For the Appellant         Mr Mohit Bidhuri Advocate with Authority letter

                                From Mr Abdul Rahiman Tamboli, Advocate

For the Respondent      Ms Deepika Nandakumar, Advocate

ORDER

1.     This appeal has been filed under section 19 of the Consumer Protection Act, 1986 (in short, ‘the Act’) passed by the Tamil Nadu State Consumer Disputes Redressal Commission, Madurai Bench (in short, ‘the State Commission’) in Consumer Complaint no. 01 of 2013 on 19^th November 2015 partly allowing the complaint and directing the opposite party to issue no due certificate/ no objection certificate, to the complainant and to pay compensation of Rs.10.00 lakh and cost of Rs.10,000/- to the complainant.

2.     The brief facts of the case are that the appellant is a financial organization duly registered under the Companies Act, 1956 and engaged in the business of hire purchase of commercial vehicles etc. The appellant alleges that the respondent herein runs a commercial business and for business purposes had availed commercial hire-purchase loans from the appellant in respect of JCB Excavators bearing numbers TN 74 L 4341 and TN 74 P 5063. The appellant further states that the respondent stood as a guarantor in respect of two other hire-purchase agreements. All the hire-purchase agreements were interlinked and interconnected and all the vehicles were given as an additional security for the outstanding amount. The respondent executed the linked letters.

3.     According to the appellant, the respondent filed a consumer case bearing no.CC 01 of 2013 before the State Commission Madurai Bench on false and frivolous grounds. The appellant contends that the respondent was not a ‘consumer’ under the Act as the respondent owns two commercial vehicles. The parties filed their reply and respective evidences before the State Commission. The State Commission on 19.11.2015, on contest partly allowed the complaint with the following observations:

We feel that a sum of Rs.5,00,000/- would be reasonable compensation for not issuing the no due certificate/ no objection certificate for cancellation for hypothecation to the complainant even after clearing the entire loan, by the complainant and a sum of Rs.5,00,000/- would be the reasonable award for mental agony and suffering caused due to deficiency in service on the part of the opposite party and the point is answered accordingly.

In the result, the complaint is partly allowed directing the opposite party to issue no due certificate/ no objection certificate, to the complainant and to pay total compensation of Rs.10.00 lakh and to pay cost of Rs.10,000/- to the complainant.

4.     According to the appellant, the respondent had purchased the JCB Excavator bearing no. TN 74 L 4341 in the year 2007 for Rs.25.00 lakh. As the respondent was under financial hardship it had entered into a hire-purchase agreement with the appellant. On 23.02.2012, a full and final settlement was made in respect of the aforesaid JCB Excavator no. TN 74 L 4341 and the hire purchase agreement was closed on 23.02.2012. However, a No Objection Certificate (NOC) could not be issued as loan was due against the other hire purchase agreements. The impugned order of the State Commission had failed to appreciate the facts and arrived at an erroneous finding against it. Hence, the appellant has prayed before us to:

1. Set aside the impugned judgment dated 19.11.2015 passed by the Tamil Nadu State Consumer Disputes Redressal Commission, Madurai Bench in CC no. 1 of 2013;
2. Allow the present appeal;
3. Ex parte stay the operation of the impugned judgment dated 19.11.2015 passed by the State Commission, Madurai Bench in CC no. 1 of 2013;
4. Award the cost of the present appeal to the appellant; and
5. Pass such other and further order (s) as this Hon’ble Commission may deem fit and proper in the facts and circumstances of the case.

5.     Aggrieved by the order of the State Commission, the appellant has filed this present appeal.

6.     We have heard the learned counsel for the parties and have given our thoughtful consideration to the material on record.

