DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, LUCKNOW
CASE No.448 of 2010
Smt. Seema Yadav,
W/o Sri Nand Gopal,
R/o 4/402, Sector-8-H,
Jankipuram, Lucknow.
……Complainant
Versus
1. Magma Leasing Ltd./Magma Fincorp Ltd.,
Regd. Office-Magma House, 24 Park Street,
Kolkata-700006.
Through its Managing Director.
2. Branch Manager,
Magma Leasing Ltd./Magma Fincorp Ltd.,
Branch Office-YMCA Building,
13, Rana Pratap Marg, Lucknow-226001.
.......Opp. Parties
Present:-
Sri Vijai Varma, President.
Smt. Anju Awasthy, Member.
JUDGMENT
This complaint has been filed by the Complainant against the OPs for directing the OPs to release the vehicle of the Complainant immediately or refund the total deposited amount of Rs.11,64,784.00 plus Rs.81,980.00 with 18% interest and for payment of compensation of Rs.5,00,000.00 and cost of suit of Rs.11,000.00.
The case in brief of the Complainant is that in the first week of February, 2007 the Complainant contacted to OP No.2 to get financial assistance for purchasing a truck of Rs.11,01,980.00 and the OPs had agreed to finance Rs.10,20,000.00 and Complainant had to make down payment of Rs.81,980.00. After payment of Rs.81,980.00 by the Complainant, the OP No.2 had taken signatures of Complainant on various blank papers as well as on various
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papers printed in English language by saying that these signatures are required for execution of hire purchase finance agreement and completion of necessary formalities. Thus, the said formalities were completed in the office of OP No.2 at Lucknow on 09.02.2007 and Complainant was assured that the copy of finance agreement shall be provided to her after getting approval from head office of the Co. but the copy of the said agreement was not given to the Complainant by OPs prior to 19.01.2010. In pursuance of agreement dated 09.02.2007 the Complainant had to repay total Rs.13,59,248.00 including finance charges of Rs.2,48,872.00 and insurance premium for the 2nd year & 3rd year of Rs.90,376.00 plus financed amount of Rs.10,20,000.00. Thus, the total amount of Rs.13,59,248.00 was to be paid by Complainant in 44 months in monthly instalments of Rs.30,892.00 each commencing from 15.02.2007. After completion of aforesaid formalities, the Complainant purchased a truck No.UP32 CN 1236. Thereafter, the Complainant regularly deposited the monthly instalments. From 15.02.2007 upto 15.06.2009 the Complainant had to deposit Rs.8,95,868.00 (Rs.30,892.00 x 29= Rs.8,95,868.00) while she had deposited Rs.8,63,784.00 thus only Rs.32,084.00 had become overdue against her upto 15.06.2009 due to some financial crisis and circumstances. Thereafter, the instalment for the month of July, 2009 was going to be due on 15.07.2009 but before 15.07.2009 the Complainant on 10.07.2009 received an undated letter of OP wherein the OP had arbitrarily stated that total Rs.1,07,976.00 had become due including EMI for the month of July, 2009 which is required to be paid upto 15.07.2009 otherwise the Co. shall be constrained to take legal action in pursuance of hire purchase agreement. Before 15.07.2009 which was the due date for payment as per demand letter, the OPs forcibly repossessed the vehicle of Complainant on 11.07.2009 through their hired goons while
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the vehicle of Complainant was on the way loaded with customer’s Maurang worth Rs.35,000.00 with cash Rs.27,000.00 kept inside the truck for payment to OPs towards instalment. After the aforesaid incident the Complainant met with OP No.2 and requested to get payment of actual due amount of Rs.62,976.00 and to release the vehicle but the OP No.2 did not pay any heed, then the Complainant issue registered notice dated 13.07.2009 through Counsel to OP No.2but the OP instead of giving reply of notice issued illegal demand notice dated 16.07.2009 making demand of Rs.5,95,435.00 to be paid within 7 days failing which the vehicle shall be disposed off. Though a sum of Rs.62,976.00 only was due against the Complainant, she was forced to deposit a sum of Rs.2,70,000.00 to get the vehicle released as per instruction of OP No.2. Therefore, the Complainant deposited Rs.1,20,000.00 and Rs.1,50,000.00 on 17.08.2009 then the OP No.2 issued letter dated 17.08.2009 to the Yard Manager of the Co. for releasing the vehicle, thereafter the vehicle was released. Despite getting payment of aforesaid amount, the OP did not make entries of said payment in their record and arbitrarily issued undated demand letter showing Rs.92,152.00 as due payable upto 10.10.2009 while excess payment had already been made by the Complainant. This demand was protested by the Complainant but the OPs instead of checking their record issued another demand letter dated 01.12.2009 showing due amount Rs.1,21,936.00 to be paid immediately. Upon receiving amount letter dated 01.12.2009 the Complainant sought clarification of alleged due amount but instead of providing the same, the OPs forcibly repossessed the vehicle of Complainant on 23.12.2009 through their hired goons. Thereafter, the Complainant issued letter dated 31.12.2009 to SSP, Lucknow for lodging FIR against the OP No.2 and goons of OPs. The Complainant also issued letter dated 31.12.2009 to RTO, Lucknow requesting him not to
