Date of Filing      : 22.02.2022
                                                                                                                 Date of Disposal: 29.05.2023

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION
THIRUVALLUR

 BEFORE  TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law)                  .…. PRESIDENT
                 THIRU.P.VINODH KUMAR, B.Sc., B.L.,                                                      .....MEMBER –I
                 THIRU.P.MURUGAN,.MCom., ICWA(Inter)., B.L.,                                    ....MEMBER-II

CC. No.12/2022
THIS MONDAY, THE 29th DAY OF MAY 2023

Mr.S.Anandhan, S/o.Sugumar,
No.365, Kamarajar Street,
Pullarambakkam,
Thiruvallur 602 023.                                                                    .........Complainant.
                                                                          //Vs//

1.M/s.Equitas Small Finance Bank Limited,
    Rep. by its Manager,
    4th Floor, Phase II, Spencer Plaza,
    No.769, Mount Road,
    Anna Salai,
   Chennai 600 002.

2.The Branch Credit Manager Mr.Vikram,
   Equitas Small Finance Bank Limited,
   No.47/47a, 1st Floor,
   South Tank Street,
   Thiruvallur 602 001.                                                                ...Opposite parties
 
Counsel for the complainant                                    :  M/s.P.Raja, Advocate.
Counsel for the 1st opposite party                           : M/s.A.Damodaran, Advocate.
                        
This complaint is coming before us on various dates and finally on 09.05.2023 in the presence of M/s.P.Raja counsel for the complainant and M/s.A.Damodaran counsel for the 1st opposite party and the 2nd opposite party did not appear and hence was called absent and was set exparte on 04.08.2022 for non appearance and for non filing of written version within the mandatory period as per the statute and upon perusing the documents and evidences of both sides, this Commission delivered the following:
ORDER
PRONOUNCED BY THIRU.P.MURUGAN, MEMBER - II

This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service of banking service along with a prayer to direct the opposite parties to return the vehicle Tata Ace Gold Diesel variant of BS-VI vehicle bearing registration No.TN 20 DA 8325 or in alternative to pay the cost of vehicle of Rs.5,15,248/- to the complainant and to pay a sum of Rs.2,00,000/- towards compensation for the mental agony caused to the complainant and to pay a sum of Rs.25,000/- towards cost of the proceedings to the complainant.
Summary of facts culminating into complaint:-

