Cholamandalam Finance Company,& Ors. V/S Sri. M. Rajkumar, - Consumer Court Case

Karnataka

Kolar

CC/41/2014

Sri. M. Rajkumar, - Complainant(s)

Versus

Cholamandalam Finance Company,& Ors. - Opp.Party(s)

M.P.Narayana Swamy

21 Sep 2015

ORDER

Date of Filing: 11/08/2014

Date of Order: 21/09/2015

BEFORE THE KOLAR DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, D.C. OFFICE PREMISES, KOLAR.

Dated: 21^st DAY OF SEPTEMBER 2015

PRESENT

SRI. N.B. KULKARNI, B.Sc., LLB,(Spl.) ……. PRESIDENT

SRI. R. CHOWDAPPA, B.A., LLB …….. MEMBER

SMT. A.C. LALITHA, BAL., LLB …… LADY MEMBER

CONSUMER COMPLAINT NO :: 41 OF 2015

Sri. M. Rajkumar,

S/o. Munivenkategowda,

R/at: Mangasandra Village,

Begli Hosahalli Post,

Kolar Taluk.

(Rep. by Sriyuth. M.P. Narayanaswamy, Advocate) …. Complainant.

- V/s -

1) The Branch Manager,

Cholamandalam Finance Company,

Near State Bank Of Mysore,

Jayanagara, Tekal Main Road,

Kolar.

2) The Manager,

Regional Office,

Cholamandalam Finance Co. Ltd.,

No.45, II Floor, Prestige Libra,

Above the Pass Port Office,

Lalbagh Road, Bangalore-560 027.

(OP Nos.1 & 2 are represented by

Sriyuth. C.M. Niranjana Swamy, Advocate) …. Opposite Parties.

-: ORDER:-

BY SRI. N.B. KULKARNI, PRESIDENT

01. The complainant having submitted the complaint on hand as envisaged Under Section 12 of the Consumer Protection Act, 1986 has sought, reliefs against these Ops jointly and severally, for returning of the truck Bolero MAX bearing registration No. KA-07-A-2691 and for compensation towards loss of income in a sum of Rs.1,20,000/- and costs of Rs.50,000/- and deficiency charges of Rs.30,000/- together with interest @ 18% p.a.

02. The facts in brief:-

It is contention of the complainant that, OP-1 as branch office in Kolar whereas OP-2 has regional office in Bangalore as per the address mentioned in the cause title. The complainant had purchased the said vehicle from Ops for a sum of Rs.4,62,000/-, whereas he had made down payment of Rs.85,000/-. And that rest of the amount was financed by the Ops by sanctioning loan of Rs.3,88,000/- which amount was to be repaid within 47 months of quarterly EMIs.

(a) Further it is contended that, by making use of the said vehicle he was getting Rs.1,500/- per day. And that till March-2014 he made payments to the Ops unfailingly. And that such payments were as mentioned below:-

1) 05.06.2013, Rs.11,235/-

2) 26.07.2013, Rs.11,300/-

3) 22.08.2013, Rs.11,250/-

4) 23.09.2013, Rs.11,250/-

5) 29.10.2013, Rs.11,250/-

6) 31.12.2013 Rs.11,000/-

7) 31.01.2014 Rs.3,000/-

8) 17.02.2014 Rs.11,300/-

9) 31.03.2014 Rs.10,000/-

(Thus total sum of Rs.91,585/-)

(b) And that while so, these Ops had seized the said vehicle on 19.05.2014 and the same came to be sold on 29.05.2014. And that, such sale was without assessment of rate of the said vehicle at the relevant time, and without any paper publication and by violating the principles of natural justice.

(d) Along with the complaint the complainant has submitted office copy of the notice dated: 08.07.2014 issued to the Ops together with postal receipts and three postal acknowledgements, RPAD letter dated: 14.07.2014 issued by the Ops to the counsel for the complainant, Xerox copy of statement of accounts.

03. In response to the notice served the Ops have put in their appearance through their said learned counsel and have submitted written version resisting the claim of the complainant in toto.

