BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.206 of 2013

Date of Instt. 17.5.2013

Date of Decision :3.12.2014

1. Tilak Raj Chawla son of Tara Chand;

2. Mrs Jamnesh Chawla wife of Tilak Raj Chawla;

3. Amit Chawla son of Tilak Raj Chawla;

4. Mrs Sania Chawla wife of Amit Chawla;

All resident of H.No.118, Harbans Nagar, Near Merry Model School, Jalandhar.

..........Complainants

Versus

1. M/s Citi Financial Consumer Finance India Ltd, formerly known as Associates India Financial Services Ltd, having its registered office at 3, Local Shopping Centre, Pushpa Vihar, New Delhi-110062 through its Managing Director/Authorized Person.

2. M/s Citi Financial Consumer Finance India Ltd, formerly known as Associates India Financial Services Ltd, having its registered office situated near Ajit Printing Press, Near Railway Road, Jalandhar City through its Managing Director/Manager.

3. M/s L & T Housing Finance Ltd, having its corporate office at 5th Floor, KGN Tower, No.52, Ethiraj Salai(Commander-in-chief road, Chennai 600105 through its Managing Director/Authorized person.

4. M/s L & T Housing Finance Ltd, having its office situated near Ajit Printing Press, Near Railway Road, Jalandhar City through Managing Director/Manager.

.........Opposite parties

Complaint under section 12 of the Consumer Protection Act.

Before: S. Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Present: Sh.Gurvinder Arora Adv., counsel for complainant.

Sh.Davinder Sharma Adv., counsel for OPs No.1 & 2.

Sh.Vikas Sood Adv., counsel for OPs No.3 & 4.

Order

J.S.Bhatia (President)

1. The complainants have filed the present complaint under section 12 of the Consumer Protection Act, against the opposite parties on the averments that opposite parties are engaged in the business of finance company and the opposite parties No.1 & 2 had approached complainants No.1 & 2 for a loan of about Rs.21 Lacs against installments for 15 years. The complainant No.3 is the son of the complainant No.1 and the complainant No.4 is the wife of the complainant No.3. The opposite parties No.1 & 2 took signatures of the complainants on various blank papers and stamp papers and also obtained their blank cheques as security of loan of Rs.21 Lacs approximately paid to the complainants No.1 & 2 in the month of October 2008. The complainants No.1 & 2 have already paid about Rs.20 Lacs to the opposite parties No.1 & 2 till date. Some receipts have already been issued by the opposite parties No.1 & 2 regarding the receipt of installments and the amounts have also been directly paid in the account of the opposite parties No.1 & 2 as well. The complainants have requested number of times to the opposite parties No.1 & 2 to provide the statement of account of their loan so that they should come to know about the remaining amount to be paid by them and the exact EMI to be paid by them. However, the opposite parties No.1 & 2 are not supplying the statement of account and are rather not rendering the true and fair accounts and are levying illegal interest/penalties and are asking to pay Rs.20,66,950.20/- to the complainants. Even, a notice has also been sent to the complainants on behalf of opposite parties No.1 & 2 on 25.4.2013 from their counsel Sethi and Associates, Advocate at Delhi in this regard which is totally an illegal act of the opposite parties to grab the amount of the complainant and to usurp the property of the complainants No.1 & 2 which according to the opposite parties No.1 & 2 is lying hypothecated in view of the above said loan of Rs.21 Lacs. The complainants have not made any default in making payment and even if according to the opposite parties No.1 & 2 some installments have been paid late in that event the opposite parties No.1 & 2 could have charged interest on the said late payment and in no circumstances, the opposite parties No.1 & 2 could claim the illegal/exorbitant amounts of Rs.20,66,950.20 from the complainants in a one go so much so when the loan amount was to be paid through installments for a period of 15 years as represented by the opposite parties No.1 & 2 at the time of advancement of the loan in October 2008. Even otherwise, the demand of the opposite parties No.1 & 2 is totally illegal so much so when the complainants have been requesting time and again to supply the statement of account so that they should be able to know about the balance amount to be paid by them for the remaining years which was by the year 2023 i.e 15 years from the date of loan. The cause of action has accrued to the complainants to file the present complaint firstly when they demanded the statement of account from the opposite parties so as to apprise them from the amount paid and the remaining amount to be paid by them in the month of March 2013 and prior to that on number of occasions and the opposite parties instead of acceding to the request of the complainants sent a notice dated 25.4.2013 through Sethi and Associates, New Delhi calling upon the complainants to pay the amount of Rs.20,66,950.20/- alongwith interest @ 24% per annum which was not at all payable by the complainants and the opposite parties are also threatening to sell, mortgage and alienate the properly of the complainants thereafter and as such the cause of action is continuous. Hence this complaint. On such like averments, the complainants have prayed for directing the opposite parties to furnish the true statement of account to them and further directing them to receive the actual remaining loan amount from them during the period of 15 years i.e October 2008 till October 2023 and not in lump sump. They have further prayed for restraining the opposite parties from selling, mortgaging and disposing of the property No.18, Harbans Nagar, Jalandhar in any manner. The complainants have also prayed for Rs.5 Lacs as compensation.

