Order by:
Sh.Amrinder Singh Sidhu, President
1. The complainant has filed the instant complaint under section 12 of the Consumer Protection Act, 1986 (now section 35 of Consumer Protection Act, 2019) on the allegations that Opposite Party No.1 is a Finance Company and doing the business for lending/ finance throughout India through its different branches out of which one is situated at G.T.Road, Moga, so the service of Opposite Parties can be affected through its Managing Director or Branch Manager/ Manager or Authorized Signatory of Opposite Party No. 2. Further alleges that the agents of the Opposite Parties approached the complainants and allured to obtain the loan against property at a very nominal rate of interest and without any hidden or incidental charges and on the allurement and believing the agents of the Opposite Parties, the complainant agreed and Opposite Parties obtained the signatures of the complainants on blank documents without explaining the terms and conditions, which are mentioned in the alleged documents and taken the blank signed cheques out of the account maintained by the complainant with Punjab & Sind Bank situated at TNH, Moga and thereafter, the Opposite Parties released the amount of Rs.5 lacs to the complainants on 28.9.2015 which was payable in 60 equal monthly installments against the equitable mortgage property standing in the name of complainant No.2; that as per the RBI guidelines and regulations, the Opposite Parties are bound to provide the fair services to the complainants and as such the complainants are the consumers of the Opposite Parties as per the provisions of Consumer Protection Act, 1986; that the complainants are regularly paying the installments of the loan to Opposite Parties through its bank account and in this way, paid 27 monthly installments till today. Further alleges that the complainants are surprised to receive a notice dated 20.8.2018 in which the Opposite Parties raised a demand of Rs.5,52,256/- from the complainant against the loan account without any explanation which are illegal and arbitrary for which the Opposite Parties have no right to demand such illegal amount. Moreover, the Opposite Parties expressed their intention to refer the matter to Sole Arbitrator without the consent of the complainants on the basis of the blank signed and alleged agreement, because the Opposite Parties want to appoint the one sided arbitrator in the matter without the consent of the complainants. That it is well settled law and various pronouncement of Apex Court that the copy of terms and conditions of agreement shall be provided to the loanee, but in the present loan, the Opposite Parties never issued any terms and conditions of the agreement nor supplied the alleged agreement to the complainant. As such, the terms and conditions, of the alleged agreement are not binding upon the complainants. However, the complainants are still ready to pay the legal and genuine demand of the Opposite Parties; that the Opposite Parties are bent upon and threatening to misuse the blank signed cheques which are already in their possession for which they have no right or title to do so. That the complainant approached the Opposite Parties time and again to charge the legal and genuine demand of the amount against the loan account, but the Opposite Parties flatly refused to admit the rightful claim of the complainant. In view of this, there is deficiency in service on the part of the Opposite Parties and the Complainant has suffered mental tension, harassment as well as financial loss. Vide instant complaint, the complainant has sought the following reliefs.
- The Opposite Parties may be directed to settle the loan account by receiving the remaining amount as agreed at the time of granting the loan and for issuance of directions to Opposite Parties not to demand the illegal/ hidden charges forcibly, arbitrarily and without due course of law and further for issuance of directions to the Opposite Parties not to refer the matter to the Arbitrator without the consent in writing from the complainants and further for issuance of directions to Opposite Parties not to misuse the blank signed security cheques taken at the time of granting the loan.
- The amount of Rs.2,00,000/- be allowed to be paid by the opposite parties on account of compensation due to mental tension and harassment caused by the complainant.
- The cost of complaint amounting to Rs.20,000/- may please be allowed.
- And any other relief to which this Hon’ble Consumer Forum, Moga may deem fit be granted in the interest of justice and equity.