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transfer the vehicle of Complainant in the name of another person. Thereafter, the Complainant through Counsel issued letter dated 01.01.2010 to OP No.2 by speed post asking him to return the vehicle of Complainant at the earliest but with no result. In pursuance of hire purchase agreement the OPs have to get total sum of Rs.13,59,248.00 upto 15.09.2010 against which a total sum of Rs.11,64,784.00 had been paid by the Complainant upto 30.09.2009, thus Rs.1,94,464.00 only is due against Complainant which is to be paid upto 15.09.2010 though the OPs have repossessed the vehicle for their own fault which is clear from the statement of account dated 20.10.2009 in which the entry of payment of Rs.2,70,000.00 dated 17.08.2009 has not been made by the OPs. The OPs have committed gross deficiency in service and have adopted unfair trade practice for which the Complainant has suffered financial loss and mental agony, hence this complaint.
The OPs have filed their WS wherein it is mainly submitted that the Complainant is not a consumer under the Consumer Protection Act. Besides this complaint pertains to settlement of a/c which cannot be settled in the Forum. The Complainant had purchased the truck exclusively for commercial purpose, therefore she ceases to be a consumer as defined under Section 2 (1) (d) of the Consumer Protection Act. The Complainant had defaulted in the payment of monthly instalment from the very beginning and till 15.06.2009 the Complainant had deposited Rs.7,42,784.00 only and not Rs.8,63,784.00 as alleged by her and a sum of Rs.1,08,084.00 was outstanding till 15.06.2009. It is not disputed that the demand notice of Rs.1,07,976.00 was issued by the OPs and since the Complainant failed to pay the amount, hence the vehicle was repossessed lawfully on 11.07.2009 by the authorised agent of the OPs. After repossession a sale notice was issued by the OPs calling upon the Complainant to pay amount of Rs.5,95,437.00 towards full
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and final closure. After repossession a receipt of the sale notice, the Complainant filed a suit for monetary injunction in the Court of Civil Judge SD but during the pendency of the suit the Complainant and her husband approached the OPs for settlement of a/c on 17.08.2009 and both of them gave undertaking to the OPs that they were willing to pay Rs.1,50,000.00 out of the due amount and the Complainant further gave the undertaking that she would pay all her future instalments on the due dates as per the agreement and hence her vehicle be released in favour of her husband and thereafter the Complainant deposited a sum of Rs.1,50,000.00 with the OPs and on the deposition of which the vehicle was released in favour of the Complainant’s husband. The Complainant issued a receipt 4497665 by the OPs for the said amount of Rs.1,50,000.00 in which it is clearly mentioned that Rs.77,500.00 would be adjusted against instalments dues, Rs.62,500.00 against delay payment charges and Rs.10,000.00 against repossession charges. With regard to the other receipt 4497663 of Rs.1,20,000.00 it is submitted that as per written undertaking of the Complainant she was to pay Rs.1,50,000.00 for releasing of the truck but the Complainant with the ulterior motive deposited Rs.1,20,000.00 at cash counter of OP No.2 and obtained the aforesaid receipt but when she approached the authorities of OP No.3 for releasing of the truck the same was refused by the authorities and the aforesaid receipt of Rs.1,20,000.00 immediately got cancelled by OP No.2 and amount of Rs.1,20,000.00 was returned to her and she was asked to deposit Rs.1,50,000.00 as per her own undertaking for the release of the truck. The Complainant or her husband got the photocopy of the receipt of Rs.1,20,000.00 with the ulterior motive and the original cancelled receipt is still with the OP Co. and it undertakes to produce the same as and when required by the Hon’ble Forum. It is denied that the Complainant had deposited Rs.2,70,000.00 with the OP on
