IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM

Dated, the 30^th day of November,  2023

Present:  Sri. Manulal V.S. President

Sri. K.M. Anto, Member

C C No. 118/2023  (Filed on 27/04/2023)

Petitioner                                 :         P.R. Sajeev,

                                                          S/o. Reghuvaran,

                                                          Amruthapury,

                                                          Vaikom P.O.

                                                          Madiyathara, Naduvile,

                                                          Kottayam – 686141

                                                          (Adv. Blessen Georgy Mathews)

                                                                   Vs.   

Opposite parties                       :    1.  Cholamandala Investment and Fianance

                                                          Company Ltd.   (Chola)

                                                          Dare House, 1^st Floor, No.2,

                                                          N.S.C. Bose road, Parrys,

                                                          Chennai – 600001

                                                          Rep. by its Managing Director.

                                                    2.   Cholamandalam Investment and

Finance Company Ltd. 

Kochuparambil Complex,

K.K. Road, Opp. Bharat Petroleum,

Kottayam – 686504

Rep. by its Branch Manager.

(For Op1 and 2, Adv. R. Ajith)

O  R  D  E  R

Sri. Manulal V.S. President

Case is filed under Section 35 of Consumer Protection Act, 2019

Case of the complainant is as follows:

The complainant who was desirous of purchasing a vehicle decided to avail the financial assistance from the opposite parties for the purchase of vehicle by the name and style Bolero which is manufactured by the Mahindra and Mahindra on 21-10-2020 for an amount of Rs.3,75,000/-. An amount of Rs.11,018/- was fixed as instalment for a period of 48 months. The complainant had promptly paid the instalments and by December 2022 he decided to sell off the vehicle.                             The complainant had informed the second opposite party that he would close the entire loan arrangements at once and requested for necessary closure papers and the balance dues. It is alleged in the complaint that the second opposite party began to behave quite indifferently when the complainant sought for an early closure of loan and began demanding more amounts than the actual amounts payable.                      The complainant being doubtful requested for the loan agreement and other documents relating the financial facility where the complainant was made to sign for closing the entire dues. However the second opposite party became reluctant to deliver the loan agreement and other necessary documents that would enable the complaint to settle the loan amount. The complainant was constrained to heed the stringent demands of the second opposite party and was made to pay an amount of Rs.5,54,100/-.  The balance amounts were fully paid on 22- 12 -2022. In the above said amount of Rs.5,33,088/- an amount of Rs.2,86,468 was paid in 26 instalments during the tenure of the loan and an amount of Rs.2,46,620/- and an amount of Rs.21,012/- was paid on 22- 12-2022. An amount of Rs.15,000/- was deducted when the loans were availed without any proper explanation. This is unlawful and against the various representations of the second opposite party. According to the complainant the sum of money that the complainant was made to pay is not lawful considering the facts that the complainant had availed only an amount of Rs.3,75,000/- and he   was ready to repay the entire amount by the 26^th  month against the agreed tenure of 48 months. It is alleged in the complaint that the opposite parties have illegally received money due to them and had made the complainant pay excess amounts forth closure of the loans availed and for the NOC papers required in the sale of the vehicle. The opposite party had taken undue advantage of the situation of the complainant by not rendering the loan papers asked and when requested by the complainant and there by has rendered deficient service and practiced unfair trade practice on the complainant. Hence this complaint is filed by the complainant praying for an order to direct the second opposite party to produce the entire documents relating to the loan agreement with the complainant and to retain the complainant the excess amount illegally held by the opposite parties and to pay Rs.50,000/- as the compensation for the loss and sufferings caused to him due to the acts of the second opposite party.

Upon notice from this Commission opposite parties appeared before the Commission and filed version contending as follows.

The complaint is not maintainable before this Commission as this Commission have no jurisdiction to entertain this complaint. On 21-10-2020 the complainant and his wife Ambili Sajeev entered into a loan agreement with the opposite party for the purchase of Mahindra Bolero vehicle bearing registration number KL- 45- P-302. The complainant was borrower and his wife Ambili Sajeev as co-borrower of the said loan agreement and availed Rs.3,75,000/-. As per the terms and conditions of the loan agreement complainant and his wife agreed to repay the loan amount along with interest in 48 monthly instalments  starting from 25-11-20. The complainant and the co borrower agreed to pay the monthly instalments on the 25^th day of every month and to pay additional interest@ 3% per month on delayed  payment of instalments if any. The representative of the opposite parties never approached the complainant nor gave any assurance to the complainant. The complainant availed NACH facility for repayment of the loan amount. The complainant is quite irregular in repaying the instalments from May 2021 onwards.   At the time of executing the loan agreement the terms and conditions of the loan agreement are clearly explained to the complainant and his wife in Malayalam by   the opposite parties. The provisions of the foreclosure penalty also explained to the complainant. The second opposite party never demanded more amount from the complainant and the complainant never demanded the original loan agreement and other documents from the opposite parties for settling loan account. The amounts mentioned in the paragraph number 7 of the complaint are false. The opposite parties properly credited loan amount in his loan account and issued proper receipts to the complainant.     The opposite parties never collected any amount unlawfully from the complainant. There is no deficiency in service or unfair trade practice only part of the opposite parties.

