Kerala

Idukki

CC/165/2017

Swapna Vinaya Raj - Complainant(s)

Versus

Muthoot Vehicles - Opp.Party(s)

Adv.M S VinayaRaj

25 Jul 2023

ORDER

DATE OF FILING : 7.8.2017

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 25^th  day of   July, 2023

Present :

SRI. C. SURESHKUMAR                  PRESIDENT

SMT. ASAMOL P.                             MEMBER

SRI. AMPADY K.S.                           MEMBER

CC NO.165/2017

Between

Complainant                                          :     Sapana, W/o. M.S. Vinayaraj,

                                                                   Mambazhasseril House,

                                                                   Karikodu, Thodupuzha East P.O.,

                                                                   Idukki.

         (By Adv:  K.M. Sanu)

And

Opposite Parties                                     : 1.  Muthoot Vehicle Asset Finance Ltd.,

                                                                   Represented by

                                                                   The General Manager,

                                                                   Nirmala Centre,

                                                                   Opposite Latha Theatre,

           Muvattupuzha, Ernakulam District.

      2.  The Manager,

                                                                   Muthoot Vehicle Asset Finance Ltd.,

                                                                   Nirmala Centre,

                                                                   Opposite Latha Theatre,

           Muvattupuzha, Ernakulam District.

 (By Adv: Shajimon P. Lukose)

 

O R D E R

 

SRI. C. SURESHKUMAR, PRESIDENT

 

1. This  case originates from a complaint filed under Section 12 of the Consumer Protection Act of 1986 (the Act, for short).  Complainant’s case if briefly discussed hereunder :

 

Complainant is having a shop in Thodupuzha.  She had purchased a Mahindra Bolero Pick Up Van, a used vehicle, after availing a loan of Rs.2 lakhs by way of hire purchase, from opposite parties,  1^st opposite party being Muthoot Vehicle Asset Finance Ltd., represented by its General Manager and 2^nd opposite party, the manager of Muvattupuzha branch of Muthoot Vehicle Asset Finance Ltd.  At the time of availing the loan, complainant was made to sign partly filled up printed agreement and also give 6 blank cheques as security to opposite party.  As the agreement was not fully drawn up,                                                                                                            (cont….2)

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complainant was unable to understand all terms and conditions of the agreement.  Complainant signed an agreement from her shop which was brought there by one agent of opposite parties.  Complainant had promptly paid monthly instalments of the loan till August 2016.  Thereafter complainant was informed that monthly instalments of Rs.10,000/- has been increased to Rs.11,000/-.  This amount was also paid by her.  However, complainant was doubtful about the increase of Rs.1,000/- in monthly instalments.  She had  enquired about the same, but was not given a satisfactory reply.  Hence complainant had informed opposite party that she will not pay further instalments until she was given details of account and copy of agreement.  However requested documents were not given by opposite parties.  On 2.8.2017, complainant had requested respondent to collect monthly instalments from her office.  However, they had not come there.  Later on complainant had come to know that all amounts paid by her were adjusted towards interest, exorbitant overdue  charges were also adjusted from her payment.  This is against the norms of RBI.  Claiming of exorbitant interest will come within the purview of Kerala Prohibition of Charging Exorbitant Interest Act of 2012.  On 3.8.2017, one of the agents of respondent had threatened complainant that they will file criminal cases against her, by using blank cheque leaves given.  They had also threatened to take forceful possession of the vehicle.  Complainant is prepared to pay monthly instalments at reasonable interest provided she is given her account details.  Complainant therefore prays for a direction against respondents to settle her account as per the norms and conditions of RBI and for a further direction for return of excess rate of interest collected from her.  She also seeks an injunction against respondents restraining from taking forceful possession of the vehicle otherwise than under due process of law.  Costs are also prayed for.