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17.08.2009. The Complainant had only deposited Rs.1,50,000.00 as per her own undertaking. In the memo of the complaint it is submitted that in the month of October, 2009 the Complainant was asked to deposit Rs.92,152.00 but she did not deposit the same so vide demand notice dated 07.12.2009 the Complainant was asked to deposit Rs.1,21,936.00 which included an amount of Rs.91,044.00 towards overdue amount, Rs.30,892.00 towards instalment for the month of December, 2009. Since the Complainant did not pay any amount, hence the vehicle in question was again repossessed by the authorised agent of OPs on 23.12.2009 and after repossession the OPs issued a sale notice dated 28.12.2009 to the Complainant as well as to her guarantor calling upon them to pay Rs.4,41,203.00 towards full and final closure of amount within a time prescribed in the said notice. The Complainant was required to pay Rs.13,59,248.00 in 44 monthly instalments of Rs.30,892.00 on or before 15th day of every calendar month, the last instalment was to be paid on 15.09.2010. Since the Complainant defaulted in making proper payment of the instalments, she is liable to pay delay payment charges. The OPs have not committed any deficiency in service or adopted any unfair trade practice towards the Complainant and they have acted only on the basis of the terms and conditions of the agreement between the parties. There is no deficiency in service on the part of the OPs, therefore this instant complaint is liable to be dismissed with special costs.
The Complainant has filed her objection against WS of OPs with 21 papers.
The Complainant has filed her affidavit with 14 annexures. The OPs have filed the affidavit and counter affidavit of Sri Ravi Vishwakarma, Assistant Manager (Legal), Magma Fincorp Ltd. with annexure CA1 and 5 annexures with the WS. The Complainant has also filed written arguments. The OPs have also filed statement of account. Both the parties have also filed their calculation charts.
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Heard Counsel for the parties and perused the entire record.
Now, it is to be seen as to whether the Complainant is a consumer under the Consumer Protection Act or not and whether this case is not maintainable in the Forum as it pertains to the settlement of a/c etc. and whether this case is bad for non joinder of the parties or not? It is also to be seen as to whether the Complainant is not a consumer because she purchased the truck for commercial purpose and hence not a consumer. It is also to be seen as to whether the Complainant defaulted in making the payment of instalment due and the OPs have lawfully repossessed the vehicle and consequences thereof. It is also to be seen as to whether the OPs have made improper demands of the amount due from the Complainant or not? It is also to be seen as whether the OPs have committed any unfair trade practice or deficiency in service in this case or not and its consequences.
We first take up the point as to whether the Complainant is a consumer under the Consumer Protection Act or not. In this regard, the stand of the OPs is that the OPs being the financers are not the service providers, therefore the Complainant is not a consumer under the Consumer Protection Act. The OPs miserably fail to show how the financers such as the OPs are not the service providers and that the case is not maintainable against them. In fact there is plethora of laws wherein it has been held that a complaint can be lodged against financial institutions for deficient services or unfair trade practice. Therefore, there is no merit in the contention of the OP that the Complainant is not a consumer on this score.
Another point raised by the OPs is that the Complainant had purchased the truck for commercial purpose and therefore she ceases to be the consumer under the provisions of the Consumer Protection Act but there is no merit in this contention of the OP because the Complainant has stated that
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she wanted to purchase a truck for earning her livelihood by means of self employment and therefore she falls in the category of a consumer under the explanation attached to the definition of consumer as provided under Section 2 (1) (d) as she had purchased the goods for the purposes of earning her livelihood by means of self employment.
One of the objections raised by the OPs is that the loan was disbursed to the Complainant and her husband but this complaint has been filed by the just one person Seema Yadav and therefore this case is bad for non joinder of the parties but there does not appear to be any merit in the argument as the Complainant Seema Yadav has filed the complaint as she is one of the loanees and therefore as the co-loanee she could file the complaint and therefore it cannot be said that because her husband is not a Complainant, therefore this case is bad for non joinder of the the parties.
