashok Leyland heavy goods vehicle (truck). As per the agreement, the loan was to be repaid in 47 equated monthly instalments (EMIs) of Rs45,600 each. However, Mr Singh contended that soon after buying the truck, some major faults developed, for which he had to bear huge losses, resulting in his inability to pay the EMI for September 2012.
During October and November, he could not deposit the full instalment and sought time from Axis Bank which the lender granted and accepted the instalment on 23 November 2012.
However, Mr Singh alleged that on 25 November 2012, an employee of Axis Bank, along with some eight to ten unknown musclemen, forcefully stopped and took possession of the truck in Haidargarh in Barabanki district in Uttar Pradesh (UP). "On the same day, Axis Bank issued a notice of sale of the truck and sold the truck in March (2013)," he says.
His civil suit was dismissed by the court, saying that the suit had become infructuous as Axis Bank had already sold the truck.
Mr Singh then filed a complaint before the New Delhi district consumer disputes redressal commission forum VI. On 19 May 2015, while allowing the complaint, the district forum directed Axis Bank to pay Rs10 lakh compensation and Rs50,000 litigation cost to Mr Singh.
In the order, the district forum noted, "Admittedly, Mr Singh was in default by not tending full instalments, and Axis Bank had the right to repossess the same. Mr Singh lives in Faridabad, but the vehicle is chased in UP and possessed while in transit, and thereafter informing the local station house officer (SHO or police inspector). There is nothing placed on record that any notice to Mr Singh was ever given before repossessing the vehicle from him in Faridabad or the opportunity for him to arrange money to avoid that. The fact of seizing the vehicle in UP itself speaks, and Axis Bank has failed to explain it."
It also mentioned that Axis Bank sold a fully furnished truck for just Rs12 lakh and created a liability of Rs5 lakh on Mr Singh.
Being aggrieved, Axis Bank preferred an appeal before the Delhi state consumer disputes redressal commission. In an order on 18 January 2019, the state commission modified the district forum's order to the extent that Axis Bank was directed to pay Rs5 lakh as compensation and Rs50,000 as cost of litigation.
The state commission noted that "The act of Axis Bank in selling the new vehicle for just Rs12 lakh speaks of haste on the part of the lender and sale at an undervalued price. Axis Bank had given a loan of Rs16.55 lakh in July 2012 itself, i.e. hardly seven-eight months before the sale. No notice before repossession was given (to Mr Singh)."
The state commission observed that Mr Singh sought compensation of Rs5.40 lakh and Rs3 lakh towards harassment; however, the district forum granted Rs10 lakh as compensation and Rs50,000 litigation expenses. "This is more than what was prayed by Mr Singh. The same cannot be sustained," the state commission said, while reducing the compensation to Rs5 lakh.
Not happy with the state commission's order, Axis Bank and Mr Singh filed revision petitions before NCDRC.
Dr Singh from NCDRC noted that both the fora below have given well-reasoned orders. While dismissing both revision petitions, the bench says, "We are also in agreement with the observations of the state commission with respect to the reducing the quantum of compensation. We find no reason to interfere with the same."
(Revision Petition Nos895/1461 of 2019 Date: 4 November 2024)
