Date of Filing : 02.07.2012
Date of Order : 02.03.2013
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, KOLAR
Dated 2nd MARCH 2013
PRESENT
Sri. J.N. HAVANUR, B.Sc., LLB (SPL) ……. PRESIDENT
Sri. H.M. SHIVALINGAPPA, B.Sc., LLB …….. MEMBER
CC No. 81 / 2012
Sri. Mune Gowda,
K.G. Pura Village,
Jangamakote Hobli,
Siddlaghatta Taluk,
Chikkaballapur District.
(By Sri. C.R. Krishnamurthy & another, Adv.) ……. Complainant
V/s.
The Branch Manager,
M/s. Sriram Transport Finance Co. Ltd.,
1st Floor, Opp. To Shakthi Sagar Hotel,
Bellary Main Road,
Chikkaballapur District.
(By Sri. Anantkumar S. Habid, Adv.) …… Opposite Party
ORDER
By Sri. J.N. HAVANUR, PRESIDENT
This is a complaint filed by the complainant against the Opposite Party No. 1 under section 12 of the Consumer Protection Act’1986, praying to pass an order, directing the OP to return back the TATA ACE, KA-40, 1966 vehicle to him alongwith damages of Rs.2,00,000=00, in the interest of justice and equity.
2. The brief facts of the complaint can be stated as under:
The complainant is a poor person and due to his finance improvement, he had purchased a four wheeler vehicle i.e. TATA ACE, KA-40, 1996 from its earlier lawful owner, and for financial adjustment, the complainant borrowed a vehicle loan from the OP company of Rs.70,550=00 vide loan No.CKBLP090723002, and at the time of borrowing the said loan, the OP company took some signatures on the blank papers and fixed Rs.5,600=00 per month. As per the terms and conditions, the complainant had paid Rs.1,15,620=00 + Rs.20,000=00 totally of Rs.1,35,260=00 as on 7-6-2011. Evenafter payment of Rs.1,35,260=00, the OP company started demanding the complainant to pay Rs.1,00,000=00, otherwise they are going to seize the said vehicle and they had given lot of pinpricks to the complainant with one or other reason. On 20.1.2012 without giving any notice to the complainant or without following any valid procedure; the OP Company had sent some goods to the house of complainant and seized the TATA ACE, KA-40, 1966 and immediately the complainant went and requested OP company to return back the vehicle, as the said vehicle is only source of income to him and his family members, but the OP company did not hear the request and necked out the complainant from their office. The complainant has filed the police complaint before the Rural police station, Siddlaghatta, but they have not taken any action against the OP company instead of that, they issued NCR, and again the complainant had given a requisition before the Taluk Legal Aid Services Authority, Siddlaghatta, but they have not taken any action to get back the vehicle to him. The complainant was earning Rs.400=00 to Rs.500=00 through their vehicle per day, and he got heavy loss due to the act done by the OP company. Hence, the present complaint is filed.
