CC Filed on 23.10.2009<br /> Disposed on 19.04.2010<br /> <br /> BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, KOLAR.<br /> <br /> Dated: 19th day of April 2010<br /> <br /> PRESENT:<br /> Sri. G.V.HEGDE, President.<br /> <br /> Sri. T.NAGARAJA, Member.<br /> Smt. K.G.SHANTALA, Member.<br /> ---<br /> <br /> Consumer Complaint No. 163/2009<br /> <br /> Between:<br /> <br /> <br /> Sri. N. Nanjundeswara,<br /> S/o. Late Neelakantachar,<br /> Aged about 56 years,<br /> Resident of No. 836/1,<br /> Betric Road, <br /> Bangarpet – 563 114.<br /> <br /> <br /> (By Advocate N. Drakshayani) <br /> <br /> <br /> <br /> <br /> <br /> ….Complainant<br /> <br /> V/S<br /> <br /> <br /> 1. M/s. Bajaj Auto Finance Ltd.,<br /> C/o Bajaj Auto Ltd.,<br /> Akrudi,<br /> Pune – 411 035.<br /> <br /> <br /> 2. M/s. Bajaj Auto Finance Ltd.,<br /> No.29, Anugraha, Nr Vinayak Circle,<br /> 12th Cross, Swimming Pool Extension,<br /> Sudindra Nagar, Malleswaram,<br /> Bangalore – 560 003.<br /> <br /> <br /> (By Advocate K. Nagendra Prasad & others) <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> ….Opposite Parties<br /> <br /> ORDERS<br /> <br /> This is a complaint filed under section 12 of the Consumer Protection Act, 1986 praying for a direction against the opposite parties to return the original R.C. Book relating to Bajaj CT 100 bearing registration No. KA-08-J-4144 and to issue No Objection Certificate to cancel the hypothecation in the R.C. relating to the said vehicle with compensation of Rs.30,000/- and costs, etc., <br /> <br /> 2. The material facts of complainant’s case may be stated as follows:<br /> That OP.1 is carrying finance business having its head office at Pune. OP.2 is a branch office of OP.1 situated at Malleshwaram, Bangalore. The complainant obtained Rs.34,000/- as loan from OP.2 for purchase of Bajaj CT 100 vehicle. The loan with interest was repayable in 36 monthly installments. According to complainant he repaid all the installments and other charges and inspite of it the OPs failed to handover the original R.C. book and to issue no objection certificate for cancellation of hypothecation entry made in R.C. relating to the said vehicle. It is alleged that inspite of several requests and evenafter issue of legal notice the OPs failed to comply with the demand of complainant and instead of it they demanded huge amount from complainant alleging to be due on the loan transaction. <br /> <br /> 3. The OPs appeared through Advocate and one A.M. Nachappa an authorized signatory on behalf of OPs filed version. The loan transaction is admitted and it is contended that as per the accounts maintained by OP.2 relating to this loan transaction the complainant is still due for a sum of Rs.25,644/- and the complainant has failed to pay the said amount, therefore there was no question of returning of R.C. book and issuing No Objection Certificate. It is contended that as per the agreement the OPs are entitled to recover a sum of Rs.350/- as delayed payment interest for default of payment of EMI per month and Rs.150/- towards other/collection charges. It is further contended that complainant failed to pay many installments within due dates, thereby the OPs imposed delayed payment interest and collection charges as per agreement. Therefore it is prayed to dismiss the complaint stating that there was no deficiency in service. <br /> <br /> 4. The parties filed affidavits in support of their case and filed relevant documents. <br /> <br /> 5. We heard the Learned Counsel for parties. We could not properly understand the various entries made in the account extract relating to loan transaction maintained by OP.2. Therefore we requested the Learned Counsel for OPs to keep present, a person who was well versed with the account maintained by OP.2 to explain the scope of certain entries. Inspite of repeated adjournments OP.2 did not send any such person before this Forum. Finally the Learned Counsel for OPs submitted that he had informed several times but he could not get a proper reply and no one appeared even before him. The Learned Counsel for OP.2 himself could not explain the correctness and validity of certain entries made in the account extract. The complainant had not maintained regular account of the payments made by him. However a major portion of payment is made through cheques, therefore he produced the S.B. account extract of Canara Bank, Robertsonpet, K.G.F from where the cheques issued to OP.2 were realized. OP.2 has also produced its account extract and the copy of loan agreement. <br /> <br /> 6. The following points arise for our consideration:<br /> <br /> Point No.1: Whether the complainant has proved that there was<br /> deficiency in service by OPs?