| Final Order / Judgement | DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA CC.No.281 of 22-04-2016 Decided on 08-05-2017 Kaur Singh S/o Darbara Singh R/o Ward No.10 Near Smadh Baba Sarwangi, Village Raman, Tehsil Talwandi Sabo, District Bathinda. ........Complainant Versus 1.Indusind Bank Limited Near Railway Crossing, Sirsa Road, Mandi Dabwali, District Sirsa, through its Branch Manager. 2.Indusind Bank Limited Near New Bus Stand, Guru Kanshi Marg, Bathinda, through its Branch Manager. .......Opposite parties Complaint under Section 12 of the Consumer Protection Act, 1986 QUORUM Sh.M.P Singh Pahwa, President. Sh.Jarnail Singh, Member. Present:- For the complainant: Sh.Ashok Gupta, Advocate. For opposite parties: Sh.K.K Vinocha, Advocate. ORDER M.P Singh Pahwa, President The complainant Kaur Singh (here-in-after referred to as complainant) has filed this complaint U/s 12 of Consumer Protection Act, 1986 against opposite parties Indusind Bank Limited and Other (here-in-after referred to as opposite parties). Briefly stated, the case of the complainant is that he took the loan from opposite party No.1 for purchase of the vehicle bearing registration No.PB-03-2177 vide loan account No.166-D. After purchase of the vehicle, he got it registered in his name. He got hypothecation of Indusind Bank incorporated in the registration certificate of the vehicle. He started making the payment of EMIs with opposite parties at Bathinda branch of Indusind Bank i.e. opposite party No.2. He has already repaid the entire loan amount and deposited a sum of Rs.4,16,000/- as full and final settlement of the loan account on 22.1.2016. Nothing remain due or outstanding against him. It is alleged that opposite parties have failed to issue requisite NOC in favour of the complainant regarding the vehicle till date despite the fact that loan account has been settled as full and final. He has been repeatedly requesting opposite parties to issue the requisite 'No Due Certificate', so that he may be able to get the hypothecation of the Indusind Bank cancelled from the original R.C, but to no effect. It is also alleged that without getting the hypothecation cancelled, the complainant is unable to dispose off/sell the vehicle. Due to non-issuance of 'No Due Certificate' by opposite parties, the complainant is suffering from great mental tension, agony, botheration etc. He has also got issued a legal notice through his counsel to opposite party No.1 on 7.4.2016, but to no effect. On this backdrop of facts, the complainant has alleged deficiency in service and unfair trade practice on the part of opposite parties. He has prayed for directions to opposite parties to issue 'No Due Certificate' regarding the vehicle in question. He has also claimed compensation to the tune of Rs.50,000/- on account of loss suffered by him and litigation expenses to the tune of Rs.3300/-. Hence, this complaint. Upon notice, opposite parties appeared through their counsel and contested the complaint by filing the written version. In the joint written version, opposite parties have raised the preliminary objections that the complainant got the vehicle financed from them having their branch office at Delhi. The loan agreement was executed regarding this at Delhi and loan amount was also disbursed from Delhi. As such, no cause-of-action has arisen within the jurisdiction of this Forum. This Forum has no jurisdiction to try and decide the complaint. The complainant is not a 'consumer' as he has purchased the commercial vehicle AL-4019 for commercial usage for which he availed the finance facility from the opposite parties bank vide loan agreement No.HDR00166D. He has concealed the material facts from this Forum that he has another commercial vehicle make AL-4019. It is also financed through opposite parties vide loan agreement No.HDR00166D. It proves that the complainant has not availed the services of opposite parties for the purpose of earning of his livelihood. He has availed the services for commercial purpose. He is the well-established transporter engaged in the business of transportation having various commercial vehicles. As such, the loan was taken by him to purchase the commercial vehicle for commercial purpose. As per opposite parties, true facts are that the complainant alongwith Harinder Pal Singh S/o Late Sh.Iqbal Singh, availed the finance facility on the vehicle bearing registration No.PB-03AF-3771 vide loan agreement No.HDZ00012D dated 21.12.2013 in which he stood as co-borrower and vehicle was registered in the name of Harinder Pal Singh. There was huge amount due against both Harinder Pal Singh as well as Kaur Singh. The vehicle was also in opposite parties (bank's) possession through section 9 order under Arbitration and Conciliation Act, 1996. Finally, an arbitration award dated 13.4.2016 has also been passed against Harinder Pal Singh and Kaur