Another point raised by the Counsel for the OPs is that this is the matter pertaining to settlement of accounts, therefore this case cannot be decided in the summary proceedings of the Consumer Forum but this objection is of no relevance as the Hon’ble State Commission in the revision 143/SC/2010 has passed the orders on 18.08.2010 for settlement of the a/c by this Forum which has become final and therefore this Forum has to see this matter which includes settlement of a/c as well.
Now, we come to the point as whether the Complainant defaulted in making the payment of instalments due and the OPs have lawfully repossessed the vehicle. In this regard, according to the Complainant he had taken loan of Rs.10,20,000.00 from the OPs for purchasing a truck the cost of which was Rs.11,01,980.00 and that the Complainant had to make payment of margin money of Rs.81,980.00 from her own resources. After the signing of the agreement the Complainant was told that the copy of the finance agreement shall be provided to her after getting approval of the Head Office of the
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Co. but the said agreement was never given to her. The Complainant was to make payment of Rs.13,59,284.00 in 44 equated monthly instalment of Rs.30,892.00 commencing on 15.02.2007. The Complainant has been making regular payment of the instalments but due to certain financial crisis she could not make payments and her vehicle was repossessed on 11.07.2009 when her vehicle which was loaded with Maurang was on way to customer’s place. The OPs demanded a sum of Rs.5,95,435.00 failing which the vehicle was to be disposed of, whereupon the Complainant deposited a sum of Rs.2,70,000.00 to get the vehicle released. The OPs did not make the entries of entire amount paid and only showed Rs.92,152.00 payable upto 10.10.2009 while excess payment had already been made to the Complainant. When the Complainant protested on that then the OPs issued another demand letter 01.12.2009 showing the amount due as Rs.1,21,936.00 to be paid immediately and when the Complainant sought clarification on alleged amount due then the OPs instead of clarifying thing, forcibly repossessed the vehicle of the Complainant again on 23.12.2009. According to the Complainant out of total sum of Rs.13,59,284.00 payable upto 15.09.2010, but as against this amount a sum of Rs.11,66,784.00 was paid by the Complainant upto 30.10.2009 and only Rs.1,94,464.00 was due against the Complainant to be paid upto 15.09.2010. In this case, the OPs have filed a Revision No.143/SC/2010 against the order passed by the Forum on 19.07.2010, whereby the Forum had ordered for releasing the truck in favour of the Complainant. It transpires that the Forum had earlier passed an order on 26.05.2010 mandating the OPs not to sell the truck in question and subsequently by means of the order dated 19.07.2010 the said order was confirmed. In the aforesaid revision the Hon’ble State Commission has passed the following order:- “We, therefore, affirm the first two orders whereby the revisionists
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were asked not to sell the truck as the sale would have caused prejudice to the interest of the Complainant and also we confirm the release order of the truck in favour of the Complainant, but with a direction that before the truck is actually handed over to the Complainant, the District Consumer Forum shall settle the accounts between the parties and the truck would be released only on payment of what is found due on the date of the accounts being settled. The future EMIs shall be payable as per agreement.” In compliance of the aforesaid orders of the Hon’ble State Commission the parties had filed the statements of a/c. In view of the orders of the Hon’ble State Commission it is to be ascertained as to what is the amount i.e. due on the date of the a/c being settled. However, learned Counsel for the OPs agreed that the matter may finally be disposed of, hence at the time of passing final order the accounts are to be settled in compliance of the revisional order. Therefore, it is necessary for making compliance of the orders of the Hon’ble Revision Court that the a/c statements filed by the both the parties, have to be looked into minutely and thereafter it is to be ascertained as to what amount is due to be paid by the Complainant. From the statement of a/c filed by the OPs, it transpires that when the vehicle was repossessed on 23.12.2009 a sum of Rs.2,24,726.4 which includes the DPC + EMI was due. In the WS, the OPs in para 13 have stated that the Complainant was asked to deposit Rs.92,152.00 in the month of October, 2009 but as she did not deposit the same so by a notice dated 07.12.2009 she was asked to deposit Rs.1,21,936.00 which included an amount of Rs.91,044.00 towards overdue amount and Rs.30,892.00 towards instalments in the month of December, 2009 but this statement is not in consonance with the figures supplied by the OPs in their statement of a/c as the statement of a/c shows that the total balance of EMI was Rs.92,152.00 in the month of October 2009, but the Complainant has made payment of
