DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BARNALA, PUNJAB.
Complaint Case No : 134/2016
Date of Institution : 11.01.2016
Date of Decision : 06.03.2017
Harish Sharma aged about 33 years son of Shri Surinder Sharma, resident of House No. B-XIV/1610, Street No. 4, Moran Wali Pahi, Sekha Road, Barnala, Tehsil and District Barnala. …Complainant
Versus
1. Fullerton India Credits Company Ltd., Registered Office at 3rd Floor, No. 165, Megh Towers, PH Road, Madaravoyal, Chennai-600095 through its Authorized Person.
2. Fullerton India Credits Company Ltd., Corporate Office at Supreme Business Park Floors 5 and 6, B Wing, Supreme IT Park, Supreme City, Powai, Mumbai-400076 through its Authorized Signatory.
3. Fullerton India Credits Company Ltd., Sector 8-C, Chandigarh through its Branch Manager.
4. Fullerton India Credits Company Ltd., K.V. Complex, Handiaya Bazar, Barnala through its Branch Manager.
…Opposite Parties
Complaint Under Section 12 of Consumer Protection Act, 1986.
Present: Sh. Gagandeep Garg counsel for the complainant.
Sh. Anuj Mohan counsel for opposite parties No. 1 to 3.
Opposite party No. 4 deleted.
Quorum.-
1. Shri S.K. Goel : President
2. Ms. Vandna Sidhu : Member
3. Shri Tejinder Singh Bhangu : Member
ORDER
(SHRI S.K. GOEL PRESIDENT):
The complainant namely Harish Sharma has filed the present complaint under the Consumer Protection Act, 1986 (hereinafter referred as Act) against the Fullerton India Credits Company Limited opposite party No. 1 and others.
2. The brief facts of the case are that the complainant availed a loan of Rs. 30,000/- on 30.12.2010 from the opposite parties at Barnala and signed the requisite papers/documents in their favour and they after completion of the paper work and necessary verification sanctioned the loan. However, the opposite party paid an amount of Rs. 27,257/- instead of Rs. 30,000/-. The said loan amount was to repay in 36 monthly equal installments of Rs. 1,603/- each.
3. The complainant has alleged that he had already paid Rs. 33,665/- to the opposite parties from 5.1.2011 to 5.1.2014 in 21 monthly installments. Then, he approached the opposite party for supplying of the details of the account. The opposite party gave the status of the account to the complainant and demanded Rs. 33,445.71 paise whereas the complainant had already paid Rs. 33,665/- against the loan of Rs. 30,000/-. Then, the complainant asked the opposite party to supply the details and rate of interest but the opposite party refused to accede to the request of the complainant and gave threat to the complainant that if he failed to deposit the demanded amount to the opposite party then the same would be recovered from the property of the complainant and other legal action would also be taken and further the opposite party had threatened that blank cheques duly signed by the complainant which were in possession of the opposite parties will be misused by them and they will initiate proceedings under Section 138 of the NI Act. It is also alleged that many attempts were made to get the matter solved but all invain. Hence the present complaint is filed seeking the following reliefs.-
1) The opposite parties may be directed to withdraw the illegal demand of Rs. 33,445.71 paise.
2) To pay Rs. 20,000/- as compensation on account of harassment and Rs. 10,000/- on account of mental torture and Rs. 5,000/- as litigation expenses.
4. Notice of this complaint was issued to the opposite parties. The opposite parties jointly filed written version taking legal objections interalia on the grounds of locus standi, jurisdiction, complaint is frivlous and it does not fall under the definition of consumer dispute. Further, the complaint is not maintainable.
5. On merits, they submitted that the complainant had availed the personal loan facility from the respondent company and vide loan Agreement dated 28.12.2010 a sum of Rs. 30,000/- was advanced/ financed by them. As per the said loan agreement the entire sum alongwith interest at the rate of 49% per annum compounded with monthly rests is to be repaid by the applicant/complainant in 36 monthly installments of Rs. 1,603/- regularly. The said loan agreement was duly signed by the complainant after reading and understanding the terms and conditions of the said agreement. However, they have denied that any blank cheques signed by the complainant were in their possession. It is also submitted that the installments period of the said loan was from 5.1.2011 to 5.1.2014. The complainant has not paid any amount after 27.2.2013. Out of 36 installments the complainant paid 21 installments of Rs. 33,665/-. Till date Rs. 24,035/- being payment of pending installments, Rs. 8,529/- being cheque bouncing charges and Rs. 1,276.47 paise being LPP Charges i.e. total amount of Rs. 33,840.47 paise is still outstanding against the complainant. They have denied the other allegations of the complainant and finally prayed for the dismissal of the complaint.
6. On the statement of counsel for the complainant dated 17.3.2016 the opposite party No. 4 was deleted from the arena of the opposite parties.
7. In order to prove his case, the complainant has tendered into evidence his own affidavit Ex.C-1, copies of receipts Ex.C-2 to Ex.C-7, copy of letter dated 18.12.2015 Ex.C-8, copy of account statement Ex.C-9 and closed the evidence. Written arguments were also filed by the complainant.
8. To rebut the case of complainant, opposite parties No. 1 to 3 tendered in evidence copy of Loan Agreement Ex.OP-1, copy of Loan Summary Schedule Ex.OP-2, copy of demand promissory note Ex.OP-3, copy of Credit Approval Memo Ex.OP-4, copy of application form for privilege programme Ex.OP-5, copy of application form Ex.OP-6, copy of Foreclosure Report Ex.OP-7, copy of Account Statement Ex.OP-8 and closed the evidence. Written arguments were also filed by the opposite parties.