(a) It is contended that the complainant was not a Consumer as defined Under the Act. And that as there is provision for invoking arbitration as per the agreement, this Forum lacks jurisdiction. And that under the said agreement the venue of the arbitration shall be at the registered office of the company housed in Dare House No-2, (Old No.234), NSC Bose Road, Parrys, Chennai-600001, or such other place/location/city which the company might decide from time to time as per discretion.

(b) And that it was up to the said company to appoint a sole arbitrator and upon his death or inability or unwillingness another was to be appointed to this post who should continue the proceedings from the stage it was left by the predecessor.

(c) And that as per the loan-cum-hypothecation agreement the complainant being borrower was not at all a Consumer Under Section 2(1)(d) of the said Act. And that the complainant was sanctioned the said loan under the said agreement dated: 08.05.2013.

(d) There is a denial of deficiency of service as contended as well contended payments made by the complainant till March-2014. There is denial with regard to daily earnings of Rs.1,500/- on the part of the complainant as contended.

(e) Further it is contended that, as the complainant was guilty of committing default in payment of installments final call letter dated: 02.05.2014 came to be issued. And that the said vehicle was repossessed on 19.05.2014, for which pre-sale notice dated: 19.05.2014 was also given to the complainant. And that as the complainant did not respond they were constrained to sell the said vehicle on 29.05.2014. And that under the circumstances there could be no deficiency in service. And that the complaint is liable to be dismissed with compensatory costs of Rs.25,000/- dismissal of this complaint has been sought.

04. The very complainant has submitted his affidavit evidence by way of examination-in-chief on 06.05.2015. On this day with Memo the learned counsel appearing for the complainant has submitted the following documents:-

1) Receipt dated: 04.06.2013 for having paid Rs.11,235/- to the Ops.

2) Receipt dated: 24.07.2013 for having paid Rs.11,250/- to the Ops.

3) Receipt dated: 21.08.2013 for having paid Rs.11,250/- to the Ops.

4) Receipt dated: 21.09.2013 for having paid Rs.11,250/- to the Ops.

5) Receipt dated: 28.10.2013 for having paid Rs.11,250/- to the Ops.

6) Receipt dated: 30.12.2013 for having paid Rs.11,000/- to the Ops.

7) Receipt dated: 15.02.2014 for having paid Rs.11,300/- to the Ops.

8) Receipt dated: 30.03.2014 for having paid Rs.10,000/- to the Ops.

05. On behalf of the Ops Sri. Manjunath.V, the Senior Associate Legal Coordinator/Power of Attorney Holder has put in his affidavit evidence by way of examination-in-chief.

06. On 22.06.2015 the learned counsel appearing for the complainant has submitted written arguments.

07. On 18.09.2015 the Learned counsel appearing for the complainant with Memo has submitted Xerox copies of following two citations:-

(i) I (2014) CPJ 14B (CN) (Har)

(ii) II (2014) CPJ 19 (NC)

(iii) Print-out of article “maintainability of consumer complaint when the goods are meant for commercial purpose” by Vandana Singh & Associates.

08. The learned counsel appearing for the Ops on 22.06.2015 has submitted written arguments with the following documents (by way of Xerox copies) :-

i) Quotation for Purchase of Vehicle dated: 29.05.2014

ii) Letter of Indemnity dated: 29.05.2014

iii) Sale Acceptance Letter on our Letter Head dated: 29.05.2014.

iv) Authorization letter to seize the vehicle dated: 19.05.2014

v) Seizure/Surrender Report dated: 19.05.2014

vi) Pre-Sale Letter to the Customer dated: 19.05.2014

vii) Pre-Seizure Intimation to Police Station dated: 17.05.2014

viii) Final Call Letter to the Customer dated: 02.05.2014

ix) Post-seizure Intimation to Police Station dated: 19.05.2014

x) postal acknowledgement

xi) Postal cover with acknowledgement.

09. Besides the learned counsel for the Ops has also submitted Xerox copies of 14 citations which shall be referred to hereafter at appropriate stage.