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Rs.30,000.00 on 27.10.2009 and Rs.2,000.00 on 30.10.2009 but interestingly the OPs do not make mention of this fact of payment of Rs.32,000.00 in the month of October, 2009 in their WS instead it is mentioned that she did not deposit the amount. So, again a demand notice dated 07.12.2009 for depositing a sum of Rs.1,21,936.00 was made by the OPs which included overdue amount of Rs.30,892.00 towards instalment for the month of December, 2009. This also appears to be incorrect as the instalment of Rs.30,892.00 for the December falls due on 15.12.2009 as is evident from the statement. Therefore, how can it be due on 07.12.2009 when only Rs.91,044.00 was due. Besides it is astonishing as to why if any interest is to be paid on any unpaid amount then the demand notice did not include the instalment due + DPC. This is important, as if at all any interest is due on the amount due, then the entire amount of instalment + interest is to be demanded from the party concerned but this practice has not been adopted by the OPs in the instant case for the reasons best known to them. It is also interesting to note that only 8 EMIs of Rs.30,892.00 were due at the time when the vehicle was repossessed by the OPs and as per the statement shown by the OPs themselves only a sum of Rs.1,21,936.00 was due as on 15.12.2009 as the amount of unpaid instalment and thereafter only 8 instalments were to be paid. It is also interesting to note that by the date of repossession of the vehicle the Complainant had made payment of Rs.95,924.00 as is evident from the statement of a/c supplied by the OPs only and a sum of Rs.2,24,726.4 + 8 EMI was due from the Complainant, out of which Rs.1,21,936.00 was the balance of EMI and Rs.1,02,790.4 was the total DPC charges due which means, on a sum of Rs.1,21,936.00, a sum of Rs.1,02,790.4 was shown as due as delay payment charges which has been remaining due over the period. This looks to be quite dubious as the calculation of DPC appears to be arbitrary as is evident from
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the very fact that for a sum of Rs.30,892.00 which was due on 15.03.2007 out of which Rs.30,500.00 was paid on 23.03.2007 and for the delay of 8 days only a sum of Rs.247.1 is shown as chargeable as DPC. Thereafter on this amount of DPC due again interest has been charged and that too @ 3% per month. Another example of arbitrary slapping of DPC is when the Complainant deposits Rs.1,50,000.00 on 17.08.2009 but in the statement provided by the OP the amount paid is shown as Rs.77,500.00 and with regard to DPC paid the amount is shown as Rs.62,500.00. Now, it is not clear as to how they have calculated Rs.62,500.00 as the amount of DPC for the amount of Rs.77,500.00 deposited. It is also not clear as to how after showing the payment of DPC Rs.62,500.00 out of the total amount DPC + EMI the figure comes to Rs.8,70,335.00. Learned Counsel for the OPs and the officials of the OPs could not explain the ambiguity. This also proves the arbitrary manner in which the DPC amount was escalated and the amount was deducted from the amount deposited by the Complainant as DPC. There is no document to show that interest was chargeable on the interest accrued. The hire purchase agreement has not been filed by the OPs for the reasons best known to them but the obvious reason appears to be that the OPs want to hide the material facts from the Forum. As discussed above a sum of Rs.1,02,790.4 is shown as DPC charges due while a sum of Rs.1,21,936.00 was due as EMI and this appears to be ridiculous. Besides charging of 3% per month DPC becomes an astronomical figure at the end of a year, simply when interest @ 6.65% is being charged by the OPs on the financed amount. So basically it appears to be a ploy by the OPs in charging astronomical figures of DPC keeping the hapeless consumers oblivious of such a ploy and that is the reason why despite the Complainant paying Rs.10,31,784.00 a sum of Rs.11,93,797.00 is shown to be due against the Complainant as per the statement supplied by the