Singh. Both have been held liable severally and equally to pay the awarded amount to the tune of Rs.17,65,316/- with interest @ 18% per annum from 4.12.2015 until the date of actual payment and Rs.3000/- for litigation fee and cost of arbitration. As per terms of loan agreements, the liability of the complainant is co-extensive. Opposite parties have also extracted some Clauses of the loan agreement. Repetition of these Clauses is not necessary at this stage. It is further pleaded that opposite parties bank has a lien over all the assets of the complainant and has every legal right to hold 'No Objection Certificate' as per RBI guidelines of Reserve Bank of India till the clearance of all the liabilities by the complainant as per guidelines of Reserve Bank of India. NOC pertaing to the loan account No.HDR00166D cannot be issued unless the other loan account i.e. HDZ00012D got regularized or settled. The complaint is false, frivolous and vexatious and it does not disclose any cause-of-action against opposite parties. There is no deficiency on the part of opposite parties. The complainant has entered into an agreement with the opposite parties and as per agreement, it is agreed between the parties that in case of any dispute between them, the same shall be referred to the arbitrator to be nominated by opposite parties. As such, opposite parties (bank) invoked the clause of arbitration and initiated the arbitration proceedings against the complainant as well as Harinder Pal for the recovery of balance due huge loan amount as well as for taking possession of the vehicle through section 9 and 17 under Arbitration and Conciliation Act. On merits, opposite parties have controverted all the averments of the complainant and reiterated their stand as taken in the preliminary objections and detailed above. In the end, they have prayed for dismissal of complaint. Parties were asked to produce evidence. In support of his claim, the complainant has tendered into evidence photocopy of R.C, (Ex.C1); photocopy of legal notice, (Ex.C2); postal receipt, (Ex.C3); his affidavit dated 19.7.2016, (Ex.C4) and submitted written arguments. To rebut the claim of the complainant, opposite parties have tendered into evidence affidavit of Sunil Kalra dated 19.9.2016, (Ex.OP1/1); photocopy of GPA, (Ex.OP1/2); photocopy of loan agreements, (Ex.OP1/3 and Ex.OP1/9); photocopy of master circular, (Ex.OP1/4); photocopy of order, (Ex.OP1/5); photocopy of interim order, (Ex.OP1/6); photocopy of postal receipts, (Ex.OP1/7); photocopy of award dated 13.4.2016, (Ex.OP1/8); photocopy of account statement, (Ex.OP1/10) and submitted the written arguments. We have heard learned counsel for parties and gone through the file as well written arguments submitted by learned counsel for parties. Learned counsel for complainant has submitted that the material facts are not in dispute. The complainant has availed the loan for truck bearing No.PB-03-2177 and paid all the loan amount with interest. Nothing is due against this loan. In reply to Paragraph 2 of complaint, opposite parties have admitted that there is nothing outstanding against the loan account No.HDR00166D. As O.P.'s have admitted that nothing is due against the loan availed by the complainant, therefore, opposite parties are duty bound to issue 'No Due Certificate' regarding this vehicle. They have refused to issue 'No Due Certificate' on the basis of agreement No.HDZ00012D. Copy of agreement is brought on record by opposite parties as Ex.OP1/9. A perusal of this agreement will prove that nothing was paid to the complainant. The complainant is shown as co-borrower, but the vehicle was allegedly purchased by Harinder Pal Singh. There is nothing to show any payment to the complainant. Therefore, he cannot be held as co-borrower. As such, no liability can be fastened against him on the basis of this agreement. He has availed loan vide agreement dated 17.9.2012, (Ex.OP1/3) whereas the loan was advanced to Harinder Pal Singh vide agreement dated 21.12.2013. Both agreements were separate and independent. In these circumstances, 'No Due Certificate' regarding to the complainant cannot be withheld on the basis of other agreement, which is independent. It is further submitted by learned counsel for complainant that opposite parties have raised the objection regarding territorial jurisdiction of this Forum, but the contract was executed at Bathinda. The complainant also used to pay the installments at Bathinda. Opposite parties are having their office at Bathinda. Therefore, this Forum has territorial jurisdiction. Opposite parties have claimed that the agreement is executed at Delhi, but there is no document to prove this fact. There is also nothing to prove that the complainant has availed the loan for the commercial purposes. Now, the dispute is not regarding any loan. The entire loan has been cleared. The