Before  the District Consumer Dispute Redressal Commission [Central], 5th Floor                                                   ISBT Building, Kashmere Gate, Delhi

                                      Complaint Case No.367/17.10.2016

Mohit Kumar Suryawanshi son of  Sh. Madan Lal Suryawanshi

R/o RZ-661, Naseer Pur Road, Kailash Puri Chowk,  

Palam, New-Delhi-110045                                               …Complainant (Borrower)

                                                Versus

Shri Ram Transport Company Ltd.

plot no. 3384, aboveSubhiksha Christian Colony,

Beadon Pura, DBG Road  Karol Bagh,

New Delhi-110005                                               …Opposite Party(Lender/Financer)

                                                                                    Date of filing               17.10.2016

                                                                                    Date of Order:             11.09.2023

Coram:   Shri Inder Jeet Singh, President

                Ms. Shahina, Member -Female

                 Shri Vyas Muni Rai,    Member

                                                       ORDER

Inder Jeet Singh , President

1.1. (Introduction to dispute of the parties) –The complainant/borrower filed the complaint with allegations of deficiency in services that his insured vehicle was stolen but the OP being lender/Financer failed to issue settle the account despite requests after theft of vehicle. It was insured with OP. The complainant suffered harassment and mental agony. The complainant seek directions to OP (i) to pay Rs.1,00,000/- as damages for physical harassment, mental agony and humiliation (ii) to close the loan account since vehicle was already stolen and (iii) to return all blank papers, forms, loan agreement, cheques etc, which got signed from him and to issue him NOC, besides other appropriate relief.

1.2. The OP/lender-Financer filed its detailed reply and opposed the complaint vehemently that neither there is any deficiency of services on its part nor it is liable for any amount or claim towards the complainant. The complainant himself failed to repay the installments of loan amount. There was repayment of  just single installment of Rs.10,467/- out of total 22 installments, remaining 21 installments are still due [i.e. 13 installments of Rs.9,520/- and 12 installments of Rs.7323/- each as per schedule to agreement].  No request of complainant for settlement of loan account was received but the OP had issued demand notice, which was not complied with.

1.3  The present complainant has also filed another complaint no.277/dt. 03.08.2016 [which is prior to this complaint no.367/dt.17.10.2016] but as a Insured against Insurer/Shri Ram General Insurance Company Ltd., its record is also available. It is also scheduled for Final order today. However, there cannot be common final orders for both the cases because of filing of separate complaints as well as features involved. However, the relevant record of that file will be appropriately referred, since the final outcome of both the cases will have bearing to each other.

2.1. (Case of complainant) – Complainant is registered owner of vehicle bearing registration no. DL-2W-4092 (TATA Magic).  In the month of August, 2015, the complainant contacted OP since he  required money, for finance of said vehicle. He had all documents with him which were valid for taking loan. The said vehicle was already insured with United India Insurance Co. Ltd. for period from 25.06.2015 to 24.06.2016.

            However, the OP had agreed to provide loan in respect of said vehicle but subject to the condition that complainant will buy fresh/new insurance policy from the OP as well as an amount of Rs. 10,000/- in cash as advance installment and Rs. 7,200/- towards file & documentation charges, etc. Since, the complainant was in need of the amount, he agreed to those conditions of OP.

2.2. Thence, the OP issued policy no. 10003/31/16/262276 for period from 25.08.2015 to 24.08.2016 against premium of Rs.18,449/-. The OP gave loan of Rs. 1,50,000/- but transferred a sum of Rs. 1,30,903/- on 27.08.2015 in the bank account of complainant. The OP also obtained complainant's signatures on some blank papers, loan agreement, forms, cheques, etc.

            On 14.10.2015 the complainant deposited a installment of Rs. 10,467/- vide cheque no. 052032 drawn on Delhi State Cooperative Bank Limited, it was apart from payment of Rs. 17,200/- in cash, before receiving the loan amount.

2.3. The complainant has been requesting the OP to settle the matter, as complainant has always been willing to settle it as OP was charging high rate of interest but it was avoided by OP on the one pretext or the other.

