Date of Filing: 20.03.2018
Date of Order: 30.08.2021
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION – I, HYDERABAD
P r e s e n t
HON’BLE Smt. P. Kasthuri PRESIDENT(FAC)
HON’BLE Sri K.RAM MOHAN, MEMBER
On this the Monday the 30th day of August, 2021
C.C.No. 143 of 2018
Between
- Mothukupally Parushuramulu
S/o M.Balaiah, aged about 41 years,
Occ: Driver
- Smt M.Manjula
W/o Mothukupally Parushuramulu
Aged abut 36 years Occ: Driver,
Both are R/o H.No.4-81, Nagisettypally
Kesavaram, Shameerpet, Hyderabad …Complainants
A N D
- The Manager
Cholamandalam Investment
and Finance Company Limited
Branch Off: Flat NO.102, 7-1-59/2,
1st Floor, Divya Shakti Apartments
Dharam Karam Road, Ameerpet
Hyderabad-50016
- The Manager
Cholamandalam Investment and
Finance Company Limited
Dare House, 2 NSC, Bose Road, Parrys
Chennai -600 001
…Opposite parties
Counsel for the complainant : Mr. P.V.Srinivsan
Counsel for the opposite parties : Mr.C.V.Srinath
O R D E R
(By Smt. P. Kasthuri PRESIDENT (FAC) on behalf of the Bench)
1. The complaint is filed under Section 12 of Consumer Protection Act 1986 to direct the opposite party no.1 to pay compensation of Rs.30,000/- per month for 8 months totalling to Rs.2,40,000/-; the opposite party no.1 shall handover the vehicle in running condition to the complainant and pay compensation of Rs.30,000/- per month; to pay compensation of Rs.5,00,000/- and costs of Rs.25,000/-.
2. The case of the complainant in brief :-
The complainant has purchased Toyota Innova bearing No.AP-10-V-9211 for the purpose of earning his livelihood having been financed for Rs.2,50,000/- under an agreement with the opposite parties whereby the loan amount was repayable with interest in monthly instalments which the complainant paid regularly without any default. The complainants further stated that they stood as the guarantors to one Chandra Shekar Reddy Dasari who is one of the member/subscriber of opposite party no.1 vide agreement No.XYSHUHYF00001632149 for the vehicle bearing No.AP20TB7913 Toyota Innova and he became the defaulter of the monthly EMIs. As a result of default of payment of EMIs, the opposite party no.1 without issuing any notice and without any intimation to the complainant taken away the vehicle from parking place where the complainant regularly parks the vehicle. The complainants lodged a complaint of theft case with the police. The opposite parties even after making repeated calls and visiting the office failed to return their vehicle. The complainants are dependent upon their vehicle for earning their livelihood and due to the possession of the vehicle by the opposite parties, the complainants become defaulters in payment of further instalments of the vehicle. Though the complainants got issued legal notice to the opposite parties, the opposite parties have not returned the vehicle of the complainant. Hence, this complaint.
3. Version of Opposite party No.1 & 2 :-
The opposite party no.1 filed its counter which was adopted by the opposite party no.2 wherein the opposite parties submitted that the complainant has been using the vehicle for commercial use and that the complainant cannot be construed s a consumer as defined u/s 2(1)(d) of the C.P.Act. The claim of the complaint is barred by the principles of waiver, estoppel acquiescence and/or resjudicata and / or principles analogous thereto. There is an arbitration clause in the agreement and the aggrieved party can approach the Arbitrator as Section 8 of Arbitration and Conciliation Act, 1996 clearly states that when there is a subsisting arbitration clause then the parties have to be refer the matter to arbitration for settlement of dispute.
The opposite parties further submitted that the complainant had obtained finance from the opposite parties against his vehicle by executing loan hypothecation agreement wherein as per clause:
“ 21. LIEN AND SET OFF
- the company shall have lien and right to set off on all money’s belonging to the Borrower/Guarantor for standing to its credit in any account whatsoever with the company. If upon demand by the company the balance outstanding in the loan account is not paid within the prescribed time, such credit balance in any account of the borrower/guarantor or his relatives as defined under the Companies Act, 1958 or partner as the case may be, shall be adjusted towards dues under the loan account. In case of any deficit, the deficit amount may be recovered by the company from the borrower/guarantor.