9. We have heard the learned counsel for the parties and have gone through the record on the file.
10. The sole question in this case is to determine whether the opposite party is entitled to interest on the loan of Rs. 30,000/- at the rate of 49% per annum or the said rate is on the higher side.
11. In order to prove that the interest at the rate of 49% per annum is on the higher side, the complainant has placed on record his detailed affidavit Ex.C-1 wherein the complainant has stated that he availed a loan of Rs. 30,000/- on 30.12.2010 from the opposite party and he had already paid Rs. 33,665/- from 05.01.2011 to 05.01.2014 in 21 monthly installments. He further stated that the opposite party did not supply the details and rate of interest but demanded Rs. 33,445.71 paise and further threatened that if the complainant failed to deposit the demanded amount then the same would be recovered from the properties of the complainant and other legal action will also be taken. To prove further that he has paid Rs. 33,665/- the complainant has placed on record the various receipts Ex.C-2 to Ex.C-7 and the account statement Ex.C-9. However, perusal of the account statement Ex.C-9 shows rate of interest as 48.24% per annum.
12. In fact the demand of Rs. 33,665/- is due to charging interest at the rate of 48.24% per annum. Facing this situation the learned counsel for the complainant has contended that the complainant has never agreed to charge such high rate of interest. Moreover, there is nothing in the agreement Ex.OP-1 which is the basic document. The opposite party cannot charge interest arbitrarily and even in the market the rate of interest is not more than 12% per annum.
13. The learned counsel for the complainant has also relied upon 1986 AIR-1571 titled Central Inland Transport Corporation Limited Versus Brojo Nath Ganguly wherein was observed as.-
“This principle is that the Courts will not enforce and will when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable
clause in a contract entered into between parties who are
not equal in bargaining power. The above principle will
apply where the inequality of bargaining power is the result
of the great disparity in the economic strength of the
contracting parties. It will apply where the inequality is
the result of circumstances, whether of the creating of the
parties or not. It will apply to situations in which the
weaker party is in a position in which he can obtain goods
or services or means of livelihood only upon the terms
imposed by the stronger party or go without them. It will
also apply where a man has no choice, or rather no
meaningful choice, but to give his assent to a contract or
to sign on the dotted line in a prescribed or standard form
or to accept a set of rules as part of the contract, however, unfair unreasonable or unconsionable a clause in
that contract or form or rules may be. This principle will
not apply when the bargaining power of the contracting
parties is equal or almost equal. mis principle may not
apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations with their vast infrastructural organisations and with the State through its instrumenta- lities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. The Court must judge each case on its own facts and circumstances.”
14. Apart from the above cited citation the learned counsel for the complainant has also brought to the notice Section 23 of Indian Contract Act to this Forum, wherein any agreement if it is opposed as to public policy containing unreasonable terms then it can be held unlawful.
15. It is also relevant to refer Section 3 of The Usurious Loans Act, 1918 which is as.-
(a) that the interest is excessive; and
(b) that the transaction was as between the parties thereto substantially unfair,
It has further added as.-
“that the Court may exercise all or any of the following powers,-
(i) re-open the transaction take an account between the parties and relieve the debtor of all liability in respect of any excessive interest;
(ii) notwithstanding any agreement purporting to close previous dealings and to create a new obligation re-open any account already taken between them and relive the debtor of all liability in respect of any excessive interest and if anything has been paid or allowed in account in respect of such liability order the creditor to repay any sum which it considers to be repayable in respect thereof;
16. Now coming to the present case. Firstly, there is nothing in the agreement Ex.OP-1 which may show that the opposite party is competent to charge such an excessive rate of interest and there is also no mention of any reasons for charging such high rate. Secondly, the application for loan Ex.OP-6 shows that the complainant is working as a Operator and his gross annual income is shown as Rs. 1,12,800/- and the net annual income is mentioned as Rs. 93,600/- i.e. Rs. 8,000/- per month approximately. Therefore, we are of the opinion that both the parties are not in equal in bargaining while entering the agreement.
17. Thirdly, the opposite party has not produced on record any document to indicate that the public sector banks/private banks or any financial institutions charging of such an excessive rate of interest. Fourthly, it is pertinent to mention here that everyone in this democratic country has the right to live and nobody is expected to exploit the means and his hard earned income by putting unreasonable terms in the agreement.
18. As a result of the above discussion, we are of the opinion that the present case is squarely covered by the Usurious Loans Act and the judgment cited as 1986 AIR-1571 Supra as referred to above. Therefore, we are of the view that ends of justice shall meet if the opposite parties are directed to charge the interest at the rate of 18% per annum instead of 49% per annum.
19. Keeping in view the above discussion, present complaint is partly accepted and the demand made by the opposite parties for Rs. 33,445.71 paise is set aside and the opposite parties are directed to charge interest at the rate of 18% per annum and issue a fresh demand accordingly to the complainant. However, in view of the peculiar circumstances of the case no order as to costs or compensation. This order shall be complied with within 45 days from the date of the receipt of this order. Copy of this order be supplied to the parties free of costs. The file be consigned to the records.
ANNOUNCED IN THE OPEN FORUM:
6thDay of March 2017
(S.K. Goel)
President
(Vandna Sidhu)
Member
(Tejinder Singh Bhangu)
Member