 

2.  Complaint was admitted and upon notice, opposite parties have appeared and filed a joint written version. Their contentions are briefly discussed hereunder :

 

Complainant had availed a hypothecation loan facility for Rs.2,75,000/- from 2^nd opposite party, on 7.9.2015.  Her husband is guarantor for the loan.  Purpose of loan was for purchasing a Bolero Pick Up van bearing Reg. No.KL-37-A-8404.  Vehicle was hypothecated in favour of opposite parties and hypothecation agreement was executed by complainant with her husband as guarantor, on 7.9.2015.  As per terms of agreement, repayment is to be made by 36 monthly instalments commencing from 9.9.2015 and ending on 7.8.2018.  First 35 instalments are of Rs.10,055/- and last instalment to be paid is of Rs.9,948/-.  It is incorrect to say that complainant was made to sign in a printed agreement which was partly unfilled and that she was made to part with 6 signed blank cheques.  Complainant was not prompt in making repayment of loan.  She had committed serious default in making payment of monthly instalments from 7.3.2017 onwards. Thereafter notices were issued to complainant requesting her to clear the dues.  However, complainant had not approached opposite parties or asked statement of                                                                                                                              (cont….3)

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account.  On 3.6.2017, a registered demand notice was issued to complainant seeking clearance of dues.  Though this was accepted, there was no response from complainant, neither had she cleared the dues.  It is incorrect to say that there was increase of Rs.1000/- in the monthly instalment amount.  These are only false allegations.  Respondent has not charged any amount contrary to the norms of RBI or any overdues as alleged in the complaint.  There was no threat of implicating the complainant in criminal case using signed blank cheques or regarding taking forceful possession of vehicle from her.  Arbitration proceedings were initiated against complainant on 2.11.2017.  Arbitrator has passed an order to take custody of the vehicle, to sell the same and for appropriating the sale proceedings towards balance amount due to opposite parties.  This order was executed by approaching Hon’ble II Additional District Judge, Ernakulam, in OP (Arb) No.1167/2017.  This Forum had passed an Interim Stay in I.A. No.89/2017, till the appearance of opposite parties on 11.9.2017.  Thereafter order was not extended.  Opposite parties pray for dismissal of complaint with costs.

 

3.  After filing of written version, case was posted for evidence.  Sufficient opportunity was afforded to both sides to take steps, during trial.  Though complainant had availed repeated opportunities, she has not tendered any oral evidence.  4 documents produced by her were admitted in evidence, without formal proof, as Exts.P1 to P4.  Ext.P1 is copy of registration certificate of the Bolero Pick Up van.  Ext.P2 is copy of  an intimation to one Mrs. Laiju, dated 15.2.2018, sent by 1^st opposite party with regard to Rs.2,15,000/-, received from her towards sale proceeds of the pick up van, on 7.2.2018.  Ext.P3 is copy of statement of account (status report as on 17.2.2018) relating to the loan transaction.  Ext.P4 is a receipt given to Laiju for having received RC Book from complainant, of the vehicle purchased by her.  On the side of respondent, initially the then manager of 2^nd opposite party branch was examined as DW1.  Exts.R1 to R8 were admitted by this witness.  However, it is seen that the witness was not available for cross examination, due to lapse of time.  It seems that he was transferred from Muvattupuzha branch, to some other place, instead DW1, Senior Collection Executive and power of attorney holder of 1^st opposite party was examined as DW1.  Exts.R9 to R13 were further proved by him.  Though earlier manager was not available for cross examination, we are only considering the documents marked as such.  Normally, there is no insistence for formal proof of documents produced before this Forum, though we would consider reliability of these documents in the absence of oral evidence after considering the pleadings addressed by parties.  DW1 was cross examined with regard to all the documents marked on the side of opposite parties during trial.  Hence we are of the view that no prejudice has been caused to complainant due to non-availability of earlier manager for cross examination.  We shall now advert to the documents admitted from the side of opposite parties.  Ext.R1 is of photocopy of specific power of attorney issued in the name of the then manager of 2^nd opposite party.  Ext.R2 is a copy of loan-cum-hypothecation agreement and schedule, wherein complainant had admittedly put                                                                                                                   (cont….4)

