ICICI Bank Ltd vs Tapan Bose & Ors

This first appeal has been filed by the appellant ICICI Bank Ltd. against the order dated 02.11.2007 of the State Consumer Disputes Redressal Commission, Delhi (in short 'the State Commission') passed in Complaint Case No.CC-2007/49.

Brief facts of the case are that complainant (respondent No.1 herein) filed a complaint before the State Commission against the opposite party No.1 bank (appellant herein). Opposite party No.2 to 9 being functionaries of opposite party No.1 bank are other respondents herein. The complainant had taken a loan of Rs.3,40,749/- for purchasing a Maruti Swift car. He had booked the Maruti Swift car from his own funds i.e. an amount of Rs.50,000/- was paid in cash vide receipt No.14758 on 26.05.2005 to M/s. Sikand & Co. Amount of Rs.3,40,749/- was paid on 09.07.2005 to M/s. Sikand & Co. He also made the payment of Rs.7661/- on 11.07.2005. Thereafter he took delivery of a silver colour Maruti Swift car bearing registration No.DL 2CP 4390. He had been paying the monthly instalments regularly as the opposite party bank had already taken post dated cheques from him for the repayment of loan amount. Moreover some payments were being collected by the bank through ECS and cash also. Three cheques of different months had bounced and thereafter the complainant started making the payments through ECS and later on he started paying the EMIS in cash to the agents of the opposite party No.1. However, the opposite parties never bothered to return the post -dated cheques which had bounced.

He requested the agents/employees of the opposite party No.1 to try and appreciate that he was having some problem with his bank account and for this reason he was interested in paying instalments in cash and taking back the cheques. Due to some instability in the business he was not able to pay three or four instalments to the opposite parties. He had never received any notice, letter or intimation from any of the agents or authorized representatives or employees of the opposite party No.1 with regard to any irregularity in the loan account of complainant with regard to the Maruti Swift car till 15.01.2007 on which date he received a letter dated 12.01.2007. However, on 08.01.2007 at about 5:15 p.m. the complainant had gone to DDCA Club along with one Vinod who was the son of his friend and was driving his car on that day. On reaching the club he asked Vinod to come with him inside the Club but Vinod told him that he would rather sit in the car. As soon as the complainant after sometime reached the parking area, he saw Vinod lying on the road approximately 60 to 100 meters away from the car from where the car was parked and the car was not there. He saw Vinod bleeding heavily from head and toe. Vinod later on told that the people from opposite party Bank took the vehicle forcibly and in order to do so beat him. When he tried to catch hold of the car to stop it, he was dragged with the car.

Being aggrieved, complainant/respondent No.1 filed a complaint before the State Commission. The State Commission passed the following order on 02.11.2007:-

"33. Complaint is allowed in terms of following orders:-

(i) OP shall pay lump sum compensation of Rs.5 lacs including the margin money and money paid by the complainant towards loan amount, for the sufferings and gravious injuries caused by their agents in brutal and boorish manner and throwing him on the road in profuse bleeding condition that made him to be admitted in the hospital for more than two weeks and stitching of serious wounds on the skull/its back, towards medical expenses as well as public humiliation, mental agony, trauma, emotional sufferings, physical discomfort and great injustice done to him.

(ii) OP shall further return all the post-dated cheques from the date of seizure and if any of them has been encashed shall refund the amount thereof. We impose punitive damages of Rs.50 lacs as a deterrent for OP's audacity and impunity with which they have been violation orders of this Commission, National commission and even Hon'ble Supreme Court by including in such an abominable and uncivilized conduct by taking the law in their hands and enforcing their right, if any, through musclemen and goons and in the process causing multiple and serious injuries in the broad- day light and humiliating and insulting the man before the public.This amount shall be deposited in favour of "State Consumer Welfare Fund (Legal Aid)."

Hence the present appeal.

Heard the learned counsel for the appellant and perused the record. Learned counsel for the appellant stated that the vehicle was repossessed as per the hypothecation agreement as the respondent No.1/complainant had become defaulter as he had not given the payments of some instalments. In fact the post-dated cheques were given by the respondent No.1 for ensuring the regular payment of EMIs, however, he asked for the return of these post- dated cheques and paid some of the instalments in cash. However, the same was stopped after some time and he became a defaulter. The complainant had only paid a sum of about Rs.13,000/-. Thus, the appellant bank was within its rights to repossesses the vehicle. In fact the complainant got his vehicle released within three days of its repossession by the appellant bank through the competent court and thus there was no loss to the complainant. Accordingly the complaint was not maintainable.

