You are here: Home » PF » Column » Others
Business Standard

No auction without title of vehicle repossessed for payment default

Lenders who violate this norm can be charged with deficient service

Jehangir B Gai 

Photo: Shutterstock
Photo: Shutterstock

It’s common for finance companies to repossess vehicles for payment default. However, before the is auctioned, it is important for the finance company to have proper title and transfer registration of the Otherwise, it would constitute a deficiency in service.

Sachin Lohan, who had his own business called Skylark Infrastructure and Telesystem, registered himself on eBay Motors, an online for the of motor vehicles, and bought a put up for sale by Tata Capital Financial Services (TCFS) for Rs 3.1 lakh.

Lohan took the delivery from along with the relevant documents. However, when he approached the registering authority for transfer, the RTO refused to do so as the was not registered in the name of TCFS, but owned by as person named Suresh Kumar. So, Lohan could not use the purchased by him.

Since neither nor redressed his grievance, he filed a complaint against both of them. did not even bother to contest the case, while questioned the maintainability of the complaint contending that Lohan could not be considered to be a consumer as he had purchased the on a meant only for car dealers.

The District Forum held the complaint to be maintainable and ordered to refund Rs 3.1 lakh, along with 12 per cent interest. It also awarded Sachin Rs1 lakh as compensation. Since was only an platform and was not concerned with the transfer of ownership of the vehicle, no order was passed against it.

challenged the Forum's order, but its appeal was dismissed by the Delhi State Commission. The company then filed a revision before the

The Commission observed that the most crucial question was whether Lohan could be considered to be a consumer. It noted that even though the purchase was made on a B2B platform, Lohan had applied for transfer and registration of the in his individual name. He had also filed his affidavit stating that the was meant for his personal use. The noted that there was no evidence to show that Lohan had purchased the for resale or for any commercial purpose. So, the Commission concluded that Lohan was a consumer and that the complaint was maintainable.

The Commission observed that had sold the without having proper ownership documents and title. It held that had a duty to get the transferred to its own name before putting it up for As this was not done, Lohan could not get ownership rights despite having paid for the The Commission concluded that this was a deficiency in service, for which Lohan was entitled to be compensated.

By its order of May 26, 2017, delivered by Justice V K Jain, the concluded that the order passed in Lohan’s favour was justified. Since the was lying unused, the Commission ordered to collect the from where it was parked. With this observation, the dismissed the revision filed by Thus, a purchaser in an can also approach the consumer fora for deficiency in service.

The author is a consumer activist

First Published: Wed, June 07 2017. 15:45 IST