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Repossession

 

Hire-purchase agreement – Financier is the real owner of the vehicle which is the subject of a hire purchase agreement, and there can not be any impediment to the Financier, taking repossession of the vehicle, when the hirer does not make payment of instalments in terms of the hire purchase agreement. #2020 SCeJ 1807

Held, Question raised by the Financier in this appeal, that is, whether the Financier is the real owner of the vehicle, which is the subject of a Hire Purchase Agreement, has to be answered in the affirmative in view of the law enunciated by this Court in Charanjit Singh Chadha K.L. Johar Co.  and Anup Sarmah . The Financier being the owner of the vehicle which is the subject of a Hire Purchase Agreement, there can be no impediment to the Financier taking possession of the vehicle when the hirer does not make payment of instalments/hire charges in terms of the Hire Purchase Agreement. However, such repossession cannot be taken by recourse to physical violence, assault and/or criminal intimidation. Nor can such possession be taken by engaging gangsters, goons and musclemen as so called Recovery Agents. [Para 87]

Under the terms and conditions of the hire purchase agreement, the ownership of the vehicle was to stand transferred to the Complainant from the Financier, upon payment of all the 35 instalments and other dues, if any. Until then, the ownership was to be with the Financier. As all the 35 instalments had not been paid by the complainant to the Financier, the ownership of the vehicle remained with the Financier. [Para 28]

 

Hire-purchase agreement – Repossession  - Issuance of notice  - Whether service of proper notice on the hirer is necessary for repossession of a vehicle which is the subject of a hire purchase agreement, and if so, what is the consequence of non service of proper notice – ......  #2020 SCeJ 1807 

In this case, however a duty to give notice to the Complainant before repossession, was implicit in the Hire Purchase Agreement. The Hire Purchase Agreement was a stereotype agreement in a standard form, prepared by the Financier. The same kind of agreements, containing, identical terms, except for minor modifications are executed by all hirers of vehicles, equipment, machinery and other goods, who enter into hire purchase agreements with the Financier. The Financier who set down the terms and conditions of the hire purchase, construed the hire purchase agreement to contain an implied term for service of notice and accordingly despatched a notice, but did not address it to the correct address of the Complainant as given in the hire purchase agreement. 

 

See also

Banking

Bank Guarantee

Banker Books Evidence Act, 1891 

 

 

Hire-purchase agreement – Repossession  - Issuance of notice  - In a case where the requirement to serve notice before repossession is implicit in the hire purchase agreement, non service of proper notice would tantamount to deficiency of service for breach of the hire purchase agreement giving rise to a claim in damages - ...... #2020 SCeJ 1807 

 

Consumer Protection Act, 1986 - Punitive damages – Award of  - A forum constituted under the Consumer Protection Act has, the power to award punitive damages -  Punitive damages should, however, be granted only in exceptional circumstances, where the action of the Financier is so reprehensible that punishment is warranted - To cite an example, where a Financier erroneously and/or wrongfully invokes the power to repossess without notice to the hirer, causing thereby extensive pecuniary loss to the hirer or loss of goodwill and repute, a forum constituted under the Consumer Protection Act may award punitive damages. #2020 SCeJ 1807 

 

Hire-purchase agreement – Repossession  - Notice  - Issuance of – Intent of  - ......

 

 

Consumer Protection Act, 1986 – Relief - Before a District Forum can grant relief to the consumer of a service, it has to be satisfied that the allegations in the complaint, and/or in other words, ........ #2020 SCeJ 1807 

 

See also

Banking

Bank Guarantee

 

Banker Books Evidence Act, 1891 

 

Consumer Protection Act, 1986 -  Section 13(2) - Casts an obligation on the District Forum to decide a complaint on the basis of the evidence brought to its notice by the Complainant and the service provider - Irrespective of whether the service provider adduces evidence or not, the decision of the District Forum has to be based on evidence relied upon by the Complainant - The onus of proof is on the Complainant making the allegation. #2020 SCeJ 1807

 

Consumer Protection Act, 1986,  Section 27  - Casts an obligation on the District Forum, the State Commission or the National Commission to dismiss frivolous complaints with costs not exceeding Rs. 10,000/-. #2020 SCeJ 1807 [Para 40]

 

Consumer Protection Act, 1986 -  Adverse inference  -  Agreement - Non production of - Can not be drawn unless ......... #2020 SCeJ 1807

 

Hire-purchase agreement – Repossession - Sale - Consumer Protection Act, 1986 -  The Financier being the owner of the vehicle, there was no obligation on the part of the Financier, to divulge details of the sale of that vehicle, and that too on its own, without being called upon to do so. .........  #2020 SCeJ 1807

 

Hire-purchase agreement – Repossession - Notice – Wrong address – Effect of . #2020 SCeJ 1807

 

 

Repossession – Theft - When the agreement between the Financier and the hirer permits the Financier to take possession of a vehicle financed by the Financier, there is no legal impediment to the Financier taking possession of the vehicle -  When possession of the vehicle is taken, the Financier cannot be said to have committed theft. #2020 SCeJ 1807 [Para 80]

 

Loan - Repossession – Whether the transaction between a Financier and a purchaser/hirer is a hire purchase transaction, or a loan transaction, might be determined from the terms of the agreement, considered in the light of surrounding circumstances -  However, even a loan transaction, secured by right of seizure of a financed vehicle, confers licence to the Financier to seize the vehicle. #2020 SCeJ 1807 [Para 81]

 

Facts:

Hire-purchase agreement - Default in payment of instalments - Financier took re-possession of the vehicle allegedly upon notice to the Complainant, and in accordance with the conditions of the hire-purchase agreement - Notice was sent to a wrong address  - Pre sale notice issued  - Complainant did not make the repayment demanded, or even part thereof,  vehicle was sold - It is not the case of the Complainant in his complaint, that the Financier took forcible possession of the vehicle through so called recovery agents, by threat or by use of muscle power - Applicant had paid complete 7 instalments out of 12.