SRI BIJAYA KUMAR DAS,PRESIDENT:-
Unfair trade practice and deficiency in service in respect of charging excess amount and non-submission of no-objection certificate (NOC) are the allegations arrayed against Ops.
2. Complaint, in brief reveals that Complainant being an unemployed youth and to maintain his family, an agent of the OP-finance persuaded the complainant to provide the financial assistance to purchase the vehicle, accordingly, after execution of a agreement vide No.- OCVO17008R1000314857 dtd. 31/12/2010 availed a finance to the tune of Rs.17,30,000/- and purchased a TATA make LPT3118 truck. Complainant has till date not received the copy of the agreement and paid Rs. 1 lakh as down payment, and as per the agreement it has been decided that entire loan amount will be repaid in 46months starting from dt. 5/2/2011 to dt. 5/2/2014 with a monthly installment of Rs. 47,613/-. The repayment schedule is filed into the case as Annexure-I. The financed vehicle is registered before R.T.A, Cuttack as OR-05-AP-4178(Annexure-II) and complainant has paid Rs. 3,71,315 out of the loan Outstanding amount the payment receipts are produced as Annexure-III series. It is further revealed from the complaint petition that on sudden stoppage in transportation of Iron ore Complaint’s financed vehicle remains idle, for which complainant was not able to repay the installments of loan amount in time. Complainant believing on the version of the officials of Ops for closure of the loan account handed over his vehicle on dt. 18/9/2012 with all relevant documents to the Ops on due acknowledgement (Annexure-IV). It is also revealed that on dt. 22/11/15 officials of Op-Company visited the Complainant’s premises and demanded Rs. 6,77,612/- as outstanding dues and turned down the proposal of issuing NOC and Op- finance Company deviating all the laws of land disposed of the vehicle of the Complainant and Ops further violating the circular of RBI on NBFC charging the delayed payment charges. The cause of action of the instant case arose on dt. 22/11/2015, when officials of Ops demanded more money and Complaint is filed with prayer that a direction may be given to Ops to issue NOC in favour of Complainant and claim of Rs. 6,77,612 by Ops are alleged and Rs. 30,000/- towards compensation for deficiency in service and mental agony along with cost of litigation.
3. Upon Notice, Op No.1&2 L&T, Finance Company appeared through their ld. Counsel and filed joint written statement into the dispute disclosing that the present complaint is not maintainable, as the complainant is a regular defaulter in respect of payment of EMI’s and clause of Arbitration in the agreement executed between the parties which is exclusively a contract, and cited different decisions of Honbl’e National Commission and State Commission and Honbl’e High Court of Odisha. The brief facts of the dispute are that Ops financed a TATA LPT 3118 Truck to Complainant after execution of an agreement and the sanctioned amount was Rs. 17,30,000/-. It was agreed between the parties that the entire loan amount will be winded up in 46 monthly EMI’s starting from dt. 5/2/11 to dt/5/11/14 with a monthly installments of Rs. 47,613/-. It is stated that as per the agreement the vehicle is hypothicated before Ops for security and Ops are authorized to charges over dues in case of delay and default in repayment. Ops in their para wise reply, denying the allegations of the Complainant and submitting the facts it is averred that a copy of the agreement was handed over to the Complainant at time of execution of agreement. As the Complainant was a defaulter, Ops issued a letter on dt. 4/4/2012(Annexure-B), copy of the loan agreement is filed into the case as Annexure-C. It is further averred that Complainant for his own fault by not responding the advocate’s Notice dt. 4/4/12, Ops were compelled to refer the matter to sole Arbitrator on dt. 20/4/12, under the circumstances Ops state that Complaint has initiated this false complaint against the ops for no fault which is to be dismissed with heavy cost.
4. Heard the Ld. Counsel for Complainant and case of Ops on merit as non-appears in the date of argument of the case, gone through the Annexures filed by the parties. The admitted facts of the case are that Complainant availed a finance to the tune of Rs. 17,30,000/- which is to be paid within 46 monthly installments @ Rs. 47,613/- per month and the said loan is to be cleared between Dt. 5/2/2011 to dt. 5/2/2014 with a total loan amount including interest is Rs. 21,90,198/- accordingly, Complainant purchased a TATA make LPT3118 truck bearing Regd. No.- OR-05-4178. It is an admitted fact that prior to finance of the said vehicle an agreement was executed between the parties with certain terms and conditions. It is also admitted that Complainant was a defaulter in respect of payment of EMI’s for which they said vehicle was handed over /surrendered to Op-finance Company on dt. 18/09/2012(Annexure-IV).