7.     The learned counsel for the appellant has stated that the State Commission has erroneously allowed the complaint filed by the respondent without considering the material on record. The learned counsel for the appellant has submitted that the appellant was a financial institution duly registered under the Companies Act, 1956 and the respondent runs a commercial business and for the said business purpose the respondent had availed commercial hire purchase loans from the appellant in respect of JCB Excavators bearing numbers TN 74 L 4341 and TN 74 P 5063. Learned counsel for the appellant states that all the hire purchase agreements were interlinked and interconnected and all the vehicles were an additional security for the outstanding amount.  The respondent accordingly executed the linked letters. Appellant contends that the respondent approached the State Commission with incomplete facts and suppressed important facts. It is submitted that the respondent availed commercial hire purchase loans from the appellant in respect of JCB Excavators bearing numbers; (i) TN 74 L 4341, (ii) TN 74 P 5063; and (iii) TN 69 AX 1096. The respondent is stated to have purchased two vehicles for commercial use and stood guarantor for others. Since all the hire-purchase agreements are interlinked and interconnected, all the vehicles were given as additional security for the outstanding amount. For this reasons, the said NOC could not be provided to the respondent.

8.     Learned counsel for the appellant also submits that the respondent does not fall under the definition of a ‘Consumer’ as defined under Section 2(d) (ii) of the Consumer Protection Act, 1986. Reliance is placed upon judgment of this Commission in Jasobanta Narayan Ram vs The Branch Manager L & T Finance Ltd., FA no. 888 of 2013, decided on 4^th March 2014 wherein it was held that a person having two commercial vehicles does not fall under the definition of “Consumer”. Learned counsel contended that the main prayer in the complaint was for directions to issue a ‘No Due Certificate’ and for hypothecation termination letter and for damages for delay in issuing the same. Learned counsel for the appellant submitted that the termination letter dated 02.01.2013 along with other relevant papers in respect of the hired vehicle no. TN 74 L 4341 has already been issued. Hence, appellant prayed that the appeal be allowed.

9.     Per contra, the learned counsel for the respondent submits that the present first appeal was bad in law as the State Commission has rightly allowed the First Appeal in part by granting compensation of Rs.10,00,000/- to the respondent and further directed to issue no due certificate/ no objection certificate to the respondent. Learned counsel for the respondent submits that there was deficiency in service on the part of the appellant and that appellant was trying to take benefit of its own wrong. Respondent further submitted that the appellant was liable for default, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance of its obligation to fulfil its part of a contractual obligation and hence no relief could be granted to the appellant. It was also submitted that the appellant had willfully defaulted in not issuing the NOC even after receiving the full amount.  It was admitted that the respondent owned one JCB Excavator, which the respondent purchased in the year 2007 for a sum of Rs.25 lakh for his livelihood as he had no means of income. He was constrained to avail financial assistance from the appellant on hire purchase basis. Respondent submitted that in April 2010, a final conclusion was arrived and the respondent deposited a sum of Rs.68,000/- towards the installment demand of the appellant as per the terms and conditions of the hire purchase agreement. The respondent was sanctioned a sum of Rs.12,50,000/- as loan carrying interest at the rate of 10% and the respondent was supposed to pay equal monthly installments to the tune of Rs.70,000/-. Learned counsel for the respondent submits that from 17.05.2010 onwards the EMI was paid for the agreed period of 22 months. Initially, the EMI was Rs.70,000/- and subsequently the respondent got some reduction in the EMI for the said sum. A sum of Rs.1,51,078/- was paid towards full and final settlement of the loan, and even though the loan was fully cleared on 23.02.2012, the appellant did not issue No Objection Certificate/ No Due Certificate. A legal notice dated 02.01.2013 was therefore issued to the appellant by the respondent. However, no response was received from the appellant. Hence, the respondent was constrained to file a complaint before the State Commission with the prayer to issue a No Due Certificate/ No Objection Certificate seeking compensation of Rs.23,00,000/- along with cost.

10.   Learned counsel for the respondent contended that the appellant’s reply had falsely stated that the appellant had already sent the No Due Certificate/ No Objection Certificate to the Madurai Branch for onward transmission to the respondent, since the respondent refused to receive the same and that thereafter, the Madurai Branch sent the same by registered post with acknowledgement due on 04.01.2013. Respondent prayed that the appeal filed by the appellant be dismissed.