- Nothing contained in these presents shall be deemed to limit or affect prejudicially the rights and powers of the company under the security documents or letter of guarantee or any of them or under the law.
- There shall be no set off or counter claim by the borrower/guarantor and that all payments made by the borrower under the agreement must be without set off or guarantee or any of them or under the law.
Thus as per the agreement the present complaint is not maintainable and as such the same is liable to be dismissed.
The opposite parties further submitted that the complainant was not regular in making the monthly payments. The Complainant stood guarantor to one Mr.Chandra Sekhar Reddy and he had defaulted the repayment of his loan and in spite of several reminders to the defaulter and also to the complainant, they did not comply with the repayment as such, the opposite parties have initiated action, against the complainant as he is a guarantor to such loan and his vehicle was taken into possession/seized by informing the complainant. The opposite parties have not committed deficiency in service and has not done any acts which are illegal or unlawful and has conducted business strictly as per the agreed terms and conditions and guidelines issued by RBI and therefore sought for dismissal of the complaint.
4. During the course of enquiry, the complainant no.1 filed his evidence affidavit reiterating the material facts of the complaint and got marked exhibits Ex.A1 to A4 and also filed Written arguments on their behalf. On behalf of the opposite parties Mr. Ali Abbas Kashani, Legal Manager and POA Holder has filed affidavit and got marked Exs. B1 to B6.
5. Despite there was a conditional order to submit arguments on behalf of both parties, they were called absent hence, their arguments were deemed to be heard.
On a consideration of the material brought on record, the following points have emerged for consideration.
- Whether there is any deficiency in service on the part of the opposite party?
- Whether the complainant is entitled for the relief claimed for?
- If so, to what relief.?
6. POINT NO.1 & 2:-
The admitted facts of the case are that that the complainant’s have purchased a Toyota Innova Vehicle bearing No. AP10V9211 by availing vehicle loan of Rs. 2,50,000/- on hire purchase agreement from opposite parties . It is also an admitted fact that the opposite parties have seized the above said vehicle of the complainant’s for default in payment of monthly installments.
It is contention of the complainants that they were very regular and prompt in paying the loan installments and never defaulted any installment to the opposite parties, but the complainant No.1 stood as a guarantor to one Mr. Chandra Sekhar Reddy Dasari who also took vehicle loan on hire purchase agreement from the same opposite parties and the said Mr. Chandra Sekhar Reddy was not regular and became a defaulter in paying installments as a result of which, without any intimation or notice to the complainant’s, the opposite parties have seized their vehicle. The complainants made several requests and also issued notices to the opposite parties for release of their vehicle, but the opposite parties have not released their vehicle.
The opposite parties resisted the complaint on various grounds stating that the complainants were running the vehicle in question as a private taxi / car service i.e, they were using the vehicle for a commercial purpose as such they cannot be termed as consumers and the present complaint is not maintainable. Further, it is also submitted that the complainant’s have entered into and hire purchase agreement with them as per which, there is an Arbitration clause in the said agreement, therefore, the present matter has to be referred to the Arbitration for settlement of disputes. The opposite parties also submitted that the complainant No.1 stood has guarantor to one Mr. Chandar Sekhar Reddy and that in spite of several requests for repayment of loan, Mr. Chandra Sekhar Reddy failed to respond, therefore with no other option left, and they initiated an action against the guarantor i.e, the complainant No.1 herein and took possession of the vehicle.
Having gone through the rival contentions of both parties, the question to be decided is whether the opposite parties are justified in seizing the vehicle of complainants and whether the opposite parties are given prior intimation / notice to the complainants about the seizure of their vehicle.
There is no denial of the fact that the complainant No.1 stood as a guarantor to the loan sanctioned by the opposite parties to Mr. Chandra Sekhar Reddy and Mr.Chandra Sekhar Reddy has defaulted in repayment of the loan to the opposite parties.
Ex.A1 & A2 dt. 02.08.2017 & 06.09.2017 respectively are the two letters issued by the opposite parties intimating the complainants about the outstanding loan. Under Ex.A1, the opposite parties have clearly stated that contrary to the terms of the agreement, complainant No.1 committed default in payment of installments and dispite several reminders and demands, complainant’s have not put any effort till date to pay the outstanding amount of Rs. 1,39,424/- and continued to remain as defaulter and further it is also specially stated in the said letter that if the complainants failed to clear the dues, they would sell the vehicle in as is where is condition and appropriate the sale proceeds towards the outstanding loan amount.