2.4. However,  in between 17.05.2016  at 7:00am to 18.5.2016 at 8:00 am, the vehicle was stolen, an FIR No. 014678 dated 18.05.2016 was registered u/s 379 IPC on the same day. The complainant has every apprehension that the vehicle is taken (i.e. re-possessed) by OP, without permission of complainant or police of concerned police station, (since complainant has not paid installments).

2.5.  The complainant has been visiting regularly to the office of OP but OP failed to pass the claim in favour of complainant. The complainant also wrote letter dated 09.06.2016 and reminder dated 10.06.2016 by speed post while requesting the OP to settle the matter in full and final, however, the OP is demanding Rs. 1,60,000/- for settlement. It is an huge amount and heavy interest, the complainant is unable to pay that amount.

            Moreover, OP is in collusion with the Insurance Company, they are regularly harassing and humiliating the complainant without any rhyme and reason, they tried to usurp the insurance amount of complainant. The OP had also issued legal notice dated 15.07.2016 through counsel and complainant was asked to pay Rs. 50,542/-, which was replied by the complainant to withdraw the legal notice and OP was asked to issue NOC, Form-35, No Due/full and final settlement letter, etc, then only complainant will ready and willing to pay amount of Rs. 50,542/- to OP. The OP claims Rs. 1,60,000/- for full and final settlement but without disclosing any documentary record of such demands, which is illegal and against the principle of natural justice. Since, the vehicle has been stolen, therefore, OP is not entitled to recover any interest from the complainant.

2.6. The acts of OP are illegal, unjust, arbitrary as well as there is deficiency of services, the complainant also suffered lot of mental agony, harassment, etc. for which OP is liable to pay compensation of Rs.1 lakh. That is why the complaint.

2.7 The complaint is accompanied with copy of insurance policy issued by United India Insurance Co. Ltd., copy of certificate cum policy issued by Shri Ram General Insurance Co., copy of cheque dated 14.10.2015 of Rs. 10,468/- of first installment paid, copy of FIR no. 014678 dated 18.05.2016, copy of letter dated 09.06.2010, further super imposed with words Reminder-1 dated 10.06.2016, copy of OP's legal notice dated 15.07.2016 and copy of complainant’s reply dated 06.08.2016 to legal notice.

3.1 (Case of OP)- The complainant opposed the complaint that neither there is any deficiency of service, nor any cause of action in favour of complainant nor OP is liable for any amount or claim towards the complainant. The OP is lender and complainant is borrower against hypothecation of the vehicle. OP is not Insurer of the vehicle as alleged by the complainant.

            Moreover, the complainant failed to repay the installment of loan amount. There was repayment of  just a single installment of Rs.10,467/- out of total 22 installments, remaining 21 installments [i.e. 13 installments of Rs.9,520/- and 12 installments of Rs.7323/- each] as still due.  No request of complainant for settlement of loan account was received. The OP had issued demand notice, which was not complied.

3.2 It is settled law that when there is breach of loan cum hypothecation agreement between the parties by non-payment of installments, the complainant is not entitled to approach any Forum (reliance is placed on Chellappan Vs Kerala Financial Corporation, 2003 (2) CPC 265; (2003) 1CPR 32; 2002(3). The complainant after executing loan cum hypothecation agreement dated 27.08.2015, he agreed to pay installment every month but he defaulted in making the payments on due dates intentionally and willfully. He had paid only a single installment.

3.3 The complainant has suppressed material information and complaint was filed out of ulterior motives to blackmail the OP. The subject vehicle was insured with United India Insurance Co. Ltd. for period of 25.06.2015  to 24.06.2016, for which policy no. 2215003115P103461412 was issued against premium of Rs. 18,464/- which was tendered by the complainant vide cheque no. 09447 dated 24.06.2015, however, the cheque was returned unpaid with remarks 'funds insufficient' and because of want of realization of cheque, the policy was cancelled automatically from its inception; United India Insurance Company also issue letter dated 10.07.2015 to this effect to complainant, which is very well in the knowledge of complainant.