2. Upon notice, Opposite Parties appeared through counsel and contested the complaint by filing written reply taking certain preliminary objections therein inter alia that the complaint is not maintainable; that the Complainants have filed the present complaint after receiving the demand notice from the Opposite Parties of paying the remaining amount alongwith the charges for default of payment by the complainants. Moreover, the arbitration case is pending against the complainants, so the complainants can not claim any relief from this District Consumer Commission; that the complainants have no right to file the instant complaint before this District Consumer Commission as the complainants have agreed in the agreement between the complainants and Opposite Parties that “all disputes differences and/ or claims, arising out of the agreement, whether during its subsistence of thereafter, shall be settled by arbitration and Conciliation Act, 1956” duly mentioned in clause 17 of the agreement. In fact, the Opposite Parties have extended the finance facility of Rs.5 lakhs to complainant No.1 for the development of business and he availed and used the said amount for his business purposes. The complainants have not mentioned in the complaint that all the terms and conditions of the agreement between the parties were read over and explained to the complainants in the language they understand and after that the complainant No.1 signed and the complainant No.2 thumb marked the agreement of loan. Moreover, the charges regarding which the complainants have based the entire complaint are specifically mentioned in the agreement and explained to the complainants with minute details and thereafter, they signed and thumb marked the agreement. But instead of paying the instalments, charges and interest to the Opposite Parties, the complainants have filed the present complaint to bypass their liability towards the Opposite Parties. On merits, the Opposite Parties took up almost the same and similar pleas as taken up by them in the preliminary objections. It is submitted that the Opposite Parties have released the amount of Rs.5 lakhs to the complainants for business purposes on 28.09.2015 to be payable in 60 equal monthly instalments against the equitable mortgage property standing in the name of complainant No.2 and it is correct that the complainants have received the demand notice of Rs.5,52,256/- from the Opposite Parties. All other allegations’ made by the complainants in their complaint are totally wrong, false and frivolous and hence, it is prayed to dismiss the complaint being not maintainable.
3. In order to prove their case, complainants tendered into evidence their affidavit Ex.C1 alongwith copies of documents Ex.C2 to Ex.C5 and closed the evidence.
4. On the other hand, to rebut the evidence of the complainants, Opposite Parties tendered into evidence the affidavit of Sh.Nachhattar Singh, Legal Officer Ex.Ops1 and copies of documents Ex.OPs2 to Ex.OPs5 and closed their evidence.
5. We have heard the ld. counsel for the parties and have carefully gone through the evidence on record.
6. Ld.counsel for the complainant has reiterated the averments as narrated in the complaint and contended that the agents of the Opposite Parties approached the complainants and allured to obtain the loan against property at a very nominal rate of interest and without any hidden or incidental charges and on the allurement and believing the agents of the Opposite Parties, the complainant agreed and Opposite Parties obtained the signatures of the complainants on blank documents without explaining the terms and conditions, which are mentioned in the alleged documents and taken the blank signed cheques out of the account maintained by the complainant with Punjab & Sind Bank situated at TNH, Moga and thereafter, the Opposite Parties released the amount of Rs.5 lacs to the complainants on 28.9.2015 which was payable in 60 equal monthly installments against the equitable mortgage property standing in the name of complainant No.2; that as per the RBI guidelines and regulations, the Opposite Parties are bound to provide the fair services to the complainants and as such the complainants are the consumers of the Opposite Parties as per the provisions of Consumer Protection Act, 1986; that the complainants are regularly paying the installments of the loan to Opposite Parties through its bank account and in this way, paid 27 monthly installments till today. Further alleges that the complainants are surprised to receive a notice dated 20.8.2018 in which the Opposite Parties raised a demand of Rs.5,52,256/- from the complainant against the loan account without any explanation which are illegal and arbitrary for which the Opposite Parties have no right to demand such illegal amount. Moreover, the Opposite Parties expressed their intention to refer the matter to Sole Arbitrator without the consent of the complainants on the basis of the blank signed and alleged agreement, because the Opposite Parties want to appoint the one sided arbitrator in the matter without the consent of the complainants. Further contended that in the present loan, the Opposite Parties never issued any terms and conditions of the agreement nor supplied the alleged agreement to the complainant. As such, the terms and conditions, of the alleged agreement are not binding upon the complainants. However, the complainants are still ready to pay the legal and genuine demand of the Opposite Parties; that the Opposite Parties are bent upon and threatening to misuse the blank signed cheques which are already in their possession for which they have no right or title to do so. That the complainant approached the Opposite Parties time and again to charge the legal and genuine demand of the amount against the loan account, but the Opposite Parties flatly refused to admit the rightful claim of the complainant and hence there is deficiency in service on the part of the Opposite Parties .