This case is concerned with asset purchase on loan basis and sold under arbitration which is challenged by the complainant seeking restoration of asset possession or to pay value of the said asset with compensation. While scrutinising the case and finding out result for both the parties, this commission put forth the following in a clear way.
Counsel Thiru. P.Raja for the complainant and Thiru.A.Damodaran for the Opposite Parties have appeared and argued their version.
The case before this Commission is explained in elaborate way since it involves loan, default and arbitration.  The Complainant who is a resident of Thiruvallur has approached Thiruvallur Popular Mega Motors India Pvt. Ltd., Poonamallee for purchase of a vehicle called TATA ACE GOLD Diesel variant of BS VI standard and he states that at this stage the 2nd Respondent’s representative executive approached him stating that they would extend financial assistance to buy the vehicle at lower interest and the complainant could pay lesser amount as down payment. Agreed with the conditions, the Complainant entered into an agreement to buy the vehicle with a down payment of Rs.70,000/- and equated monthly instalment of Rs.14,700/- for a period of 48 months. Therefore, agreement bearing No SLTRVL RO 276717 made between the complainant and 1st Opposite Party mutually.
The vehicle was delivered to him on 09.07.2020 and the complainant states that within a period of one month from the date of purchase the vehicle’s engine seized and the complainant has to repair it and he alleges that it is due to manufacturing defect and the vehicle has to be repaired in a continuous way. The Complainant put forth while agreement made on finance he was not informed about the loan amount and interest there on. As such he was regular in paying the Equated monthly instalment on time and only for a month i.e. in the month of October 2020 he could not make the pay due to his ill health but subsequently he paid that instalment also.  From the month of purchase of vehicle which starts from July 2020 to Feb’2021 he has paid the EMI regularly. Regarding the defects on the vehicle the Complainant has reported to the 2nd Opposite Party who has assured replacement of the vehicle through insurance claim since the vehicle is not repairable but insured and a new vehicle in lieu of old vehicle is possible as assured by 2nd Opposite Party, states the complainant.
The Complainant states that trusting the words of the 2nd Opposite Party he left the vehicle in the possession of Opposite Party in the month of March’2021. But on 15.07.2021 the complainant has received a notice from the Opposite Party demanding to pay a sum of Rs.1,53,939/- as due from him. While enquiring the Opposite Party has informed that the vehicle was sold for Rs.3,00,000/- and the demand of Rs.1,53,939/- is the due payable by him  after the adjustment of sale proceeds of the vehicle and the loan payable by him. Offended by the action of Opposite Party, the Complainant has preferred the complaint filed before this Commission to return the vehicle or to pay the cost of vehicle with compensation of Rs.2,00,000/- and Rs.25,000/- as cost. The complainant’s main submission is that the Opposite Party never informed the sale process and taking possession of the vehicle in lieu of loan due and the arbitration is in entry level of loan on this issue.
Crux of the defence put forth by the 1st opposite party:-
On the other hand the 1st Opposite Party has put forth that the complainant and his father who is a guarantor have approached the 2nd Opposite Party on 06.06.2020 for financial assistance for buying a new Commercial vehicle namely TATA ACE GOLD vide loan application bearing No.VF740191 and the complainant had sought for 100% finance and the Opposite Party has sanctioned Rs.4,98,500/- which is the total cost of the asset vide sanction letter date 07.07.2020 and a loan agreement No.SL TRVLR 0276717 accepting all the terms and Conditions of the loan agreement was signed by both. The complainant and the Co-borrower has agreed and promised to abide all the obligations towards the Opposite Party bank and agreed to repay the said loan amount in 46 monthly instalment of Rs.14,670/- with period of duration of loan being 10.09.2020 to 10.06.2024. It is clearly put forth by the Opposite Parties that the complainant is well aware of the loan amount, period of repayment amount of EMI and the conditions laid out in the loan agreement for non payment. They stress that is not true that the version of the Complainant that the seller of the vehicle and the Opposite Parties are in collusion.
The Opposite parties does not have any link with the seller of the vehicle apart from financing for the vehicle that too through the complainant’s application. The amount whatever financed is of public fund and it is the responsibility of the Opposite Party to safe guard the money and becoming non performing asset. The complainant was irregular in making payment of the loan through instalment and therefore the opposite Parties have initiated action to recover the dues. The repair and service of the vehicle have to be dealt with the seller of the vehicle that is Thiruvallur Popular Mega Motors Ltd., and the Opposite Parties does not have any role on it, they argue.
Since the loan amount was due from the complainant, due action was taken by the Opposite Parties. Therefore, on 15.07.2021 the Opposite Parties have sent a demand notice vide Ref. MA/ESFB/20/2021 to the complainant and his Co-borrower to pay the sum of Rs.1,53,939/- towards settlement of loan amount. As such there is no reply, the Opposite Parties have initiated arbitration proceeding before the sole arbitrator through M.Aniruthan on 18.08.2021 with proper notice to the complainant. Consequently on 05.09.2022 an  Arbitral Award passed in favour of the Opposite Parties to claim a sum of Rs.1,53,939/- since the complainant has not turned up for enquiry before Arbitrator. This is being the whole issue of the case, this Commission has focussed a clear view on the case.   
On the side of complainant, proof affidavit was filed and submitted documents marked as Ex.A1 to Ex.A5 on their side.  on the side of 1st opposite party proof affidavit was filed and submitted documents marked as Ex.B1 & Ex.B2. Inspite of sufficient notice and opportunities the 2nd opposite party did not appear and hence was called absent and was set exparte on 04.08.2022 for non appearance and for non filing of written version within the mandatory period as per the statute.