10. On 18.09.2015 the learned counsel appearing for the Ops with Memo has submitted following original documents:-

i) Final Call Letter to the Customer dated: 02.05.2014

ii) Postal acknowledgement

iii) Pre-Seizure intimation to Police Station dated: 17.05.2014

iv) Post-Seizure Intimation to Police Station dated: 19.05.2014

v) Authorization Letter to Seize the Vehicle, dated: 19.05.2014

vi) Pre-Sale Letter to the Customer, dated: 19.05.2014 pasted with postal receipt.

vii) Redirected RPAD cover.

viii) Seizure/Surrender Report dated: 19.05.2014.

11. The learned counsel appearing for the Ops on 18.09.2015 has submitted Xerox copies of the following two documents and citation:-

i) Application form.

ii) Loan Agreement – Vehicle Finance annexed with schedule.

iii) I (2015) CPJ 228 (NC)

12. Heard painstaking and persuasive oral arguments as advanced by the learned counsel appearing for both sides on 25.08.2015 and then on 18.09.2015.

13. Therefore the points that do arise for our consideration in this case are:-

1. Whether the present complaint is not maintainable as there is arbitration clause as contended by the OPs?

2. Whether the complainant was/is a Consumer as envisaged Under Section 2(1)(d) of the Consumer protection Act, 1986?

3. If so, in the presence of hire purchase agreement the Ops could be held as guilty of deficiency in service?

4. If so, to what relief the complainant is entitled to?

5. What order?

14. Findings of this District Forum on the above stated points for the following reasons are:-

POINT 1: In the Negative.

POINT 2: In the Affirmative.

POINT 3: In the Affirmative.

POINT 4: The complainant is entitled to recover total sum of Rs.2,00,000/- together with interest @ 9% p.a. from 11.08.2014 being the date of the complaint till realization from Op Nos.1 & 2 jointly and severally.

POINT 5: As per final order for the following:-

REASONS

POINT NO.s. 1 to 4:-

15. To avoid repetition in reasonings and as these points do warrant common course of discussion, the same are taken up for consideration at a time.

(a) There is a bald plea on the part of the OPs that in the event of litigation the same should be referred to the arbitration. Even then, we are of the definite opinion that, as per Section 3 of the Consumer Protection Act, 1986 the complainant is having every liberty to approach this forum by preferring the complaint on hand. Consequently, the complaint is maintainable.

(b) The learned counsel appearing for the Ops by placing reliance on principles enunciated in II 1993 CPR 392 maintained that, truck purchased for transport business being for commercial purpose as per the said provisions of Section 2(1)(d) of the Act the complainant was/is never a Consumer. As against the said submissions the learned counsel appearing for the complainant by placing reliance on the said treatise which incorporate principles enunciated in [1992 CPJ (1) 95 NC], (1991) 1 CPJ, AIR 1995 SC 1428, II 1995 CPJ 139, 2001-CPJ-3-9-NC maintained that, such purchasing of the said truck was for self-employment and even instances like hiring others instead of keeping the vehicle idle, or plying the same as public carrier by himself and at times to allow cleaner to drive the vehicle, would have the effect of treating him as consumer only, as per the provisions of the said Act.

(c) As the principles enunciated in the citation relied by the Ops are inapplicable to the case on hand and as the principles enunciated in the said treatise as relied by the learned counsel appearing for the complainant do apply to the present facts of the case, we have no hesitation to hold that, the present complaint was/is consumer within the meaning of provisions of the said Act. Besides we are mindful about the plea maintained by the complainant which is to the effect that by using the said truck he was earning Rs.1,500/- per day. This would mean rather emphatically that the complainant was using the vehicle in question for his self-employment. Even it shall be so, if the complainant were to allow at times to entrust the cleaner to drive the vehicle as per the principles enunciated in the said treatise. So we reaffirm that, the complainant was/is a Consumer as per the said provisions of the Act.