<br /> <br /> Point No.2: If point No.1 is held in affirmative to which reliefs<br /> the complainant is entitled to?<br /> <br /> Point No.3: To what order?<br /> <br /> 7. After considering the records and examining the account extracts and the submissions of parties our findings on the above points are as follows:<br /> Point No.1: Before considering the correctness or otherwise of the entries made in the account extract maintained by OP.2, it becomes necessary to know the material terms of loan agreement. <br /> <br /> The loan agreement was entered into between complainant and OP.2 on 19.07.2005. The financed amount was Rs.34,000/-. The rate of interest was 10.50% p.a. The loan and interest was repayable in 36 monthly equated installments commencing from 05.09.2005 and ending to 05.08.2008. The service charges for the loan agreed to be paid was Rs.610/-. On the date of agreement, it was arrived that the total interest payable would come to Rs.10,710/-. Further it was arrived that EMI would be Rs.1,307/- and out of it principal per month was Rs.945/- and interest per month was Rs.298/-. The complainant issued 36 post dated cheques bearing the dates on which the EMI would fall due, apart from issuing two more blank cheques of Canara Bank, Robertsonpet, K.G.F bearing serial nos. from 734561 to 734598. It was agreed that the time for payment of installment on the due dates should be the essence of the contract. The other material term in respect of any delayed payment was as follows: <br /> <br /> 11. In respect of any delayed payments,<br /> a) The company shall be entitled to recover a sum of Rs.350/- as delayed payment interest per default per month, and Rs.___________ towards other/collection charges. For this purpose, part of the month shall be treated as a full month of delay.<br /> b) In the case of an arrangement for financing under any scheme of direct deduction of the EMIs from the salary of the Borrower(s), these delayed payment interest shall apply in case of delay/default in remittance to the company, even if the EMIs has been deducted from the salary of the Borrower(s) by the employer/society as per the undertaking executed with the company.<br /> C) Any sums received by the company from the Borrower(s) shall be appropriated first against the delayed payment interest or any other claim of the company on the Borrower(s) under this agreement and thereafter against the overdue EMI payments.<br /> <br /> OP.2 has produced the statement of account from 05.09.2005 to 31.03.2009. The said statement of account shows that Rs.23,550/- is still due towards overdue charges as on 31.03.2009. Further it shows that the principal amount is cleared. <br /> <br /> The statement of account of Canara Bank shows that 26 cheques each for Rs.1,307/- were realized by OP.2 apart from realizing two cheques each for Rs.885/-. The statement of account of OP.2 does not disclose the realization of two cheques each for Rs.885/- shown in the account extract of Canara Bank. These two cheque nos. are mentioned in the said account extract of Canara Bank and it is shown that the payee was OP.2. Therefore we have no hesitation in concluding that these two cheques were also realized by OP.2. Apart from it, the complainant has paid Rs.3,921/- on 27.07.2007 and he has paid Rs.6,535/- on 31.12.2008. For these payments there are receipts produced by complainant. These two payments by complainant are not disputed by OP.2 and its account extract also discloses the said payments. Therefore the total amount realized by OP.2 comes to Rs.46,208/-. <br /> <br /> The finance amount was Rs.34,000/- and the total interest worked out is Rs.10,710/- at the rate of 10.5% p.a. The loan was repayable in 36 equal monthly installments. Therefore each installment should have been for Rs.1,241.94 which may be rounded off to Rs.1,242/-. Instead of it, it is wrongly arrived at Rs.1,307/-. It appears this was only due to arithmetical error. <br /> <br /> In the loan papers it is made clear that the principal amount payable per month is Rs.945/- and the interest payable per month is Rs.298/-. The total of which almost comes to Rs.1,242/-. In the account extract also it is shown that each installment is of Rs.1,242/-. However the complainant had issued each cheque for Rs.1,307/-, therefore the same amount has been paid from the S.B. Account of complainant to OP.2. The actual amount which should have been paid was Rs.1,242/- x 36 = Rs.44,712/-. As already noted the complainant had paid in all Rs.46,208/-. Therefore the excess amount collected towards principal comes to Rs.1,496/-.