BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 1774/2007 against C.C. 26/2007, Dist. Forum,Nalgonda
Between:
Sanghishetty Srinivas
S/o. Janaiah, Age: 40 years
R/o. 9-135, Seetharampuram
Miryalaguda Town, Nalgonda Dist. *** Appellant/
Complainant
And
1) M/s. Laxmi General Finance Ltd.
Mallika Towers, 1st Floor
Opp. Telephone Exchange
Kodad, Nalgonda Dist.
2) M/s. Sundaram Finance Ltd.
D.No. 11-2-16 to 19,
Abida Enclave
1st Floor, Wyra Road, Khammam
Rep. by its Managing Director
3) M/s. Vijaya Car Travels
Varthaka Sangam Bazar
Kodad, Nalgonda Dist.
Rep. by its Proprietor
Veerababu. *** Respondents/
O.Ps.
Counsel for the Appellant: M/s. K. Visweswara Rao
Counsel for the Resps: M/s. G.A. Padmanabha Rao
F.A. 1778/2007 against C.C. 26/2007, Dist. Forum,Nalgonda
Between:
1) M/s. Laxmi General Finance Ltd.
Mallika Towers, 1st Floor
Opp. Telephone Exchange
Kodad, Nalgonda Dist.
2) M/s. Sundaram Finance Ltd.
D.No. 11-2-16 to 19,
Abida Enclave
1st Floor, Wyra Road, Khammam
Rep. by its Managing Director *** Appellants/
Ops 1 & 2
And
1) Sanghishetty Srinivas
S/o. Janaiah, Age: 40 years
R/o. 9-135, Seetharampuram
Miryalaguda Town, Nalgonda Dist. *** Respondent/
Complainant
2) M/s. Vijaya Car Travels
Varthaka Sangam Bazar
Kodad, Nalgonda Dist.
Rep. by its Proprietor
Veerababu. *** Respondent/
O.P. No. 3
Counsel for the Appellant: M/s. Prabhakar Sripada
Counsel for the Resps: M/s. K. Visweswara Rao.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
MONDAY, THIS THE TWENTY NINETH DAY OF NOVEMBER TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) These are cross appeals F.A. 1774/2007 preferred by the complainant dis-satisfied by the order while F.A. 1778/2007 by Ops 1 & 2 in against the order of the Dist. Forum directing the opposite parties to pay Rs. 1,56,660/- together with interest @ 12% p.a., and costs.
2) The parties are described as arrayed in the complaint in order to avoid confusion in narrating the facts.
3) The case of the complainant in brief is that Op1 is doing finance business and it was maintained by Op2, Op3 is their agent. He purchased a Tata Indica car on 29.9.2004 by paying a sum of Rs. 10,000/- towards booking amount as against total value of Rs. 3,64,400/-. On his request they had agreed to advance a sum of Rs. 2, 90,000/- payable in 36 instalments at Rs. 9,140/- per month. He had paid Rs. 74,400/- as margin money and Op1 advanced an amount of Rs. 2,90,000/- vide sale invoice dt. 14.10.2004. OP1 also collected Rs. 500/- towards documentation charges, Rs. 500/- towards stamp paper charges. He had issued post dated cheques towards monthly instalments. Op1 has also taken his signatures on various blank papers, including the format said to have the hire purchase agreement. The contents were not explained to him, and therefore it would not bind him. Op1 has encashed five post dated cheques, and failed to encash remaining cheques. He paid the instalments by way of cash up to 9th instalment. He had incurred Rs. 16,500/- towards extra fittings, Rs. 12,500/- towards tape recorder and speakers, Rs. 32,975/- towards life tax and registration, Rs. 2,000/- towards seat covers and Rs. 5,500/- towards registration number etc., in order to bring it in roadworthy condition. While so, Op1 by its letter dt. 31.3.2005 informed about the merger with Op2 w.e.f. 1.4.2005. Without presenting the post dated cheques that were issued it has insisted for payment of the amount and on that enclosed a cheque for Rs. 36,560/- and requested them to encash towards payment of four instalments amount which was sent through courier on 12.11.2005. Though it had received it did not encash with a malafide intention. It was adopting unfair trade practice in not encashing the cheques. It has addressed a letter to Op3 directing him to re-possess the vehicle on the ground that he was a defaulter. Op3 without following any procedure or provisions of hire purchase agreement seized the vehicle on 8.12.2005 by force. Later he learnt that it was sold away without giving any notice. Therefore they are liable to refund margin money of Rs. 74,400/- and instalments of Rs. 82,260/- together with interest @ 24% p.a., from 8.12.2005 till the date of payment and reimburse Rs. 500/- per day for 480 days towards hire charges besides Rs. 5 lakhs towards compensation for mental agony and Rs. 20,000/- towards costs.
4) Op1 did not choose to contest the matter.