Since, there was no reply to the above said letter, the opposite parties have initiated action for recovery of loan and seized the vehicle of the complainant and gave information to him under Ex.A2 dt. 06.09.2017 stating that they have seized the vehicle on 06.09.2017 by following due process under the Agreement and in view of seizure of the vehicle, the agreement stands terminated and the total outstanding amount shall be payable by the complainant’s within 7 days from the date of receipt of the said letter and take release of their vehicle.
To the above said letters as seen from the record, there was no reply from the complainants to show that they have put any efforts to make payment for release of the vehicle. However after several months, the complainants got issued a legal notice under Ex.A3 dt. 16.02.2018 calling upon the opposite parties to handover the vehicle to the complainants. For the said legal notice, of complainant, the opposite parties gave a reply dt. 27.02.2018, wherein they stated that one Mr. Chandra Sekhar Reddy availed the vehicle loan under hire purchase agreement and the complainant No.1 stood as a guarantor to the said agreement and since Mr.Chandra Sekhar Reddy defaulted in repaying the loan, the loan account got accrued with huge outstanding amount and as per the right, the opposite parties under the agreement took possession of the vehicle after complying with the due process of law and further also advised the complainant’s to approach their branch to remit and settle the outstanding dues, but the complainants instead of approaching them, they filed the present complaint.
Thus from the above said letters, it becomes clearly established that there was a default in repayment of loan to the opposite parties by the complainants for the loan taken by them and also in capacity of the guarantor to the loan granted to Mr.Chandra Sekhar Reddy. Further, it is also sufficiently proved by the opposite parties that they have given prior intimation to the complainants regarding the outstanding amounts due to be paid and the nonpayment of the outstanding amount within the stipulated time would result in seizure of the vehicle, but the complainant has not taken any steps. Hence, there is no deficiency in service on the part of the opposite parties and seizure of vehicle is justified on their part.
It is a settled law that according to Sec. 128 of the Indian Contract Act, the liability of the guarantor is co-extensive with that of the principal debtor and the grantor will be liable to the extent as the principal debtor will be. It depends upon the creditor to choose against whom he wants to proceed first. If he so wishes to move against the surety first, then the fact that he did not initiate a proceeding against the principal debtor holds no consequence. The same is true for hypothetic goods and mortgaged goods. However, the surety can limit his liability by placing such terms in the contract itself.
Here, in the present case, the complainant has stood as a guarantor to the loan granted to Mr. Chandra Sekhar Reddy and for the failure on behalf of Mr. Chandra Sekhar Reddy to repay his loan amount, the complainant’s vehicle was seized after due intimation to him and gave sufficient opportunity to take repossession of the vehicle by paying the outstanding loan but the complainant has not utilized the opportunity.
Hence, based on the discussion held above, it is clear that the opposite parties have issued letters to the complainants before seizing the vehicle and when the complainants did not respond to the said letters, the opposite parties after following the due procedure have seized the vehicle. Therefore, we find that there is no merit in the case of the complainants. As such, we strongly feel that the complaint has to be dismissed.
7. POINT NO.3
In the result, the complaint of the complainant is dismissed. Each party to bear their own costs.
Dictated to steno, transcribed and typed by him, pronounced by us on this 30th the day of August, 2021.
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
WITNESS EXAMINED
-
EXHIBITS FILED ON BEHALF OF THE COMPLAINANT:
-
Ex.A2 – Copy of Loan Agreement No. XSHUHYF00001509612 dt.
06.09.2007.
Ex.A3 – Copy of Legal notice dt. 16.02.2018.
Ex.A4 – Copy of Loan Agreement No. XSHUHYF00001509612 dt.
07.07.2017.
EXHIBITS FILED ON BEHALF OF THE OPPOSITE PARTIES:
Ex.B1-Copy of Loan agreement and terms and conditions
Ex.B2- Registration Certificate Extract.
Ex.B3- Loan application.
Ex.B4- Inventory receipt.
Ex.B5- Letter issued to the complainant dt. 11.08.2017.
Ex.B6- Letter issued to the complainant dt. 06.09.2017
MEMBER PRESIDENT
