Tamil Nadu

StateCommission

CC/26/2013

K K PLOYCOLOR INDIA LTD., MANAGING DIRECTOR - Complainant(s)

Versus

SHRIRAM CITY UNION FINANCE LTD., EXECUTIVE DIRECTOR - Opp.Party(s)

SENTHIL SELVAN

16 Aug 2022

ORDER

 IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

BEFORE      Hon’ble Thiru Justice R. SUBBIAH          PRESIDENT

                             Thiru R.VENKATESAPERUMAL                          MEMBER

 

CC.NO.26/2013

 DATED THIS THE 16^th DAY OF AUGUST 2022

M/s. K K Polycolor India Ltd

(Rep. by its Managing Director

       Krishna Kumar Kankani)

KK Manor, F-6 Ambattur Industrial Estate

Ambattur, Chennai – 600 058                                               ....Complainant

 

                                                  Vs 

 

M/s. Shriram City Union Finance Ltd.,

(Rep. by T.Vijayaraghavan, Executive Director)

221, Royapettah High Road

Mylapore, Chennai – 600 004                                              ....Opposite party

 

Counsel for complainant                               :   M/s  Senthamil Selvan

Counsel for opposite party                           :   M/s. Uma Shankar

 

         This complaint coming before us for hearing finally on 23.6.2022 and on hearing the arguments of counsel appearing for complainant and upon perusing the material records this Commission made the following order:

ORDER

Justice R. SUBBIAH,  PRESIDENT    

1.       This complaint has been filed under Sec.17 of the Consumer Protection Act, 1986, as against the opposite party for the following reliefs:

  i.        Pay a compensation of Rs.50,00,000/- for the business loss, mental agony etc.,

  ii.     Pay interest @ 18% p.a.,

 

2.            The case of the complainant in brief is as follows:

          The opposite party had sanctioned “Enterprise Finance Loan” of Rs.30 lakhs to the complainant vide its sanction letter 28.2.2011.  The opposite party took a sum of Rs.30000/- for processing charges for loan.  The tenure for repayment is for 24 months and Equated Monthly instalment is Rs.164666/-.   The opposite party has paid the loan amount of Rs.2,97,0000/-vide cheque No.073555 dt.28.2.2011 drawn on HDFC Bank, Teynampet, after deducting the processing fees.   The opposite party had provided the repayment schedule giving 24 equated monthly instalment to start on 28.3.2011 and 24^th EMI due to end on 28.2.2013.  The opposite party had collected 24 cheques from the complainant for the EMI payments and also one cheque as security cheque @ Rs.39,51,984/-.    The complainant had been making payment from 28.3.2011.  After realising the payment of Rs.164666/- towards EMI, by using the complainant’s cheque  No.157710 on 18.2.2012, all of a sudden for no reason the opposite party had chosen to deposit the aforesaid security cheque of Rs.3951984/- on 20.2.2012 and subsequently the opposite party had transferred back a sum of Rs.18,20,459/- to the complainant’s account, after adjusting the entire loan amount.  Thus the opposite party had pre-closed the complainant’s loan, without any notice or intimation to the complainant.  The opposite party’s highhanded act of pre-closing the complainant’s loan account is nothing but arbitrary.  Infact in the month of February 2012, the complainant had to pay Rs.28.15 lakhs to the Salestax Department as the salestax due amount and the said amount was reserved for the department.  Since the opposite party had taken away the amount without the knowledge of the complainant, they were not in a position to pay the amount due to the salestax department.  Thus alleging negligence on the part of the opposite party, the present complaint is filed.   

 

3.       The opposite party filed their version stating as follows:

          The complainant in order to settle the amount due to the opposite party, under the loan transaction in full quit, requested the opposite party over phone to present the security cheque given to the opposite party and to realise the amount due to it and refund the excess amount to the complainant with “No due certificate”.  Acceding to the request of the complainant, the opposite party had presented the security cheque on 20.2.2012, and issued a letter dt.22.2.2012, to the complainant, intimating the encashment of the security cheque at his request and the settlement of the amount due to it.  The opposite party has not collected even a penny in excess of the amount due to it.  Hence the act of the opposite party in en-cashing the security cheque and realising the amount due to it under the instruction of the complainant would not amount to deficiency in service and the complainant is not entitled to maintain this complaint on that score.  Further the complainant had not raised any objection for the pre-closure of the loan immediately, but he raised the objection only after 10 months of his request.  Having enjoyed the amount reimbursed by the opposite party, the complainant is now raising the objection.  Even assuming that the opposite party had presented the security cheque as alleged by the complainant,  he is entitled to only for damages that too can be claimed by way of a suit before civil court.   The averments with regard to the liability towards sales tax is frivolous and made only with an intention to invoke sympathy of this commission.  It is pertinent to note that the sales tax department has initiated the proceeding for the recovery of sales tax in arrears way back in 2009.  The proceedings of the Assistant Commissioner, Ambattur Assessment Circle dt.27.3.2012 would run to show that the complainant is liable to pay the sales tax arrears to the tune of Rs.10175990/- from 2009.  Furthermore there is no whisper about the demand and the alleged payment to be made to the sales tax department in the notice issued by the complainant.  The above facts would prove that the complaint is frivolous and concocted, and thus they sought for dismissal of the complaint.