11.   It is not in dispute that the JCB Excavator was procured through hire purchase agreement between the appellant and the respondent. The appellant’s case is that the respondent was not a ‘consumer’ as it was a business to business arrangement. The issues that were considered by the State Commission were whether there was deficiency in service and whether the complainant (respondent herein) was entitled to claim compensation and extent of relief. Its finding was that:

6. POINT Nos: 1 and 2

It is pertinent to note that as per the bank statement of accounts Ex.A3 the entire loan has been discharged by the complainant on 23.02.2012, in pursuance of which the opposite party ought to have issued no due certificate/no objection certificate to the complainant which they failed to do. The complainant issued legal notice Ex.A4 to the opposite party on 23.12.2012, for which the opposite party has sent reply notice Ex.B4 on 09.01.2013 stating that the HP termination papers were already sent to their Madurai Branch.

7.       It is relevant to note that the Madurai Branch of the opposite party has sent intimation to the complainant only on 04.01.2013 to collect the HP termination papers from their office as evidenced by Ex.B3.

8.      We have to further note that the complaint has been filed on 03.01.2013 and only afterwards the opposite party has issued reply notice Ex.B4 dated 09.01.2013 and their Madurai Branch of the opposite party has sent intimation to the complainant only on 04.01.2013.

9.       Therefore it is patently evident that the loan has been fully discharged by the complainant on 23.02.2012 as seen from the statement of accounts Ex.A3 and intimation has been sent to the complainant from their Madurai Branch regarding the HP Termination papers only on 04.01.2013 and evidently the opposite party has taken a long time -10 months to come forward to issue the certificates, that too after filing of the complaint before the Commission.

12.   For the aforesaid reasons, the State Commission concluded that there was deficiency on the part of the appellant/ opposite party in not issuing No Due Certificate/NOC immediately after discharge of loan and issuance of the NOC after 10 months after filing of the complaint. It had accordingly quantified the relief at Rs.5.00 lakh as compensation and another Rs.5.00 lakh as compensation for mental agony and suffering along with Rs.10,000/- as costs.

13.   The contention of the appellant that the respondent was not a ‘consumer’ under section 2 (i) (d) of the Consumer Protection Act, 1986, is an argument that has been taken up in this appeal and had not been pressed before the State Commission as per the objections filed by it. The contention that merely because the loan had been obtained to purchase an excavator rendered the respondent liable to be ousted from the provisions of Consumer Protection Act cannot be considered since there is no averment that the said JCB excavator had been procured for commercial purpose. No evidence has also been led to that effect. Procurement of a JCB through hire purchase by itself cannot be a ground for arguing that the nature of transaction was for commercial purpose and therefore, the respondent was not a ‘consumer’ under section 2 (1) (d) of the Act. The discharge of the loan by the respondent also not been disputed by the appellant.

14.   It is evident from the record that the NOC was issued by the appellant nearly 10 months of the application. The contention of the appellant is that the same could not be issued earlier since the vehicle was collateral for the hire purchase loan pertaining to other vehicles. However, in view of the fact that the NOC was, in fact, issued although after a period of 10 months, even though the appellant contends that the same was refused by the respondent and had to be sent to its Madurai Branch to be handed over for which no evidence has been brought on record the contention of the appellant cannot be accepted. The findings of the State Commission that the appellant had been deficient in service cannot be faulted. We are therefore, inclined to accept the finding of the State Commission with regard to deficiency in service on the part of the appellant qua the respondent in respect of the issuance of no due certificate on the discharge of the loan.

15.   As regards the quantum of compensation determined by the State Commission, it is seen that in addition to Rs.5.00 lakh of compensation, the State Commission has also awarded further Rs.5.00 lakh compensation for mental agony and suffering. Award of multiple compensation for a singular default has been held by the Hon’ble Supreme Court in several cases to be not justifiable. Compensation of Rs.5.00 lakh for mental agony and suffering therefore, deserves to be set aside.

16.   In view of the foregoing discussion and in the facts and circumstances of this case, the appeal is partly allowed and is disposed of with the following directions:

1. The appellant shall compensate the respondent with a sum of Rs.5.00 lakh as ordered by the State Commission vide impugned order dated 19.11.2015;
2. Litigation cost of Rs.10,000/- awarded by the State Commission is left undisturbed;
3. Rs.5.00 lakh for mental agony and suffering set aside.
4. These directions shall be complied with within 45 days of this order failing which the amount of Rs.5.00 lakh awarded shall be repaid with simple interest @ 6% per annum till realization.

17.   Pending IAs also stand disposed of with this orders.