Anoop Kumar Mendiratta, Member

Present Revision Petition has been preferred by the Petitioner/ (Complainant in proceedings filed before the learned District Forum), challenging Order dated 18.07.2017 passed learned. State Consumer Disputes Redressal Commission, Punjab in First Appeal No. 1176 of 2015, whereby the appeal was partially allowed. Consequently, Order passed by the learned District Forum directing the opposite party to pay Rs.3,53,776/- to the complainant/(petitioner) was set aside but compensation of Rs.25,000/- with cost of Rs.3,000/- was enhanced to Rs.60,000/- with litigation cost of Rs.20,000/-.

2. The petitioner and respondent, are hereinafter referred to as complainant and opposite party as appearing in the complaint filed before the learned District Forum, for sake of convenience.

3. The facts fall within a narrow compass. In brief, complaint was preferred by Faqir Mohammad/(complainant no.2) on the basis of Special Power of Attorney executed by Avninder Singh (complainant no. 1) in respect of vehicle/truck bearing registration no.PB-23F-9907. The said vehicle stood hypothecated with Kotak Mahindra Bank/opposite party since loan of Rs.6,80,000/- was obtained by registered owner Avninder Singh/complainant no.1, vide loan agreement dated 24.12.2012. The vehicle was further sold by Avninder Singh/complainant no.1 to Faqir Mohammad/complainant No. 2 on 03.09.2013 and an affidavit of sale along-with receipt of consideration amount was executed by Avninder Singh. However, the vehicle was not got transferred in record of transport authority and registered in the name of Faqir Mohammad/complainant no.2 due to hypothecation of the vehicle. EMI towards repayment of loan taken from Kotak Mahindra Bank were regularly paid by Faqir Mohammad till May, 2014. The grievance of the complainants is that when the EMI installment for the month of June, 2014 was approaching, officials of opposite party without giving any prior notice regarding any default on the part of the complainant, illegally seized the vehicle on 18.06.2014 at 7.30 a.m. near Ahmadabad (Gujarat) through recovery agents. Despite contacting the officials of opposite party, the balance due installment as on 20.06.2014 was not accepted.

4. It is further the case of complainant that opposite party/respondent violating Section 11 of the Arbitration & Conciliation Act and without giving any notice to the complainants arbitrarily appointed Shri Harbhajan Dass, Additional District & Sessions Judge (Retired) as sole Arbitrator and a claim petition for Rs.2,61,824/- was filed for recovery.

5. In the afore-said background, complainant preferred the complaint before District Forum Jalandhar wherein vide Order dated 09.07.2014, opposite party was restrained from selling the vehicle in question. However, suppressing the fact regarding restraint Order dated 09.07.2014 passed by the learned District Forum, opposite party obtained an Order form the learned Arbitrator for sale of the said vehicle. Further, the vehicle was sold for Rs.3,70,000/- for recovering the loan amount of Rs.2,61,824/- on 10.11.2014.

The complaint was instituted on the basis of Special Power of Attorney executed by complainant no. 1 in favour of complainant no.2 which stands allowed by the learned District Forum thereby directing the opposite parties to pay an amount of Rs.3,53,776/- along with Rs.25,000/- towards compensation and cost of Rs.3,000/-.

6. In First Appeal No. 1176 of 2015 preferred on behalf of the opposite parties, the Order passed by the learned District Forum was modified by learned State Commission as noticed above. Aggrieved against the same, present Revision Petition has been preferred by the complainants.

7. Learned counsel for the complainant submits that learned State Commission despite holding that no notice was given prior to forcible possession of vehicle through recovery agents, failed to appreciate that the vehicle had been seized merely on account of non-payment of last EMI which was to fall due on 19.06.2014. The earlier instalments are stated to have been paid on 18.05.2014. He further contends that the sale consideration of the value of vehicle was rightly taken up as Rs.8,00,000/- by the learned District Forum in the absence of invoice, though the actual value for purchase of truck was much higher and the loan amount of Rs.6,80,000/- which was financed by OP, only partially covered the total consideration of the purchase value of truck. He emphasizes that since the vehicle was sold by opposite party in November, 2014 at much lower price than the market value, the loss to the complainant is apparent. He points out that the depreciated value of the vehicle was rightly assessed by the learned District Forum at Rs.6,15,600/-. He clarifies that to assess the loss, the purchase price of vehicle was taken as Rs.8,00,000/- and further Rs. 1,84,400/- was deducted as depreciated value for two and a half years as per established norms @ 10% per annum {i.e. Rs.8,00,000/- (consideration value of truck) minus Rs.1,84,400/- (depreciation) = Rs.6,15,600/-(market value in 2014)}. As such, the sale of vehicle at Rs.3,70,000/- in auction by OP was apparently at a throw away price. He further submits that after deducting outstanding amount of loan of Rs.2,61,824/- as awarded by the Arbitrator from Rs.6,15,600/-, an amount of Rs.3,53,776/- was held to be payable to the complainant. Learned counsel emphasizes that ignoring the logical conclusions arrived at by the learned District Forum, the findings have been simply set aside by the learned State Commission by observing that it cannot be held that vehicle was purchased at price of Rs.8,00,000/- and had been sold at a lower amount by the OPs.

