Date of Filing 17.08.2023

                                                                                                             Date of Disposal: 28.11.2023

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

BEFORE TMT. Dr.S.M. LATHA MAHESWARI, MA. ML, Ph.D (Law),                                         …….PRESIDENT

               THIRU.P.VINODH KUMAR, B.Sc., BL,                                                                                ……MEMBER-I

CC.No.80/2023

THIS TUESDAY, THE 28^th DAY OF NOVEMBER 2023

1.Mrs.S.Kalpanadevi,

    W/o.G.Sukumar,

2.Mr. G.Sukumar,

   S/o.Govindaswamy,

Both are residing at No.3/73,

Dr.Ambedkar Street,

Karanodai, Sholavaram Post,

Ponneri Taluk, Thiruvallur District.                                                     ......Complainants.

                                                                              //Vs//

1.The Branch Manager,

   Equitas Small Finance Bank,

   Senkundram, Ponneri Taluk,

   Thiurvallur District.

2.The Manager,

    Equitas Small Finance Bank,

    4^th Floor, Phase 2, Spencer Plaza,

    No.769, Anna Salai, Chennai 600 002.                                         …..opposite parties.

Counsel for the complainants                                           : Party in Person.

Counsel for the opposite parties                                      : Mr.Sushil Kumar, Advocate.

This complaint coming before us on various dates and finally on 18.11.2023 in the presence of the complainant who appeared party in person and Mr.Sushil Kumar, counsel for the opposite parties and upon perusing the documents and evidences of both sides this Commission delivered the following:

ORDER

PRONOUNCED BY TMT.Dr.S.M. LATHA MAHESWARI, PRESIDENT

1. This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service with regard to loan repayment against the opposite parties along with a prayer to direct the opposite parties to discharge the complainants from loan and to award Rs.5,00,000/- compensation for destroying the business of complainants, reduction of CIBIL Score etc., along with Rs.5,00,000/- compensation for mental agony and Rs.69,000/- towards expenses for redemption of loan totalling an amount of Rs.10,69,000/-.  It is also prayed to cancel the license granted to opposite parties.

Summary of facts culminating into complaint:-

2. Aggrieved by the act of the opposite parties finance company the present complaint was filed.

3. The crux of the complaint was that vide Loan Agreement No.SERDHLS02693777 an amount of Rs.9,80,000/-was obtained from the 1^st opposite party to be repaid in monthly EMIS.  After payment of 22 monthly instalments amounting to Rs.3,88,652/-, there was a balance amount to be repaid i.e., a sum of Rs.5,91,348/-. During the said period Rs.17,30,000/- was sanctioned vide loan from National Trust Housing Finance Limited.  Hence, when opposite party was approached on 17.05.2022 with cheque for a sum of Rs.10,00,886/- the opposite party demanded extra amount of Rs.54,000/- as pending amount. Further the opposite party’s staff treated the complainants very badly leading to mental agony and harassment to the complainants.  The 1^st complainant even went to the state of committing suicide.  Further the complainants were not informed about the rate of interest charged, details about the amount paid etc.  Due to the act of opposite parties the loan sanctioned by National Trust Housing Finance Limited was also got cancelled.  Thus aggrieved present complaint was filed to discharge the complainants from loan and to award Rs.5,00,000/- compensation for destroying the business of complainants, reduction of CIBIL Score etc., along with Rs.5,00,000/- compensation for mental agony and Rs.69,000/- towards expenses for redemption of loan totalling an amount of Rs.10,69,000/-.  It is also prayed to cancel the license granted to the opposite parties.