 

4.       In support of their contentions, proof affidavits are filed by both parties alongwith documents, which are marked as Ex.A1 to A9 on the side of the opposite party, and Ex.B1 and B2 on the side of the opposite party.  Written arguments filed by the complainant. Though sufficient time and opportunities were granted, neither opposite party nor their counsel appeared before this commission to advance their argument.  Therefore we have heard the learned counsel for complainant, perused the version and documents and passed the following order.

 

 5.      It is an admitted case of the complainant that he has borrowed loan to the tune of Rs.30 lakhs towards Enterprise Finance, on 28.2.2011.  Out of that a sum of Rs.30000/- had been deducted by the opposite party towards processing fee, and the said amount has to be repaid by way of 24 equated monthly instalments.  Hence the complainant has handed over 24 blank cheques to the opposite party, each for Rs. 164666/-.  That apart he has also handed over one security cheque for a sum of Rs.39,51,984/-.  The complainant had been making EMI payments regularly.  After realising the payment of Rs.164666/- towards EMI vide cheque No.157710 dt.18.2.2012, all of a sudden the opposite party had chosen to deposit the security cheque for a sum of Rs.39,51,984/- on 20.2.2012, and thereafter the opposite party had transferred back a sum of Rs.18,20,459/- to the complainant’s bank account, after adjusting the entire loan amount.  Thus the opposite party had pre-closed the loan account without any notice.

 

6.       Per contra, the learned counsel for the opposite party would contend that they have presented the cheque only on the instruction given by the complainant over phone.  Further according to them they have not collected any amount after realising the amount due, and the balance amount was deposited in their account.  Therefore, there is no deficiency in service on their part.  Even assuming that the opposite party had presented the cheque as alleged by the complainant, they are only entitled for damages, for which the complainant has to work out his remedy before the civil court.  The contention of the complainant that they were not in a position to pay the salestax arrears since the opposite party had withdrawn the money from his account is only to create sympathy of this commission.  Thus prayed for dismissal of the complaint.

 

7.       Though very many contentions have been raised, the only question that has to be decided in this case is whether there is deficiency in service on the part of the opposite party?

 

8.       The main contention of the opposite party is that only based on the oral instruction of the complainant over phone, they had deposited the security cheque, which defence is vehemently denied by the complainant. 

          In this connection, it is pertinent to note here that though the opposite party had strongly denied the allegation of the complainant that they have not given any instruction for presenting the security cheque, but they have not come forward with any document or proof to prove that they had deposited the security cheque only based on the instruction of the complainant.  It is also not the case of the opposite party that the complainant company had defaulted in their payment of EMI.  Further, in this connection the opposite party had not cited any terms and conditions to establish that their act of depositing the security cheque is a bonafide one. The opposite party had also not produced any valid document  to show that they have given intimation to the complainant in writing before presenting the cheque based on the request of the complainant over phone.  Therefore, we are of the considered opinion that their act of depositing the security cheque was not made on the basis of the instruction given by the complainant.  Thus we hold that the allegation of deficiency in service on the part of the opposite party goes unrebutted.   Therefore, we have no other option except to come to the conclusion that the conduct of the opposite party in presenting the cheque certainly would amounts to deficiency of service. 

9.       When the point is answered in affirmative, the quantum of compensation to be awarded to the complainant is to be decided.

          In this connection, the learned counsel for the complainant would submit that because of the presentation of the security cheque, the complainant was not in a position to honour their commitment of making payment @Rs.28.15 lakhs to the Sales Tax department, within the due date, since the above said amount was reserved for making payment to the sales tax department.  Because of their non-payment, the department had created a charge on company’s immovable property therefore it has caused huge financial loss and mental tension to the complainant.  In order to prove the same, they have produced the intimation of creation of charge by the Sales Tax Department as per Ex.A7.   Therefore, we are of the considered opinion that the complainant is entitled for compensation for mental agony and stress.  In this connection it is also to be noted here that the complainant had not proved the presentation of the security cheque by the opposite party is the only cause for non-payment of the salestax dues in time.  Accordingly, considering all these factual aspects of the case, we are of the considered opinion that awarding a sum of Rs.50000/- towards compensation, alongwith cost of Rs.5000/- would meet the ends of justice. 

 

10.     In the result, the complaint is allowed in part by directing the opposite party to pay a sum of Rs.50000/- towards compensation, alongwith cost of Rs.5000/-.  Time for compliance two months, from the date of receipt of the copy of the order, failing which the above amount shall carry interest @9% p.a., from the date of default, till realisation. 

  

            R VENKATESAPERUMAL                                                          R SUBBIAH     

                    MEMBER                                                                                 PRESIDENT

Exhibits filed on the side of complainant

A1      28.02.2011    Loan sanction letter

A2             “           Repayment schedule

A3            “            Extract of Minutes of the Meeting

A4            “            Consent letter given by board of directors

A5      25.02.2012    No due Certificate issued by OP

A6      29.02.2012    State of Account by OP

A7      27.03.2012    Sales Tax Department intimation

A8      17.10.2012    Authorization letter by other board of directors

A9      03.10.2012    Legal Notice by complainant with acknowledgement

 

 

Exhibits filed on the side of 1^st Opposite party

B1      22.02.2012    Letter by OP

B2      08.10.2012    Reply by OP

 

 

 

 

 

  R. VENKATESAPERUMAL                                                                 R SUBBIAH     

           MEMBER                                                                                        PRESIDENT

 

INDEX : YES / NO

Rsh/d/rsj/ Open court