CC Filed on 27.07.2009<br /> Disposed on 14.12.2009<br /> <br /> BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, KOLAR.<br /> <br /> Dated: 14th day of December 2009<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. 57/2009<br /> <br /> Between:<br /> <br /> <br /> Sri. M. Venkateshappa,<br /> S/o. Muniyappa,<br /> Aged about 63 years,<br /> Dodda Vallabhi Village,<br /> Kasaba Hobli,<br /> Kolar Tq.,<br /> <br /> (By Advocate Sri. A.V. Ananda & others) <br /> <br /> <br /> <br /> <br /> <br /> ….Complainant<br /> <br /> V/S<br /> <br /> <br /> M/s. L&T Finance Ltd.,<br /> Monarch Ramani,<br /> No.3/E, 4th Floor, 7-C. Main,<br /> P.B. Marg, Warli,<br /> Mumbai – 18.<br /> 3rd Cross, 3rd Industrial Block,<br /> Koramangala,<br /> Bangalore – 34.<br /> <br /> (By Advocate Sri. Krishnamurthy & others) <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> ….Opposite Party<br /> <br /> ORDERS<br /> <br /> This is a complaint filed under section 12 of the Consumer Protection Act, 1986 in essence praying for a direction against the opposite party to return the tractor and trailer bearing registration No. KA-07-T-8398/KA-07-T-8399 to complainant and to direct the OP to reschedule the payment of loan amount on receiving Rs.50,000/- and not to charge any interest on loan from the date of seizure of the tractor and trailer till its release and not to claim parking fee for having kept the tractor and trailer and to pay compensation of Rs.2,00,000/- with interest and costs etc., <br /> <br /> 2. The material facts that may be gathered from the pleadings and documents, required for the disposal of this case may be stated as follows:<br /> That the complainant is an agriculturist. He purchased a John Deere tractor and also a tractor-trailer with tyres from Maruti Farm Equipments, Kolar as per tax invoice dated 11.05.2007. The value of tractor was Rs.4,23,780/- including VAT and the value of tractor-trailer with tyres was Rs.80,000/- including VAT. The complainant obtained finance to the extent of Rs.3,90,000/- from OP.1 as per the terms and conditions mentioned in the loan agreement dated 18.05.2007 executed between him and OP and hypothecated the tractor as security for repayment of loan and interest. Further he also offered the surety of one Hanumanthappa for repayment of loan and interest and the surety executed the letter of guarantee on the same day. The tractor and trailer were registered before the R.T.O Kolar as KA-07-T-8398 and KA-07-T-8399 respectively. OP paid Rs.3,90,000/- to Maruti Farm Equipments, Kolar on behalf of complainant and the balance amount of Rs.1,13,780/- was paid by complainant himself to that dealer towards the total consideration of Rs.5,03,780/-.<br /> <br /> The complainant paid Rs.9,750/- towards loan processing charges as agreed to OP. The loan of Rs.3,90,000/- was repayable with flat rate of interest at 11% p.a. in 48 monthly installments of Rs.11,700/- each and the first installment commencing from 18.06.2007. The total of all installments was Rs.5,61,600/-. The complainant was liable for penal interest at 36% p.a. on the overdue amount. The agreement also provided authority to OP to seize the tractor subjected to hypothecation. <br /> <br /> The complainant made certain payments towards the installments that became due. The OP maintained account relating to this loan transaction. The OP seized the tractor and trailer on 25.05.2009 alleging that the complainant failed to clear the overdue installments inspite of repeated notices and also a pre-seizure notice dated 10.04.2009 and that 8 installments were outstanding before the date of seizure. The OP stated that a notice dated 02.06.2009 was issued to complainant to clear the entire loan within 7 days and intimating that on default the vehicle would be sold. Further it contended that the complainant failed to comply with that notice, therefore the OP was compelled to sell the seized tractor and trailer for Rs.3,02,000/- which was the highest market value fetched for it. The OP stated that after adjustment of sale proceeds the complainant is still due an amount of Rs.49,104/-. <br /> <br /> 3. The complainant alleged the following grounds in his complaint in support of the reliefs prayed by him. (a) before seizure of the vehicle only two installments were overdue and the total dues payable was Rs.82,283/- but the OP was claiming Rs.1,20,000/-. (b) the complainant tendered Rs.1,10,000/- for release of the vehicle, but the OP refused to receive it. (c) at the time of seizure of the vehicle 26th installment was on and still 22 monthly installments had not become due and the demand of OP to clear the future installments at once was in violation of the terms and conditions of the contract. (d) The OP took away 150 boxes of tomato worth Rs.30,000/- at the time of seizure of the vehicle. (e) The trailer seized was not subjected to any charge and it could not have been seized. (f) The OP seized the vehicle with an ulterior motive to account for