3. After service of the notice, the OP has appeared through its counsel and filed objection, contending interalia as under:
The entire contents of the complaint are all false, frivolous and vexatious, and it is not tenable in law or on facts. The OP is engaged in the commercial vehicle finance business at Chikkaballapur and the complainant has borrowed a loan from the OP by executing loan cum hypothecation agreement at Chikkaballapura. The complainant is resident of Siddlaghatta, Chikkaballapur district, therefore this forum has no jurisdiction to entertain and try the complaint. It is specifically denied that as on 7-6-2011, the complainant has paid Rs.1,35,260=00 in favour of OP. The complainant has sought relief of direction in the form of mandatory injunction to hand over the said vehicle. In fact, this forum has no jurisdiction to grant injunction in the form of direction, so the present complaint is not maintainable. The complainant has borrowed a loan from the OP to purchase a TATA ACE vehicle bearing registration No.KA-40/1966 by executing loan cum hypothecation agreement in favour of OP. In view of availment of loan from OP, the complainant is borrower of OP, so the borrower is not a consumer within the meaning of Section 2 (1) (d) of the CP Act. The complainant has borrowed a loan from the OP by executing loan cum hypothecation agreement dated 23-7-2009 to purchase TATA ACE vehicle for commercial purpose to run it for transportation business. The loan availed by the complainant is purely a commercial vehicle loan, hence the complainant is not a consumer and therefore this forum has no jurisdiction to adjudicate the dispute. The contents of the complaint to the effect that, evenafter paying sum of rs.1,35,260=00, the OP is demanding the complainant to pay Rs.1,00,000=00 otherwise they are going to seize the vehicle and they had given lot of pinpricks to complainant are all false. The contents of the complaint to the effect that, on 20-1-2012 without giving any notice to the complainant or without following any valid procedure the OP company has seized the TATA ACE vehicle then the complainant went to OP and requested to return back the vehicle, but the OP did not hear the requests and necked out the complainant from their office are all false. The seizure of vehicle by OP, on account of default committed by the complainant is in accordance with the terms and conditions of Loan cum hypothecation agreement. The essence of the agreement is prompt, punctual and regular payment of monthly installments. The complainant did not pay the monthly installments regularly according to repayment schedule. The receipts produced by the complainant in the present case eloquently speak about the non payment of installment according to the terms of repayment schedule. The OP being financier of the vehicle exercised its right in accordance with the terms of the agreement. The OP has issued notice dated 30-10-2010 by registered post to the complainant and his guarantor. The complainant instead of clearing the dues got issued notice through his advocate on 15-6-2011, again OP has sent registered notice dated 10-12-2011 calling upon the complainant to clear the dues, but the complainant did not bother to make the payment of the same. The complainant himself is a defaulter, so he is not entitled for any pre notice according to the dictum laid down by the High court of Karnataka. So having no option, the OP has re-possessed the vehicle on 20-1-2012. Evenafter re-possession of vehicle, the complainant has been called upon to clear the arrears by sending notice letter to the complainant, but the complainant instead of clearing the loan dues of the OP; has approached the forum for seeking dictums against the OP. The complainant after having borrowed a loan instead of repaying the installments regularly as per the repayment schedule, he is teaching philosophy to the OP financier. After having agreed to the contractual terms of the agreement, complainant subsequently cannot raise his voice contrary to the terms of agreement. The total amount payable by the complainant is Rs.1,71,300=00, the complainant agreed to pay delayed payment charges at the rate of 3% per month as liquidated damages, as per the statement of account, the total due amount payable by the complainant to the OP is Rs.1,12,154=00 as on 21-8-2012 and this fact is well within the knowledge of the complainant. Prior to availment of loan dated 23-7-2009 the complainant had borrowed a loan of Rs.1,40,000=00 by executing loan cum hypothecation agreement dated 10-10-2006 under the guarantor ship of Mr.Krishnappa.M, for the purpose of very same vehicle and under the said agreement, the total amount payable was Rs.1,81,430=00 when default was committed under the previous agreement, at the request of the complainant, his loan account is re-constructed to enable him to make payments, thereafter afresh agreement dated 23-7-2009 was executed by the complainant under the guarantorship of one Mr.Nagaraj. Under the said subsequent agreement Rs.1,20,000=00 is advanced to the complainant and out of which Rs.45,000=00 is adjusted to his previous loan account of the complainant and the complainant has paid Rs.70,550=00 to IDBI bank account payee cheque and amount of Rs.1,950=00 is levied towards service and documentation charges, but inspite of instructing the complainant to clear of the arrears he has failed to make subsequent monthly installments regularly. There is no cause of action to file the present complaint. The OP is not negligent and there is no deficiency of service on the part of the OP. Hence it is prayed to dismiss the complaint alongwith cost and compensatory cost of Rs.25,000=00.
4. So from the averments of the complaint of the complainant and objection of the OP, the following points arise for our consideration.
(i) Whether the complainant proves that, the OP is negligent and there is deficiency of service on the part of OP in making seizer of the vehicle in question?
(ii) If point no.1 is answered in the affirmative, what relief, the complainant is entitled to?
(iii) What order?
