Date of filing : 25-03-2009 Date of order : 05-01-2010 IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD C.C. 83/09 Dated this, the 5th day of January 2010 PRESENT SRI.K.T.SIDHIQ : PRESIDENT SMT.P.RAMADEVI : MEMBER SMT.P.P.SHYMALADEVI : MEMBER Joji, S/o. George, R/at “Kumarakath Kalayil House”, Kadumeni, Po, Cherupuzha Via, } Complainant Kasaragod.Dt. (Adv. M. Pramodkumar, Hosdurg) 1. M/s. Lakshmi finance Corporation, 5/20, Tilak Street, North Usman Road, } Opposite parties T.Nagar, Chennai. 600 017. (Advs.M.A.Johnson & Giriprasad, Kasaragod) 2. Thankachan, T.M. Auto Consultants& T.M. finance, Cherupuzha.Po, Kannur.Dt. (Advs. M.A.Johnson & Giriprasad, Kasaragod) O R D E R SRI.KI.T.SIDHIQ, PRESIDENT 1. The case of the complainant. Complainant availed a loan of Rs.80,000/- from opposite party through opposite party No.2 his financing agent on the security of his Mahindra Jeep bearing Reg.No.KL-14/A 1557. As per the agreement the amount with interest ought to have been repaid was Rs.1,04,900/- in 30 monthly instalments. The first 10 monthly instalments were of Rs.46,00/- and the remaining 20 instalments were to be repaid @ Rs.3150/- per month. The RC of the vehicle, 10 blank cheque leaves with cheque Nos 529801 to 529810 of Syndicate bank Cherupuzha and a blank signed stamp paper were obtained by opposite party No.2 at the time of granting the loan. The period of loan payments was from 9-10-2006 to 9-3-2009. But the complainant approached opposite parties on 21-02-09 and expressed his willingness to close the entire loan account by paying Rs.34,900/- that was due to opposite party No.1. But opposite party demanded Rs.59,600/- towards the closure of account including overdue charges and refused to accept the amount tendered by the complainant. The attempt of opposite party No.1 is the extraction of more money and complainant is not liable to pay the amount. Hence the complaint. 2. Version of First opposite party. Complainant is not a consumer and the dispute is not maintainable for want of jurisdiction since the hire purchase agreement is executed at Chennai and as per the agreement the litigation in respect of the transaction for the HP agreement was duly fixed and decided among the parties with written pre-consent within the courts of Chennai. The entire transaction of the hire purchase is a written contract between the complainant and the 1st opposite party. Hence both parties are bound by the terms of contract and hence there is no deficiency in service on the part of the opposite party. The 2nd opposite party is not an authorized agent of Ist opposite party and the transaction was not taken place from Kadumeni the complainant’s house and the complainant has not issued 10 numbers of blank signed cheques and blank signed stamp paper to opposite party. The opposite parties are not liable to issue No Objection Certificate on receipt of Rs.34,900/-only from complainant. He is liable to pay Rs.59,600/- up to 9-3-2009. The Ist opposite party is the real owner of the vehicle KL-14/A 1557 and the complainant is only a hirer in terms of HP agreement till the existence of full and final settlement. Complainant is not entitled to get the No Objection Certificate, HP Termination Letter since he is not paid the amount legally due to the opposite party and the complaint is liable to be dismissed with the compensatory cost of the opposite party. 3. Version of Second opposite party. The opposite party No.2 is not an authorized agent of opposite party No.1 but only a commission agent. The transaction is between the complainant and opposite party No.1. No transaction was took place between opposite party No.2 and complainant from the house of complainant at Kadumeni. It is not correct to say that on 12-02-2009 the complainant approached opposite party No.2 for closing the loan and the allegation of threatening to file a complaint against the complainant utilizing his blank signed cheque leaves are only in ill motivated story. The opposite party No.2 is not at all liable to do any administrative functions of opposite party No.1. On forseeing the legal consequences to be initiated against the default committed by the complainant and to escape from that legal consequences he filed this complaint. There is no deficiency in service on the part of opposite party No.2. 4. Evidence of Parties Complainant filed affidavit as PW1 in support of his case reiterating that is stated in the complaint. He was cross-examined by the counsel for opposite parties. Exts A1 to A6 marked. No oral evidence adduced by opposite party No.1. Opposite party No.2 filed affidavit and faced cross-examination by the counsel for complainant. Exts B1 & B2 marked. Both sides heard. Documents perused. 5. The crux of the case of the complainant is that the last instalment was payable on 9-3-2009 but he approached opposite party No.2 the agent of opposite party No.2 expressing his willingness to close the entire dues as on 12-2-2009 itself but 2nd opposite party refused to accept the amount and claimed additional hire charges. Hence he caused a registered lawyer notice on 21-02-09 expressing his readiness to pay the balance Rs.34,900/-. But Opposite parties demanded Rs. 59600/- towards the closure of loan that will be due on 9-3-2009. 