SMT. RAVI SUSHA  : PRESIDENT

   Complainant has  filed  this complaint U/S 12 of the Consumer Protection Act 1986, for  getting an order (1) declaring that the complainants are not liable to  pay any  amount to opposite party pertaining to the loan agreement dtd.20/6/2011 executed  by complainant  in favour of OP  in connection with  the vehicular loan sanctioned by OP for  purchase of  vehicle No.KA-12-7585, (2)  directing the opposite party to pay Rs.5,00,000/- as compensation to the 1^st complainant along with 12% interest from the date of complaint till realization  and  cost of the proceedings to the complainants.

    Brief facts of the complaint  is that the 1^st complainant availed a vehicular loan of Rs.5,25,000/- from OP on 20/6/2011 for the purchase of 2^nd hand lorry.  The 2^nd complainant is the surety of the 1^st complainant  in respect of the said loan.  The 1^st complainant  has been repaying  the loan instalments regularly till the month of February 2014.  The insurance policy and vehicular documents  pertaining to the vehicle was in the name of  1^st complainant.  During the year 2014 the said lorry met with an accident and the  1^st complainant was forced to spent  more than Rs.2,40,000/- for reconditioning and making  the said lorry  road worthy.  The insurance company indemnified the complainant  by an amount of Rs.70,000/- only and the OP grabbed the said amount  also from the 1^st complainant towards loan repayment by illegally influencing the  insurance company which has  affiliation with the OP.  Altogether the complainant has repaid an amount of Rs.4,95,000/- in connection with  the loan transaction to the OP.  After the  accident the 1^st complainant approached the OP to give necessary no objection certificate for the purpose of renewing the permit of the said vehicle and assured repayment of the entire loan liability after renewing the permit and by plying  the lorry.  It may be noted that without no objection certificate from the OP renewal of transport permit was not possible  and without a valid transport permit the 1^st complainant was unable to ply the lorry.  The 1^st complainant had  also  expressly represented before the officials of OP that without plying  the lorry the loan instalments could not be paid in time.  The OP illegally denied the lawful request  made by the complainant on the basis of one or the other lame excuses and protracted the matter.  According to complainant , the officials of Iritty branch office of OP took an illegal stand that unless the entire loan liability is closed the NOC would not be  issued.  On account of the omission  on the part of OP to furnish the NOC required for  renewing the permit, the 1^st complainant could not  renew  the transport permit and he was forced to keep the said vehicle idle with effect from November 2015 onwards.   Since  the said vehicle was kept idle for more than three years for want of renewed transport  permit the same became useless and the vehicle can now fetch only Rs.1,00,000/- as scrap value.  The OP illegally initiated arbitration proceeding against the complainants.  Though the  complainants appeared before the Arbitrator through counsel and sought time for filing written objection, the Arbitrator passed an exparte award without giving an opportunity to the complainants to represent their case before the Arbitrator.  Thereafter the complainants filed OP.NO.85/16 before the Hon’ble District Court, Thalassery to set aside the  arbitration award vide order dtd. 31/1/2019.  Complainants further submitted that the illegal stand taken by the OP they could not ply the said lorry from 2015 onwards  and the vehicle belonging to  the complainant is rendered useless on account of the omission on  the part of the Op to grant necessary NOC for renewing  transport permit. 1^st complainant  also suffered much mental pain and agony on account of the  illegal  and unfair  practices adopted by OP over and above the financial loss of Rs.4lkhs by way of depreciation value of the said vehicle.  There is  deficiency in service  on the part of OP, the complainant is entitled  compensation  from the OP.  Hence the complaint.