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OPs only where the fact is that only a sum of Rs.10,20,000.00 was the amount financed by the OPs to the Complainant. Therefore, there is total arbitrariness in calculating the DPC and it appears to be totally an unfair trade practice under which such DPC is being slapped on the hapeless consumers. Besides it is also astonishing to note that when the OPs make demand for the payment of the instalments due then why they do not give notice of the DPC due on the amount due. But this appears to be a ploy of keeping the Complainant in dark about what is cooking behind the scene and suddenly coming out with an amount which is legally due with the arbitrary DPC due and had it not been for the intervention of the Forum the OPs would have sold out the vehicle after making the illegal heightened amount due despite the Complainant paying hefty amount out of the financed amount with interest to the OPs. Under the circumstances, we find that the OPs have committed totally unfair trade practice as also deficiency in service in making illegal demand of the amount due which include not only the amount of EMIs due but also escalated amount of DPC making it out a staggering figure to the Complainant to pay. Obviously, the financial institutions are not there for charitable purpose. They are to make profits in the business but it does not mean to device ways and methods to indirectly loot the hapeless consumers of their valuable property. It is to be mentioned here that out of the financed amount of Rs.10,20,000.00 the Complainant after purchasing the truck also invested about Rs.3,60,000.00 in body building, seat, accessories etc. and Rs.40,000.00 for registration and road tax etc. Considering the entire facts and circumstances of the case and the conduct of the OPs the Complainant is entitled to the possession of the truck on payment of amount due on the date of repossession i.e. 23.12.2009 which comes to Rs.1,21,936.00 + 8 EMIs i.e. Rs.2,47,136.00 = Rs.3,69,072.00 the amount of EMIs due on 23.12.2009 as borne out of the statement
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provided by the OPs themselves. With regard to the claim of the Complainant that he had deposited Rs.2,70,000.00 on 17.08.2009 but the OPs refuted this claim on the ground that only Rs.1,50,000.00 deposited and Rs.1,20,000.00 claimed by the Complainant as deposit in addition to Rs.1,50,000.00 is absolutely wrong as OPs had refused to accept Rs.1,20,000.00 amount in place of Rs.1,50,000.00 for the release of the truck and therefore the claimant after getting back Rs.1,20,000.00 deposited Rs.1,50,000.00 but on the basis of the photocopy of the original receipt the Complainant is trying to project as if he had deposited Rs.1,20,000.00 + Rs.1,50,000.00 i.e. Rs.2,70,000.00. The original receipt is with the OPs and it is not understandable as to why when the Complainant was supposed to deposit Rs.1,50,000.00 as is evident from the applications moved by the Complainant herself that she would deposit Rs.2,70,000.00. Therefore, on the basis of evidence on record, it is not proved that the Complainant had deposited Rs.1,20,000.00 in addition to the sum of Rs.1,50,000.00 required to be deposited for the purpose of the release of the truck.
Thus, on the basis of discussions made above, it is clear that there is arbitrariness in calculating the DPC and making demand for an amount much in excess of what was due from the Complainant and therefore the OPs have certainly committed unfair trade practice and therefore they are liable to return the truck to the Complainant on payment of the amount due i.e. Rs.3,69,072.00 by the Complainant. If it is not possible to return the truck then the OPs should after deducting the amount that was due from the Complainant i.e. Rs.3,69,072.00 out of the total amount deposited by the Complainant i.e. Rs.10,31,784.00 plus the initial margin money of Rs.81,980.00 totalling Rs.11,13,764.00, is to be refunded to the Complainant with interest. The Complainant also appears to have been much harassed in this case, therefore she is also entitled to
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compensation to the tune of Rs.1.00 lakh. The Complainant is also entitled to the cost of the litigation.
ORDER
The complaint is partly allowed. The OPs are jointly and severally directed to provide truck to the Complainant after receiving the due amount of Rs.3,69,072.00 from the Complainant. In case the OPs are not able to provide the truck to the Complainant then pay Rs.7,44,692.00 (Rupees Seven Lakh Forty Four Thousand Six Hundred Ninety Two Only) with 9% interest from the date of filing of the case till the final payment is made to the Complainant.
The OPs are also directed to pay Rs.1,00,000.00 (Rupees One Lakh only) as compensation and Rs.4,000.00 (Rupees Four Thousand Only) as cost of the litigation. The compliance of the order is to be made within a month. If the compliance of the order is not made within a month then the OPs shall pay 12% interest on the entire amount due.
(Anju Awasthy) (Vijai Varma)
Member President
Dated: 24April, 2015