(d) The learned counsel appearing for the Ops by placing reliance on the principles enunciated in,

i) 1995 (3) CPR 93,

ii) 1995 (3) CPR 293,

iii) I (2008) CPJ 121 NC

iv) 2004(2) CPR 584

v) 2006 CTJ 209 Supreme Court (CP)

vi) 2011 (3) CPR 113 NC

vii) 2012 (4) CPR 75 NC

viii) 2012 (3) CPR 89

ix) Judgment in Appeal No.120/2010, dated: 12.01.2011 as passed by the Hon’ble Karnataka State Consumer Disputes Redressal Commission, Bangalore.

x) Order dated: 02.03.2013 in C.C. No.81/2012 passed by the then learned Predecessor’s of this very Forum.

xi) I (2015) CPJ 228 NC,

maintained that as undoubtedly purchase of the said vehicle was under hire purchase agreement and as the Ops were financiers being real owners of the said vehicle had every right, and authority in law to repossess the said vehicle and even sell the same in auction to realize the balance. And that hence the complainant has no locus-standi to question the same.

(e) As against the said submissions made by the learned counsel appearing for the Ops the learned counsel appearing for the complainant by placing reliance on principles enunciated in (i) I (2014) CPJ 14A (CN) Uttarkhand and (ii) II (2014) CPJ 19 (NC), maintained that, even in the presence of hire purchase agreement and the contended dues being there, if the vehicle came to be repossessed forcibly and without any reasonable cause and such vehicle was to be sold at “throw away price” just equivalent to the contended outstanding amount, the same would be illegal, and hence the present Ops since are guilty of the same they are accountable for deficiency in service.

(f) We have thoughtfully gone through the principles enunciated in the citations as relied by the learned counsel appearing for the Ops. True when the purchase is through hire purchase agreement in case of default in payment of installment necessarily the creditors have dominating right being owners of such vehicles to repossess and sell the same, but the same shall have to be subject to following certain legal procedures. And one of such legal procedure is to ascertain what exactly was the outstanding due just prior to repossession of the vehicle from the person to whom financial help has been extended, and secondly to put him on guard by issuing pre-sale notice so that principles of natural justice would have met in case such a person were to come forward either to discharge the dues or to agitate the very claim of financer with regard to the contended outstanding dues, if according to him arrival of outstanding dues was erroneous. What has happened in this case is, the Ops were guilty of assuming outstanding dues in a very out of proportion way as such, seizer of the said vehicle was illegal and the contended attempt to issue pre-sale notice without ascertaining that, the same was received by the complainant on a particular day would amounts to deficiency in service. So now we proceed to assign our reasons for arriving at such conclusion.

(g) As per the Final Call Letter to the Customer dated: 02.05.2014 the outstanding dues were Rs.53,285/-. Whereas the statement of accounts issued by the Ops to the complainant, as produced, the same would indicate that as on 01.05.2014 the complainant was due for 12^th installment in a sum of Rs.11,235/-. When so, how come this final call letter to the customer dated: 02.05.2014 disclosed the dues as in a sum of Rs.53,285/-? We will forget for the time being additional finance charges of Rs.10,000/- mentioned in this final call letter and what would be accountable as overdue installment value as mentioned in this letter is in a sum of Rs.43,285/-, which figure is against their own admitted figure in a sum of Rs.11,235/- as on 01.05.2014 as disclosed in the statement of accounts. Besides what is the ground to claim additional finance charge is unknown. Consequently such a claim is bound to be held as figment of imagination. So this is impermissible.

(h) Besides the Ops are not at one with regard to the mode of repayment by way of installments. True, as per this statement of accounts there shall be 47 equal monthly installments which shall be in a sum of Rs.11,235/- each. And even in the very loan application though the very same figure is repeated as Rs.11,235/-, 47 monthly installments, the RPAD letter dated: 14.07.2014 as issued at the instance of the Ops would disclose that the period of 47 months for repayment was to be covered by quarterly EMIs. Therefore the very Ops are totally uncertain with regard to the mode of repayment of installments as to whether it was equal monthly installments (EMIs) or Quarterly Equal installments (QEIs).

(i) It is worth to be noted that, the so called pre-sale letter to the customer was dated: 19.05.2014 disclosing outstanding dues as in a sum of Rs.3,87,790/- no doubt this notice is annexed with the postal receipt which is dated: 20.05.2014. This much of evidence is not enough, for, it was up to the Ops to come up with relevant evidence as to on what date this document was received by the complainant. Evidence is wanting in this context. Therefore the contended sale on 29.05.2014 was without giving an opportunity for which the complainant was legally entitled to, so that he could have made legitimate representations to the Ops as to how and why the vehicle in question was not at all to be sold by the Ops. This is glaring and inexcusable error on the part of the Ops which has resulted in deficiency in service.