The crux of the defence put forth by the opposite parties:-

4. The opposite parties disputing the allegations stated that the complainants had availed mortgage loan for the purpose of business expansion and hence they do not come under the definition of consumer.  As per the arbitration clause (30) of the said loan agreement the opposite party had initiated Arbitration proceedings and award has been passed.  The complainant had not raised any objection or appeared before the sole arbitrator. The complainant defaulted in repayment of loan under the loan agreement and the opposite party initiated SARFAESI proceedings.  The complaint filed by the complainants was a counter claim against the SARFAESI.  There is no deficiency in service by the opposite parties under section 2(11) of the Consumer Protection Act 2019 as alleged in the complaint. The opposite party Bank had sanctioned loan for a sum of Rs.9,80,000/- and the same was availed and borrowed by the complainants.  A loan agreement No.SERDHLS0269377 dated 24.12.2019 was entered and opposite parties disbursed sum of Rs.9,30,751/- after deducting charges towards processing fee, Cersai, Insurance, Admin fee, Documentation charges and the said loan amount was credited to the complainants account. The complainant and the co-borrower had also endorsed in the loan application form. The contents of the loan application form were read to them in vernacular language and the same was understood by them. The 2^nd complainant had mortgaged the schedule mentioned property to the opposite party Bank and executed the Memorandum of Deposit of Title Deeds of the property in favour of the opposite party Bank towards security of the loan account. Contrary to the Terms and conditions of the loan agreement the complainant failed to pay the instalment amounts. As the loan account remained overdue for a period of more than 90 days, the account was declared as non-performing asset.  As per the arbitration clause (30) of the said loan agreement the opposite parties had filed Arbitration Claim petition which was numbered as ACP 1883/2022.  The Arbitrator had issued reference notice and claim petition with summons to the complainants.  The complainant remained absent and they were placed exparte and finally the Arbitrator passed an award on 11.11.2022 and the same was communicated to the complainants. The opposite party denies the allegation that they behaved arrogantly and threatened to seize the house or lock the house.  The complainants defaulted the loan account and failed to adhere to the Terms and Conditions of the loan agreement and failed to pay the legitimate loan amount due to the Bank, inspite of many reminders given to the complainants for the repayment of the outstanding amount.  Since the complainant committed default in repayment of monthly instalments the opposite party Bank after following the guidelines of the RBI classified the loan account as “Non Performing Asset” within the meaning of section 2(o) of the SARFAESI Act.  The opposite party Bank issued a demand notice dated 26.08.2022 under section 13(2) of the SARFAESI Act 2002. The opposite party had filed a petition under section 14 of SARFAESI Act before Chief Judicial Magistrate, Thiruvallur in Crl.Mp.No.3583/2023 seeking court assistance in taking physical possession of the property. The opposite party comes under the purview of RB and was acting according to the guidelines stipulated by the Regulatory Authority. Thus the opposite party states that all the allegations mentioned in the complaint are nothing but false and fabricated allegations with ill-intention. Thus they sought for the dismissal of the complaint.

5. On the side of complainants proof affidavit was filed and documents marked as Ex.A1 to Ex A13 were submitted. On the side of opposite parties proof affidavit was filed and documents marked as Ex.B1 to Ex.B8 were submitted.

Points for consideration:-

1. Whether the Consumer Complaint is maintainable before this Commission?
2. If so, whether the complaint allegations has been successfully proved by the complainants by admissible evidence against the opposite parties?
3. To what relief the complainants are entitled?

Point No.1:-

The following documents were filed on the side of complainant in support of their contentions;

1. Welcome letter issued by the opposite parties for loan Agreement No.SERDHLS0269377 dated 23.01.2020 was marked as Ex.A1;
2. Statement of Accounts issued by the opposite parties from Feb.2020 to April 2022 was marked as Ex.A2;
3. Loan Offer Letter issued by National Trust Housing Finance Limited to the complainants dated 31.03.2022 was marked as Ex.A3;
4. Cheque issued by the National Trust Housing Finance Limited for a sum of Rs.10,00,886.00/- dated 31.03.2022 was marked as Ex.A4;
5. Foreclosure Letter issued by the opposite parties to the complainants dated 17.05.2022  was marked as Ex.A5;
6. Letter given by the complainant to the opposite parties with regard to cancel the Housing Loan Agreement dated 23.05.2022 was marked as Ex.A6;
7. CD was marked as Ex.A7;
8. News paper publication in the New Indian Express and Dhinamani dated 10.11.2022 was marked as Ex.A8;
9. Notice written by the opposite parties in the complainants house wall was marked as Ex.A9;
10. Notice issued by the complainants to the 1^st opposite party was marked as Ex.A10;
11. Notice issued by the complainants to the 2^nd opposite party was marked as Ex.A11;
12. Licence in the name of complainant was marked as Ex.A12;
13. Aadhaar Card of the complainants was marked as Ex.A13;

The following documents were filed on the side of opposite parties in support of their defence;

• Loan Application Form was marked as Ex.B1;
• Sanction letter dated 19.12.2019  was marked as Ex.B2;
• Loan Agreement was marked as Ex.B3;
• MODT was marked as Ex.B4;
• Arbitration Award dated 11.11.2022 was marked as Ex.B5;
• Demand notice issued by the opposite parties to the complainants dated 26.08.2022 was marked as Ex.B6;
• News paper publication in the New Indian Express and Dhinamani was marked as Ex.B7;
• Statement of Accounts and Foreclosure letter was marked as Ex.B8;

            6. Heard both party in person/complainant and learned counsel appearing for the opposite parties.

7. As the opposite parties learned counsel had taken a preliminary defence as to the maintainability of the case before this Consumer Commission, we decided to discuss the maintainability of the complaint as a preliminary issue.

Complainants’ arguments:-

8. The complainant/party in person argued that though he was ready to foreclose the Loan Account with the opposite parties, they purposefully avoided the same and threatened the complainants with dire consequences.  It is his argument that there is no due to be paid by him except the amount arrived by him.  Thus he sought for the complaint to be allowed as prayed for.