6. The claim of the opposite party No.1 is not sustainable on many grounds. Along with the loan agreement that is termed as Hire Purchase Agreement Opposite party No.1 produced a statement of account showing the dues. In that it is clear that the opposite party No.1 has not followed the law of appropriation of interest in calculating the interest and overdue interest even if that is allowable. As per Law of appropriation of interest “A payment upon an interest bearing debt will be applied to the interest in preference to the principal and where the law allows interest on interest a payment should be applied first to discharge over due interest on interest and second to discharge the interest and third to discharge the principal”. 7. In this case it is seen that the opposite party No.1 is adding interest calculating over due charges without adjusting the subsequent payments to overdue charges even if it is considered that they are entitled for overdue charges. 8. Moreover, it is also seen that opposite party No.1 claiming overdue charges @ 36% per annum for the delayed monthly instalment dues. Actually the opposite party is fixing the EMI’s (Equated monthly instalments) after calculating the interest for the principal for whole the period of 30 months. So again charging interest on the delayed monthly EMI’s as overdue charges that too at an unconscionable rate of 36% is a stipulation by way of penalty. For which they are legally not entitled. Opposite party is entitled to collect interest only from the due date of last instalment. Otherwise opposite party should have been fixed the EMI’s without adding the interest at the initial stage. Further opposite parties are entitled to collect interest only on prorate basis. The mere execution of a printed loan agreement termed as Hire Purchase Agreement will not make it a hire purchase agreement and that will not confer any absolute right with opposite party No.1 to collect interest that is repugnant to laws. 9. From Ext.B1, copy of the hire purchase agreement, it is seen that the complainant is the owner of the vehicle and the amount is advanced as a loan. Hence it is not a hire purchase transaction but it only a loan transaction termed as hire purchase transaction. In this context reference can be made to the judgment of Hon’ble NCDRC in the case Citicorp Maruto Finance Ltd V. S. Vijayalaxmi III (2007)CPJ 161 (NC). The relevant observations to the context are reproduced as under. “When a vehicle is purchased by a person by borrowing money from the money lender/financier/banker, the consumer is the owner of the vehicle and not the money lender/financier/banker unless the ownership is transferred.” 10. Here the complainant is the RC owner and therefore the transaction is only a loan transaction. Hence opposite party is not entitled to enjoy the benefits that is stipulated in the so called HP Agreement unless they are in harmony with the laws of the land. The contentions of opposite party No.1 that the Forum lacks jurisdiction to deal the case is also not maintainable. DW1 has stated in cross-examination that the opposite party No.1 deputed him to collect the loan instalments disbursed in Kannur and Kasaragod Districts. The staff of opposite party No.1 is used to came to Kannur and Kasaragod Districts with respect to their financial transactions. Friends Auto Agency is owned by him and some of the instalments are received by this agency. Opposite party No.1 authorised him to collect money from the loanees, to whom they have given loan. From this version of opposite party No.2 it is clear that he is acting as an agent of opposite party No.1 and opposite parties 1 & 2 are carries on business in Kasaragod District also. As per Sec.11 of the Consumer Protection Act, a complaint can be instituted in a District Forum within whose jurisdiction the opposite party or each of the opposite parties actually and voluntarily resides or carries on business or has a branch office or personally works for gains or the cause of action wholly or in part arises. 11. The specific case of the complainant is that he was ready to foreclose the loan by paying all the remaining instalments in lumpsum but opposite party demanded huge overdue charges that is legally nor due from him. 12. The demand for exorbitant interest by way of overdue charges is an unfair trade practice on the part of opposite parties. Hence opposite parties are liable under the Consumer Protection Act. Therefore the complaint is allowed and complainant is directed to pay Rs.34,900/- within interest @ 15% per annum from 9-3-2009, the date of last instalment, till the date of payment to opposite party No.1 On receipt of the said amount opposite party No.1 shall return the RC, the blank signed cheque leaves along with HP Termination Letter and No Objection Certificate in respect of the vehicle KL-14/A 1557 to the complainant. If opposite party No.1 fails to issue HP Termination Letter and No Objection Certificate even after the receipt of the said amount, then on application by the complainant, the concerned RTO will be directed to issue duplicate RC after canceling the endorsement of HP in respect of vehicle KL-14/A 1557 favouring opposite party No.1. Time for compliance is limited to 60 days from the date of receipt of copy of the order. There is no order as to costs. Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Exts. A1. Pass book issued by OP A2. 21-2-09. Copy of lawyer notice. A3. Reply notice. A4. Returned registered letter A5. Series (7 Nos) Temporary receipts A6.Series (9 Nos) Receipts B1. Photocopy of HP Agreement B2. Settlement statement as on 9-3-09. PW1.Joji DW1. Thankachan Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Pj/ Forwarded by Order SENIOR SUPERINTENDENT
......................K.T.Sidhiq
......................P.P.Shymaladevi
......................P.Ramadevi | | 