7. On the other hand, ld.counsel for Opposite Parties has repelled the aforesaid contention of the ld.counsel for the Complainant on the ground that the Complainants have filed the present complaint after receiving the demand notice from the Opposite Parties of paying the remaining amount alongwith the charges for default of payment by the complainants. Moreover, the arbitration case is pending against the complainants, so the complainants can not claim any relief from this District Consumer Commission; that the complainants have no right to file the instant complaint before this District Consumer Commission as the complainants have agreed in the agreement between the complainants and Opposite Parties that “all disputes differences and/ or claims, arising out of the agreement, whether during its subsistence of thereafter, shall be settled by arbitration and Conciliation Act, 1956” duly mentioned in clause 17 of the agreement. In fact, the Opposite Parties have extended the finance facility of Rs.5 lakhs to complainant No.1 for the development of business and he availed and used the said amount for his business purposes. The complainants have not mentioned in the complaint that all the terms and conditions of the agreement between the parties were read over and explained to the complainants in the language they understand and after that the complainant No.1 signed and the complainant No.2 thumb marked the agreement of loan. Moreover, the charges regarding which the complainants have based the entire complaint are specifically mentioned in the agreement and explained to the complainants with minute details and thereafter, they signed and thumb marked the agreement. But instead of paying the instalments, charges and interest to the Opposite Parties, the complainants have filed the present complaint to bypass their liability towards the Opposite Parties. It is further contended that the Opposite Parties have released the amount of Rs.5 lakhs to the complainants for business purposes on 28.09.2015 to be payable in 60 equal monthly instalments against the equitable mortgage property standing in the name of complainant No.2 and it is correct that the complainants have received the demand notice of Rs.5,52,256/- from the Opposite Parties, but the complainants have repay the entire loan amount, rather filed the instant complaint which is legally not maintainable.
8. It is not disputed that the complainant availed the loan worth Rs.5 lakhs from the Opposite Parties on 28.09.2015 to be payable in 60 equal monthly instalments ( i.e.Rs.14,794/- each instalment) and in this way, the complainants was to pay Rs.8,87,640/- in 60 months starting w.e.f. 10.11.2015 till 10.10.2020. It is not disputed that the complainants could pay only 27 instalments worth Rs.14,794/- amounting to Rs.3,99,438/- and the remaining amount which was to be paid comes to Rs.4,88,202/-. It is the case of the Opposite Parties that the Complainants have filed the present complaint after receiving the demand notice from the Opposite Parties of paying the remaining amount alongwith the charges for default of payment by the complainants. Moreover, the arbitration case is pending against the complainants, so the complainants can not claim any relief from this District Consumer Commission; that the complainants have no right to file the instant complaint before this District Consumer Commission as the complainants have agreed in the agreement between the complainants and Opposite Parties that “all disputes differences and/ or claims, arising out of the agreement, whether during its subsistence of thereafter, shall be settled by arbitration and Conciliation Act, 1956” duly mentioned in clause 17 of the agreement. In this regard, the Opposite Parties have placed on record the copy of claim petition filed before the Sole Arbitrator bearing Arbitration Case No.YKR/SCUF/267/2018 (Ex.OP3) vide which they have already filed claim petition under section 23 of the Arbitration & Conciliation Act, 1996 on 21.11.2018 and the present consumer Complaint has been filed by the complaints afterwards i.e. on 26.11.2018 on the receipt of notice from the arbitrator. Not only this, during the course of arguments, ld.counsel for the Opposite Parties also produced the copy of award 23.10.2019 passed by the ld.Arbitrator and also stated that the execution proceedings of the award have also been initiated by the Opposite Parties against the complainants.