dispute is regarding only for issuance of 'No Due Certificate'. To support these submissions, learned counsel for complainant has cited 2013 (1) CPC 155 Kotak Mahindra Bank Limited Vs. Jumma Khan. On the other hand, learned counsel for opposite parties has submitted that the complainant has availed the loan vide agreement, (Ex.OP1/3). This agreement is executed at Delhi. The loan amount was also disbursed to the complainant from Delhi. As such, this Forum has no territorial jurisdiction to decide this complaint. To support these submissions, learned counsel for opposite parties has cited 2010 (1) CLT 252 Sonic Surgical Vs. National Insurance Company Limited. It is further submitted by learned counsel for opposite parties that the complainant has availed the loan for purchase of truck, which is commercial vehicle. Therefore, he has availed the services for commercial purposes. He does not fall within the ambit of 'consumer'. The complaint is not maintainable for this reason also. Next submission of learned counsel for opposite parties is that the complainant has availed the loan in question vide agreement dated 17.9.2012, (Ex.OP1/3). Opposite parties have placed on record another agreement dated 21.12.2013. Harinder Pal Singh was main borrower and complainant stood co-borrower. A perusal of liability of borrowers and co-borrowers will make it clear that co-borrowers are guarantor for due performance by the borrowers. Therefore, contention of the learned counsel for complainant that no loan was advanced to the complainant is without any merits. He was actually guarantor for due performance of the main borrower Harinder Pal Singh in this case. The liability of borrower and co-borrower is also detailed in Clause 2.12 of agreement and these liabilities are joint and several. It is co-extensive with the borrowers. In the written version, opposite parties have revealed that the complainant stood co-borrower for the loan availed by Harinder Pal Singh. It is also revealed that a huge amount is due against Harinder Pal Singh. The complainant has not denied this fact in his affidavit also. Opposite parties have also brought on record account statement relating to Harinder Pal Singh, (Ex.OP1/10), which also proves that a huge amount of more than Rs.10 lakhs was due against Harinder Pal Singh. This complaint has been filed on 22.4.2016. Opposite parties have also placed on record copy of award, (Ex.OP1/8). This award was passed on 13.4.2016 i.e. before filing of this complaint. The award was passed against both Harinder Pal Singh and Kaur Singh. Both were jointly and severally held liable to pay the amount of more than Rs.17 lakhs. As per Clause 20 of agreement, lender has lien over all the assets of the borrowers/co-borrowers. Therefore, opposite parties are having lien over the vehicle of the complainant against which the loan has been cleared. Opposite parties are entitled to withheld 'No Due Certificate' till the loan against another account is cleared. The complaint is liable to be dismissed. To support these submissions, learned counsel for opposite parties has cited decision of Hon'ble Haryana State Commission rendered in First Appeal No.518 of 2016, Decided on 25.1.2017 Indusind Bank Limited and Other Vs. Amrik Singh. We have given careful consideration to these rival submissions and gone through the case law cited by learned counsel for parties. It is admitted that the complainant has availed the loan vide agreement, (Ex.OP1/3). The version of the complainant is that the loan was availed at Bathinda. Opposite parties have pleaded that the agreement was executed at Delhi, but nothing is mentioned in the agreement regarding place of its execution. Moreover opposite parties are having office at Bathinda. The complainant has paid the loan at Bathinda. Therefore, this Forum has territorial jurisdiction to decide the case. Opposite parties have also pleaded that the complainant is not 'consumer. Of-course, the loan was availed for the purpose of vehicle, which is commercial vehicle, but the loan has already been paid. The dispute is regarding only issuance of 'No Due Certificate'. In case of Kotak Mahindra Bank Limited (Supra) also, dispute was only regarding issuance of 'No Due Certificate' and loan was availed for purchase of truck. Therefore, keeping in view the facts of the case and observations of Hon'ble National Commission in case of Kotak Mahindra Bank Limited (Supra), it is held that the complainant also falls within the definition of 'consumer'. Now, coming to the main controversy. Admitted facts are that the complainant has availed the loan and entire loan has been paid. The version of opposite parties is that the complainant also stood co-borrower in another loan case of one Harinder Pal Singh and executed agreement, (Ex.OP1/9). In the affidavit, (Ex.C4), the complainant has nowhere denied this fact and nor