5. The Complaint is filled with prayer that a direction may be given to Ops for issue of NOC and declared the excess amount of RS. 6,77,612/- calculated up to dt. 31/10/2012 by Ops upon the complainant is illegal and compensation of Rs. 30,000/- for deficiency in service and unfair trade practice. Ld. Counsel for Complainant submitted that the Op-finance Company has disposed of the vehicle by flouting Fair practice code of the Reserve Bank of India, which is meant for all Non-Banking financial Companies. It is further submitted by the Ld. Counsel for Complainant that inspite of order of the Forum bearing no.18 dtd. 14/2/2016 when this Forum considering the Petition of the Complainant directed the OP-finance Company to produce documents, including the documents related to process of auction of the hypothicated vehicle of the Complainant which is handed over/surrendered to the Op, till hearing of the case the document was not produced Ld. Counsel for complainant categorically stated that the said documents is very much essential to decide the fate of the case. On the other hand the written version of Ops and their Annexures filed into the dispute do not disclose a single sentence regarding allegation of “Auction of hypothicated vehicle” or ‘sale of vehicle’ and violation of guidelines of Reserve Bank of India. On the written statement of Ops they challenge the maintainability of the Complainant on different grounds by citing decisions, apart from this the Op-finance Company’s versions are that as complainant being a ‘defaulter’ in respect of payment of monthly installments and as per the terms and conditions of the agreement the Ops invoking the clause of arbitration referred the matter to sole Arbitrator Mr. Bharat B.Jain on dt. 20/4/2012 prior to that an advocate’s Notice was issued to Complainant as “borrower’ and other two guarantors on dt. 4/4/2012. The attested photocopy of Advocate’s Notice and reference letter to sole Arbitrator by Op-finance Company is filed into the dispute as Annexure-B. Complaint petition is silent regarding knowledge of filing of any Arbitration proceeding. Equally the Op-finance Company failed to convince us that the Advocates Notice dtd. 4.4.2012 and referral letter to sole Arbitrator dtd. 20.4.2012(Annexure-B) was duly served , acknowledged or refused by the Complainant-borrower. The Op-finance Company has kept unusual silence regarding mode of service of the Annexure-B to the Complainant-Borrower.
Considering the written statement and Annexure-B, we are not sure till date regarding the status of the vehicle which was handed over/ surrendered to Op-finance Company on dt. 18/9/2012(Annexure-IV). The Annexure-IV does not disclose that whether complainant–borrower handed over/ surrendered the vehicle with the knowledge of the Advocate’s Notice or referral letter to sole Arbitrator(Annexure-B), which according to Op-finance Company was issued to complainant. Further, the result of the Arbitration proceeding, if any does not see the light of the day till the date of argument. In this respect, Op-finance Company is legally bound to disclose the status of the vehicle when the said vehicle is received and kept in possession of the Op-finance Company. It is clear from the above facts that the OP-finance Company has acted on ‘status of the vehicle’ with a hidden agenda which is not appreciated by this Forum.
6. Paragraph 12 &13 of Complaint petition reveals that, the Ops disposed of the vehicle by flouting the guide lines of RBI and on dt. 22.11.2015 the officials of Op-Company visited the Complainant’s residence and demanded Rs. 6,77,612/-(up to 30/10/2012) and turned the request of the Complainant to issue NOC without clearing the said amount. Though the same allegations are denied, but did not disclose the fact. It is crystal clear from the submissions and action of the OP-Finance Company which clarifies that, though by virtue of the hypothecation agreement between the parties, the Op-finance Company is the owner of the vehicle and has every legal right to take action by referring the matter to Arbitrator and to sold the vehicle, but care and caution is to be taken to keep the fundamental principles, i.e. before auctioning or selling a notice is to given to the borrower and after completion of process of auction. The complete process of the auction in details to be intimated to the complainant-borrower. In another side, if the vehicle in question is not put into auction or sold, then the said vehicle is in possession of the OP-Finance Company from its date of handed over i.e. dtd.18.09.2012 by the complainant-borrower till-date, if it is a fact then the liability of OP-Finance Company increases as the said vehicle remains idle with the OP-Finance Company for more than 5 years without taking any action and causing financial and emotional loss to the complainant. If the OP-Finance Company has complied such provisions, by lawfully auction of the vehicle what obstacles were there to disclose the facts before the Forum in the present dispute ? By not disclosing the same this Forum feels that OP-Finance Company has committed deficiency in service and unfair trade practice.