9. Now the question is whether a consumer complaint can be decided by the District Consumer Commission after an arbitration award is passed. The simple answer t o this question is in negative. In this regard, Hon’ble National Commission Disputes Redressal Commission, New Delhi in case titled as Instalment Supply Ltd.Vs. Kangra Ex-Serviceman Transport, 1 (2007) CPJ 34 (NC) has held to the following effect:-
“1. The issue involved in this case is whether a complaint can be decided by the Consumer For a after an arbitration award is already passed. The simple answer to this question is ‘No’
Not only this, Hon’ble State Commission Disputes Redressal Commission, U.T.Chandigarh in Appeal No. 329 of 2018 in case titled as Tirlok Chand Vs. Bansal Credits Limited decided on 18.12.2018 also held to the following effect:-
“14. In our considered opinion, once arbitration award has been passed, the appellant/complainant could not knock the doors of the Consumer Fora. Had the arbitration award been set aside by the Competent Court, the matter would have been different and in that event, the complaint filed before the Forum could be said to be maintainable and proceeded with. The complainant failed to join the arbitration proceedings and exparte award was passed, which still stands as on today. The arbitration award is still not challenged by the appellant/complainant. The submission made in the grounds of appeal that the award passed during the pendency of consumer complaint was not binding on the Forum is devoid of merit in view of the settled law on the subject as referred to above. To challenge the arbitration award, the remedy available with the appellant/complainant is to approach the Civil Court having competent jurisdiction. Accordingly, we endorse the view held by the Forum and in our opinion, the appeals are liable to be dismissed out rightly.
Hon’ble Apex Court in case titled as Ethiopian Airlines Vs. Ganesh Narain Saboo, Civil Appeal No.7037 of 2004 decided on 9.8.2011 vide has held that the proceedings before the Consumer Fora are like that of a civil suit. Further reliance placed on case titled as Vishnu Sugar Mils Ltd. Vs. I.S.P. Trading Co., AIR 1984 Cal 246 and the relevant paragraph 7 of the same reads as under :-
“7. If we look at the point from a different angle, in our opinion, we would come to the same conclusion. After all, the principle of res judicata is meant to avoid conflict in decisions. We have repeatedly asked Mr. Das as to whether if we allow the present suit to proceed and if it ends in a decree in favour of the plaintiff, such a decree would not be inconsistent with the decree which the defendant had already obtained against the plaintiff. Mr. Das has failed to answer this question though, in our opinion, there could be no doubt about the fact that the answer would be in the affirmative. Since the answer would be in the affirmative this suit should no longer be allowed, to proceed with a possible risk of ending in an inconsistent decree.”
10. Keeping in view the supra judgements of Hon’ble Apex Court as well as Hon’ble National Commission, New Delhi and Hon’ble U.T.State Commission, Chandigarh, we are of the view that since the arbitrator has already adjudicated the matter in dispute under the Arbitration & Conciliation Act, 1996 (As amended upto date), the instant complaint is not maintainable before this District Consumer Commission and the same stands dismissed. However, the complaints are at liberty to challenge the said award passed by the arbitrator under section 34 of the Arbitration & Conciliation Act, 1996 (as amended upto date) before the District Judge, being the Principle Judge under the Arbitration & Conciliation Act, 1996, in accordance with law. Keeping in view the peculiar circumstances of the case, the parties are left to bear their own costs. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.
11. Reason for delay in deciding the complaint.
This complaint could not be decided within the prescribed period because the government has not appointed any of the Whole Time Members in this Commission for about 3 years i.e. w.e.f. 15.09.2018 till 27.08.2021 as well as due to pandemic of COVID-19.
Announced in Open Commission.
Dated: 07.12.2021.