8. On the other hand, learned counsel for the opposite party supports the impugned Order passed by the learned State Commission and submits that the complaint preferred by the petitioner/complainant is not maintainable since the vehicle was illegally sold by Avninder Singh (complainant no.1) to Faqir Mohammad (complainant no. 2) on Power of Attorney. Further, in view of default in payment of instalments, Arbitration proceedings are stated to have been initiated for recovery of balance loan amount which was awarded at Rs.2,61,824/-. The vehicle is stated to have been sold at market value as per auction bids received at Rs.3,70,000/-.

He further submits that the sale consideration of Rs.8,00,000/- as presumed by the learned District Forum had rightly not been accepted by the learned State Commission for determination of fair market price of the vehicle in 2014.

9. We have given considered thought to the contentions raised. It is pertinent to notice that learned District Forum gave a specific finding that the vehicle in question, had been sold by the opposite party merely for Rs.3,70,000/- despite stay Order dated 09.07.2014 passed by the learned District Forum which had not been vacated. The arbitration proceedings and sale in pursuance thereafter were observed to be in violation of the interim stay order. Learned District Forum further took into consideration that the vehicle was financed in April, 2012 for Rs.6,80,000/- and it is a matter of common knowledge that the banks or finance companies finance the vehicle at a lesser price than the market value of the vehicle and in absence of original purchase invoice, the market value of the vehicle of the model 2007 was taken at Rs.8,00,000/-. Further, since the vehicle was sold in auction by OP on 10.11.2014, the depreciation value was calculated taking depreciation for the first two years at @ 10% and 5% for the further period of six months from the date of purchase, following the ratio laid down in Deep Hire Purchase Ltd. v. Khem Singh & Co., 2012 (3) CLT 198. Accordingly, after deducting the depreciated value of Rs.1,84,400/- from the purchase value of Rs.8,00,000/-, the fair market price of the vehicle was assessed as Rs.6,15,600/- in the year 2014. Since the vehicle was sold by OP merely for Rs.3,70,000/- despite the fair market price assessed at Rs.6,15,600/-, the complainant was held entitled for compensation for loss caused due to sale of vehicle at much less value than the market price. Further, after deducting the balance loan amount of Rs.2,61,824/- from Rs.6,15,600/-, an amount of Rs.3,53,776/- was directed to be returned as compensation for loss. Apart from above, opposite party was directed to pay compensation of Rs.25,000/- along with litigation expenses of Rs.3,000/- within one month of the passing of the Order, failing which the opposite party was held liable to payment of interest @ 9% per annum on the entire awarded amount after the expiry of period of one month till the date of payment.

Also, relying upon Chaman Lal v. Shine Blue Hire Purchase Pvt. Ltd., II (2008) CPJ 431 and DLF Limited v. Mridul Estate Pvt. Ltd. & Anr, III (2013) CPJ 439 (NC), learned District Forum categorically held that the arbitration clause in the loan agreement in no manner ousted the jurisdiction of the consumer forum.

10. Vide impugned Order dated 18.07.2017, learned State Commission concurred with the finding of the learned District Forum that the possession of the vehicle was taken by the OP without issuing of requisite mandatory notice. Further, placing reliance upon Manager ICICI Bank Limited v. Prakash Kaur & Ors., AIR 2007 SC 1349 and Citicorp Maruti Finance Limited s. S. Vijaya Laxmi, III (2007) CPJ-161 (NC), it was observed that OPs failed to comply with clause 5.2 of the contractual obligations and re-possession of the vehicle was in forceful manner without issuing any notice.

11. Under Section 14 of the Consumer Protection Act, 1986, the District Forum if satisfied about the allegations in the complaint, may direct the service provider to:

                   (i) remove the deficiencies in the service in question. [Section 14(1 )(a)];

                   (ii) return the charges paid by the complainant [Section 14(1 )(c)];

                   (iii) pay such amount as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the service provider [Section 14(1 )(d)];

                   (iv) pay punitive damages in such circumstances as the District Forum deems fit [Proviso to Section 14(1 )(d)];

                   (v) discontinue the unfair trade practice [Section 14(1 )(f)].

