D.O.F:21/03/2015
D.O.O:16/11/2020
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
CC.No.75/2015
Dated this, the 16th day of November 2020
PRESENT:
SRI.KRISHNAN.K :PRESIDENT
SRI.RADHAKRISHNAN NAIR.M : MEMBER
SMT.BEENA.K.G : MEMBER
Mohammed Rafeek
S/o Moideen Kutty, Business
R/at Kelot House, P.O Perdala, Badiadka, : Complainant
Kasaragod – 671551
(Adv: Shajid Kammadam)
And
M/s Mahindra & Mahindra Finance Ltd
Manimunda Tower, Near Bus Station : Opposite Party
Uppala, Kerala – 671121 Rep: by its Manager
(Adv: Babuchandran.K)
ORDER
SRI.KRISHNAN.K :PRESIDENT
Complaint filed under section 12 of Consumer Protection Act.
Briefly stated the facts of the case as per complaint is as follows –
- Complaint availed hire purchase loan of Rs 240000/- from opposite party on 16/08/2017 for his vehicle Maruti Alto KL-14M 3544. Hire purchase agreement is entered in to but his signature is obtained by deceit, non challant maner, without explaining or supplying a copy of the same. Schedule shows Rs. 5880/- is payable for 60 months, blank cheques leaves are obtained by coercion, signature is obtained in blank stamp papers for misuse. Further case is that he is very regular in repayment as per terms but opposite party credited most of payments towards delayed payments. On 18/03/2015, he volunteered to clear all the dues for obtaining no due certificate but opposite party refused to accept the same claiming exorbitant interest. Opposite party charged 36% interest thereby practiced unfair trade practice. Deficiency in service mental agony, emotional insult. He claimed following reliefs :
- Restraining opposite party from leaving usurious rate of interest and illegal charges.
- Directing opposite party to pay Rs 25000/- was compensation and costs.
2. Opposite party filed written version opposite party admitted hire purchase loan availed but denied all other allegations. Opposite party say that complaint is a chronic defaulter. He is liable to pay Rs 81900/- EMI for 14 instalments, Rs 2779/- as finance charges Rs 2000/- as cheque return charges, Rs 135240/- as future balance. In total he has to pay Rs 217560/- as on 16/08/2015 but paid only Rs 135660/-. There is no deficiency in service or unfair trade practice and prayed for dismiss the complaint with compensating costs.
3. Complaint filed statement of account opposite party filed interim order passed by arbitrator dated 16/08/2012 authorizing the receiver to take custody of vehicle. Complaint filed IA 74/15 to produce loan hypothecation agreement. No oral evidence for complainant or opposite party complainant’s side one witness examined relating to claim of interest.
4. Following points arise for consideration:-
a) Whether complainant is entitled to dispute the claim of rate of interest or usurious rate of interest? After agreeing and signing hire purchase agreement?
b) Whether contention of complaint that the signed agreement and issued document by coercion or by deceit is true or acceptable?
c) Whether there is unfair trade or deficiency in service from opposite party in demanding or enforcing the claim for interest against RBI circulars?
d) Whether complainant is entitled to compensation? If so for what reliefs?
All points are answered by Joint discussion.
5. There is absolutely no evidence made available present position of recovery of loan amount or result if any after the re-possession order passed by Arbitrator or step taken by opposite party in the matter or whether vehicle is with the complainant or with opposite party there is also no evidence any portion of amount due is paid by complainant to the opposite party after filling of the case or what is the correct amount due as on the present date.
6. In central Bank of India U Ravindra and another AIR 2001 SC 3095
(a constitutional bench) it has been held that the Expression of the Principal sum adjusted occurring in CPC includes the amount of interest charged on periodical rests and capitalized with the principal sum actually advanced. It has been further held that “award of interest pendent elite and post decree is discretionary with the court as it is essentially governed by S.34 of CPC dehors the contract between the parties when borrower has promised to pay the particular rate of interest and avail the credit and on default by borrower, when an action is commenced ending in decree the proper exercise of discretion would be to grant interest at the contractual rate from the date of sui till the date of realization. To reduce or deny interest would amount to penalizing the creditor for approaching the complainant and encouraging the debtor to deliberately and unjustly prolonging the litigation and this should be ordinary rate.”
7. Further the Honourable Delhi High Court in syndicate Bank Vs M/s W.B Cements Ltd 19th para 14 .... The grant of interest at a rate less than the contractual rate, as matter of rule will amount to giving a premium to those who trade upon the money of others.
8. The mutual rights and obligations arising out of the contract one required to be respected and enforced by the courts. The court cannot and would not vary the terms of contract and impose a new contract on the parties.
9. It is the settled proposition of law that reduction of interest from contractual rate to a lower rate, would be permissible only in exceptional and special circumstances.
10. We referred the citation in Punjab Financial Corporation v/s Surya Auto Industries 2010 1 SCC 297, State Bank of India v/s Yasangi Venkateshwara Rao (1999) 2 SEC 375, Indian Bank v/s Blue Jaggers Estate Ltd and others (2016) 8 CC 129.
11. To deprive or deny interest will tantamount to penalizing a creditor for approaching the complainant forum/court and further encourage the debtor to warranty and unfairly procrastinate the litigation. The complainant enjoyed the facility for three years, paid interest and also volunteered to clear the due and so prayers to restrain opposite party from levying interest on contract rate is rejected.
12. For the reasons aforesaid Complaint is not entitled to dispute the claim of rate of interest as usurious rate of instalment or illegal after agreeing to and signing the hire purchase agreement and on complying its terms for three years.
13. Judgement II (1994) BC 613(sc) Corporation Bank v/s D.S Gowda and Anr .. Observed that if rate observed is in violation of RBI direction then Court can disallow such excess interest and then can give relief to the party. Charging of interest should be reasonable. Demanding by opposite party or enforcing the claim for interest as per hire purchase agreement is unfair trade practice and violating of RBI circulars. Hence point no 1 & 2 fund in favour of complainant.
14. So far as issue no 3 is concerned since there is clear violation in claiming interest more than directed by RBI there is deficiency in service and complainant is entitled for compensation.
15. So far as prayer for restraining opposite party from levying usurious rate of interest is conserved District commissioner finds that there is no legal Justification for the same. But demanding exorbitant rate of interest is absolutely illegal.
In the result complaint is partly allowed directing the opposite party to levy interest only as per RBI circular and not entitled to levy any illegal charges in the matter. Opposite party is directed to pay RS 15000/-(Rupees Fifteen thousand only) as compensation to the complaint and pay Rs 5000/- (Rupees Five thousand only) as cost of litigation within 30 days from the date of receipt of the order.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Witness Examined
Pw1.Sudheesh.C
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Forwarded by Order
Senior Superintendent
Ps/