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her signature.  Her husband is also a signatory to the document as a guarantor.  Ext.R3 is copy of loan sanction letter dated 4.9.2015.  Ext.R4 is copy of intimation sent to complainant from opposite parties regarding sale of the vehicle, which is dated 3.6.2017.  7 days notice was given before sale to complainant for clearing dues in accordance with Ext.R2 agreement.  Ext.R5 are photocopies of postal acknowledgement cards containing signatures of complainant.  Ext.R6 is copy of order passed by arbitrator dated 2.11.2017 wherein opposite parties were permitted to repossess the vehicle in question and to sell the same in accordance with law and thereafter to appropriate sale proceeds towards balance amount due towards the loan.  Ext.R7 is copy of order passed by II Additional District Judge, Ernakulam in OP (Arb) No.1167/17 whereby Ext.R6 order was executed.  Ext.R7 reveals that vehicle was taken possession by Advocate Commissioner appointed for the same and handed over to petitioner.Ext.R8 is copy of status report as on 17.2.2018, which is already marked as Ext.P3.  Ext.P9 is copy of power of attorney executed by opposite parties in favour of DW1.  Ext.R10 is copy of registered intimation sent to complainant by opposite parties with regard to intended sale of vehicle, dated 20.1.2018.  Here also she was given 7 days time to clear the dues.  Ext.R11 is copy of postal receipts evidencing sending of Ext.R10 to complainant and her husband.  Ext.R12 series, 2 in numbers are 2 postal AD Cards pertaining to receipt of original of Ext.R10 by complainant and her husband.  Ext.R13 is letter addressed to complainant, sent by opposite parties intimating her with regard to seizure of vehicle and thereafter its sale to Mrs. Laiju, W/o. Barrid Antony, for Rs.2,15,000/- on 17.2.2018.

 

After examination of DW1, evidence was closed.  Both sides were heard.  Now the point which arise for consideration are :

1)  Whether there is any deficiency in service from the side of opposite parties ?

2)  Whether complainant is entitled for any of the reliefs prayed for in the complaint ?

3)  Final Order and costs ?

 

4.  Point No.1 :

 

          Though opposite parties have raised contentions with regard to maintainability, they have no specific case in this regard.  Allegation is of charging excess interest and collection of exorbitant charges, which, according to complainant, is unfair.  Opposite parties have taken a contention that no specific pleadings are addressed to the effect that there is deficiency in service from the side of opposite parties.  We have considered allegations at large.  Though complainant has not specifically stated that there is deficiency in service from the side of opposite parties, allegations  that excess interest, penal and other charges were collected which is not in accordance with the directions of RBI are seen raised.  This would tantamount to allegations of deficiency in service as opposite parties have allegedly done something which is against the interests of their customers, the act being unlawful, as per the allegations.  Non-mentioning of deficiency                                                                                                                     (cont….5)

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in service as such in pleadings therefore, does not persuade us to throw out the complaint as not maintainable. 

 

          However, we do notice that there are no specific pleadings with regard to charges of excess interest and other charges.  Complainant does not specify what is the rate of interest charged for the loan and how other charges including cheque bounce charges are termed as exorbitant / unreasonable by her.  According to complainant, charging of interest is against the directions of Kerala Prohibiton of Charging of  Exorbitant Interest Act of 2012.  As per Section 3 of this Act, there is prohibition from charging interest in excess of what is mentioned in Section 7(1) of Kerala Money Lenders Act.  Money Lenders Act in turn only prohibits charging of interest in excess of 18% and 2% towards default charges.  Ext.R2 is the loan-cum-hypothecation agreement.  Though complainant claims that she was made to sign the agreement which was partly unfilled, she has not ventured to give evidence in this regard.  Ext.R2 is copy of original loan-cum-hypothecation agreement.  It contains signatures of both complainant and her husband.  Requisite columns in the agreement are seen filled up.  We also notice that apart from complainant, her husband has also signed the document as guarantor.  Complainant has no case that the guarantor has also signed the very same document.  Therefore her case that she was made to sign the agreement which was partly unfilled is not believable.  As per Ext.R2, rate of interest chargeable is 10.53% flat per annum for 36 monthly instalments.  There is evidence and pleadings to the effect that out of 36 instalments, 35 instalments are of Rs.10,055/- and  last instalment is of Rs.9,948/-.  Total amount payable as per 36 months would come to Rs.3,61,873/-.  Loan amount is Rs.2,75,000/- as per Ext.R2.  Excess is Rs.86,873/-.  This would work out to only 31.5% for 3 years.  Thus, interest charged is only 10.53% per annum.  As per Section 7(1) of the Money Lenders Act, prohibition is only against collection of interest in excess of 18% plus 2% of charges as such.  Contentions that excess interest and charges are being collected, therefore, are not at all sustainable.  It was then contended that cheque bounce charges are exorbitant.  As per account statements, that is Ext.P4, 500 + service tax is collected towards cheque bounce charges.  We also notice that in case of dishonour of cheques, legal formalities including sending of notice demanding the cheque amount in accordance with NI Act would be necessary. A Legal person will have to be approached by company who will have to be paid his fees and therefore charges in this regard cannot be termed as exorbitant. 