2. Upon notice, the opposite parties appeared and filed their written replies. In their separate written reply, opposite parties No.1 & 2 pleaded that complainant alongwith co-complainants i.e Jamnesh Chawla, Amit Chawla and Sania Chawla approached opposite party No.2 for taking a home equity loan facility of Rs.21,94,000/- vide loan agreement No.15659187. Accordingly, opposite party No.2 had considered the request of the complainants and consequently, the said loan was disbursed to the complainants on 30.10.2008 after deducting the agreed processing charges which was to be repayable in 146 installments of Rs.34,355/- each. Further, the complainants had mortgaged the property i.e House No.118, Harbans Nagar, Near Merry Model School, Jalandhar in favour of opposite party No.2 in consideration of the loan availed by the complainants. However, the complainants No.1 & 2 had only paid the 50 installments against the disbursed loan. Thereafter, the complainants have not made the payment of further installments as per the schedule mentioned in the loan agreement and consequently defaulted in making the payment thereof. Thus, an amount of Rs.21,12,141.86/- on 20.6.2013 is outstanding which deserves to be paid alongwith upto date interest and charges. The complainants had taken loan from the opposite parties after reading and understanding the terms and conditions mentioned in the loan documents and the opposite parties are not demanding any amount over and above the amount mentioned in the said documents. Thus, the complainant should be estopped form raising this present issue by filing this present false and frivolous complaint against the opposite parties as the same are beyond the scope of terms and conditions mentioned in the loan documents. They denied other material averments of the complaint.

3. In their separate written reply, opposite parties No.3 and 4, who were impleaded later on as opposite parties No.1 & 2 have assigned the loan to them, pleaded that LTHEL has acquired certain financial assets with all underlying securities, interest etc from M/s Citi Financial Consumer Finance India Ltd, (CCFIL) by virtue of assignment deed on dated 30.11.2013 in its favour. That the opposite parties No.3 and 4 by virtue of the said assignment has become (i) the sole, full, true and absolute legal and beneficial owner of such assets, free from all encumbrances;(ii) the only person entitled to all such assets (including to receive, recover and realize all the receivables and to the benefits of the securities); (iii) the only person entitled to file suits or institute proceedings and take any other action, as may be required (including any action for the enforcement of any securities) for the purpose of recovery and/or realization of the receivables in its own name and as the legal and beneficial owner/acquirer thereof and not as the representative or agent of CCFIL;(iv) vested with all the rights, title, interests, property, benefits, duties, risks, liabilities, obligations, claims, powers and remedies of CCFIL against the obligors in respect of the assets, whether by way of damages or otherwise; and (v) have the right to deal with the assets(or any of them) in any manner whatsoever and without any reference or interference from CCFIL or any person(s) claiming by, through, under or in trust for CCFIL. That the account of the complainant with all right and underlying securities has been assigned in favour of them by virtue of the afore-stated assignment deed. The complainant had availed finance of Rs.21,94,000/- under Home Equity Loan from CCFIL under loan agreement reference No.15659187 dated 30.10.2008 and for tenure of 146, EMI of Rs.34355/- the complainant and the co-borrower expressly agreed to be bound by the terms and conditions, as enumerated in the afore-referred agreement/contract. That the complainant fell in default of eleven installments in November 2013 at the time of deed of assignment. The borrower Mr.Tilak Raj Chawla defaulted on payments and as per the terms of the agreement Citi Financial had invoked arbitration and an award dated 2.8.2013 passed by Sh.Rajiv Shukla, Sole Arbitrator for a sum of Rs.20,66,950.20/- with interest @ 18% per annum from 25.4.2013 till the date of realization. The complainant has thereafter filed the present false and frivolous consumer complaint before this Forum. However, it is specifically denied that the complainants had not made any default in making payments. In this regard, it submitted that the complainants had paid only 51 installments against the disbursed loan which can be borne out from the SOA of CCFIL dated 30.11.2013. Further, it is relevant to mention here that the complainants after going through the terms and conditions mentioned in the loan agreement signed the same and clause No.2.5(b) mentioned in the said agreement clearly shows that the delay in payment of installments shall render the borrower liable to interest @ 24% P.A. It is submitted that the opposite parties had never took any signatures of the complainants on blank papers. Thus the question of conversion of blank documents for any purpose or threatening the complainants does not arise. It is also denied that an amount of Rs.20 Lacs has already been paid by the complainants or that the amount of Rs.20,66,950/- is not payable by the complainants by any stretch of imagination or that the calculations made by the opposite party/CCFIL in notice dated 25.4.2013 is illegal or arbitrary or not binding upon the complainants. They denied other material averments of the complaint and they also took preliminary objection regarding limitation etc. They also took preliminary objections that there is arbitration clause in the agreement which is valid and binding as per provision of the Act. The parties have agreed to get their dispute and differences to be resolved by way of arbitration and jurisdiction of this forum is barred.