      After receiving notice  OP entered appearance  through counsel and filed version.  It is contended that the complainant availed a loan of Rs.5,29,788 from the OP on 20/6/2011.  As per the terms of the agreement executed by the 1^st complainant and  OP.  The complainant  has to repay the loan amount with interest and other  charges by 36 monthly instaments of Rs.20,389/-. As per  the terms of the agreement the complainant has to repay the entire loan amount  with  interest within the stipulated period mentioned in the chart.  The  last  payment is to be made in 20/6/2014 and the complainant was very irregular in  making the monthly instalments as agreed, he was regular in payment  only in the 1 to 3 instalments.  Even though the entire loan amount  has to be paid on 20/6/2014 he paid only a merger  amount towards the loan.  Apart from the monthly  charges he has to repay the 3 insurance charges, which was arranged by the OP on the request of the complainant.  The OP further submit that within the stipulated agreement period the complainant not approached the OP and not demanded for no objection certificate for renewing the permit of the vehicle.  The period of the agreement between the parties ends on 20/6/2014 and every legal action on it by the side of the complainant has to  be  taken within the period of two years, hence the complaint is strictly barred by limitation.  There is no deficiency  of service on their part, hence prayed for the dismissal of the complaint.

      At the evidence stage, complainant has filed chief affidavit and documents.  He has  been examined as  PW1 and marked Exts.A1 to A18 documents.  Ext.A1 is the Arbitration Award.  Exts.A2 to A17 are the receipts issued by OP financial institution pertaining to the repayment of the loan instalments by the complainant on different date.  Ext.A18 is the judgment of Hon’ble District Court, Thalassery with respect to the setting aside of the Arbitration Award passed by the Arbitrator in  AOP 48/15.  OP has not adduced oral evidence. Submitted Ext.B1  the loan agreement executed between complainant and OP.  After that the learned counsel of complainant made oral argument and the learned counsel of OP filed written argument  note.

   We have perused the documents on record and considered the submissions of the learned Counsels.

   Admittedly the questioned vehicle was purchased by the complainant after having been financed by the OP Finance company as vehicle loan and EMI was Rs.20,389/- per month  by 36 monthly instalments.  The question to be decided is whether the OP financial  company had committed deficiency in service towards the  complainant  in non issuance of  No  objection certificate and initiating  Arbitration proceeding towards the  complainant?

       It is commonly known that financed amount is to be repaid by the borrower in periodical instalments and non-payment of loan instalments  amounts to default  on the part of the borrower which entitles the financier to take necessary legal steps for recovery of out standing loan dues.

      As per vehicle loan agreement executed between complainant and OP company(Ext.B1) dtd.20/6/2011, the loan amount was Rs.529788/- , and the  hypothecated asset  was the vehicle in question .  Further the rate of interest was 23.02% per annum  to be  computed with monthly rest  on the outstanding balance.  Further, additional interest payable by way of liquidated damage 3% per month.  Further total amount payable Rs.734021/- from 20/7/2011 till 20/6/2014.

      Complainant’s case is that the 1^st complainant has been repaying the loan instalments regularly  till the month of February 2014 and during the year 2014, the vehicle met with an accident.  According to 1^st complainant he had repaid altogether an amount of Rs.4,95,000/- towards loan transaction to the OP.  For establishing the said pleading complainant has produced Exts.A2 to A17.  1^st  Complainant has stated that for renewing the permit  of the vehicle, he approached  OP to give  no objection certificate with an assurance of repayment of the  entire loan liability after renewing the permit and by plying  it, but the  officials of OP took an illegal stand that unless the entire loan  liability is closed, the NOC would not be issued. 1^st Complainant pleaded that since NOC was  issued, he could not  renewed  transport permit of the vehicle and the same was kept in idle with effect from November 2015 onwards. 1^st  Complainant further alleged that the OP illegally initiated arbitration proceeding against  the complainant without complying  the statutory  formalities.  Though Exparte Arbitration Award was  passed, the Hon’ble  District Court Thalassery set aside the said award.  According to the complainant  on account of the omission  on the part of the OP to grant necessary NOC for renewing the permit of the  vehicle, the complainant could not ply the vehicle and could not repay the loan dues.