 

          It has  come out in evidence that during pendency of case, arbitration proceedings were initiated in accordance with arbitration clause in Ext.R2.  Arbitrator had issued Ext.R6 Interim Order authorizing opposite parties to repossess the vehicle, sell it in accordance with law and to appropriate sale proceeds towards balance amount due towards loan.  Ext.R7 is copy of the order passed by 2^nd Additional District Judge, Ernakulam in OP(Arb)1167/17.  Ext.R7 proves that vehicle was seized by an Advocate                                                                                                              (cont….6)

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Commissioner appointed by Court and handed over to opposite parties.  Seizure of vehicle is in accordance with law.  Thereafter it was sold and sale proceeds were appropriated towards loan amount.  During cross examination of DW1, specific questions were put to the effect that sale in public auction was not properly conducted.  These contentions are not sustainable in the light of Ext.R2 agreement which authorizes opposite party to sell the vehicle and appropriate the proceeds towards balance amount.  Though several suggestion based upon events post filing of case were put to DW1, complaint has not been amended to modify the reliefs in accordance with such events.  Hence we do not think that these questions put during cross examination were of any importance or relevance. Evidence indicates that the vehicle was seized in accordance with law after initiation of arbitration proceedings.  It has been sold and amount has been adjusted towards arrears due from complainant.

 

          We find no evidence of any deficiency in service or unfair trade practice as alleged       in the complaint.  Therefore we find that there is no deficiency in service or unfair trade practice from the side of opposite parties.  Point No.1 is answered accordingly.

 

5.  Point Nos.2 and 3 are considered together :

 

          In view of our findings on Point No.1, we further find that complainant is not entitled for the reliefs prayed for.  In the result, this complaint is dismissed, considering the circumstances, without costs.  Parties are directed to take back extra copies without delay.

 

          Pronounced by this Commission on this the   25^th  day of July, 2023

 

 

                                                                                                Sd/-

SRI. C. SURESHKUMAR, PRESIDENT  

                             Sd/-     

        SMT. ASAMOL P., MEMBER

 

                                    Sd/-

       SRI. AMPADY K.S., MEMBER

 

 

 

 

                                                (cont....7)

 

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APPENDIX

 

Depositions :

On the side of the Complainant :

Nil.

On the side of the Opposite Party :

DW1      -  Sibu Vinayan & Anish P.S.

Exhibits :

On the side of the Complainant :

Ext.P1    -  Copy of RC Book.

Ext.P2    -  Letter from opposite party to complainant dated 15.3.2018.

Ext.P3    -  Status report as on 17.2.2018.

Ext.P4    -  Receipt given by one Laiju Barris.

On the side of the Opposite Party :

Ext.R1    -  Copy of power of attorney to Siby Vijayan.

Ext.R2    -  Copy of hypothecation agreement.

Ext.R3    -  Loan sanction letter.

Ext.R4    -  Demand notice for the loan dues.

Ext.R5    -  Copy of postal AD Card.

Ext.R6    -  Interim Order passed by Arbitrator.

Ext.R7    -  Order in OP (Arb) No.1167/2017 passed by the II Addl. District Judge,

                  Ernakulam.

Ext.R8    -  Status report as on 17.2.2018.

Ext.R9    -  Copy of power of attorney to Anish P.S.

 

 

                                                                                      Forwarded by Order,

 

 

 

                                                                               ASSISTANT REGISTRAR