KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
VAZHUTHACAUD, THIRUVANANTHAPURAM
APPEAL No. 567/2016
JUDGMENT DATED: 20.07.2023
(Against the Order in C.C. 218/2012 of CDRC, Malappuram)
PRESENT:
SRI. AJITH KUMAR D. : JUDICIAL MEMBER
SRI. RADHAKRISHNAN K.R. : MEMBER
APPELLANTS:
- M/s Cholamandalam Investments & Finance Co. Ltd., Dare House, No. 2, N.S.C. Bose Road, Parrys, Chennai-600 001.
- Manager, Cholamandalam Investment and Finance Company Ltd., Court Road, Manjeri.
(By Adv. P. Balakrishnan)
Vs.
RESPONDENT:
Abdul Basheer, S/o Ummar, Thaikandi Parambil House, Melangadi, Calicut Airport P.O., Near Government School, Kondotty, Malappuram-673 647.
JUDGMENT
SRI. AJITH KUMAR D.: JUDICIAL MEMBER
The appellants were the opposite parties in C.C. No.218/2012 on the file of the District Consumer Disputes Redressal Commission, Malappuram (referred as District Commission as short). The District Commission as per the order dated 29.04.2016 directed the opposite parties to pay the complainant a sum of Rs.72,674/- with interest @ 6% per annum, to pay compensation of Rs. 10,000/- and Rs. 5,000/- as costs. Being aggrieved by the order this appeal has been filed.
2. The case of the complainant in brief is that the complainant had purchased a 2010 model Tata Lpt Lorry bearing Reg. No.KL10 AF-6645 by availing loan from the opposite parties and the same was endorsed in the RC Book of the vehicle. The first opposite party directed the complainant to pay Rs.19,819/- each in monthly instalments spreading a period of seven years from 30.09.2010 and obtained 17 signed cheque leaves, blank agreements, vouchers, receipts and forms as security. After collecting Rs. 24,000/- from the complainant the first opposite party paid the price of the vehicle to the dealer who delivered the vehicle to the complainant. The complainant paid Rs. 15,000/- to the opposite parties and he spent Rs. 2,00,000/- to decorate the vehicle. The Lorry was used for the Transportation of live chicken from Tamil Nadu. But the complainant was not able to repay the loan amount on account of the complications related to the Sales Tax Authorities and on account of an accident. The engine of the Lorry got damaged resulting in replacement of the engine. The complainant had paid Rs.1,55,311/- towards the loan and obtained receipts from the opposite parties. But the writing in those receipts had vanished within few days. The remittance made by the complainant was not credited to the principal amount but towards the inspection charges, interest on interest, notice charges, collection charges etc. The first opposite party, with the assistance of the police had seized the lorry by force even after receiving the major portion of the loan. The opposite parties still attempted to collect further amount by illegal means. When the complainant contacted the opposite parties they told him that the Lorry was sold for Rs 4,75,000/-. Actually the vehicle is worth Rs.12,00,000/-. The opposite parties were illegally extracting interest on interest. Hence the complainant would seek for an order directing the opposite parties to pay a sum of Rs. 4,00,000/- as excess amount collected and Rs. 5,000/- as compensation.
3. The opposite parties filed version with following pleadings:-
The agreement executed between the complainant and the opposite parties bear a specific clause that the parties should resort to arbitration proceedings in the event any dispute arises and the agreement stipulates jurisdiction for it at Chennai. As per the agreement dated 30.09.2010 the first complainant is the borrower and Mrs. Ramla is the guarantor in the loan and they were to pay Rs.9,31,493/- in 47 instalments for the period extending from 01.10.2010 to 01.08.2014. As they defaulted the instalments even after due notice the first opposite party had filed an application before the Hon’ble Madras High Court as per Sec. 9 of the Arbitration Act as A 5125/2011. As per the order dated 03.11.2011 of the Hon’ble High Court an Advocate Commissioner was appointed and the vehicle was seized on 26.11.2011. The allegation that the complainant had spent Rs. 2,00,000/- for decorating the vehicle is incorrect. The interest agreed to be paid was Rs. 2,01,493/- and not Rs.1,63,460/- as alleged by the complainant. The complainant had availed loan for Rs 7,30,000/- and not Rs. 7,00,000/- as alleged in the complaint. The complainant and his wife were served with notice prior to the sale of the vehicle, but they never resorted to settle the matter. No cause of action arose within the jurisdiction of the District Commission.
4. In the appeal memorandum the following contentions are raised:
The District Commission ought to have dismissed the complaint on the reason that the complainant does not come under the definition of "consumer" under the Consumer Protection Act. The District Commission had passed the order on a presumption. Here the question of presumption does not arise as the arbitrator had already adjusted the sale proceeds towards the loan and an award has been passed in view of the specific clause in the agreement.
5. The respondent/complainant remained absent though he was served with a notice issued by this commission. Hence the counsel for the appellant was heard. Perused the records received from the District Commission.
6. The learned counsel for the appellant drew our attention to the inherent falsehood contained in the complaint. In the complaint it is alleged that the appellant had taken possession of the vehicle by force with the aid of the police. In fact the appellant had approached the Hon’ble Madras High Court under Section 9 of the Arbitration and Conciliation Act and obtained an order appointing an Advocate Commissioner and took possession of the vehicle through due process of law which is alleged as an illegal taking of possession. The District Commission was inclined to pass an adverse observation against the complainant by suppressing material facts. It ultimately passed an order on fixing the total costs of the vehicle by mere presumptions. It is also significant to note that the complainant and his wife who was the guarantor were fully aware about the auction sale conducted which fact was elicited in cross examination of the complainant. So it is evident that the complainant was misleading the District Commission to secure a favourable order. When the facts transpired are known to the complainant it is obligatory on his part to narrate all those facts to the District Commission while seeking an order. There was calculated move on the part of the complainant in furnishing a distorted version of the actual facts and the District Commission was ready to grant a favourable order to such a litigant. The hypothecation agreement contemplates specific clause to resolve the disputes, if any, through the process of arbitration. The appellant had already initiated steps by approaching the court to get possession of the vehicle. Only thereafter Arbitration proceedings commenced and an award was also passed. A copy of the Arbitration award dated 30.07.2016 is filed. Arbitration proceedings had already reached the finality. So the question of presumption in fixing the balance to be paid does not arise. The learned counsel for the appellant cited an order of the National Commission reported in 111(2021) CPJ (NC) in “Mir Alam V Magma Finance Corporation" to canvass a proposition that in case an award has been passed by the arbitrator a complaint before the District Commission is not maintainable and the only option for such a person is to file an application under Sec. 34 of the Arbitration and Conciliation Act. This being the legal position it could be seen that the District Commission had exercised the discretion in an improper manner and reached at a strange conclusion on the basis of presumptions. Since the arbitration award was already passed the complainant ought to have exercised the reliefs under the Arbitration and Conciliation Act. The order passed by the District Commission is found as perverse, against the legal position and unsustainable. Hence the appeal is allowed.
In the result, the appeal is allowed and the order of the District Commission is set aside. The complaint shall stand dismissed. The respondent shall pay Rs. 5000/- as costs to the appellant.
AJITH KUMAR D.: JUDICIAL MEMBER
RADHAKRISHNAN K.R. : MEMBER
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