(j) At this juncture we should take in to consideration the contended Final Call Letter dated: 02.05.2014. As per the postal acknowledgment the Xerox copy of which is submitted by the Ops there is no seal impression as to on what date it was received by the complainant. We have before us the original of this postal acknowledgment which bears the postal date-seal to show as if it was delivered to the complainant on 08.05.2014. If this document was then existing Xerox copy of which is produced by the very Ops why it is not to bear the date-seal impression ? Therefore serious doubts would arise with regard to the original postal acknowledgment.

(k) Furthermore there is initial put, which according to the Ops is of the very complainant. It cannot be accepted, for, the ink and the handwriting with regard to address particulars of the complainant and the ink and style for the so called initial found are not only in one and the same handwriting but of the ink also. This kind of unacceptable attempt make us to come to the definite conclusion that, even the original final call letter dated: 02.05.2014 was not at all received by the complainant, on any date much less on 08.05.2014.

(l) On the loan application & loan agreement-vehicle finance the complainant has signed his full name. Whereas the so called postal acknowledgment is only in initial that too differing in handwriting style. So we are of the opinion that, the so called initial on this postal acknowledgment contendedly dated: 08.05.2014 was not of the complainant.

(m) As such the Ops are guilty of violating principles of natural justice in not communicating the complainant with this final call letter as well pre-sale letter which are said to be dated: 02.05.2014 and 19.05.2014. Secondly the sale of the vehicle conducted on 29.05.2014 on the part of the Ops was nothing but illegal, and hence there was total deficiency of service on the part of the Ops.

(n) One of the reliefs claimed is for returning of the said vehicle. It is undisputable that it has already been sold on 29.05.2014 and even the sale proceeds of Rs.3,30,000/- have been appropriated by the Ops to the contended dues. In such event we cannot even think of granting of this relief though the complainant has been worst hit on account of wrongful conduct of the Ops.

(o) The principles enunciated in III (1992) (I) CPR 482 as relied by the learned counsel appearing for the Ops is to the effect that this forum while granting relief Under Section 14 of the Act, cannot issue any direction in the nature of injunction, for this, we have to observe that, there is no need to apply the principle to the case on hand in as much as the said vehicle has already been disposed-off by the Ops. Had the vehicle been in the custody of the Ops then there could have been occasion for us to consider the claim of the complainant for returning of the said vehicle, in which event, certainly the said principle would have gained paramount importance.

(p) So we are of the opinion that, whatever the sums the complainant has paid so far to the Ops shall have to be refunded. Admittedly at the time of purchase of the said vehicle the complainant has paid in cash a sum of Rs.85,000/- further by way of installments he has paid sum of Rs.91,585/- thus the Ops are in receipt of the total sum of Rs.1,76,585/-. Further, we are also of the definite opinion that, the complainant is entitled to compensation for the deficiency in service he has suffered. We quantify the sum as in a sum of Rs.24,415/-. As such the complainant is entitled to recover the total sum of Rs.2,00,000/- together with interest @ 9% p.a. from 11.08.2014 being the date of the complaint till realization, from the OP NOs.1 & 2 jointly and severally. Hence findings on these points.

POINT 5:-

16. We proceed to pass the following:-

ORDER

01. For foregoing reasons the complaint stands allowed with costs of Rs.3,000/- against these OPs as hereunder:-

(a) The complainant is held entitled to recover a sum of Rs.2,00,000/- together with interest @ 9% p.a. from 11.08.2014 being the date of the complaint till realization from the OP Nos.1 & 2 jointly and severally.

(b) We grant time of one month to the OPs to comply the order from the date of receipt of the same.

(02) Send a copy of this order to both parties free of costs.

(Dictated to the Stenographer in the Open Forum, transcribed by him, corrected and then pronounced by us on this 21^th DAY OF SEPTEMBER 2015)

MEMBER MEMBER PRESIDENT