IndusInd Bank Asked Not To Seek Loan Dues, Pay Rs1.10 Lakh to Borrower after Arbitrarily Selling His Truck
Moneylife Digital Team 23 August 2023
Refusing to intervene in the orders passed by fora below, the national consumer disputes redressal commission (NCDRC) directed IndusInd Bank Ltd to pay a compensation of Rs1.10 lakh to a borrower. The district forum had directed the Bank not to seek from the borrower any outstanding amount with respect to the loan agreement after selling his truck, ignoring its interim order.
 
In an order, the NCDRC bench of Dr Inder Jit Singh (presiding member) says, "The petitioner (Indusind Bank) has not been able to bring out any illegality or material irregularity or jurisdictional error in the order of the state commission. Both the state commission and district forum have given a well-reasoned order. A perusal of the order of the district forum also shows that Indusind Bank sold the vehicle during the pendency of the case despite interim orders passed in favour of the complainant. Accordingly, the order of the state commission is upheld. Revision petition (filed by IndusInd Bank) is dismissed."
 
The bench also pointed out the observation by the state commission about the violation by IndusInd Bank regarding the instructions contained in the code of bank's commitment to customers (Code) formulated by the Reserve Bank of India (RBI) on 1 July 2006. The Code contains detailed guidelines for giving notice to borrowers, repossession of security, valuation and sale of property and opportunity for the borrower to take back the security.
 
In June 2012, Belur, Howrah-based Sanjay Ghosh took a loan of Rs8 lakh from IndusInd Bank to buy a second-hand truck for self-employment. However, due to the illness of his family members, he could not operate the truck to earn his livelihood.
 
However, he alleged that on 25 November 2012, IndusInd Bank took away his truck. When he went to the Bank to take back his vehicle, he was told to pay Rs10.63 lakh within 10 days, failing which the lender would sell his truck.
 
Mr Ghosh then approached the Howrah district consumer disputes redressal forum, praying for interim directions for restraining IndusInd Bank from selling his truck. On 26 December 2012, the district forum issued an interim order restraining the lender from selling the truck.
 
However, IndusInd Bank sold the truck for Rs5 lakh. Mr Ghosh informed the district forum about the sale of his vehicle by the lender. In its order, the district forum says, "Being a reputed organised company, how could IndusInd Bank violate the order passed by this Forum? They simply showed no regard or respect for this adjudicating authority. Admittedly IndusInd Bank allowed the complainant (Mr Ghosh) to repay the entire loan amount in 36 instalments for a period starting from 16 June 2012 to 21 May 2015. There is also a provision of charging penalties and interest on the overdue amount. Why IndusInd Bank took this kind of daring step of selling out the vehicle even without informing this Forum and in the absence of the complainant?"
 
"In this written version also, they (IndusInd Bank) have not mentioned on which date they sold out the vehicle. Mr Ghosh has mentioned that the truck was his only means of livelihood. By such arbitrary action on the part of IndusInd Bank, the complainant has been thrown into a real miserable condition for which he is to suffer a terrific financial crisis...in this case, IndusInd Bank is really guilty of negligence. Accordingly, we hold IndusInd Bank deficient in service," the district forum says.
 
The district forum directed IndusInd Bank to pay Rs1.10 lakh to Mr Ghosh, including Rs50,000 as compensation, Rs55,000—the entire decretal amount and Rs5,000 as litigation cost.
 
IndusInd Bank challenged the order before the West Bengal state consumer disputes redressal commission, which dismissed the appeal. Referring to RBI's code for banks, the state commission says, "A comparison of these guidelines vis-à-vis the steps taken by the IndusInd Bank is a clear pointer of the fact that the regulatory directive was thrown to the windows by IndusInd Bank. This cannot be allowed."
 
IndusInd Bank then approached NCDRC.
 
After perusing orders passed by fora below and documents available on record, Dr Singh from NCDRC noted that IndusInd Bank has not been able to place on record any document related to the loan and sale of the truck. "IndusInd Bank has not been able to place on record any documents showing the price or invoice of the vehicle paid by the respondent (Mr Ghosh), which is generally necessitated by the financers at the time of giving loan, whether any valuation of the said vehicle was done before its sale, any record showing the sale of the said vehicle, and the process adopted."  
 
"In the absence of these, it is not possible to say whether the price fetched in the sale was reasonable or not. IndusInd Bank has drawn our attention to letter dated 27 July 2013 addressed to Mr Ghosh, which states that an amount of Rs3.56 lakh is outstanding and they have initiated the process of appointment of a sole arbitrator. However, IndusInd Bank has not placed on record whether any arbitrator was actually appointed and whether any award was passed by the arbitrator," NCDRC observed.
 
While upholding orders passed by the district forum and the state commission, NCDRC dismissed the appeal filed by IndusInd Bank.
 
(Revision Petition No920 of 2019 Date: 8 August 2023)
Comments
ushagoswami1001
11 months ago
Every subsequent forum should double the amount towards harassment of the Consumer.
ppindia18
Replied to ushagoswami1001 comment 11 months ago
Nobody cares about customer in India
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