5. Our findings on the above points are;
(i) Negative
(ii) In view of the negative findings on the point No. (i), the complainant is not entitled to any relief as prayed in the complaint
(iii) As per final order
REASONS
6. So as to prove the case, the complainant has filed his affidavit by way of evidence and produced five documents alongwith list dated 30-6-2012, and receipts for having paid installments. On the other hand, one Kumaraswamy who being the field product executive has filed his affidavit and also additional affidavit on behalf the OP and produced 12 documents with list dated 15-9-2012, two documents alongwith memo dated 5-1-2013, and two more documents alongwith memo dated 2-2-2013. We have heard the arguments of both sides, and we have gone through the oral and documentary evidence of both parties meticulously.
7. One B.Munegowda, who being the complainant has stated in his affidavit filed by way of evidence that, he is a poor person and due to finance improvement, he had purchased a TATA ACE, KA-40, 1996 being four wheelers from its earlier lawful owner, and for financial adjustment, he borrowed a vehicle loan from the OP of Rs.70,550=00 vide loan No.CKBLP090723002, and at the time of borrowing the said loan, the OP got some signatures on the blank papers and fixed Rs.5,600=00 per month. As per the terms and conditions, he had paid Rs.1,15,620=00 + Rs.20,000=00 totally of Rs.1,35,260=00 as on 7-6-2011. Evenafter payment of Rs.1,35,260=00, the OP started demanding him to pay further Rs.1,00,000=00, otherwise they will seize the vehicle and OP gave lot of pinpricks to him. On 20-1-2012 without giving any notice to him or without following any valid procedure; the OP sent some good to his house, and seized the TATA ACE, KA-40, 1966 and then he went and requested OP to return back the vehicle, but the OP did not hear his requests, then he gave a police complaint before the rural police station, Siddlaghatta, but the police did not take any action against the OP, but they issued NCR, and he gave a requisition before the taluk legal aid service authority, Sidlaghatta, and they have not taken any action to get back the vehicle to him, and he was earning Rs.400=00 to Rs.500=00 through that vehicle per day, and he had got heavy loss due to the act done by the OP, and he is a poor person and without the said vehicle he and his family members will be thrown on the foot path, so, he prayed to allow the complaint and grant relief as prayed for.
8. By a careful reading of the averments of complaint and evidence of complainant, it is explicitly clear that, the complainant has tendered his evidence in conformity with the averments of the complaint. Let us have a look at the relevant documents of the complainant, so as to know whether the oral testimony of complainant stands corroborated by documentary evidence or not. One letter of OP dated 23-1-2012 produced by the complainant discloses that, TATA ACE vehicle bearing Reg.No.KA-40/1966 has been re-possessed by OP on 20-1-2012, as the complainant has committed default in paying the instalments, and that letter has been addressed to the complainant. The complainant has produced one more letter of OP dated 23-1-2012 addressed to the complainant stating that, the vehicle has been repossessed due to continuous default in payment of HP installments and the complainant owes a sum of Rs.91,798=00 inclusive of seizing expenses Rs.4,500=00 calculated up to 31-1-2012, so the complainant is called upon to clear the dues within seven days, failing which, they will make sale of the said vehicle for the highest price. The complainant has produced copy of notice of OP dated 10-12-2011 issued to complainant and his guarantor informing that, the complainant has availed loan facilities of Rs.1,20,000=00 in respect of TATA ACE vehicle by executing an agreement, agreeing to pay Rs.1,72,5599=00 in 30 monthly installments, but the complainant and his guarantor have failed to perform their obligations and neglected to pay the monthly loan installments regularly, and they called upon to pay Rs.83,089=00 towards full and final settlement alongwith expenses and other charges, failing which, they will proceed to take criminal action. The complainant has produced receipts for having paid installments. The complainant has produced RC book of the vehicle and SB account of IDBI bank existing in the name of the complainant and also copy of legal notice issued to OP dated 15-6-2011 stating that, he has already paid Rs.1,15,260=00 as on 7-6-2011 and he is ready to pay the balance loan amount, but office staff of OP again and again went to the house of the complainant and gave trouble, so the OP is called upon not to disturb the complainant’s day-to-day activities, otherwise he will take legal action against the OP in the court of law. The said document of the complainant discloses that, the complainant has availed a loan amount from the OP, and he paid installment not regularly, and the complainant is still due to the OP and on account default in paying the installments as per terms and conditions of hire purchase agreement, the OP has seized the vehicle by issuing notice. The oral evidence of the complainant that, the OP did not follow the procedure while making seizure of the vehicle is not corroborated by any documentary evidence.