5) Op2 resisted the case. While denying each and every allegation made in the complaint it alleged that the Dist. Forum had no jurisdiction, and the relationship between them was that of financer and borrower. He was not a consumer at all. Op1 was amalgamated with it as per the orders of High Court of Madras in Company Petition No. 8 & 9 of 2005, dt. 25.5.2005. Loan agreement was entered into with Op1 on 18.10.2004 wherein an amount of Rs. 3,29,150/- was repayable in 36 monthly instalments from 18.10.2004 to 18.09.2007. The allegation that they had obtained signatures on blank forms etc. was denied. The complainant did not issue any post dated cheques for the contract period. The cheques that were issued towards 2nd to 4th instalments were honoured. The cheques issued for February, 2005, and two more cheques were returned in March, 2005. The complainant was highly irregular in payment of amounts. In case of default of even a single instlament it had a right to re-possess the vehicle. It need not wait till default of three consecutive instalments. There was no need to inform about the merger as he was not a shareholder to take his consent. The complainant’s wife was having two accounts for which the complainant was a guarantor. Since most of the cheques were dishonoured and the amounts were not maintained, on their insistence, the complainant had paid some amounts by way of cash. They did not have any personal animosity against the complainant. When repeated requests were made the complainant issued cheques for 3 or 4 instalments however they were returned for insufficient funds. Since the cheque for Rs. 36,550/- was returned for insufficient funds it had no other go than to seize the vehicle and the same was made on 18.12.2005. The protest letter alleged to have been sent on 9.12.2005 was never received and it was created for the purpose of this case. Immediately after seizure it had sent a letter on 26.12.2005 to the complainant as well as the guarantor calling upon them to settle the amount, however, they failed to settle the claim. After giving wide publicity including issuing paper publication in Eenadu daily newspaper on 17.3.32006 and after collecting quotations from the prospective purchasers it was sold to one Mr. J. Srinivasa Rao at Rs. 2,42,000/- on 13.7.2006 being the highest price offered. There is still a shortfall of Rs. 36,585/- which he was liable to pay. The complainant was not entitled to any of the reliefs claimed including Rs. 500/- per day towards hire charges and therefore prayed for dismissal of the complaint with costs.
6) Op3 also resisted the case. While denying various allegations made in the complaint he alleged that by virtue of authorization he was asked to seize the vehicle on default of any customer in payment of amounts. He has never complained before seizure of vehicle. He did not sign on the letter dt. 8.12.2005. It was forged. If the document was sent to an expert the real facts would come out. By the time of seizure there was no function. Therefore he prayed for dismissal of the complaint with costs.
7) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A21 marked while Op3 filed his affidavit evidence and Op2 filed the affidavit evidence of its Asst. Manager and got Exs. B1 to B20 marked.
8) The Dist. Forum after considering the evidence placed on record opined that the complainant was not a defaulter in payment of instalments and consequently the vehicle sold by Op2 was not valid. He was entitled to margin money of Rs. 74,400/- paid by him besides Rs. 82,260/- paid towards 9 instalments with interest @ 12% p.a., from 8.12.2005 together with costs of Rs. 2,000/-.
9) Aggrieved by the said decision, Ops 1 & 2 preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. The complainant was not a consumer and he was only a borrower and therefore he does not come under the definition of ‘consumer’ under the Consumer Protection Act. The observation that it did not follow the procedure laid down under the N.I. Act was irrelevant while considering the case on hand. When cheques were dishonoured re-possession was made under legal contract. Therefore it prayed that the appeal be allowed setting aside the order of the Dist. Forum.
10) Equally the complainant preferred F.A. 1774/2007 contending that the Dist. Forum ought to have allowed the prayer for reimbursement of hire charges of Rs. 2,40,000/- extra fitting items and registration charges of Rs. 70,295/- and compensation of Rs. 5 lakhs.
11) The points that arise for consideration are:
i. Whether the complainant has committed default in payment of instalments?
ii. Whether the seizure and sale of vehicle is valid and binding?
iii. Whether the complainant is entitled for hire charges and compensation
towards mental agony etc.?
iv. To what relief?
12) It is an undisputed fact that the complainant had purchased a car and entered into hire purchase agreement with Op1 financier for a sum of Rs. 2,90,000/- he having paid Rs. 10,000/- towards booking amount and Rs. 74,400/- towards margin money against the cost of vehicle at Rs. 3,64,400/-. He had to pay Rs. 9,140/- per month in 36 instalments vide Ex. B1 hypothecation agreement dt. 18.10.2004.
