Punjab

StateCommission

A/5/2015

Tilak Raj Chawla - Complainant(s)

Versus

M/s Citi Financial Consumer Finance India Ltd. - Opp.Party(s)

Kawaljyot Singh

04 Feb 2015

ORDER

                                                               FIRST ADDITIONAL BENCH

 

 

STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION, PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

 

First Appeal No. 05 of 2015

                                                 Date of Institution: 05.01.2015.

                             Date of Decision  : 04.02.2015.

 

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.

 

                                                     …..Appellants/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.

                                                     ….Respondents/opposite parties

    

First Appeal against order dated 03.12.2014 passed by the District Consumer Disputes Redressal Forum, Jalandhar.

 

Quorum:-

 

     Shri J. S. Klar, Presiding Judicial Member.

               Shri Vinod Kumar Gupta, Member.  

Present:-

 

     For the appellants            :     Sh. Kawaljyot Singh, Advocate,

     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

ORDER

                                 

                    This order shall dispose of this preliminary point at the admission stage of this appeal in this case with regard to maintainability of the appeal. The District Forum, Jalandhar dismissed the complaint of the appellants (the complainants therein) in favour of the respondents of this appeal (hereinafter referred as OPs). The complainants have filed the complaint against the OPs before the District Forum, Jalandhar.

2.                The facts of the case, as stated in the order of the District Forum in detail, are re-produced as under:

                    That OPs are engaged in the business of finance company and the OP Nos. 1 & 2 had approached complainant Nos. 1 & 2 for a loan of about Rs.21 lakhs 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 OP Nos.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 lakhs approximately paid to the complainant Nos. 1&2 in the month of October 2008. The complainant Nos. 1 & 2 have already paid about Rs.20 lakhs to the OP Nos. 1&2 till date. Some receipts have already been issued by the OP Nos. 1 & 2 regarding the receipt of installments and the amounts have also been directly paid in the account of the OP Nos. 1 & 2 as well. The complainants have requested number of times to the OP Nos. 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 OP Nos. 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 OP Nos. 1 & 2 on 25.04.2013 from their counsel Sethi and Associates, Advocate at Delhi in this regard which is totally an illegal act of the OPs to grab the amount of the complainants and to usurp the property of the complainant Nos. 1 & 2 which according to the OP Nos. 1 & 2 is lying hypothecated in view of the above said loan of Rs.21 lakhs. The complainants have not made any default in making payment and even if according to the OP Nos. 1 & 2, some installments have been paid late in that event, the OP Nos. 1 & 2 could have charged interest on the said late payment and in no circumstances, the OP Nos. 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 OP Nos. 1 & 2 at the time of advancement of the loan in October 2008. Even otherwise, the demand of the OP Nos. 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 OPs 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 OPs instead of acceding to the request of the complainants sent a notice dated 25.04.2013 through Sethi and Associates, New Delhi calling upon the complainants to pay the amount of Rs.20,66,950.20/- along with interest @24% per annum which was not at all payable by the complainants and the OPs 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 complainant on such like averments, the complainants have prayed for directing the OPs 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 sum. They have further prayed for restraining the OPs from selling, mortgaging and disposing of the property No.18, Harbans Nagar, Jalandhar in any manner. The complainants have also prayed for Rs.5 lakhs as compensation.

3.                Upon notice, the OPs appeared and filed their written replies. In their separate written reply, OP Nos. 1 & 2 pleaded that complainant along with co-complainants i.e. Jamnesh Chawla, Amit Chawla and Sania Chawla approached OP No.2 for taking a home equity loan facility of Rs.21,94,000/- vide loan agreement No.15659187. Accordingly, OP 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 OP No.2 in consideration of the loan availed by the complainants. However, the complainant Nos. 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 20.06.2013 is outstanding which deserves to be paid along with upto date interest and charges. The complainants had taken loan from the OPs after reading and understanding the terms and conditions mentioned in the loan documents and the OPs are not demanding any amount over and above the amount mentioned in the said documents. Thus, the complainants should be estopped form raising this present issue by filing this present false and frivolous complaint against the OPs as the same are beyond the scope of terms and conditions mentioned in the loan documents. They denied other material averments of the complaint.

4.                In their separate written reply, OP Nos. 3 and 4, who were impleaded later on as OPs 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 OP Nos. 3 & 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 02.08.2013 passed by Sh.Rajiv Shukla, Sole Arbitrator for a sum of Rs.20,66,950.20/- with interest @18% per annum from 25.04.2013 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 OPs 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 lakhs 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 OPs/CCFIL in notice dated 25.04.2013 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.