Learned counsel for the appellant further argued that roughly the total amount of loan along with interest is due on the complainant, but the State Commission has ordered a compensation of Rs.5,00,000/- to be paid to the complainant including the margin money and the amount of instalments paid by the complainant. Whatever be the case of the complainant he cannot be allowed to not to repay the loan taken from the bank otherwise this will create a bad precedent. Even on merits, the case of the complainant was that the vehicle was repossessed forcibly and therefore, this was illegal repossession. The decision of the criminal court has come now and the court vide its order dated 04.02.2011 has acquitted all the accused except for one K.K.Sharma, who was also found guilty only under Section 323 of the IPC, which relates only to simple hurt and not even grievous hurt and K.K.Sharma was sentenced till rising of the court along with a fine of Rs.1,000/-. Thus, the judgment of the criminal court clearly establishes that there was no case of grievous hurt and it was a simple scuffle. Thus, the whole case of the complainant is falsified. On the basis of this order of the criminal court, the anger expressed by the State Commission is not justified.

In the light of the established fact now that there was no use of force while repossessing the vehicle, the award of compensation of Rs.5,00,000/- to the complainant is not justified. The impugned order has not been passed on merit, but it has been passed with an intent of anger believing the version of the complainant as true. Moreover, the State Commission has totally erred in directing the appellant bank to pay punitive damage of Rs.50,00,000/- by depositing the same into the Consumer Welfare Fund of the State. Learned counsel argued that punitive damages can only be ordered if specifically the punitive damage has been demanded in the complaint and if there is any other cause of action against the opposite parties beyond the main cause of action on which the complaint has been filed. In support of his argument, learned counsel referred to the judgment of the Hon'ble Supreme Court in General Motors (India) Private Limited Vs. Ashok Ramnik Lal Tolat & Anr., Civil Appeal No.8072-8073 of 2009, decided on October 9, 2014 (SC), wherein the following has been held:-

"20. We have already set out the relief sought in the complaint. Neither there is any averment in the complaint about the suffering of punitive damages by the other consumers nor the appellant was aware that any such claim is to be met by it. Normally, punitive damages are awarded against a conscious wrong doing unrelated to the actual loss suffered. Such a claim has to be specially pleaded. The respondent complainant was satisfied with the order of the District Forum and did not approach the State Commission. He only approached the National Commission after the State Commission set aside the relief granted by the District Forum. The National Commission in exercise of revisional jurisdiction was only concerned about the correctness or otherwise of the order of the State Commission setting aside the relief given by the District Forum and to pass such order as the State Commission ought to have passed. However, the National Commission has gone much beyond its jurisdiction in awarding the relief which was neither sought in the complaint nor before the State Commission. We are thus, of the view that to this extent the order of the National Commission cannot be sustained. We make it clear that we have not gone into the merits of the direction but the aspect that in absence of such a claim being before the National Commission and the appellant having no notice of such a claim, the said order is contrary to principles of fair procedure and natural justice. We also make it clear that this order will not stand in the way of any aggrieved party raising a claim before an appropriate forum in accordance with law."

It was argued by the learned counsel for the appellant that the order of the State Commission directing payment of punitive damage is against the referred judgment in General Motors (India) Private Limited Vs. Ashok Ramnik Lal Tolat & Anr., (supra). Accordingly, it was requested that the order of the State Commission be set aside along with complaint.

Learned counsel for the appellant further mentioned that the case of the complainant is based on the use of force against Mr. Vinod and Mr. Vinod has not been made party in the complaint case. Thus, no advantage is to be given to the complainant for any alleged force against Mr. Vinod.

On the other hand, the learned counsel for the respondent No.1/complainant stated that not many instalments were due and if some instalments became due, the appellant had post -dated cheques of the complainant and the same could have been encashed. No notice was issued to the complainant for depositing the due instalments before the repossession of the vehicle. The vehicle was repossessed when the complainant along with son of his friend had gone to club and the agents of the appellant bank took away the vehicle by beating Mr. Vinod, who got severe injuries and was bleeding profusely at the time of incident. There may be many reasons why the criminal court has acquitted the accused except for one who has been convicted under Section 323 of the IPC. The decision of the criminal court is not binding on proceedings of civil court or the consumer forum. The evidence given by the complainant clearly proves that Mr. Vinod was severely beaten up by the goons of the appellant bank, who had taken the vehicle along with them. The use of force is not permitted even if the vehicle is to be repossessed under the provisions of the hypothecation agreement. In this regard, the guidelines of Reserve Bank of India are very clear and even Hon'ble Supreme Court has given guidelines in the matter and the financier is supposed to follow these guidelines. It was mentioned that the Hon'ble Supreme Court in Citicorp. Maruti Finance Ltd. Vs. S. Vijayalaxmi, AIR 2012 SC 509, has observed the following:

"21. 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 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 and/or wrongfully recovered by use of force from the loanees. The aforesaid question has since been settled by several decisions of this Court and in particular in the decision rendered in ICICI Bank Ltd. Vs. Prakash Kaur (supra). It is, not, therefore, necessary for us to go into the said question all over again and we reiterate the earlier view taken that even in case of mortgaged goods subject to Hire- Purchase Agreements, the recovery process has to be in accordance with law and the recovery process referred to in the Agreements also contemplates such recovery to be effected in due process of law and not by use of force. Till such time as the ownership is not transferred to the purchaser, the hirer normally continues to be the owner of the goods, but that does not entitled him on the strength of the agreement to take back possession of the vehicle by use of force. The guidelines which had been laid down by the Reserve Bank of India as well as the Appellant Bank itself, in fact, support and make a virtue of such conduct. In any action is taken for recovery in violation of such guidelines or the principles as laid down by this court, such an action cannot but be struck down."