Points for consideration:-
Does the Complainant’s prayer for replacement of new vehicle or in lieu of vehicle, the entire cost of the vehicle should be paid by the Opposite Party?
The action of the Opposite Party in this case on loan recovery is justifiable?
Point No.1:-
As it is rightly said in the prior Para, this is a case of obtaining a loan of finance for purchase of movable property on agreed terms and conditions and default of repayment of loan, the reason for non repayment is repair occurred on the movable asset, here it is a commercial vehicle and revenue earned by the commercial vehicle stops.  Since, non repayment of loan instalments occurred loan recovery action by finance institution by arbitration initiated. This is challenged by the complainant before this commission asking for relief and compensation and cost. The Complainant has prayed that direction may be issued to return the vehicle TATA ACE GOLD DIESEL vehicle bearing Registration No.TN20DA8325 or in the alternative to pay the cost of vehicle amounting to Rs.5,15,248/- with compensation of Rs.2,00,000/- and Rs.25,000/- towards cost.
On the other hand the Opposite Parties have put forth their point on the non repayment of loan availed, the action on recovery of loan on Arbitration initiated. They limit their responsibility on the vehicle repair and the reason for non repayment of loan due to vehicle break down and put forth that it is the responsibility of the vehicle seller and the vehicle buyer to settle on the issue of repair and replacement. There is no more action by the Complainant to get the vehicle repaired or demand for replacement with the seller of the vehicle that is TVL Popular Mega Motors India Ltd. The Complainant’s blame of getting the vehicle not repaired or replaced by the 2nd Opposite Parties does not find good.
The prime duty of the loan borrower should have been in settling issue of vehicle operation, revenue generation and loan repayment. Since, the Complainant has miserably failed in the task of repayment of loan, the loan provider has taken stops to recover the dues as per the condition of the loan agreement. This action of recovery also done in a legal manner by the Opposite Parties and the Complainant has not appeared before the Arbitrator though he was served notice by the Arbitrator. This clearly indicates the motive of the borrower of loan in not settling the issue. Thus this case is under due consideration for verdict based on material fact.
 It is very clear that the Complainant has purchased a new vehicle with the financial assistance from 1st Opposite Party and this version of manufacturing defect of the vehicle was never proved at any stage. There would have been a repair / service history of the vehicle for which the 1st Opposite Party does not have any solution but only the seller of the vehicle does have the answer. But there is no record filed by the Complainant that he approached the seller of the vehicle and blames in straight line that the 2nd Opposite Party has promised to replace the vehicle.
 As a guardian of asset, the Opposite Parties would have taken possession of the vehicle and since the recovery is important in their business they sought the way legally by appointing Arbitrator. Since there is no appearance before Arbitrator by the Complainant, the issue was finalised with a demand to settle the loan. Though opportunity given for the complainant, he has not used the same. In short, the loan provider has taken stops to recover the amount lent through proper way. Therefore, the prayer of the complainant for replacement of new vehicle or in lieu of vehicle, payment of entire cost with compensation stands quashed
Point No.2:-
 As a loan provider, the opposite party does have the responsibility in recovering the loan when it is in default mode. In this case the Opposite Party has moved to recover the due thru’ Arbitrator by appointing a Arbitrator legally and the process of Arbitration is clear. The ways and means to recover the amount of loan by the bank, here the Opposite Party is justified in short.
 In the result, the complaint is dismissed.  No order as to cost.
Dictated by the Member - II to the steno-typist, transcribed and computerized by him, corrected by the Member -II and pronounced by us in the open Commission on this the 29th day of May 2023.

   Sd/-                                         Sd/-                                                  Sd/-
MEMBER-II                        MEMBER-I                                PRESIDENT

List of document filed by the complainant:-

Ex.A1 06.06.2020 Loan Application Form. Xerox
Ex.A2 08.07.2020 Loan Agreement. Xerox
Ex.A3 15.07.2021 Notice given by the Respondent. Xerox
Ex.A4 21.07.2021 Reply notice to the first respondent. Xerox
Ex.A5 15.07.2021 Consent letter for appoinment of arbitrator. Xerox
      
List of documents filed by the 1st opposite party:-

Ex.B1 06.09.2022 Arbitral Award. Xerox
Ex.B2 03.11.2022 Statement of Account. Xerox

   Sd/-                                       Sd/-                                              Sd/-
MEMBER-II                       MEMBER-I                            PRESIDENT