5.                In support of their complaint, complainants tendered in evidence affidavits Ex.CW1/A and Ex.CW2/A along with copies of documents Ex.C1 and Ex.C13 and closed their evidence. On the other hand, OP Nos.1 & 2 tendered in evidence Ex.OP/A along with copies of documents Ex.OP-1 to Ex.OP-3 and closed evidence. Further OP Nos.3 & 4 has tendered affidavit Ex.O7 along with copies of documents Ex.O4 to O16 and closed their evidence. The District Forum dismissed the complaint of the complainant primarily on the ground that the remedy has already been availed under the Arbitration and Conciliation Act, 1996. The petition under Section 34 of the Arbitration Act was accepted and matter has been pending with regard to validity of the arbitration award       before the competent Civil Court between the parties of this case. The complainant also admitted this fact in their additional written arguments which are re-produced as under:-

          "That the OP Nos. 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 OPs 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 OP initiated the arbitration proceedings at the back of the complainant and passed an ex-parte 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 OPs with regard to the alleged loan. However, in the petition under Section 34 of the Arbitration and Conciliation Act, the ex-parte award obtained by the OPs 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 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".

6.                It is, thus, evident that the remedy under Arbitration and Conciliation Act, 1996 has already been availed in this case and the Civil Court is seized of the matter. The point for adjudication before us in this appeal, is whether this consumer complaint is maintainable in spite of availing the effective remedy by the complainant under the Arbitration Act before Civil Court. On this point, the counsel for the appellants referred to law laid down in "Dhanbir Singh  Versus   Haryana Urban Development Authority" reported in 2013(11) SCC 472,   "M/s National Seeds Corporation Ltd.  Versus  M. Madhusudhan Reddy and another" reported in 2012(1)RCR (Civil) 838, "Lucknow Development Authority  Versus  M.K. Gupta" reported in 1994 AIR (SC) 787 and "M/s Fair Air Engineers Pvt. Ltd. and another   Versus  N.K. Modi" reported in 1997 AIR (SC) 533 before this Commission. We have examined all the authorities cited before us by counsel for the appellants. Undoubtedly, Section 3 of the Consumer Protection Act 1986 provides additional remedy which is not in derogation of other remedy. We find that the cited authorities nowhere lays down that if a party has already availed of the remedy under the Arbitration and Conciliation Act and Civil Court is already seized of the matter, the consumer complaint can be filed and continued at the same time. Section 3 of the Act gives option to the complainant either to seek the remedy under the Consumer Act or to seek the remedy from the Civil Court. Herein, it is nowhere laid down in any of the authorities that if the complainants have already availed of the remedy under Arbitration and Conciliation Act, 1996 before the competent Civil Court with regard to the same subject matter, they can still avail the remedy under the Consumer Protection Act. We find that District Forum has correctly reached the conclusion that complainants have admitted to have filed petition under Section 34 of the Arbitration Act before the competent Civil Court regarding the validity of the arbitral award and it is still pending before the Court of Additional District Judge, Jalandhar. We are of this view that a party cannot avail two remedies simultaneously, one before the Consumer Fora and second before the Civil Court under the Arbitration Act, 1996. Consequently, the view taken by the District Forum is sustainable that when the complainants have already availed of the remedy under the Arbitration Act before the Civil Court, then this complaint is not competent before Consumer Forum.

7.                The District Forum has also observed that the relief of the complainant is aimed at furnishing of true statements of account from the OPs. The loan was advanced in the year 2008 and instant complaint was instituted in the year 2013. We endorse the view of the District Forum in this appeal that it would not be possible to examine each and every entry of the statements of account ranging from 2008 to 2013 in accordance with terms and conditions of loan agreement. The instant controversy can be settled by the competent Civil Court and not in a summary matter by the Consumer Fora. Consequently, we find that the present complaint has rightly been dismissed by the District Forum being not maintainable.

8.                In view of our above discussion, we find no ground to admit this appeal being not maintainable. The appeal is hereby dismissed in limine.

9.                Arguments in this appeal were heard on 02.02.2015 and the order was reserved. Now the order be communicated to the concerned parties.

 

                                                                          (J. S. KLAR)

                                                             PRESIDING JUDICIAL MEMBER

                       

                                                                   (VINOD KUMAR GUPTA)

                                                                              MEMBER

 

February 4, 2015.                                                                           

(MM)