By Smt. Saji Mathew, Member:

The Complaint filed U/S 12 of the Consumer Protection Act 1986.

The gist of the case is as follows.

The Complainant is the registered owner of Bus No.KL.12/B.3784, which was purchased from one Hamza.A.P. At the time of purchase, the complainant has availed a loan of Rs.5,75,000/- from the 1^st Opposite Party. As per the repayment schedule, total amount

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payable was Rs.7,93,449/-. The Complainant has paid Rs. 8,65,181/- in addition to the security of Rs.50,000/- having maturity value of Rs.70,000/-. The entire amount was paid to the 1^st Opposite Party through the Ernakulam and Sulthan Bathery Branch of the 2^nd Opposite Party. The Complainant has paid an excess of Rs.1,74,332/- still the Opposite Party is not issuing clearance certificate to cancel the hypothecation. The 2^nd Opposite Party has collected 10 signed blank cheques and 2 signed and blank stamp papers from the Complainant. Even though the payment of excess amount to the 2^nd Opposite Party is in effect he has not returned the cheque leaves or stamp papers to the Complainant. Instead, the Opposite Parties are demanding Rs.53,502/- in excess from the Complainant. The Opposite Parties have charged an additional amount of Rs.25,500/- towards all charges and Rs.7,100/- towards expense. This too is illegal. There is unfair trade practice on the part of the Opposite Parties. Hence the Complainant prays for an order directing the Opposite Parties to issue no objection certificate to cancel the hypothecation and return Rs. 1,74,332/- with 12% interest from 30.06.2007. The complainant also prays for the return of 10 blank cheque leaves and 2 signed blank stamp papers worth Rs.50/- and to pay a compensation of Rs. 2,00,000/-. The Opposite Parties if not issuing the NOC, the complainant also prays for an order directing the 3^rd Opposite Party to cancel the H.P endorsement in the R.C.

2. The 1^st and 2^nd Opposite Parties appeared and filed version. According to the 1^st Opposite Party, the complainant is not a consumer as defined in the Act and this Forum has no territorial jurisdiction to try this complaint. The disputed transaction is for commercial purpose the Complainant is a transport operator employing several workers on a commercial scale. There are agreements between 1^st and 2^nd Opposite Parties for a scheme named as the

(Contd....3)

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“ Small Road Transport Operators (SRTO), Direct lending scheme to Transport Operators in Kerala”. By the agreements 1^st Opposite Party agreed to provide financial assistance to borrowers for the purchase of heavy commercial vehicles, strictly as per the terms and conditions of the contract between the 1^st and 2^nd Opposite Parties. As per the clause I of the scheme, the 2^nd Opposite Party, referred as SIL in the agreement, can select and sponsor borrowers and such applications are to be screened and sanctioned by 1^st Opposite Party. The 2^nd Opposite Party has guaranteed the prompt payment of monthly instalments and other dues whether or not the individual borrowers make default in the payment of instalments and other dues to the SIL ie, the 2^nd Opposite Party. In the event of default of monthly instalments by the borrowers, the SIL has the right to take steps to recover the amount. So, the collection of instalments and any complaint regarding chart are not matters concerning the 1^st opposite Party.

3. Under the above said scheme, the 1^st Opposite Party has sanctioned a loan of Rs. 5,75,000/- to one A.P Hamza for purchase of a Tata 709. The application for the loan was forwarded to 1^st Opposite party along with Rs.1,94,078/- as margin money. The 1^st Opposite Party has disbursed an amount of Rs.5,05,528/- infavour of M/S Benz Motors and Rs.2,62,000/- in favour of M/s Maryland Auto- body works through the 2^nd Opposite Party which included the sanctioned loan amount of Rs.75,000/- and also the margin money. Then

the Complainant has brought the vehicle from Hamza and also executed an agreement of guarantee. All the transaction were through the 2^nd Opposite Party and the 2^nd Opposite Party is answerable to the individual borrowers. So the 1^st Opposite Party prays for an order dismissing the complaint against the 1^st Opposite Party.

(Contd.....4)

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4. 2^nd Opposite Party also states in the version that the transaction is commercial. 1^st Opposite Party points out that the Complainant has not produced copy of agreement between him and the 2^nd Opposite Party to show the conditions of payments and consequence of non payment in time. The loan of Rs. 5,75,000/- was disbursed by the 1^st Opposite Party on the instruction and recommendations of 2^nd Opposite Party under the SRTO Scheme. In addition to that a special charge of Rs.25,000/- for the service of the 2^nd Opposite Party was added to the loan amount and altogether Rs.6,00,000/- was repayable towards principal amount along with interest and other charge within a period of 60 months. The total agreement value is Rs.8,95,000/-. The last instalment date is on 5.08.2007. The allegation that the 2^nd Opposite party has collected Rs.1,74,332/-in excess from the Complainant is not correct. The Complainant has not remitted the instalments in time and he is liable to pay penal charges. The allegation that the 2^nd Opposite party has collected 10 signed blank stamp papers is not true. Only after the payment of dues from the Complainant the 2^nd Opposite Party is liable to issue loan termination letter. The Complainant has not paid the instalment in time and for the delayed instalments the complainant is liable to pay compensation at the rate of 36% P.A as per the agreement. Therefore, the 2^nd Opposite Party prays for an order dismissing the complaint.