7. Ops challenge the maintainability of the complaint on grounds that as per the terms and conditions of the agreement on failure to payment of installments Ops are legally entitle to take action against the borrower by referring the matter to sole Arbitrator this Forum lacks the jurisdiction to entertain the complaint. In support of their version Ops cited a number of decisions including the judgement of Hon’ble Apex Court in case of Bharati Knittny Company-Vrs-DHL worldwide Express courier(1996) 4 SCC 704 and another decision of Hon’ble High Court of Odisha passed in W.P.(C) MP 2792/04 in the matter of Bikram Pradhan-vrs-Magma Fincrop.Ltd.. So far the decision of Hon’ble Apex Court we are agreed the parties entered into the agreement must abide by it and on the 2nd cited decision of Hon’ble High Court this case is not befitting to the present dispute. As the present complaint relates illegal demand of excess amount and issue of NOC after selling of the vehicle in question.The onus lies with the OP-Finance Company to disclose that as per the allegation the vehicle has been put into auction after complying the legal formalities, and if, the vehicle is not sold then what is the status of the vehicle till date ? Ops also raised the question of ‘Equity’ alleging on the complainant that complainant has not approached this Forum with a clean hand as the complainant was a chronic defaulter in respect of payment of monthly installment which is reflected in Annexure-A. On careful perusal of complaint, written statement and Annexures, it is clear that complainant is more transparent in the dispute in comparison to OP-Finance Company. In paragraph-8 of the complaint petition, complainant fairly admits that due to non-plying of the vehicle for specific reasons he could not repay the installments, on the other side OP-Finance Company being a responsible business organization suppressed material information like ‘status of the disputed vehicle’ and ‘result of the Arbitration proceeding’ before this Forum for better appreciation of the facts. In this aspect, we are of the unanimous view that the allegation of ‘Equity’ as raised by Ops carries a reverse impact upon OP-Finance Company. To answer all the questions in maintainability and factual aspect of the complaint, we rely on a decision of Hon’ble National Commission reported in 2014(3) CPR 73(NC) in case of Smt. Sulakhsna Talan-Vrs- B.M.,M/S.Sriram Transport Finance Ltd. which is befitting case law to the present dispute, where all the questions raised by the OP-Finance company including surrender of vehicle for inability to pay installments, accounts dispute and No notice prior to sale of vehicle, filing of Arbitration proceedings before the Learned Arbitrtator. Hon’ble National commission on a detail analysis of factual aspect of the position of law allowed the revision petition in favour of the Petitioner-borrower. In addition to the cited decision Sec. 3 of the C.P.Act,1986 provides ample power to the Foras to adjudicate the disputes which are coming under deficiency in service and unfair trade practice, to support our opinion, we rely on the decision of Hon’ble Apex Court in case of Fair AIR Engineers Pvt. Ltd.-Vrs- N.K.Modi reported in 1996 III CPJ I(SC). Accordingly, in our opinion the complaint is maintainable before this Forum under the circumstances, in spite of the clause of Arbitration in the agreement. If any thing brought into the notice of the Forum regarding passing of any award by the Arbitration then the matter would be different, as there was a chance of clash between the two authorities established under the statute.
8. As we have discussed in earlier paragraphs that if the vehicle of the complainant-borrower is ‘sold’ or ‘auctioned’ by the OP-Finance Company without giving any prior ‘Notice’ of ‘sale’ or ‘auction’ in result the Ops are deficient in service and adopted unfair trade practice. Equally if the vehicle remains with the oP-Finance Company till-date, from the date of surrender i.e. dtd.18.09.2012 by the complainant-borrower, this Forum can not force the complainant-borrower to take the possession of the vehicle because depreciation in value of the cost of vehicle is involve and complainant does not prayed this Forum to get back the vehicle. Also, as per the agreement the OP-Financer is the lawful owner of the vehicle, and in this peculiar circumstances, OP-Finance Company may use the said vehicle as per their sweet will. Complainant-borrower claims compensation of Rs.30,000/- for mental agony, financial loss, deficiency in service and unfair trade practice along with cost. In this regard, we, are of the opinion that when admittedly complainant is a ‘defaulter’ in respect of payment of installments, claim for compensation is in higher side without any justification. In these circumstances, it is a case of ‘no amount is payable by any of the parties to the other, obviously when no amount is due on the complainant-borrower, the Ops are legally bound to issue No objection Certificate(NOC) in favour of the complainant within one month of receipt of this order, failing which action will be initiated against the OP-Finance Company as per the provisions of C.P.Act,1986.
Accordingly, the complaint is allowed in part without any cost.
Pronounced in the open Court, this 29th day of April, 2017.
