LexCITICORP. MARUTI FINANCE LTD. versus S. VIJAYALAXMI
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A B [2011] 14 (ADDL.) S.C.R. 1050 CITICORP. MARUTI FINANCE LTD. v. S. VIJAYALAXMI (Civil Appeal No.9711 of 2011) NOVEMEBR 14, 2011 [ALTAMAS KABIR, CYRIAC JOSEPH AND SURINDER SINGH NIJJAR, JJ.] HIRE PURCHASE AGREEMENT: Recovery process - C Forcible Possession of vehicles - Held: Even in case of mortgaged goods subject to Hire-Purchase Agreements, recovery process has to be in accordance with law - Till the time the ownership is not transferred to the purchaser, the hirer normally continues to be the owner of the goods, but that does o not entitle him on the strength of the agreement to take back possession of the vehicle by use of force - The guidelines laid down by the Reserve Bank of India support and make a virtue of such conduct - If any action is taken for recovery in violation of such guidelines or the principles as laid down by E the Supreme Court, such action cannot but be struck down. CONSUMER PROTECTION ACT, 1986: Hire-Purchase Agreement in respect of a Maruti Omni Car - On failure of hirer to pay hire charges in terms of repayment schedule, appellant (owner-bank) took possession of financed vehicle F and sold it in auction - Complaint by hirer before Consumer District Forum alleging deficiency in service - Allowed by District Forum directing owner to pay a sum of Rs.1,50,000 - State Commission, affirmed order of District Forum and directed payment of a further sum of Rs. 50, 0001- on account G of punitive damages - National Commission while dismissing revision petition modified order of State Commission by setting aside punitive damages - Instead, it directed appellant-bank to pay a sum of Rs.10,0001- to hirer by way of cost - On appeal, held: After vehicle was seized, it was also H 1050 CITICORP. MARUTI FINANCE LTD. v. S. VIJAYALAXMI 1051 sold ·and third patty rights had accrued over the vehicle - A . Appellant-bank had complied with the directions of the District " Forum notwithstanding the pendency of the case - Since appellant Bank had already accepted decision of District Forum and had paid the amounts as directed, no relief could be granted to appellant. B A Hire-Purchase Agreement was entered into between the parties whereby the appellant hired to the respondent a maruti van for a sum of Rs.1,82,3961-, repayable, along with interest, in 60 equal monthly hire charges of Rs.4,6041- each. As per the agreement timely C payment of the hire charges was the essence of the Agreement. The respondent failed to pay the hire charges in terms of the repayment schedule. Thereafter, in keeping with the terms and conditions of the Hire- Purchase Agreement, the Appellant took possession of D the financed vehicle. A one time offer made by the appellant to pay Rs.60,000 for liquidating the outstanding dues was made but the respondent failed to pay the amount. Thereafter, the appellant sold the vehicle in auction. E The respondent filed the complaint before the Consumer Disputes Redressal Forum, against the appellant alleging deficiency in service. The District Forum directed the apellant to pay a sum of Rs.1,50,000/ -, along with interest at the rate of 9% per annum, from the date of filing of the complaint till the date of payment, together with a further sum of Rs.5,000/- towards harassment and cost of litigation. The State Commission F · affirmed the order of the District Forum and directed payment of a further sum of Rs.50,000/- on account of G punitive damages. The National Commission, while dismissing the revision petition filed by the appellant modified the order of the State Commission by setting aside the direction to pay Rs.50,000/- on account of punitive damages. Instead, the Commission directed the H 1052 SUPREME COURT REPORTS (2011] 14 (ADDL.) S.C.R. A appellant to pay a sum of Rs.10,000/_. __ to the respondent by way of cost. The instant appeal was filed challenging the order of the High Court. B Disposing of the appeal, the Court HELD: 1.1. Since during the pendency of the Special Leave Petitions before this Court, the appellant had complied with the orders of the District Forum and the National Commission had already set aside the punitive damages imposed by the State Commission, the reliefs C prayed for on behalf of the appellant had been rendered ineffective and the submissions were, therefore, channeled towards the question of whether the fora below were right in holding that the vehicles had been illegally
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