13) It is not in dispute that he might have spent Rs. 500/- towards documentation charges vide Ex. A3, Rs. 500/- towards stamp paper charges vide Ex. A4 Rs. 2,000/- towards seat covers vide Ex. A11, Rs. 12,500/- towards extra fittings vide Ex. A12. It is also not in dispute that Op1 was merged with Op2 pursuant to the orders of High Court of Madras vide Ex. B2. Whether post dated cheques were given or not the fact remains that the complainant had paid Rs. 9,140/- on 18.11.2004, 20.12.2004, 25.1.2005, 23.2.2005 and cash of Rs. 86,600/- for the months of February and Mach, 2005. The complainant alleges that though the post dated cheques were issued for subsequent instalments they were not presented under the guise that he had committed default. The vehicle was seized even without any notice arbitrarily on 18.12.2005. The complainant alleges that on 12.11.2005 he had sent a cheque dt. 14.11.2005 for Rs. 36,580/- towards 10th to 13th instalments and in order to show him as defaulter they deposited it on 30.11.2005 without even waiting for the result of the cheque, the vehicle was seized on 8.12.2005. Since the cheque was given for collection on 14.12.2005 after seizure of the vehicle the cheque was dishonoured as such there was no lapse on his part.
14) It may be stated herein from his own averments, it is evident that he paid the consolidated amount towards 10th to 13th instalments at one time. It would show that he had committed default in payment of amounts under each instalment. Apart from it, the complainant had issued cheques for Rs. 37,000/- dt. 30.7.2005, Rs. 28,120/- dt. 30.9.2005, Rs. 36,560/- dt. 14.11.2005. They were returned with endorsement ‘Insufficient funds’ vide Exs B5 to B7. It is the duty of the complainant that whenever he issues a cheque he has to see it is honoured. Even otherwise when the cheques issued were bounced for successive instalments assuming that he would pay the amount, still it would amount to default in payment of instalment by due date. It is for the complainant to see that adequate amount is available in order to enable the drawee of the cheque to encash the amount. The complainant did not dispute issuance of cheques for this period. He could not give any explanation for non-availability of funds.
15) Non-taking of action by the finance company u/s 138 of N.I. Act would not be a factor against the finance company. At any rate, it cannot be assumed in favour of the complainant to state that he did not commit default. The finance company had admittedly issued pre-sale notice under Ex. B10 informing that he had committed default and as such by virtue of terms of agreement the vehicle was repossessed on 18.12.2005 and total outstanding was Rs. 2,13,775/- and as such the vehicle would be sold if loan account was not settled within 10 days. A copy of notice was also issued to guarantor followed by telegrams Exs. B11 to B13 and after issuing paper publication in Eenadu it was sold. Despite all these notices the complainant did not try to clear the loan. We are unable to accept the opinion of the Dist. Forum that the finance company had failed to prove that the complainant had committed default in payment of instalments and therefore it was not entitled to seize the vehicle nor sell it away.
16) The Hon’ble Supreme Court, in Orix Auto Finance (India) Ltd. v. Jagmander Singh & Anr., reported in II (2007) CPJ 45 (SC) held:
“Essentially these are matters of contract and unless the party succeeds in showing that the contract is unconscionable or opposed to public policy the scope of interference in writ petitions in such contractual matters is practically non-existent. If agreements permit the financier to take possession of the financed vehicles, there is no legal impediment on such possession being taken. Of course, the hirer can avail such statutory remedy as may be available.”
17) The finance company had admittedly lent Rs. 2,90,000/- calculating with interest he had to pay Rs. 3,29,150/- in 36 instlaments vide Ex. A7 commencing from 18.10.2004 to 18.09.2007. Admittedly he had paid Rs. 82,260/-. The opposite party finance company alleges that the vehicle was sold at Rs. 2,40,000/- on 30.7.2002, still an amount of Rs. 36,585/- was due. The complainant did not dispute the statement of account filed by the finance company under Ex. B4. Therefore, we do not see any deficiency in service on the part of finance company in this regard. The Dist. Forum did not consider any of these aspects. Despite the fact that the cheques were bounded evidenced under Exs. B5 to B7 the Dist. Forum did not take cognizance. The complainant did not protest any of these notices sent by the finance company directing him to pay the amount towards instalments due. It is not the case of the complainant that he had paid the amounts on due dates. On the other hand the evidence discloses that he had committed default in payment of instalments and even the cheques issued were bounced, therefore we are of the opinion that the complainant is not entitled to any of the amounts.
18) The complainant by way of cross-appeal sought recovery of amounts alleged to have been spent by him towards hiring charges vide series of bills filed in appeal. Even assuming that he had hired a vehicle he cannot recover the amount from the finance company when we held that the seizure as well as sale were valid and by no stretch of imagination it could be termed as illegal or arbitrary. He was not entitled to hire charges which he had spent in hiring a car, equally so the claim for compensation of Rs. 5 lakhs towards mental agony etc. He himself did not pay the amount and therefore the question of reimbursement will not arise, more so when notice was issued followed by paper publication issued in regard to sale of the vehicle. The complainant is not entitled to any amount.
19) In the result the appeal preferred by opposite parties in F.A. No. 1778/2007 is allowed consequently the complaint is dismissed. As a corollary F.A. No. 1774/2007 filed by the complainant is dismissed. No costs.
1)
_______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 29. 11. 2010.
*pnr
“UP LOAD – O.K.”