9. At this stage, it is relevant to have a cursory glance at the material evidence of the OP. One Kumaraswamy who being the field product executive of OP has stated in his affidavit and also in the additional affidavit that, the complainant has borrowed a loan from their financial institution by executing loan cum hypothecation agreement which is purely commercial, so the complainant is not a consumer and this forum has no jurisdiction to adjudicate the dispute. As per the statement of account, the total due amount payable by the complainant to their financial institution is Rs.1,21,154=00 as on 21-8-2012. Since the complainant has not cleared his dues, so the vehicle has been seized by giving notice as per their terms and conditions of the agreement. The OP is not negligent and there is no deficiency of service on the part of the OP. Prior to availment of loan dated 23-7-2009, the complainant had borrowed a loan of Rs.1,40,000=00 from OP by executing loan cum hypothecation agreement dated 10-10-2006 by giving guarantor ship of Mr.Krishnappa.M, for the purpose of very same vehicle and under the said agreement, the total amount payable was Rs.1,81,430=00 when default was committed under the previous agreement, at the request of the complainant, his loan account is re-constructed to enable him to make payments, and afresh agreement dated 23-7-2009 is executed by the complainant and one Mr.Nagaraj as guarantor, and under the said subsequent agreement, the complainant is due a sum of Rs.1,20,000=00, but the complainant has failed to pay the said amount. The complainant has not approached this forum with clean hands, so the complaint be dismissed with cost.
10. The OP has produced Loan cum hypothecation agreement executed by the complainant and OP and as per the clause 6 of the said document, it is clear that, if the borrower commits any act of default in payment of installments, the OP is having power to take possession of the vehicle and adjust the loan amount by making sale of the vehicle. EMI schedule is produced by the OP granting EMI facilities to the complainant. Notice copy dated 30-10-2012 is produced by the OP to show that, the notice was issued to the complainant by OP informing that, the complainant has not paid the installments of loan properly, and he is requested to pay the installments regularly, failing which, they will take appropriate recovery action against the complainant and his vehicle. The OP has produced loan cum hypothecation agreement dated 10-10-2006 executed by the complainant and one Krishnappa.M and the OP has also produced statement of account of the complainant and that statement shows that, the complainant has paid a sum of Rs.2,24,942=00, and still the complainant is due a sum of Rs.1,20,000=00 to the OP, but the complainant has failed to make the full payment of arrears of loan.
11. On making careful scrutiny of the oral and documentary evidence of both parties, it is made manifest that, the complainant after availing the loan amount from the OP, has paid installments not regularly and in total he has paid Rs.2,24,949=00 and still the complainant is in arrears of Rs.1,20,000=00 as per the statement of account of OP. In view of not paying the balance amount, the OP has started recovery proceedings against the complainant by making seizure of the vehicle, as per the terms and conditions of the loan cum hypothecation agreement, and notice was issued to the complainant for having seized the vehicle as per the procedure laid down in the agreement between the parties. In fact, the OP has acted strictly in accordance with the terms and conditions of the loan cum hypothecation agreement and there is no negligence or deficiency of service on the part of OP. On the other hand, the complainant is a contumacious defaulter in paying the balance amount of loan to the OP. Since the loan availed by the complainant is a commercial loan, as per the documents placed before the forum. So the complainant does not fall within the definition of a consumer as per the CP Act. So, under the circumstances, we are of the views that, the oral and documentary evidence of the OP are more believable trustworthy and acted upon than the material evidence of complainant.