The consumer as such is entitled to damages for loss suffered by reasons of denial or deficiency of service, for which the consumer has paid or agreed to pay the consideration. Liquidated damages may be imposed on the party in breach in the event of breach of contract as provided in the agreement. Where the liquidated damages have not been agreed between the parties, unliquidated damages, which are compensatory in nature may be imposed on the party in breach. Such damages are not punitive but to compensate the party which is not in breach. Also, the damages may be imposed which would restore the position of the party not in breach, to the position before the breach occur, in case the breach is severe and extensive. It may also be observed that punitive damages are generally awarded if the party in breach has acted in a reprehensible manner, which calls for punishment.

12. The financer may resort to taking over the possession of vehicle, in case default is committed in payment of instalments by the hirer or the person availing the loan in case of loan transaction, as per terms of the agreement. However, such repossession cannot be taken by recourse to criminal intimidation, use of muscle power or physical violence. The service of a proper prior notice on the person availing the loan is necessary, if the same is implicit in the agreement. In case the repossession is resorted to by use of power, without serving the notice implicit in the agreement, the same would tantamount to deficiency of service for breach of agreement, giving rise to a claim for damages. The consumer is accordingly entitled to compensatory damages on assessment of loss caused to complainant by cause of omission to give notice.

13. Reverting back to the facts of the present case, it is not disputed that the complainant had availed a loan of Rs.6,80,000/- and the last EMI of the vehicle had been paid on 19.05.2014. The vehicle was forcibly taken into possession by recovery agent at behest of the opposite party on 18.06.2014, even before the next instalment was due on 19.06.2014 as pointed out by learned counsel for the complainant. The vehicle has been thereafter sold by the opposite party in November, 2014 on the basis of award given by the Arbitrator, merely for sum of Rs.3,70,000/- for the purpose of recovery of the entire balance loan amount of Rs.2,61,824/-. It is pertinent to reiterate at this stage that learned District Forum noticed that the repossession of the vehicle had been resorted to despite a restraint order by the District Forum which was not vacated till the date of sale. The opposite party, as such, proceeded to sell the vehicle despite the restraint order by the District Forum in violation of the same.

Further, there are concurrent findings of fact by the learned District Forum as well as learned State Commission that no notice had been served upon the complainant prior to seizing the vehicle. It is also the case of the complainant that despite approaching the bank officials, the due instalment in June, 2014 was refused to be accepted. As such, the complainant, in principle is rightly entitled to compensation for seizing of vehicle without issuing mandatory notice.

14. On the face of record, learned District Forum calculated the fair market price of the vehicle in 2014 at Rs.6,15,600/- after duly deducting depreciation @ 10% per annum for two years and @ 5% per annum for further period of six months, as per law. The purchase price of the vehicle was taken as Rs.8,00,000/-, in absence of any invoice being produced on record and considering the fact that the loan amount is usually for a lower amount than the actual purchase value of the vehicle. Further, deducting the balance loan amount of Rs.2,61,824/- as awarded by the Arbitrator from the fair market price of Rs.6,15,600/-, the opposite party was directed to pay Rs.3,53,776/- to the complainant, being the loss suffered on account of sale of vehicle at throw away price. The approach of learned District Forum cannot be faulted as cogent reasons were given for the same. The compensation was further awarded for sum of Rs.25,000/- with litigation cost of Rs.3,000/-.

Learned State Commission set aside the findings of the learned District Forum directing the return of amount of Rs.3,57,776/- without any cogent reasoning but increased the compensation to Rs.60,000/-along with litigation cost of Rs.20,000/- on account of deficiency in service due to seizure of vehicle without serving of mandatory notice by OP.

15. We are of the considered opinion that loss suffered by the complainant is apparent due to forcible and illegal possession of the vehicle without serving of mandatory notice and sale of the same by OP despite restraint orders by the learned District Forum, which were not vacated. Further, the vehicle was sold at much below the market price at Rs.3,70,000/- though the fair market price in November, 2014 was about Rs.6,15,600/- as rightly assessed by the learned District Forum.

In the facts and circumstances, the view taken by the learned District Forum for return of amount of Rs.3,53,776/- is fair and equitable and did not call for any interference by the learned State Commission. The order passed by the learned State Commission is accordingly set aside and the order passed by the learned District Forum is restored. Revision Petition is accordingly allowed with cost of Rs.25,000/-. Pending applications, if any, also stand disposed of.