DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the 20th day of May, 2024.
Filed on: 11/01/2022
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C. No. 22/2022
COMPLAINANT
Kunhikrishnan M, S/o Ananthan, Valiyaveettil House, 8th Lane, Major Road, Vytila, Ernakulam.
(Rep. by Adv.K.S.Arundas #35, DD Oceana Mall, Near Taj Gate Way Hotel, Marine Drive, Ernakulam-682 031)
VS
OPPOSITE PARTY
The Manager, Mahindra and Mahindra Financial Services Ltd, 1st Floor, 31/1149, KP Cheekuttys Mansion, Vytila, Ernakula, Ernakulam District.
(Rep. by Adv. Vivek V. Kannankeri, Kannankeri & Bhaskar, 3rd Floor, Vattoly Complex, Kombara Junction, Kochi 18)
F I N A L O R D E R
D.B. Binu, President:
- A brief statement of facts of this complaint is as stated below:
The complaint was filed under Section 35 of the Consumer Protection Act, 2019. The complainant, a taxi driver, financed the purchase of a Ford Aspire car through a loan of Rs. 5,97,332 from a money lending business on February 16, 2017, agreeing to 54 monthly instalments of Rs. 17,770 each. The lender allegedly had the complainant sign various documents, some blank, without proper disclosure of their contents. The complainant made regular payments until June 2021, by which point 48 instalments were paid.
During the COVID-19 pandemic, the Reserve Bank of India announced a loan repayment moratorium from March to August 2020, which the complainant utilized. As of the moratorium's announcement, the complainant had Rs. 1,06,620 remaining in payments. However, in September 2021, the lender claimed an outstanding amount of Rs. 1,43,621 and offered to reschedule the loan, which the complainant accepted due to decreased earnings from his taxi service. After rescheduling, the complainant found the balance was unfairly increased to Rs. 2,32,000, contrary to what had been agreed upon.
The complainant claims this act as an unfair trade practice and deficiency in service, causing significant distress. The lender also allegedly threatened to seize the vehicle without due process. The complaint requests the commission to prevent the unlawful possession of the car, reschedule the loan back to Rs. 1,06,620 or permit its closure at that amount, and award Rs. 100,000 in compensation for mental agony plus Rs. 10,000 for litigation costs.
2) Notice
The Commission issued notice to the opposite party, and in response, the opposite party provided their version.
3) THE VERSION OF THE OPPOSITE PARTY
The opposite party challenges the accuracy of the facts presented in the complaint, claiming it omits crucial information and misrepresents the situation, constituting an abuse of the legal process. The lender refutes the complainant’s version of the events and asserts that the loan, totalling Rs. 5,97,332, was agreed upon for the purchase of a Ford Figo Aspire Ambiente 1.5, under the terms of a specific agreement (Loan agreement No. 4643547). They stated that the complainant was irregular in repaying the instalments, leading to additional charges for late payments, and ultimately a loan recall notice dated January 4, 2022, when Rs. 2,07,257 was overdue.
By March 21, 2022, the outstanding amount had increased to Rs. 2,51,549 due to accumulated interest and other charges, after loan foreclosure. The opposite party also states that they have attempted to resolve the issue through arbitration, as stipulated in the loan agreement, and have legally invoked the right to take possession of the vehicle due to breach of agreement terms by the complainant.
The lender claims that the relief sought by the complainant contradicts the terms agreed upon in the loan agreement and therefore, the petition should be dismissed as non-maintainable. They assert that all actions taken have been lawful and supported by proper documentation, stating that the balance of convenience favours them and not the complainant.
4) . Evidence
The complainant had produced a proof affidavit along with one document, marked as Exhibit A-1
Exhibit A1: The Loan Details Issued by the Opposite Party.
The opposite party had produced a proof affidavit along with one document, marked as Exhibit B-1
Exhibit B-1: True copy of the statement of accounts.
5). The main points to be analysed in this case are as follows:
i) Whether there is any deficiency in service or unfair trade practice from the side of the opposite parties to the complainant?
ii) If so, whether the complainant is entitled to get any relief from the side of the opposite parties?
iii) Costs of the proceedings if any?
6). The issues mentioned above are considered together and are answered as follows:
The complainant, a taxi driver, filed a complaint alleging unfair trade practices and deficiency in service related to a vehicle loan agreement with a Non-Banking Financial Institution. The complainant claims the rescheduled loan amount was unfairly inflated and is seeking relief including loan adjustment, compensation for mental agony, and litigation costs, as well as prevention of vehicle repossession without due process.
The summary of the argument note was filed on behalf of the opposite party, as represented by their counsel Sri. Vivek V Kannankeri, is as follows:
The opposite party, a Non-Banking Financial Institution, contests the complainant's claims regarding the vehicle loan agreement for a Ford Figo Aspire Ambiente 1.5, under Loan agreement No. 4643547. They assert that the complainant was inconsistent in making the agreed monthly payments of Rs. 17,770, leading to additional charges for late payments and eventual issuance of a loan recall notice on January 4, 2022, when the complainant owed Rs. 2,07,257.
