Date of filing   :  21-07-2011 

                                                                            Date of order  :   28-03-2012

IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD

                                                CC.181/2011

                          Dated this, the  28^th      day of  March    2012

PRESENT

SRI.K.T.SIDHIQ                                             : PRESIDENT

SMT.P.RAMADEVI                                      : MEMBER

SMT. K.G.BEENA                                        : MEMBER

Sasidharan.T.V,                                                                    } Complainant

S/o.Thamban Elaya Achary,

Chekkiyarappa House, Po.Haripuram,

Kasaragod.Dt.

( Adv.Madhavan Malankad, Kasaragod)

1. Proprietor, Pawan Investments, 43-44,                          } Opposite parties

    Erullappan Street, Roop Chambers, Shop.No.G-8,

    Chennai-79, Tamilnadu State.

2. Proprietor, Standard Auto Deal Links,

    Opp. Kailas Theatre, Kanhangad,

    Po. Kanhangad, Kasaragod.District.

 (Adv.A.Manikandan, Hosdurg)

                                                                                    O R D E R

SMT.K.G.BEENA, MEMBER

            The case of the complainant is that he availed a vehicle loan from opposite party No.1 for an amount of `1,09,000/- with an agreement to repay the same in 30 instalments commencing from 13-10-2008 to 11-12-2010.  Though he remitted entire instalments in time with additional finance charges opposite parties refused to issue loan clearance certificate and release of hire purchase endorsement of the vehicle. Hence the complaint.

2.         According to opposite parties, the complainant has entered in to a hire purchase agreement with the opposite party on 12-05-2008 repayable in 30 instalments.  One to 10 instalments are for a sum of `3,900/- each and  20 instalments for a sum of `3,500/- each.  Monthly instalments are to be paid on 12^th of each month.  In default of payments of monthly instalments on due dates the complainant is bound to pay interest.  Opposite party No.1 is ready to issue loan clearance certificate and NOC on clearance of dues and the complaint is liable to be dismissed.

3.         Complainant filed proof affidavit in support of his case and faced cross-examination by the counsel of opposite party.  Exts A1 to A15 marked.  Both sides heard and materials on record perused.

4.         Here the complainant entered into a hire purchase agreement with opposite party.  According to the complainant he had paid the entire amount within the agreement period.  But on 21-03-2011 complainant received a letter demanding `2000/- as the balance due amount.  As per the agreement the repayment became due after 12^th of every month and in default of payments of monthly instalments on due dates complainant is bound to pay interest.  Opposite party has not produced the statement of account showing payment details opposite parties would have realised or collected additional finance charges whenever the complainant made the subsequent monthly instalments belatedly.  This would make a customer aware of about the payment of additional interest and therefore he would make it a point to pay the monthly instalments promptly. Most of them in practice what is prevailing  that no customer will be made aware about the terms and conditions printed in the agreement in fine prints while he is available at the other side of the bank counter for the few movements to execute the agreement for availing loan. 

5.         Moreover, as per the law of appropriation of interest a payment upon an interest bearing debt will be applied to the interest in preference to the principal. Where the debt allows interest on interest a payment should be applied first to discharge the additional interest.  On interest second to discharge interest and third to discharge principal.

6.         In this case opposite parties have no case that any principal or interest is due from the complainant.  As per the law of appropriation of interest additional interest should have been collected then and there itself when the subsequent instalment is paid in a belated date.  If it is not collected and only the interest and principal is collected then that means additional interest for that period is waived.  Therefore a financier is not entitled to allow to accumulate the additional interest till the date of  payment of last EMI and then collect the total accumulated additional interest when the No Objection Certificate is demanded by the customer to cancel the HP endorsement. This is nothing but an unscrupulous exploitation of consumer and it amounts to deficiency of service.

            In the result, complaint is allowed and opposite parties are directed to issue NOC to the complainant with respect to his Mahindra Jeep bearing Reg.No.KL-7/J 6764 with a compensation of `3000/- and cost of `2000/-. Time for compliance is limited to 30 days from the date of receipt of copy of the order.

    Sd/-                                               Sd/-                                               Sd/-

MEMBER                                           MEMBER                                           PRESIDENT

Exts.

A1. to A14 Receipts  issued by Pawan Investments.

A15.  Notice  issued by Pawn Investments.

PW1. Sasidharan.T.V.

     Sd/-                                               Sd/-                                                 Sd/-

MEMBER                                           MEMBER                                           PRESIDENT

Pj/                                                                    Forwarded by Order

                                                               SENIOR SUPERINTENDENT