4. In support of their complaint, learned counsel for the complainants has tendered into evidence affidavits Ex.CW1/A and Ex.CW2/A along with copies of documents Ex.C1 and Ex.C13 and closed their evidence.

5. On the other hand, learned counsel for opposite parties No.1 & 2 has tendered affidavit Ex.OP/A alongwith copies of documents Ex.OP-1 to Ex.OP-3 and closed evidence. Further learned counsel for opposite parties No.3 and 4 has tendered affidavit Ex.O7 alongwith copies of documents Ex.O4 to O16 and closed evidence.

6. We have carefully gone through the record and also gone through the written arguments submitted by both the parties.

7. Without going into other contentions raised by both the parties in their written arguments, the present complaint is liable to be dismissed on the short ground that the complainants have already availed remedy under the Arbitration and Conciliation Act by filing the petition under section 34 of the said Act by challenging the award passed by the arbitrator. Counsel for the opposite parties has placed on record copy of petition under section 34 of the said Act filed by the complainants which is stated to be pending in the court of Sh.HS Lekhi, learned Additional District Judge, Jalandhar. This fact is not disputed. In their additional written arguments, the complainants have mentioned as under:-

" That the opposite parties No.1 & 2 have stated in para No.5 of the written arguments that complainant has filed a petition under section 34 of the Arbitration and Conciliation Act against the opposite parties which is pending in the court of Sh.HS Lekhi, Addl.District Judge, Jalandhar. It is worth mentioning here that the complainant had filed present complaint at the first stage and during the pendency of the case, the opposite party initiated the arbitration proceedings at the back of the complainant and passed an exparte award. The complainant after coming to know about the same has filed petition under section 34 of the Arbitration and Conciliation Act. It is worth mentioning here that matter in controversy before this Hon'ble Court in not connected with the petition under section 34 of the Arbitration Act. In the case in hand, the complainant has taken the issue of unfair trade practice and deficiency in services on the part of the opposite parties with regard to the alleged loan. However, in the petition under section 34 of the Arbitration and Conciliation Act, the exparte award obtained by the opposite parties by playing fraud and despite the pendency of the present case has been challenged. Thus, the continuation of the proceedings before this Hon'ble Court is no bar so much so this Hon'ble Court has only the pecuniary jurisdiction to entertain, try and decide the matter in controversy. Therefore, the complaint is liable to be allowed on this score".

8. So in their additional written arguments, complainants have admitted to have filed a petition under section 34 of the Arbitration and Conciliation Act challenging the award passed by the Arbitrator. By filing petition under section 34 of the Arbitration and Conciliation Act in away the complainants have accepted the arbitration proceedings and award passed by the Arbitrator. So matter regarding the validity of the arbitration award is pending before the Civil Court i.e court of Learned Additional District Judge, Jalandhar. A party can not avail two remedies at the same time i.e one before this forum and second before the civil court or under the Arbitration and Conciliation Act. The matter would have been different if the complainants have not availed the remedy under the Arbitration and Conciliation Act by filing the petition under section 34 challenging the award passed by the Arbitrator. So in our opinion, the complainants have availed the remedy against the arbitration award by filing petition under section 34 of the Arbitration and Conciliation Act in the court of learned Additional District Judge, Jalandhar and as such are estopped from continuing the present summary proceedings. Even otherwise the relief claimed by the complainants can not be effectively decided in the present summary proceedings. The complainants have prayed for directing the opposite parties to furnish the true statement of accounts. The loan was taken in the year 2008 and whereas the present complaint was filed in the year 2013. So it is not possible to scrutinize each and every entry of the statement of accounts right from the year 2008 to 2013 in accordance with the terms and conditions of the loan agreement and to determine as to what exact amount is due from the complainants to the opposite parties. Even otherwise controversy involved in the present case can not be effectively decided in the present summary proceedings.

9. In view of above discussion, the present complaint is dismissed with no order as to cost. Copies of the order be sent to the parties free of costs under the rules. File be consigned to the record room.

Dated Jyotsna Thatai Jaspal Singh Bhatia

3.12.2014 Member President