lesser sale price than the price for which actually it could be sold. <br /> <br /> The other allegations in the complaint that the complainant purchased the tractor from OP and the loan required to be sanctioned was only Rs.3,65,000/- but it was shown as Rs.3,90,000/- and he paid Rs.65,000/- to OP at the time of sanction of loan, are prima-facie not acceptable in view of the documents relating to this transaction. <br /> <br /> 4. The OP took the following contentions in support of his prayer to dismiss the complaint. (a) that this Forum has no jurisdiction to try the present case in view of the terms agreed between parties for settlement of disputes (b) the complainant is not a Consumer within the definition of Sec – 2 (1)(d) of the Consumer Protection Act, 1986. (c) that the complainant committed default in paying the installments inspite of repeated demands and 8 installments were outstanding at the time of seizure of the vehicle and a pre-seizure notice dated 10.04.2009 was issued intimating to pay a sum of Rs.71,150/- due as on 31.03.2009 with overdue charges on defaulted installments and the complainant failed to comply with this notice, which entitled the OP to seize the vehicle as per the terms agreed. (d) that OP issued notice dated 02.06.2009 calling upon the complainant to make payment of Rs.3,47,731/- within 7 days from the date of receipt of notice towards full and final discharge in respect of loan transaction and to get back the vehicle seized, and in default the vehicle would be sold, etc., and the complainant did not comply this notice thereby the seized vehicle was put to sale and the highest offer of Rs.3,02,000/- towards the value of vehicle seized was accepted and the seized vehicle was sold to the purchaser Anwar Pasha on 23.07.2009 and he paid the entire consideration of Rs.3,02,000/-. It is contended that complainant is still due an amount of Rs.49,104/- after adjustment of sale price. Therefore OP contended that there was no deficiency in service. The other allegations made by complainant are denied by OP.<br /> <br /> 5. Both parties filed affidavits in support of their respective pleadings and filed the documents. The Learned Counsel for parties filed the written arguments, they did not address oral arguments. <br /> <br /> 6. From the rival contentions the following points arise for our consideration:<br /> <br /> Point No.1: Whether this Forum has jurisdiction to entertain the <br /> complaint?<br /> Point No.2: Whether the complainant is a ‘Consumer’ as defined<br /> in the Act.<br /> Point No.3: Whether there is deficiency in service by OP?<br /> Point No.4: To which reliefs the complainant is entitled to?<br /> Point No.5: To what order?<br /> <br /> 7. After considering the pleadings and records and the written submissions of parties our findings on the above points are as follows:<br /> Point No.1: The loan/hypothecation agreement dated 18.05.2007 entered between parties states that in case of disputes the Courts in Mumbai shall have territorial jurisdiction, but not any other Courts and that the dispute is to be solved only by referring the matter to Arbitrator. On the basis of such terms in the agreement the OP has taken the present contention. But now it is settled law that inspite of such terms in the agreement, a Consumer Forum has jurisdiction to entertain the complaint where cause of action arises within the jurisdiction of that Forum. In the present case the vehicle was seized within the jurisdiction of this Forum. Therefore for the alleged illegal seizure of vehicle the complaint is maintainable before this Forum as the cause of action or a part of it arises within the jurisdiction of this Forum. Hence point No.1 is held in affirmative. <br /> <br /> Point No.2: The complainant made a casual allegation in his complaint that he used to earn Rs.5,000/- from his tractor by leasing it to Contractors doing NH-4 road work and there was demand for tractors from June 2009. On the basis of this allegation the present contention is taken. The complainant is an agriculturist, he took the tractor for his agricultural work. It appears for claiming damages at a higher rate he made such statement in the complaint. In his affidavit he has not supported the said allegation made in the complaint, which means he intended to ignore that allegation. The OP has no personal knowledge on this fact. Therefore we hold that this is only a casual statement and it is to be ignored. Hence point No.2 is held in affirmative.