12. At this stage, the learned counsel for the OP has relied on the following authorities.
(1) 1995 (3) CPR 93 (Smt.Revathi Kalyan Kumar vs KSFC)
“Consumer Protection Act, 1986 – Sections 12 and 17 – complainant borrowed a loan and mortgaged property and hypothecated the stock properties put to auction sale towards recovery of loan in the proceedings initiated u/s 31 of state finance corporation Act – claim for compensation on allegation that properties were sold for a paltry sum – Relationship between complainant and OP-party is only that of borrower and creditor – complainant is not a consumer and complaint is untenable”.
(2) 2006 CTJ 211009 (Supreme Court) (CP), Managing Director, Orix Auto Finance (India) Ltd –vs- Jagmander Singh and another
Seizure of financed vehicle – Hire purchase agreement-Whether a financier can seize/take possession of the vehicle financed by it in case of default on the part of the hirer in making payment of the monthly installments? – Essentially a matter of the agreement – if the hire purchase agreement executed by the parties permits the financier to take possession of the financed vehicle, no legal impediment is to come in the way of such possession being taken – Therefore, not proper for the High Courts to lay down any guidelines in this regard – Such an act would amount to variation of the agreed terms – In the case in hand re-possession of the vehicle clearly permissible in terms of the hire purchase agreement – Appeal allowed.
(3) 2012 (3) CPR 89, V.Sridhar Goud –vs- Magma Shrachi Finance Corporation Ltd and Anr.
“Consumer Protection Act, 1986 – Sections 15 and 17 – Financial Services – Hire – Purchase – Repossession of vehicle – Complainant dismissed by district forum – Default in repayment of loan- complainant was aware of notice issued by opposite parties and it is not his case that he did not receive pre sale notices and he also lodged a complaint with police-In absence of any documentary evidence that complainant was not given sufficient notice and time to pay installments and also that complainant failed to prove that opposite party violated any terms of agreement with respect to seizure or sale of vehicle, there is no deficiency in service on behalf of respondents – OPs- Appeal dismissed.
(4) I (2008) CPJ 121 (NC), Rajeshwar Prasad –vs- BCL Financial services Ltd.
“Consumer Protection Act, 1986 – Section 21 (b) – Jurisdiction – Summary – Hire purchase agreement – vehicle financed – complicated and complex question of law and facts involved – sign on blank papers and blank cheques alleged – Mater not adjudicable summarily – Relegated to Civil Court – No interference required in revision”.
13. Looking to the present case on hands, on the back ground of guidelines of the said decisions, it is no doubt true that, the complainant of the present case on hand has borrowed loan from the OP by executing Loan cum Hypothecation Agreement and paid the some of installments to the OP, but subsequently, he did not pay the installment regularly, and in view of committing default in paying the arrears of loan by way of installments, the OP has initiated recovery proceeding by making seizure of the vehicle, as per the terms and conditions of the Loan cum Hypothecation Agreement and issued notice to complainant duly. The OP has not committed any mistake in making seizure of the vehicle of complainant, and act of the OP in making seizure of the vehicle of complainant is in accordance with the terms and conditions of the agreement. The said citations quoted by the learned counsel for the OP are aptly applicable to the present case on hand. As per obiter dicta of the said citations, the present complaint is not sustainable, in view of existence relationship of creditor and borrower between the parties. The OP is having full power to proceed against the complainant to recover a loan due to the OP, pursuant to terms and conditions of the Loan cum Hypothecation Agreement. So viewing the case of the complainant, on the back ground of the material evidence of both parties and guidelines of the said decisions, we are of the view that, the complainant who come to the forum seeking relief has utterly failed to prove with clear and tangible evidence that, the OP is negligent and there is deficiency of service on the part of the OP, and according, we answer this point in a negative.
14. iew of our negative findings on the point no.1, the complainant is not entitled to any relief as prayed in the complaint. So, we answer this point in a negative. In the result, for the foregoing reasons, we proceed to pass the following order.
ORDER
The complaint of the complainant is hereby dismissed. So, under the circumstance, both parties shall bear their own cost.
Supply free copy of this order to both parties.
Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open forum on this, the 2nd day of March 2013.
H.M. SHIVALINGAPPA J.N. HAVANUR
Member President