5. The Complainant was examined as PW1 and documents were marked as Ext.A1 to Ext.A11 series. On the side of 1^st Opposite Parties Ext. B1 to Ext. B3 are marked. No oral evidence was given by the Opposite Parties.

6. The matters to be considered are :-

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

2. Whether the Complainant is entitled for any relief and cost.

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7. Point No1. Ext.B1 shows that the amount advanced by 1^st Opposite Party to the Complainant is Rs.5,75,000/-. Including the interest of Rs.14,375/- the total amount payable is Rs.5,89,375/-. This amount is to be paid before 5.10.2007. As per Ext.B1 only Rs.61 is the balance to be paid in to this account. On the other hand Ext.A4 shows that Rs.7,93,448/- is paid by 5.07.2007 to the 2^nd Opposite Party. The loan transaction is over and the account is also closed. The 2^nd Opposite Party challenge this document and state that the Complainant is bound to pay as per Ext. A5. Ext.A5 shows that 2^nd Opposite Party has collected Rs. 8,90,681/- from the Complainant and still demanding Rs.53,502/-. The 2^nd Opposite Party has not produced any agreement between them and the Complainant which entitle them to collect this much amount from the Complainant. On the other hand 1^st Opposite Party has produced an agreement between them and the 2^nd Opposite Party (Ext.B3) as per which the 2^nd Opposite Party is entitled to collect only 3% of the loan amount as service charge from the loanee that too with the consent of the party. In this case, the 2^nd Opposite Party in their version state that they have initially collected 25,000/- as service charge. Even then they have collected interest and penal charges. On Ext.A5, vehicle value is shown as Rs.6,00,000/- and financial charges as Rs.2,35,563/-. But on Ext. B1, loan amount is shown as 5,75,000/- and including the interest, the schedule amount is Rs. 5,89,375/-. In the version of 2^nd Opposite Party also 5,75,000/- is the disbursed amount. So it is very evident that the 2^nd Opposite Party has collected huge amount from the Complainant in appropriately. This is a case of grave deficiency in service and unfair trade practice. So the Point No.1 is found against the 2^nd Opposite Party.

(Contd.......6)

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8. Point No.2 It is seen from Ext.A9 that the loan endorsement is in the name of 1^st Opposite Party. As it is found that the Complainant has remitted to the 2^nd Opposite Party huge amount more than he is liable to 1^st Opposite Party is directed to issue no objection certificate to cancel the loan endorsement in the R.C of vehicle No. KL-12-B-3784. The 1^st Opposite Party can collect the balance due if any, from the 2^nd Opposite Party. The second Opposite Party has to return the excess amount collected from the Complainant. As per Ext.B3, the 2^nd Opposite Party is entitled to collect only 3% of the loan amount as their service charge. Hence the loan amount is 5,75,000/- and including 3% of this amount, being 17,250/-, the total amount enforceable by the 2^nd Opposite Party is only 5,87,250/-. Here the Complainant has paid the interest of Rs.14,375/- to the 1^st Opposite party and paid service charge of Rs.25,000/- to the 2^nd Opposite Party. Even after that he has been paying interest and penal charges. The Complainant was not a defaulter in paying the instalments. He has paid more than the loan amount and service charge before, the due date of last instalement. Ext.A5 shows that the Complainant has paid Rs.8,90,681/- to the 2^nd Opposite Party. However the Complainant has requested only for the return of Rs.1,74,332/- and he is entitled for it. The Complainant is also entitled to get a compensation of Rs.10,000/-.

Therefore the complaint is partly allowed and the 1^st Opposite Party is directed to issue no objection certificate to cancel the loan endorsement in respect of the vehicle No. KL-12-B-3784. The 2^nd opposite opposite Party is directed to pay an amount of Rs.1,74,332/- (Rupees One lakh seventy four thousand three hundred and thirty two only )and compensation of Rs 10,000/-(Rupees Ten thousand only) to the Complainant within one

(Contd...7)

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month from the receipt of this order. The 2^nd Opposite Party is also directed to pay an interest at the rate of 12% on Rs. 1,74,332/- from the date of complaint till payment.

Pronounced in Open Forum on this the 30^th day of April 2009.

PRESIDENT: Sd/-

MEMBER-I : Sd/-

MEMBER-II: Sd/-

A P P E N D I X

Witnesses for the Complainant :

PW1. Moidutty. Complainant.

Witnesses for the Opposite Party :

Nil.

Exhibits for the Complainant :

A1. Copy of lawyer notice dt.17.03.2004

A2. Postal Receipt

A3. Acknowledgement card. dt.18.03.2004

A4. Repayment Schedule

A5. Report No.M 24. dt. 9.06.2008

A6. Receipt dt.14.09.2002

(Contd.....8)

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A7. Receipt dt.11.11.2002

A8 Receipt dt.30.06.2007

A9. Photo copy of Registration certificate

A10. Agreement

A11Series(46 Nos) Receipt

Exhibits for the Opposite Party :

B1. Loan status agreement

B2. Letter dt.5.08.2002

B3. Copy of Agreement.