As of March 21, 2022, the outstanding balance had increased to Rs. 2,51,549, which included overdue interest and other fees after loan foreclosure. The opposite party alleges that despite repeated attempts to collect repayment, the complainant evaded payment, leading to the initiation of arbitration proceedings in Mumbai as per the loan agreement terms.
The opposite party argues that the complainant’s requests for relief and interim orders are not consistent with the loan agreement terms, particularly the right to repossess the vehicle in case of a breach of the agreement. They state that the moratorium granted during the COVID-19 pandemic was correctly applied to the loan but insist that the complainant is still required to cover the payments for that period.
The document B-1, a statement of accounts, has been presented as evidence to support the opposite party's claims, and it has been accepted without opposition from the complainant.
The opposite party contends that the complainant has no substantial case or merit, and the balance of convenience favours them, requesting the dismissal of the complaint along with costs against the complainant for a lack of prima facie case and seeking relief contrary to the agreed terms.
The complainant did not submit the argument note to the commission, and their counsel stated that they had received no instructions from the complainant.
In the catena of decisions, it has been established that the burden of proof lies with the complainant to demonstrate negligence or deficiency in service by presenting evidence before the commission. Mere allegations of negligence are insufficient to support the complainant's case. Consequently, the complainant has failed to prove any deficiency in service or negligence on the part of the opposite parties.
In the case of SGS India Ltd Vs. Dolphin International Ltd 2021 AIR SC 4849 held that:
“19. The onus of proof of deficiency in service is on the complainant in the complaints under the Consumer Protection Act, 1986. It is the complainant who had approached the Commission, therefore, without any proof of deficiency, the opposite party cannot be held responsible for deficiency in service. In a Judgement of this Court reported as Ravneet Singh Bagga v. KLM Royal Dutch Airlines & Anr. 4, this court held that the burden of proving the deficiency in service is upon the person who alleges it. “
We have carefully listened to the submission made at length by the learned counsel representing the opposite party, and have considered the entire evidence on record.
In a series of decisions, it has been established that the burden of proof lies with the complainant to demonstrate negligence or deficiency in service by presenting evidence before the Commission. Mere allegations of negligence are insufficient to support the complainant's case. As stated in the case of SGS India Ltd Vs. Dolphin International Ltd (2021 AIR SC 4849), "the onus of proof of deficiency in service is on the complainant in complaints under the Consumer Protection Act." It is the complainant who approached the Commission, and without any proof of deficiency, the opposite parties cannot be held responsible for deficiency in service.
- Issue (ii) & (iii): Deficiency in Service and Unfair Trade Practices
The core of the dispute lies in the handling of the loan payment schedule and the rescheduling of the loan. The opposite party asserts that due to the complainant's irregular payment history, additional charges were rightfully applied as per the loan agreement. The introduction of a moratorium by the RBI was acknowledged, but the opposite party contends that payments were deferred and not waived, leading to accumulated interest and charges.
The opposite party provided a detailed account statement (Exhibit B-1), which was not disputed by the complainant. This document supports the claim of accumulated dues arising from the complainant's failure to make timely payments, even considering the moratorium period.
Legal precedents suggest that for a practice to be deemed unfair, the service provider must have acted with deceit or significant procedural lapses that prejudice the consumer. In the present case, the Commission observes no evidence of deceit or intention to mislead the opposite party. The charges and interest applied appear to be in accordance with the agreed terms of the loan, which were presumably understood by the complainant at the time of the agreement.
- Issue (iv): Reliefs and Costs
The reliefs sought by the complainant, including significant loan reduction and compensation for mental agony, are based on the assumption of unfair practice by the lender. Since the Commission has found no unfair trade practices or significant service deficiency, these reliefs are not justifiable.
Furthermore, given that the terms of the loan agreement stipulate the conditions under which penalties and additional charges would apply, and the complainant has failed to demonstrate how these terms were breached or applied unfairly, the request for interference in the agreed terms of the loan repayment schedule is also denied.
The Commission notes that financial agreements, especially those involving credit, require strict adherence to agreed terms by both parties. Consumers are urged to fully understand the implications of loan agreements, including the conditions under which additional charges may be incurred.
In light of the foregoing, the Commission finds that:
In conclusion, the Commission finds that the complainant failed to provide sufficient evidence to substantiate their claims of deficiency in service or negligence by the opposite parties. Therefore, the complaint is dismissed, and no relief is granted to the complainant.
We have decided not in favour of the complainant on all the issues mentioned above. After careful consideration, we found that the case presented by the complainant is meritless. As a result, the following orders have been issued.
ORDER
Based on the aforementioned circumstances, the Commission has determined that the contentions raised by the complainant lack merit. As a result, the complaint is dismissed. No cost. The order in I.A. 10/2022 dated 28/10/2021 is hereby vacated.
Pronounced in the Open Commission on this the 20th day of May 2024
Sd/-
D.B. Binu, President
Sd/-
V. Ramachandran, Member
Sd/-
Sreevidhia.T.N, Member
Forwarded/By Order
Assistant Registrar
Appendix
Complainant’s Evidence
Exhibit A1: The Loan Details Issued by the Opposite Party.
Opposite party’s Exhibits
Exhibit B-1: True copy of the statement of accounts.
Despatch date:
By hand: By post
kp/
CC No. 22/2022
Order Date: 20/05/2024