3.4 It is matter of record that loan was of Rs. 1,50,000/- and  there was transfer of Rs.1,30,903/-, since insurance premium to the insurance company, documents charges were deducted and remaining amount were transferred in  account of complainant.   The loan cum hypothecation agreement, was entered between the parties after having satisfied with the terms and conditions. The loan was repayable in 22 installments along with finance interest of Rs. 34,023/-, the agreement value was Rs. 1,84,023/- but till date the complainant paid a single installment of Rs. 10,467/-. Since, he had not paid the installment on due dates, he is liable for delayed payment interest (DPI) to OP.  The vehicle has been stolen, therefore, OP is entitled for insurance claim amount as vehicle is under hypothecation as well as complainant failed to pay the outstanding amount. Since, the complainant had not paid the installments as per schedule of payment, how he can claim relief of NOC from the OP without repayment of entire loan with other charges. The complainant is trying to take advantage of his own wrongs, such complaint is liable to be dismissed being  frivolous and vexatious within the meaning of section 26 of the Act 1986.

3.5  The vehicle was to be under hypothecation, in order to secure the risks of theft or accident or otherwise, the insurance of said vehicle was required and the complainant was asked to get the vehicle insured from any insurance company. It was got insured by complainant from Insurer/Shri Ram General Insurance Company Limited.

3.6   There was no blank papers got signed or signatures were not obtained on any blank paper, loan agreement, forms, cheques, etc. It is also baseless on the part of complainant that high rate of interest was charged or OP avoided the settlement or it was proposed by the complainant; letter dated 09.06.2016 or reminder dated 10.06.2016 were also denied by the OP. The OP also refutes allegations that the vehicle was taken or repossessed by it, being baseless and bald allegations.

 3.7.  Neither the complainant approached OP for any kind of settlement on any point of time nor there was any occasion to demand Rs. 1,60,000/-. However, the OP had written legal notice dated 15.07.2016 calling the complainant to pay due amount of Rs. 50,542/-, but the counter plea of complainant in reply was not tenable to issue him NOC. without payment of due amount.  While denying the other allegations of complaint, the OP requests for dismissal of complaint. The reply is accompanied with statement of loan account and copy of letter dated 10.07.2015 issued by United India Insurance Company for cancellation of policy.

4. (Replication) –The complainant filed detailed replication, it is in narrative to deny each and every allegation of reply of OP as well as to reaffirm the complaint as correct. The complainant requests that the complaint is correct.

5.1 (Evidence)- Then case came for evidence. Complainant led his evidence by filing detailed affidavit of evidence with the support of documents filed with the complaint, it is replica of complaint.

5.2 The OP also led its evidence by filing detailed affidavit of its attorney Shri Ravindra Tomar, AR of OP and it is on the ditto lines of reply to complaint, coupled with documents.

6. (Final hearing)- The complainant filed its written arguments followed by oral submission by complainant's  father with authority of complainant.  The OP had filed written arguments but OP failed to make oral submissions. Since the written arguments are replica of pleadings & evidence, it does not need to reproduce them as cases of parties are already detailed hereinabove.

7.1 (Findings)- The rival contentions of parties are considered and assessed keeping in view evidence on record, besides the record of other case [CC no.227/2016]. There are admixture facts, some of them are admitted facts and other are disputed facts.   The admitted facts are that the complainant took the loan from the opposite party, the loan amount was Rs. 1,50,000/- and it was against hypothecation of the vehicle to ensure repayment of the loan amount. The complainant had paid a single installment of Rs. 10,467/- out of total 22 installments.

7.2. The other disputed facts are being taken one by one. A disputed fact is in respect of status of the OP, since the complainant is putting two types of averments that he availed the loan from the OP as well as he also get insured the vehicle from OP. Whereas, the plea of OP is that it is lender/financer and it is not Insurer.

            The answer to this plea lies in the record  itself (para-7 of reply of OP as well as paragraph-3 of other complaint no.277/16) that the complainant got his vehicle Insured from Shri Ram General Insurance Co. Ltd. vide policy no. 10003/31/16/262276 for period from 25.08.2015 to 24.08.2016. Thus, it stand establish that OP is not Insurer of the vehicle but other insurance company (Shri Ram General Insurance Co. Ltd.), a separate entity from OP (Shri Ram Finance Co. Ltd.).

7.3.  The complainant has also apprehension that the vehicle was repossessed by the OP, which is also vehemently opposed by OP.