9. On the other hand, the opposite parties’ counsel argued in Tamil as per the request of the complainant.

10. The learned counsel apart from disputing the maintainability of complaint argued that the complainants did not pay the instalments properly and hence they had initiated the recovery proceedings only as per the guidelines provided for Nor Banking Financial Institutions.  Thus he sought for the complaint to be dismissed.

11. On perusal of pleadings and evidences put forth before this Commission, on the question of maintainability we come across Ex.B5 and Ex.B6 produced by the opposite parties herein. ExB5 is the Arbitration Award passed in ACP.No.1883/2022 wherein the opposite parties had raised a claim for Rs.10,72,985/- from the complainants herein based on the loan availed and loan agreement executed by them.  The complainants herein did not appear before the Arbitrator and hence an exparte Award was passed for a sum of Rs.10,72,985/- with 18% interest from the date of claim petition i.e., on 08.09.2022.

12. The said Award was not assailed by the complainants herein by preferring any petition under section 34 of the Arbitration and Conciliation Act, 1996.  By catena of decisions it is well settled that the Arbitration Act, 1996 is a complete code and once an Award is passed unless it is challenged by an application under section 34 of the said Act, for setting aside the Award, the Award attains finality.  When the Award is in force, no legal proceedings could be raised or initiated against the same issue (Loan Agreement No.SERDHLS02693777).  Undisputedly, in the present case, the complainants did not challenge the Award passed by the Arbitrator.

13. In addition to the same, against the property mortgaged as collateral Security for the loan availed by the complainants SARFAESI proceedings were also initiated by the opposite parties which is well established by Ex.B6, the demand notice issue under section 13(2) of the SARFAESI Act, 2002 dated 26.08.2022.  It is to be highlighted here that both recovery proceedings were initiated well before filing of the present complaint dated 17.08.2023.

14.  In such facts and circumstances, we have no hesitation to hold that the present complaint as filed before this Commission is not maintainable.  We find our view supported by the decision rendered by National Consumer Disputes Redressal Commission in Balmukand Joshi Vs Suresh Rathi Securities Private Limited dated 11.01.2023 in Revision Petition No.1178/2021. In the said decision it has been held as follows;

12. A reference can be made to the Order dated 13.09.2021 passed by the Hon'ble Supreme Court in 'Navneet Jha vs. Magma Shrachi Finance Limited' [SLP No. 13778 / 2021] wherein it has held as under:-

"It appears that there were criminal proceedings, complaints, etc. It may be pertinent to point out that the agreement executed contained an arbitration clause. The matter was apparently referred to arbitration. The arbitrator passed an award dated 06.07.2011. The complainant neither complied with the award nor took any steps to challenge the award under Section 34 of the Arbitration and Conciliation Act, 1996, but instead, filed a complaint under the Consumer Protection Act, 1986 in the District Consumer Redressal Forum (District Forum), Karwadha in Kabirdham District in Chhattisgarh. The District Forum dismissed the complaint observing that there was evidence of an arbitral award passed against the petitioner. The complaint was, therefore, held not to be maintainable.

Against the aforesaid order, an appeal was filed before the State Consumer Disputes Redressal Commission, Chhattisgarh (State Commission). The State Commission affirmed the order of the District Forum and dismissed the appeal. The revision petition filed by the petitioner has been dismissed by the judgment and order impugned.

It is well settled that the Arbitration and Conciliation Act, 1996, is a complete code and once an arbitral award is passed, it is to be challenged in the manner provided in the Arbitration and Conciliation Act, 1996 by making an application under Section 34 for setting aside of the award, within the time stipulated under Section 34(3) of the said Act. This has admittedly not been done."

13. Undisputedly, in the present case, the Arbitration Award had attained finality as the Complainant / Petitioner did not challenge the Award under Section 34 of the Arbitration and Conciliation Act, 1996.  The Award has also been complied with. Accordingly, as rightly held by the State Commission, the Consumer Complaint is not maintainable  

 Thus the point answered against the complainants holding that the complaint is not maintainable wherein they have sought for discharge of the Loan Account No.SERDHLS02693777 and other allied reliefs.

Point Nos.2&3:-

15.  As we have held above that the complaint itself is not maintainable before this Commission, we do not take any pain to discuss the merits of the case.  We leave it open to be decided by appropriate forum.  Hence complainants not entitled to any relief. 

In the result, the complaint is dismissed. No order as to cost.

            Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this 28^th day of November 2023.

     -Sd-                                                                                                                        -Sd-

MEMBER-I                                                                                                           PRESIDENT

List of document filed by the complainant:-

List of documents filed by the opposite parties:-

      -Sd-                                                                                                                         Sd-                                                                                        MEMBER-I                                                                                                         PRESIDENT