<br /> <br /> Point No.3: The material contentions taken by the complainant to establish deficiency in service, are stated by us in para.3 of this Order at (a) to (f). The contentions (a) to (d) stated therein are not supported by any convincing evidence either oral or documentary. Certain statements made therein are self-contradictory and improbable. Those allegations are denied by OP. At best out of these allegations one can believe that complainant might have approached the OP with a request to release the vehicle after its seizure by tendering a part of overdue amount. But the OP was not bound to receive a part of overdue amount for release of seized vehicle. Therefore the grounds narrated in (a) to (d) for establishing deficiency in service are to be rejected. <br /> <br /> The ground noted in (e) that the trailer was not subjected to charge and it could not have been seized appears to be well founded. In the version the OP did not give any reply regarding the allegation that the trailer was not subjected to any charge. The reply in the version if any on this point is evasive. In the written argument also there is no mention on this point by the OP. The hypothecation/loan agreement describes in the annexure only the tractor as the subject matter of hypothecation. In clause 1.2 of the said agreement equipment description is described as follows:<br /> 1.2 Equipment Description<br /> The equipment includes the tractor model as described in the Annexure alongwith attachments including all accessories and equipment, annexed or fixed to the said equipment and all machinery, spares, tools parts and accessories in respect of or pertaining to the equipment and whether lying loose or fixed to the equipment. <br /> <br /> We think trailer cannot be brought under any of the above inclusive definition of tractor. The trailer is an independent equipment and a separate registration number is being allotted to it. The tractor alone can be used for many operations with certain accessories and equipments. But those accessories or equipments are not separately registered by R.T.O. Therefore we hold that trailer is not subject matter of charge/hypothecation in the present case. In that event the seizure of trailer is illegal and unauthorized. <br /> <br /> The contention noted in (f) of complainant is only an assumption, such allegation is made thinking that the seized vehicle was still in the custody of OP and it was not yet sold. According to OP one Anwar Pasha at Kolar on 17.07.2009 offered Rs.3,02,000/- for tractor and trailer and it was accepted on 23.07.2009 and the said sale price was credited by purchaser Anwar Pasha to OP. Earlier to it the complainant had received pre-sale notice dated 02.06.2009. The copy of this notice is produced by the complainant himself. The mere assumption of showing lesser amount in the accounts than the actual price that could be realized may not be a ground to hold that there was deficiency in service by OP. The complaint was filed on 28.07.2009 before this Forum. The sale was completed on 23.07.2009. Therefore it is for the OP to show that the sale was conducted prudently and the price fetched was the possible best price in the circumstances. We think here also the OP has not taken the required care at the time of sale of the tractor and trailer. The tractor and trailer were purchased on 11.05.2007 for Rs.5,03,780/-. The same was sold just after two years on 23.07.2009 for Rs.3,02,000/-. Even if 10% depreciation is allowed per year the total depreciation of value comes to Rs.50,378/- X 2 = Rs.1,00,756/-. The price fetched in the sale conducted by OP is only Rs.3,02,000/- which almost comes to 40% less than the original value paid at the time of purchase. Therefore a prudent man can say that there was loss of Rs.1,00,000/- by selling the tractor and trailer for Rs.3,02,000/-. In that event it was the duty of the OP before accepting the offer to give a notice to complainant intimating him, the amount offered for the vehicle and to inform him either he can purchase it for the said value or he can bring better offer from others. The OP has not taken such step before sale of the tractor and trailer. Therefore on this count also we hold that there is deficiency in service. For the above reasons we hold point No.3 in affirmative to the extent noted above. <br /> <br /> Point No.4: The seizure of the trailer is illegal. It was worth of Rs.80,000/- at the time of purchase. The sale of seized vehicle was not conducted in a reasonable and required manner which caused loss of Rs.1,00,000/-. For the above deficiencies in service we think totally a sum of Rs.1,50,000/- may be awarded as global compensation. Hence Point No.4 is held accordingly.<br /> <br /> Point No.5: For the above reasons we pass the following:<br /> <br /> O R D E R<br /> <br /> The complaint is partly allowed with costs of Rs.1,000/-. The OP shall pay Rs.1,50,000/- (rupees one lakh fifty thousand only) to complainant with interest at the rate of 10% p.a. from the date of seizure (i.e. 25.05.2009) till the date of realization, within 30 days from the date of this order. In default OP shall pay further interest at 6% p.a. from the date of default till the date of payment on the total amount that became due as on the date of default. <br /> <br /> Dictated to the Stenographer, corrected and pronounced in open Forum this the 14th day of December 2009.<br /> <br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> <br /> <br />