             However, such perception or apprehension of complainant is also misplaced as in the other complaint [CC. No. 277/2016], the complainant has proved untraced police report in respect of FIR of theft of vehicle, it was lodged by the complainant. The untraced report means the vehicle and/or culprit remained untraced despite investigation. Accordingly, this contention is also disposed off against complainant.

7.4.   There is  also dispute about execution of blank papers, loan agreement, cheques, forms, etc. The OP denies these allegations of complainant. Since the documentary record has been filed by the parties, it answers and dispel this dispute.

            The OP has proved loan-cum-hypothecation agreement, which is duly signed by  the complainant,  his guarantor and OP with its seal. This agreement is appended with Forms/Schedule-I, Schedule-II and Schedule-III, which  also details  number of monthly installments with corresponding amounts (already detailed). Neither the loan agreement nor the Forms/Schedules are blank, all of them are duly filled in, signed and sealed. Therefore, the circumstances are not establishing plea of complainant that the loan agreements and forms got signed blank.

            The complainant has proved photocopy of cheque of Rs. 10,467/- of payment of first installment given to OP, which is an admitted fact by the OP. However, cheques always pertain to account holder and  bank account of drawer, the complainant would be drawer of the cheque(s). But the complainant has not furnished any detail like total signed blank cheques,  serial number bearing on cheques, name of bank drawn on etc. Therefore, these circumstances are also not leaning towards the complainant that blank cheques were got signed from the complainant.

7.5.    The parties have juxtaposition reservations about letter dated 09.06.2016 of settlement of loan account or its reminder dated 10.06.2016.

            On the face of letter dated 09.06.2016 or being endorsed as reminder dated 10.06.2016 were sent by speed post but there is no postal receipt of speed post proved or the other mode of service of those letters. On the other side, the OP had sent legal notice dated 15.07.2016, when complainant was asked to pay arrear of Rs.50,542/- for which conditional reply dated 06.08.2016 was given by the complainant.  However, this reply dated 06.08.2016 does not give any reference of letter dated 09.06.2016 or reminder of 10.06.2016. It is also not explained if the letter dated 09.06.2016 was sent by post, then what was need of sending immediate reminder on very day on 10.06.2016?

7.6.  The legal notice dated 15.07.2016 is not disputed as it is replied by the complainant and when this legal notice was sent, there were arrears of Rs. 50,542/. Moreover, it is also admitted case of the parties that the complainant paid single installment of Rs. 10,467/-. The complainant put a condition precedent in reply dated 06.08.2016 to issue NOC and then that amount of arrears will be paid by him.

However, NOC or no due certificate could be issued by OP only when all outstanding amount is repaid, or when there is no dues on the part of complainant. It would also be wrong that OP issues NOC without receipt of amount vis a vis if NOC/no dues certificate is issued, then what would be left to be arrears or how OP could say arrears are existing? Further, there was repayment of single installment of Rs10,467/- by complainant out of total 22 installments, remaining 21 installments [i.e. 13 installments of Rs.9,520/- and 12 installments of Rs.7323/- each] were not paid by him vis a vis there is total theft loss of vehicle.

7.7.1 By taking into account stock of all material, it is apparent that complainant failed to pay the outstanding amount of loan in respect of hypothecated vehicle, which met with fate of theft loss. The complainant has raised objections that he is not liable to pay interest, since there was theft of the vehicle and liability to pay interest ceases from the date of theft loss. It needs to refer the loan agreement.

7.7.2 As per clause no.39 of loan cum hypothecation agreement executed by the parties, it covenants that in the eventuality of loss or damage is caused to the hypothecated vehicle, including theft, it will be at the cost, risks and consequences of borrower/complainant. Similarly, as per clause no.38 (c)  thereof, in case insurance amount is received from the insurance company in respect of loss or damaged to hypothecated vehicle, the same will be at the utilization and disposal of OP.  