Complainant filed proof affidavit in lieu of chief examination and marked exhibit A1 from the side of the complainant. Manish T who is the legal executive of the opposite parties filed a proof affidavit and marked exhibit B1and B2.

On evaluation of complaint, version and evidence on record we would like to consider the following points.

1. Whether the complaint is maintainable ?
2. Whether the complainant had succeeded to prove any deficiency in service or unfair trade practice on the part of the opposite parties?
3. If so, what are the reliefs and costs?

Point No.1

There is no dispute on the fact that on 21-10-2020 the complainant and his wife entered into a loan agreement with the opposite parties for the purchase of Mahindra Bolero Vehicle and availed a loan amount of Rs.3,75,000/-. Opposite parties contended that as per clause 29 of loan come hypothecation agreements any dispute arise has to be referred to arbitration so the complaint is not maintainable before this commission.  In Emaar MGF Land Limited vs. Aftab Singh reported at I (2019) CPJ 5 (SC), wherein the Apex court has held as under:-

55. We may, however, hasten to add that in the event a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/special remedy and he is a party to an arbitration agreement, there is no inhibition in disputes being proceeded in arbitration. It is only the case where specific/special remedies are provided for and which are opted by an aggrieved person that judicial authority can refuse to relegate the parties to the   arbitration.

“The Hon’ble Apex Court has put to rest the controversy relating to the existence of arbitration clauses in the allotment letter/apartment buyer agreement etc. as is evident from the relevant paragraph of Emaar MGF Land Limited (supra). In the present case also, the Complainant has opted for the special remedies provided under the Consumer protection Act, 1986 therefore, this commission can refuse to relegate the present case to the arbitration. Hence, this Commission is authorized to adjudicate the case and the existence of an arbitration clause in the loan agreement does not affect the jurisdiction  of this Commission. Hence point number one is answered in favour of the complainant.

Point number 2 and 3

The complainant’s precise allegation is that the opposing parties received funds illegally and coerced additional payments for loan closure. Additionally, the second opposite party hesitated to provide the loan agreement and essential documents necessary for the complainant to fully understand the loan’s terms and conditions, hindering their ability to settle the loan amount.

According to the complainant he has paid Rs.5,33,088/- towards the loan amount out of that an amount of Rs.2,86,468/- was paid in 26 instalments during the tenure of the loan and an amount of Rs.2,46,620/- and an amount of Rs.21,012/- was  paid on 22-12-2022. It is proved by Ext.A1 that the complainant had paid Rs.2,46,620/- towards the loan account on 22-12-2022. ExhibitB1 is the loan agreement which was executed by the complainant and his wife Ambily Sajeev with opposite party on 21-10-2020. On a perusal of exhibit B1 we can see that complainant is the borrower and his wife is co-borrower in the said loan and they affixed their signature in exhibit B1. On going through the conditions for the interest in the loan agreement it is stated that the borrower shall be liable to pay the rate of interest for the loan amount which is specified in the schedule. It is further stated that rate of interest remain fixed during the tenure of the loan. In the schedule it is stated that the rate of interest is 18.01% and additional interest rate is 36% per annum. On going through the exhibit B2 statement of the loan account of the complainant we can see that the complainant was irregular in repaying the loan installment from May 2021 onwards. It is evident from exhibits B2 that the installment for the month of May 2021, June 2021 September 2021, February 2022, April 2022, August 2022 ,September 2022, October 2022, and November 2022 were not paid by the complainant in accordance with the Ext.B1  loan agreement and the cheques issued for those months were dishonoured. Therefore the complainant is bound to pay the penal interest for the same as per the exhibit B1 loan agreement.

On Perusal of schedule of the B1 loan agreement it is stated that no preclosure is permitted within 6 month from the date of agreement and for the pre closure from 7 to 12 months from the date of loan agreement a prepayment charge of 5% on principal outstanding plus service tax will be charged by the opposite parties and if the pre-closure is after 12 months from the date of agreement the prepayment charge is 4 % on principal outstanding plus service tax will be charged from the borrower. As stated earlier the rate of loan is a fixed rate of interest during the tenure of loan so the guidelines of the Reserve Bank of India regarding the pre-closure charges it is not applicable in this case. On the evaluation of above discussion we are of the opinion that the complainant has failed to prove his contention that the opposite parties illegally collected excess amount from him at the event of closure of the loan. Therefore we allow this complaint in part and pass the following order:

1. We hereby direct the second opposite party to give all the documents relating to the loan agreement to the complainant within 30 days from the date of receipt of the copy of this order. Failing which the second opposite party shall pay Rs.5,000/- (Rupees Five thousand only) as compensation to the complainant. Considering the nature of the case there will be no order of separate compensation and cost.

   Pronounced in the Open Commission on this the 30^th day of November, 2023

Sri. Manulal V.S. President             Sd/-

Sri. K.M. Anto, Member                 Sd/-

Appendix

Exhibits marked from the side of complainant

A1 – Duplicate copy of payment receipt dtd.22/12/2022

Exhibits marked from the side of opposite party

B1- Copy of loan agreement

B2 – Copy of account statement from 21/10/2020 to 27/05/2023 by opposite party

                                                                                                          By Order

                                                                                      Assistant Registrar