controverted the averments of opposite parties. Therefore, it is to be accepted that the complainant stood co-borrower in the loan agreement whereas Harinder Pal Singh was the main borrower. As per this agreement, the co-borrower in consideration to the loan to the borrower (Harinder Pal Singh in this case) has agreed to pay on demand any money due or which may become due and payable to the lender under the agreement and not paid by the borrower. Therefore, this liability of co-borrower makes it clear that he was guarantor for due performance on the part of Harinder Pal Singh and not co-loanee. The liability of borrower and co-borrower are detailed in Clause 2.12 of agreement. For sake of convenience, this Clause is reproduced as under:- “Liability of the borrower and the co-borrower is joint and several:- The liability of the co-borrower(s) is joint and several and is co-existent with that the borrower. The liability of the Co-borrower(s) to repay the loan together with interest etc. and to observe the terms and conditions of this agreement/and any other agreement/s, document/s that may have been or may be executed by the borrower with the lender in respect of this loan or any other loan or loans, is joint and several and consequently, the lender shall have a sole discretion to proceed against both or either of them to recover the loan and other charges payable by the borrower to the lender.” A perusal of this Clause also proves that the liability of co-borrower is joint and several and lender (opposite parties in this case) has sole discretion to proceed against both or either of them to recover the loan. Opposite parties have also placed on record copy of award, (Ex.OP1/8). As per this award, a sum of Rs.17,65,316/- was found payable by the borrower and co-borrower. Both were jointly and severally held liable. Clause 20.1 and 20.2 deal with the right of opposite parties, in case of default by borrowers. For sake of convenience, these Clauses are also reproduced as under:- “20.1) Notwithstanding anything contained in this agreement, the lender shall have a lien over all the assets of the borrower(s)/Co-borrower(s) in the lender's control and a right of set off against any monies due to the lender from the borrower/co-borrower(s) and to combine all accounts of the borrower(s)/co-borrower(s) for recovery of the lender's dues hereunder. 20.2) It is hereby agreed and understood by the borrower that, in the event the borrower(s) defaults in payment of the installments/charges/fees, without prejudice to the right of termination, the lender shall have the right to set-off all monies, securities, deposits, other assets and properties of the borrower's/co-borrower' that is held by the lender as secured asset, against the amount in respect of which the default has been committed under this agreement or any other agreement.” As per above provisions, opposite parties are having lien over all assets of the co-borrower also and they vare also having right against assets and other properties of the co-borrower. Now, it is to be seen whether the cases law cited by the learned counsel for complainant i.e Kotak Mahindra Bank Limited (Supra) is helpfull to the complainant or not. A perusal of this judgment reveals that in this case, the matter was relating to two separate loan accounts. Moreover the entire loan was paid by the complainant. This judgment is not applicable to the facts of the case in hand. In case of Indusind Bank Limited and Other (Supra), facts were similar. Amrik Singh, complainant paid the entire loan relating to truck bearing No.HP-17B-8586. It was financed by appellants (present opposite parties), but opposite parties did not issue 'No Due Certificate' despite clearance of the entire loan. The version of opposite parties was that the complainant was co-borrower in another loan and huge amount is due/payable by him and main borrower, which was not repaid. An award was also passed against borrower and complainant. The terms and conditions of the agreement between the parties were exactly similar to the terms and conditions involved in this agreement. Although, District Forum accepted the complaint and directed opposite parties (appellants) to issue 'No Due Certificate', but the appeal was accepted and complaint was dismissed. As a result of above discussions, the conclusion is that opposite parties are justified in with-holding 'No Due Certificate' and no deficiency in service or unfair trade practice can be attributed on their part. Thus, the complaint is hereby dismissed without any order as to cost. The complaint could not be decided within the statutory period due to heavy pendency of cases. Copy of order be sent to the parties concerned free of cost and file be consigned to the record. Announced:- 08-05-2017 (M.P Singh Pahwa) President (Jarnail Singh) Member
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