     On the other hand, the learned counsel of OP submitted that the complainant  was  irregular in making payment as agreed in Ext.B1 agreement.  He had paid only three instalments in regular.  Apart from the monthly charges, the  complainant has to repay three insurance charges which was  arranged by the OP at the request of the complainant.  OP further contended that though complainant received Rs.5,29,750/- repaid only Rs.4,95,000/- and  after 23/2/2014, he has not  repaid  any amount.  Complainant alleged that due to the accident happened on the vehicle he could not ply the vehicle and could not repay the further instalments and also alleged that when he approached OP to get NOC for renewing the  Transport permit of the vehicle with an assurance to repay the balance amount, OP had denied in issuing the NOC without remitting the due loan amount.  The said allegation was denied by OP.  OP contended that complainant never approached them for getting NOC to renew the permit of the vehicle.  Complainant could not establish his said allegation by material  like copies of the request in support of his allegation. 

       Moreover it is seen in Ext.A1 that the OP has filed Arbitration OP 48/15 in the year 2015.  After filing Arbitration OP, complainant had enough time to ascertain , from the OP financial company, the total outstanding loan  dues  during  happening of continuous defaults so as to clear it  off, but he failed to do so.  Here complainant alleged that the interest calculated by OP is exorbitant and is against Money  Lenders Act and hence  in the light of ruling  reported in 2017(2)KLT by Hon’ble  High Court of Kerala, the agreement executed by the  complainant in favour of the OP is void and is not entitled to recover any amount from the complainant in future.

     In Ext.A18, the order in OP(AEb) 85/16 the Hon’ble District Judge held that “ the total amount paid as per the statement of the company is  Rs.4,93,500/-, the total  loan amount  was Rs.5,29,788/-.  As per the agreement the petitioner has to pay the amount of Rs.7,34,002/- by way of 36 instalments being the principal amount and interest as on 28/2/2014.  It is evident from the arbitration award  that they have calculated the total outstanding amount of Rs.6,90,124/- after adding the interest at 3.02%  per annum to be compounded with monthly rests on the outstanding balance with an additional interest of 3% per month  by way of liquidated damages.  As per the decision cited herein above charging of interest more than  12% is against the law. 

       Further held that the company calculated the total outstanding amount after adding  the  flavor of 3% liquid damages.  That is against the public policy as envisaged in decision of Central Bank of India.  Thus the total amount calculated by the company is in violation of the statutory principles and precedents.  That be so, the arbitration award passed by the arbitrator is liable to be interfered.  Accordingly, the arbitration  award passed is hereby set aside.”

       Here in Ext.B1 loan finance agreement , it is evident that complainant has availed financial assistance of Rs.529788/- from OP company for purchasing the vehicle in question.  From Ext.A2 to A17 receipt, the total amount paid by the complainant is Rs.4,93,500/-.  Then even though the interest and penal interest will not be calculated, the complainant is liable to remit the financial amount he has received from OP company.  Hence we cannot blame OP in initiating legal steps  against the complainant to recover the balance loan dues.  Further there is no evidence to show that complainant has submitted request to OP for getting NOC for obtaining transport permit.  Without any material evidence, we cannot believe the mere averment of the complainant.

        Under the forgoing discussion and facts of the case, we are of the view that there is no deficiency in service on the part of OP.

     Therefore, complaint is dismissed.  No order as to cost.

Exts:

A1- Arbitration award

A2 to A17-loan repayment receipts

A18- Judgment of  Hon’ble  District court Thalassery

B1- Vehicle loan Agreement

PW1-N.V.Benny- 1^st complainant

Sd/                                                               Sd/                                                     Sd/

PRESIDENT                                             MEMBER                                         MEMBER

Ravi Susha                                       Molykutty Mathew                                    Sajeesh K.P

eva           

                                                                        /Forwarded by Order/

                                                                   ASSISTANT REGISTRAR