7.8. In view of the aforementioned detailed discussion the following conclusion are drawn-

(i)  there is no loan cum hypothecation agreement which was got signed blank from the complainant nor any such form or cheques nor the same were proved by the complainant,

(ii) the complainant could not establish as to how or under what law, he deserves return of such loan agreement or forms from borrower,

(iii)  there is no agreement that payment of interest would ceases from the date of theft, since loan-cum-hypothecation agreement is between the Borrower/complainant and Lender/OP, which independent to other insurance contract between the Insured and the Insurer [complainant & OP in other complainant case no.277/16]. In addition, clause no. 39 of the loan agreement does not give leverage to the borrower/complainant from payment of interest even in theft loss.

(iv) loan account could not be closed without payment of loan amount by the borrower, the entire loan amount is not repaid by complainant,

(iv) the circumstances like non-payment of installment by complainant could not be construed deficiency on the part of OP, therefore, no case of physical harassment, mental agony and humiliation or payment of any amount  as damages is made out against OP.

7.9.1  It is undisputed and  also proved fact that OP/Shri Ram Transport Finance Company Ltd is lender/financer of vehicle and the vehicle is under its hypothecation.  The OP/Financer has also first right to receive the  admissible amount against hypothecated vehicle. Further as per clause no.38 (c) of loan cum hypothecation agreement, in case insured amount is received from the insurance company in respect of loss or damaged to hypothecated vehicle, the Financer/OP is entitled for the secured amount to the extent of outstanding amount.

7.9.2 It is appropriate at this stage to refer the material and findings in other complaint [CC no.277/2016], which is also schedule today. In paragraph 6.5.1 of  that complaint no.277/2016, it is held that the complaint no. 277/2016 is allowed in favour of insured-Complaint (Mohit Kumar Suryawanshi) and against the Insurer (Shri Ram  General Insurance Company Ltd.) to pay Rs.2,77,500/- along-with interest  at the rate of 7% pa from the date of complaint till realisation of amount, damages/compensation of Rs.20,000/- apart from costs of Rs. 5,000/-.  

7.9.3  Since OP is entitled to received the admissible outstanding loan amount against hypothecated vehicle, therefore, OP/Financer is required to furnish details of balance outstanding amount and other requisite documents. Accordingly it is directed to OP to furnish such details and documents, either directly to Shri Ram  General Insurance Company Ltd. [who is Insurer of vehicle in other complaint cc no.277/2016) or to the Complainant (for handing it over to Insurer) ; since it will enable the Insurer to release that admissible outstanding amount directly to OP/lender/Financer (herein), since vehicle was hypothecated to the OP herein. It will strike balance for both sides since insured vehicle was under hypothecation with OP as well as the complainant need not to arrange amount separately to pay due amount.

 7.9.4. Therefore, OP is directed to furnish details of balance outstanding amount in writing and other requisite documents either directly to Insurer/Shri Ram  General Insurance Company Ltd. or to the complainant under acknowledgement, so that Insurer will release amount to OP/Financer to the extent of admissible outstanding payable by the complainant, which OP deserves to receive its outstanding amount on loan account of complainant. The complainant will also cooperate OP appropriately to materialize the directions.

OP is also directed to comply the order at the earliest or within 30 days  from the date of receipt of  this order. In case OP directly handsover the detail and record to Insurer but not to complainant, then simultaneously, the complainant will be informed in writing by OP that record is directly provided to Insurer.  In case, OP refuses to the provide such record, then Insurer will remain at liberty to release the amount to complainant.

7.9.5. Now, it needs to go to other complainant. These direction are also incorporated therein appropriately.

7.9.6 Thence, on receipt of entire outstanding amount from Insurer in respect of loan  account of vehicle of complainant, then OP will issue no due certificate or other appropriate certificate/document to complainant forthwith and without delay and loan account will be closed. Failing, which the complainant may enforced the order u/s 27 of the Consumer Protection Act, 1986.

8.  Accordingly, the complaint is disposed off in above terms . No order as to costs.

9.  It is manifest that final order in this complainant and in other complaint case are being written side by side in order to harmonize the circumstances and to appreciate case of parties vis a vis both the orders could not be canvassed at one place.

10.Announced on this 11th Sept.  2023 [भाद्र 20, साका 1945].  

11.Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for compliances.  

[Vyas Muni Rai]                                 [Shahina]                                 [Inder Jeet Singh]

              Member                                Member (Female)                              President