By Smt. Saji Mathew, Member:-

The Complainant availed a loan of Rs.6,50,000/- from the 1^st and 2^nd Opposite parties pledging his Eicher Cab Lorry KL 12 C 5308. The Loan was endorsed in R.C book at the Regional Transport Office Kalpetta. As per chart issued by the Opposite Parties, the Complainant has to repay the loan amount with flat interest of Rs.2,69,750/- by 59 monthly instalments of Rs.15,330/- each. The termination date of loan agreement is on 05.05.2011.

2. The Complainant paid Rs.5,15,968/- towards the instalments up to 20.01.2010. Then the Complainant decided to dispose the vehicle and approached the 1^st Opposite Party to settle the loan by paying the entire instalments altogether. But the Opposite Parties demanded a sum of Rs.7,20,000/- as overdue interest.

3. On 22.04.2010 the Opposite Parties tried to repossess the vehicle. The Complainant and neighbors resisted this attempt. A separate petition is filed along with the complaint to restrain the Opposite Party from repossessing the vehicle.

4. The Opposite Parties are legally bound to accept the real balance amount and issue no objection certificate for the cancellation of loan endorsement in the R.C. Failing to do so is deficiency in service on the side of the Opposite Parties.

5. The Complainant therefore prays for an order directing the Opposite Party to receive the real balance loan amount and issue loan clearance certificate to the Complainant. The Complainant also prays for a compensation of Rs.25,000/-.

6. The 1^st and 2^nd Opposite Parties filed version and stated that the original loan sanctioned was Rs.6,50,000/- on 05.06.2006 and the amount was repayable along with interest and other charges within a period of 60 months, the total amount being Rs.9,19,750/-. The Complainant defaulted in instalment payments and penal interest accrued on the amount. The Opposite Parties state that since penal interest accrued on the defaulted instalments the Complainant availed personal loans from the company of Rs.70,000/- on 04.12.2008 and thereafter Rs.40,000/-. Cheques were issued after deducting up front interest and document service charges. This fact is suppressed by the Complainant before the Forum. The statement of account submitted by the Opposite Parties show that the consolidated amount due would come to Rs.7,15,060/- as on 18.05.2010 therefore the claim of the Complainant that he is bound to pay the future instalments alone is not true. The Complainant paid only Rs.4,96,068/- towards the loan. The instalments remitted by the Complainant is properly accounted and there is no question of non-receipt of the instalments. No attempt was made to repossess the vehicle forcefully. There is no deficiency in service or unfair trade practice and hence the Opposite Parties prays for the dismissal of the complaint.

7. The Complainant was examined as PW1 and documents were marked as Ext.A1 and A2 on the side of the Complainant. No oral evidence was adduced on the side of the Opposite Parties but documents were marked as Ext.B1 to B4 for them.

8. The matters to be decided are:-

1. Whether there is any deficiency in service on the side of the Opposite Parties?

2. Whether the Complainant is entitled for any relief?

9. Point No.1:- The Complainant has produced receipts for the payment of Rs.5,15,968/- of this, 2 receipts No.4, No.7 in Ext.A1 series are for the same payment. So this amount of Rs.15,500/- should be substracted from the total amount shown as paid. Thus an amount of about Rs. 5,00,468/- is paid by the Complainant. As per Ext.B1 Rs. 9,19,750/- is the total amount to be paid by the Complainant by the date 05.06.2011. Interest is calculated for the entire period of 60 months and added to the loan amount. If the loanee is paying the amount before the termination day, he is charged with interest for the period during which there is no loan at all. The Opposite Party demands penal interest for the delayed instalments. But they never return interest in case of early payment of instalments or loan settlement before the termination date. Interest for the entire loan period is collected even for the first instalment. Thus the entire system confers unjust benefit upon the financiers. In this case, the Complainant could not settle the loan because of the undue demands made by the Opposite Parties. National Commission has held in Ashok Leyaland Finance Limited V/S Ramjilal Gupta that penal interest can be obtained only on payments after the termination period of agreement. In this case, Ext.A1 series shows that penal interest is charged even before the termination date of loan agreement. Hence, point No.1 is decided against the Opposite Parties.

10. Point No.2:- As per Ext.B1 Rs. 9,19,750/- is the total amount to be by the Complainant. As per Ext.A1 series 5,00,468/- is paid by the Complainant. The balance amount is 9,19,750 - 5,00,468 = 4,19,282/-. The Complainant is entitled to get the loan clearance certificate on payment of this amount before 05.06.2011. About the personal loans mentioned in the version, there is no agreement or evidence regarding such loans. The Ext.B1 is only regarding the vehicle. The Opposite Party is not entitled to give joint chart for the vehicle loan and personal loan.

Hence the complaint is partly allowed and the Opposite Parties are directed to issue loan clearance certificate to the Complainant on payment of Rs.4,19,282/- (Rupees Four Lakh Nineteen thousand Two hundred and Eighty Two only) to the Opposite Parties on or before 05.06.2011. No order as to cost or compensation

Pronounced in open Forum on this the day of 23^rd September 2010.

Date of filing:29/04/2010.

PRESIDENT: Sd/-

MEMBER : Sd/-

MEMBER : Sd/-

A P P E N D I X

Witness for the Complainant:

PW1. Mathai. Complainant.

Witness for the Opposite Parties:

Nil.

Exhibits for the Complainant:

A1. Repayment Schedule.

A2 series. Temporary Receipts.

Exhibits for the Opposite Parties:

B1. Loan cum hypothecation agreement. dt:05.06.2006.

B2. Copy of the Cheque. dt:04.12.2008.

B3. Copy of the Cheque. dt:04.12.2008.

B4. Copy of the Repayment Schedule.