Date of filing : 12-11-2010
Date of order : 02-04-2011
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
CC. 234/2010
Dated this, the 2nd day of April 2011
PRESENT
SRI.K.T.SIDHIQ : PRESIDENT
SMT.P.RAMADEVI : MEMBER
George Mutholy,
Mutholy House, Maloth.Po. Parappa, } Complainant
Hosdurg Taluk, Kasaragod.Dt.
(Adv. Kodoth Unnikrishnan, Kasaragod)
1. The Manaing Director, Ashok Leyland Finance } Opposite parties
Division of Indus Ind.Bank, R.S.80/8 and 80/3
Old Mahabalipuram Road, Karapakkam,
Chennai, Tamil Nadu.
2. The Regional Manager, Indus Ind. Bank,
Regional Office, Shalon Tower, Byepass,
North End, Edappally, Ernakulam.
3. The Branch Manager, Indus Ind. Bank
Kanhangad Branch, IInd floor, Madana Arcade
Hosdurg, Po.Kanhangad, Kasaragod.Dist.
(Adv. A.Manikandan, Hosdurg)
O R D E R
SRI.K.T.SIDHIQ, PRESIDENT
Bereft of unnecessaries the case of the complainant is as follows:-
Complainant availed a loan from opposite parties with a condition to repay `5,06,300/-in 20 monthly instalments commencing from 20-06-2008 and ending on 21-1-2010. Though he remitted entire instalments in time with additional finance charges, opposite parties refused to issue No Objection Certificate. Hence he could not sell Verna car bearing Reg.No.KL-60/A 2112. As a result he had a loss of `50,000/- in market value of the vehicle. Hence the complaint.
2. According to opposite parties the complainant failed to make the remittance of Equated Monthly Instalments in time within the due date as per the agreement. The cheque issued by the complainant for the payment of EMI during the month of August 2009 had been bounced and the complainant has failed to remit the EMI in that month. The monthly instalments were remitted with much delay and that caused the additional finance charges to accrue in the loan account. Now there is a balance of 2489.70 as on 28-09-2010 outstanding in the account. Hence he is not entitled to get the No Objection Certificate and they are not liable for the depreciation of value of the vehicle and the complaint is liable to be dismissed.
3. Complainant filed proof affidavit as PW1 reiterating that is stated in the complaint. Exts A1 & A2 marked through PW1. The Branch Manager of opposite party filed affidavit and Exts B1 & B2 marked through DW1. Both sides heard and documents perused.
4. Ext.B1 is the statement of account showing the payment details of the loan of complainant. Ext.B2 is the statement of additional interest charges. As per Ext.B2 total A/C accrued as on 28-09-2010 is `2610.97. The opposite parties claiming the additional interest for issuing No Objection Certificate. But on a close perusal of Ext.B2 it is clear that the opposite parties has not followed the law of appropriation of interest for computing the additional interest. Had the opposite parties been legally entitled for additional interest as per the agreement as claimed by them then they ought to have realized it from the customer lawfully. If that be so, they would have realised or collected additional finance charges whenever the complainant made the subsequent monthly instalments belatedly. This would make a customer aware about the payment of additional interest ant therefore he would make it a point to pay the monthly instalments promptly. Most often in practice what is prevailing is that no customer will be made aware about the terms and conditions printed in the agreement in fine prints while he is available at the other side of the bank counter for the few moments to execute the agreement for availing loan.
5. Moreover, as per the Law of Appropriation of interest a payment upon an interest bearing debt will be applied to the interest in preference to the principal. Where the debt allows interest on interest, a payment should be applied first to discharge the additional interest on interest second to discharge interest and third to discharge principal.
6. In this case opposite parties have no case that any principal or interest is due from the complainant. As per the law of appropriation of interest additional interest should have been collected then and there itself when the subsequent instalment is paid in a belated date. If it is not collected and only the interest and principal is collected then that means, that the additional interest for that period is waived. Therefore a Financier is not entitled to allow to accumulate the additional interest till the date of payment of last EMI and then collect the total accumulated additional interest when the No Objection Certificate is demanded by the customer to cancel the HP endorsement. This is nothing but an unscrupulous exploitation of consumer and it amounts to deficiency in service.
In the result, complaint is allowed and opposite parties are directed to issue NOC to the complainant with respect to his vehicle Verna bearing Reg.No.KL-60/A 2112 with a compensation of `3,000/-and a cost of `2,000/-. Time for compliance is limited to 30 days from the date of receipt of copy of the order. Failing which on request by the complainant necessary direction will be issued to the concerned registering authority to cancel the HP endorsement favouring the opposite parties from the RC of the Verna car bearing Reg.No.KL-60/A 2112.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Exts.
A1. 21-9-2010. Copy of lawyer notice.
A2.29-09-2010 reply notice.
B1. Statement of Account as on 21-01-2011.
B2.AIC Statement for the contract NumberEGAA01835(EGAA01835) As on 28-09-2010.
PW1. George Muttoli.
DW1.Abilash.K.P.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Pj/
Forwarded by Order
SENIOR SUPERINTENDENT