I have given a thoughtful consideration to the arguments of the learned counsel for the parties and have examined the record. First of all, it is seen that there is a delay of 515 days in filing of the present appeal.

On the question of punitive damages, it is seen that for a complaint case having subject matter as a loan roughly of Rs.3,00,000/-, the State Commission has ordered punitive damages of Rs.50,00,000/- to be deposited with Consumer Welfare Fund of the State. I have perused the complaint and there is no separate averments/prayer from the complainant to award punitive damage against the opposite parties. Though he has requested for award a sum of Rs.5,00,000/- as compensation/exemplary damages to the complainant against the opposite parties for failure on their part to comply with the orders/directions passed by this Commission in Appeal No.A-954 of 2006 titled as M/s. Magma Leasing Ltd. Vs. Bharat Singh on 08.12.2006. This prayer cannot be treated as a specific prayer for awarding punitive damages for any other activity of the opposite parties against the complainant, which is not the main matter of the present complaint. Thus, going by the principles laid down by the Hon'ble Supreme Court in General Motors (India) Private Limited Vs. Ashok Ramnik Lal Tolat & Anr., (supra), I am of the view that the State Commission was not justified in ordering the punitive damages of Rs.50,00,000/- against the opposite party/appellant bank.

Now coming to the question of award of compensation of Rs.5,00,000/- to the complainant including the margin money and amount paid by the complainant, I agree with the counsel for the appellant that the borrower is duty bound to return the loan amount to the bank. Here the main complaint was filed in respect of illegal repossession of the vehicle by the opposite parties using brutal force. Though, the criminal court vide its order dated 04.02.2011 has acquitted all the accused except for one K.K.Sharma, who has been convicted under Section 323 IPC, it clearly shows that there was use of force against the complainant or his accomplice Mr. Vinod. So, even if Mr. Vinod is not the party in the present complaint case, it is the complainant who has suffered and he was required to be compensated and the State Commission has done the same. The complainant has filed medical treatment certificate relating to Mr. Vinod, which is sufficient to prove use of brutal and severe force against the complainant's accomplice Mr. Vinod. Moreover, Hon'ble Supreme Court in Vishnu Dutt Sharma Vs. Daya Supria (SMT), (2009) 13 SCC 729 has clarified that the order of the criminal court cannot be a binding on the civil court. It has been observed:-

"26. It is, however, significant to notice a decision of this Court in M/s Karam Chand Ganga Prasad & Anr. etc. vs. Union of India & Ors. [(1970) 3 SCC 694], wherein it was categorically held that the decisions of the civil court will be binding on the criminal courts but the converse is not true, was overruled therein, stating: K.G. Premshanker case, SCC .98,para 33):

"33. Hence, the observation made by this Court in V.M. Shah case that the finding recorded by the criminal court stands superseded by the finding recorded by the civil court is not correct enunciation of law. Further, the general observations made in Karam Chand case are in context of the facts of the case stated above. The Court was not required to consider the earlier decision of the Constitution Bench in M.S. Sheriff case as well as Sections 40 to 43 of the Evidence Act."

If judgment of a civil court is not binding on a criminal court, it is incomprehensible that a judgment of a criminal court will be binding on a civil court. xxxxxxxxxxx "

Even otherwise also, all the accused have not been clearly acquitted, therefore, the criminal court judgment actually proves the assault by the agents of the appellant bank. Thus, clearly the repossession was not in order and no notice was also served on the complainant in respect of repossession or sale of vehicle. The arguments of the learned counsel for the appellant that no loss has occurred to the complainant as the vehicle was got released within three days, does not hold good as the complainant has definitely suffered for three days and must have had to spend money to get the vehicle released and also he has spent the money on treatment of Mr. Viond. Clearly complainant is entitled to compensation for illegal and forceful repossession of the vehicle. It is seen from the record that the complainant had deposited Rs.5,00,000/- with this Commission vide order dated 11.05.2009 and 50% of this amount was released to the complainant vide order dated 11.05.2009 of this Commission. It is also observed that the complainant has not repaid the loan amount which he is liable to repay. Looking at the fact that the appellant bank has adopted illegal method to recover the loan, I close this case by ordering that whatever amount has been released by this Commission to the complainant shall be sufficient compensation to him and the remaining amount deposited vide order dated 11.05.2009 of this Commission shall be released to the appellant. Accordingly, the order of the State Commission in respect of award of compensation of Rs.5,00,000/- stands modified. As already examined earlier, the order of the State Commission in respect of award of punitive damages of Rs.50,00,000/- is set aside. First Appeal No.172 of 2009 is disposed of in these terms.