<br /> <br /> It is true that the complainant committed default in paying certain installments. From the account extract we can make out that there was default in paying installment nos. 4, 5, 11, 14, 15, 17, 26, 30, 31 & 35. These defaulted installments were regularized by paying cash of Rs.3,921/- on 27.07.2007 and cash of Rs.6,535/- on 31.12.2008 and by realizing the two cheques each for Rs.885/- on 04.01.2007 and 06.02.2008. We roughly calculated the total months of delay in paying installment amount. It comes to nearly 200 months of delay in paying one installment. Therefore the total delayed payment interest as per agreement almost comes to Rs.350/- x 200 = Rs.70,000/-. However OP.2 has claimed only Rs.23,550/-. OP.2 has not produced any detailed calculation how it came to the total penalty of Rs.23,550/- claimed in the account. <br /> <br /> The Learned Counsel for complainant submitted that the penalty for delayed payment at the rate of Rs.350/- per month cannot be sustained in law and only a reasonable compensation for the delay in payment may be awarded. The said submission appears to be prima-facie acceptable. The delayed payment interest of Rs.350/- per month on Rs.1,307/- almost comes to interest at the rate of 321% p.a. Such claim in a contract for payment of interest for delayed payment is nothing but penalty. Section 74 of Indian Contract Act provides that in such cases the contracting party is entitled to receive only a reasonable compensation not exceeding the amount of penalty so named. We think at best the interest at 24% p.a. may be awarded for delayed payment. We have taken into consideration of Rs.65/- collected in excess for each installment while fixing the rate of interest for delayed payment. In that event for delayed payment of Rs.1,242/- for 200 months the interest payable comes to Rs.4,980/-. We have already noted that the excess principal collected is Rs.1,496/-. Hence the balance interest payable on delayed payment comes to Rs.3,484/-. <br /> <br /> The claim of OP.2 towards delayed payment of installments is excessive and exorbitant and it cannot be sustained under the law. OP.2 has not intimated the quantum of interest on delayed payment prior to filing the version. In the letter dated 28.06.2007 OP.2 has claimed arrears of three installments besides the agreed overdue penal charges. But he did not quantify the overdue penal charges in his letter. It has not replied the legal notice dated 13.04.2009 issued on behalf of complainant. In such circumstance we hold that there is deficiency in service by OP.2. Hence point No.1 is held in affirmative.<br /> <br /> Point No.2: It was required for OP.2 to intimate the overdue penal charges from time to time, but it has not intimated the said amount, so that the overdue charges went on increasing. The demand of exorbitant amount towards that overdue charge is illegal. The complainant stated that no proper reply was given either orally or in writing to his queries to ascertain the amount due by him. Therefore we think compensation of Rs.10,000/- may be awarded to complainant for mental agony and harassment. It is obvious that the complainant is entitled to return of the R.C. book and No Objection Certificate for deleting the encumbrance entry if any in the R.C. Book on payment of Rs.3,484/-. Hence point No.2 is held accordingly.<br /> <br /> Point No.3: Hence we pass the following:<br /> <br /> O R D E R<br /> <br /> The complaint is allowed with costs of Rs.1,000/-. The OP shall pay Rs.6,516/- to complainant (Rs.10,000/- (rupees ten thousand only) payable to complainant towards compensation minus Rs.3,484/- recoverable by it towards overdue interest). OP.2 shall also return the original R.C. book of the vehicle in question and shall issue No Objection Certificate for deleting the encumbrance entry if any in the R.C. <br /> <br /> This order shall be complied within 30 days from the date of this order.<br /> <br /> Dictated to the Stenographer, corrected and pronounced in open Forum this the 19th day of April 2010.<br /> <br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> <br /> <br />