The National Consumer Disputes Redressal Commission (NCDRC), on 5^th Jan 2021, in a Revision Petition filed against the order dated 29.08.2020 of State Consumer Disputes Redressal Commission, Bhopal, Madhya Pradesh upheld the decision of the State Commission, Bhopal, Madhya Pradesh. The order was passed by the Presiding Member C. Viswanath (NCDRC) and in his ruling he opined that the seizure and auction by the bank of the tractor made in hurry on the basis of the assumption or apprehension that the party will become defaulter in the future is illegal and amounts to unfair trade practice.

Background:

The party took a loan of Rs.3,23,255 from the bank to purchase the tractor and it was to be repaid in 14 half-yearly instalments of Rs.39,250/-. According to the bank, the party had paid six instalments and the seventh instalment which was to be paid in May, 2010, but it was not paid by the party on time. The bank issued recalling notice against the party on 28.07.2010, whereby the party was given 7 days’ time to deposit the payment. Thereafter, on 13.08.2020, the bank seized the tractor of the party. In order to recover the loan amount and auctioned the tractor on 01.10.2020. Then the party approached the District Commission and it gave the decision in the favour of the party and aggrieved by the order of the District Commission the bank approached the State Commission by way of an appeal and the State Commission partly allowed the appeal and reduced the amount of the compensation to Rs.1,30,423/- in place of Rs.2,46,678 and the order in respect of mental agony amount of Rs.5,000/- and case expense amount of Rs.1,000/- passed by the District Commission was upheld by the State Commission.

Findings of The National Commission (NCDRC):

“Learned Counsel for the Bank contention was that the tractor was seized, as the party did not pay the instalment amount in time nor he replied to their notice. Bank themselves admitted that the party had paid six instalments in time. Recall notice was issued on 28.07.2010 and the tractor was seized on 13.08.2010. Learned Counsel for the Bank admitted that the auction notice was also given on 13.08.2010 itself, after seizure of the tractor. As per the bank, the party was issued many reminders to deposit the amount.

However, notices were issued by the bank to deposit the entire amount, beyond the means of the party. The party sought to deposit the demanded amount, after the crop season, which is expected of a farmer. If the party was to deposit the entire amount and not in instalments, there was no purpose of taking a loan. It defeats the very scheme of scheduling repayment of loans. In a tiring hurry, the tractor was seized, causing great hardship to the party. Merely based on an apprehension that the party would become a defaulter in future, the Learned Counsel for the bank stated that action was taken to seize and auction the vehicle to realise the dues. Apprehension of the bank that the party would become defaulter in future, cannot be a valid ground for seizure and auction of the tractor. Hurried seizure of the tractor and auctioning the same on the basis of assumptions and surmises, certainly amounts to unfair trade practice on the part of the bank”.