BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA<br /> <br /> PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President,<br /> 2. M.N.MANOHARA, B.A., LLB., Member,<br /> 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, <br /> <br /> ORDER<br /> <br /> Complaint No.MDF/C.C.No.76/2009<br /> Order dated this the 20th day of October 2009<br /> <br /> COMPLAINANT/S <br /> <br /> Sri.B.Basavaraju S/o Basavaiah, <br /> R/o B.D.O. Office Road, <br /> Near State Bank of India, <br /> Mandya.<br /> <br /> (By Sri.C.Siddaraju., Advocate)<br /> <br /> -Vs-<br /> <br /> OPPOSITE PARTY/S<br /> 1. Shriram City Union Finance Ltd.,<br /> No.286/48, 3rd Floor, <br /> Indira Towers, 11th Cross, <br /> Wilson Garden, Bangalore – 560 027.<br /> 2. Shriram City Finance Ltd., <br /> Opposite to Silver Jubilee Park, <br /> Opposite to Railway Station, <br /> 3rd Main Road, Mandya Rep. <br /> by its Branch Manager. <br /> (By Sri.H.S.Nagendra., Advocate)<br /> <br /> Date of complaint 26.06.2009<br /> Date of service of notice to<br /> Opposite parties 29.07.2009<br /> Date of order 20.10.2009<br /> Total Period 2 Months 21 Days<br /> Result The complaint is partly allowed, directing the Opposite parties to pay compensation of Rs.5,000/- with cost of Rs.500/- to the Complainant within six weeks.<br /> <br /> Sri.Siddegowda,<br /> President<br /> <br /> 1. This complaint is filed under section 12 of the Consumer Protection Act, 1986 against the Opposite parties claiming compensation of Rs.1,00,000/- alleging deficiency in service.<br /> 2. The case of the Complainant is that he had borrowed the loan from the Opposite party Finance Company during 2005 and the loan was repayable in equal monthly installments of Rs.2,167/- and he had issued cheques bearing No.153401 to 153408 drawn on Karnataka Bank Ltd., Mandya. The Complainant has made payments through cheque and also by way of cash. After discharge the loan, he has taken back the unpresented cheques and also the security cheque from the Opposite parties. Even though, the Complainant has cleared the entire loan, he received the demand notice dated 02.12.2008 from the Opposite parties and then contacted the 2nd Opposite party and apprised about the clearance of the loan. The 2nd Opposite party behaved harshly and directed the Complainant to pay the amount demanded in the notice or otherwise to face the legal consequences. Without properly verifying the records of the loan account of the Complainant, the Opposite parties filed the case before the Sole Arbitrator in Arbitration case No.2328/2008 and the Complainant was made to fight the case for none of his fault by engaging an advocate by paying Rs.5,000/- as his legal fee. The Complainant has filed detailed objections and contested the case. Thereafter, the Opposite parties realized the mistakes committed on their part and voluntarily withdrew the case filed by them. The Complainant was made to visit Bangalore for attending the hearings in Arbitration case on several occasions by spending huge amount and the reputation of the Complainant being a Contractor was affected on account of filing the false case. Further, though the brother of the Complainant namely Sri.Siddaraju is in no way connected to the loan transaction, the Opposite parties have also issued demand notice to his brother. The acts of the Opposite parties in unnecessarily dragging the Complainant to the litigation and causing demand notice to his brother has caused unbearable mental shock and agony. Therefore, the Opposite parties have committed deficiency of service. In spite of legal notice, Opposite parties have not complied. Hence, the present complaint.<br /> 3. The Opposite parties have filed version contending that the Complainant has not paid the loan properly in time, the cheque was dis-honoured on the ground of insufficient fund and staff of Opposite party used to visit and inform and thereafter he used to pay. In fact, notice was issued claiming the balance, if the Complainant had replied with proper documents about the clearance of the loan, the matter could have ended. Filing of the Arbitration case is not intentional, but by oversight. It is denied that the Complainant has paid Rs.5,000/- to engage the counsel and has spent more for visiting Bangalore. By mistake notice was issued to the brother of the Complainant, since he had also borrowed loan. The Complainant is not a Consumer. Therefore, the complaint is not maintainable. The agreement between the Complainant and the Opposite parties ended completely when the cheque amounts were paid. Mere filing of Arbitration will not create relationship of Consumer. The allegation of deficiency in service is false. Therefore, the complaint is liable to be dismissed with costs.<br /> 4. During trial, the Complainant has filed affidavit and produced the documents Ex.C.1 to C.10. On behalf of the Opposite parties affidavit of 2nd Opposite party is filed.<br /> 5. We have heard both the sides.<br /> 6. Now the points that arise for our considerations are:-<br /> 1. Whether the Complainant is a Consumer?<br /> 2. Whether the Opposite party has committed deficiency in service?<br /> 3. Whether the Complainant is entitled to the compensation?<br /> 7. Our findings and reasons are as here under:-<br /> 8. POINT NO.1:- The undisputed facts are that the Complainant had borrowed loan from the Opposite party Finance Company during 2005 with condition to repay the loan in monthly installments at the rate of Rs.2,167/- p.m. and issued cheques. It is also proved by Ex.C.5 & C.6 that the cheques issued by the Complainant were presented by the Opposite party on the respective dates though dis-honoured later, the Complainant has deposited the same in cash with penalty of Rs.200/-, Rs.250/- and Opposite party has issued the receipt voucher. Further, as per Ex.C.7 and C.8, the Complainant deposited the amount in cash and the cheques were returned to the Complainant without encashing them. <br /> 9. According to the contention of the Opposite party, after the payment of all the installments by the Complainant, the agreement between the Complainant and Opposite party ended and thereafter, there is no relationship between them and mere filing of a case before the Arbitrator does not create relationship and there is no question of providing any service, therefore, the Complainant is not a Consumer. This contention of the Opposite party cannot be sustained for the reason till the loan account of the Complainant is closed by the Opposite party, the Complainant continuous to be a customer and consumer of the Opposite party. Admittedly, Ex.C.1 is the notice issued by the Opposite party to the Complainant claiming balance amount of Rs.3,317/- and it is dated 02.12.2008. Further, for the same loan, the Opposite party has issued Ex.C.2 notice to the brother of the Complainant who is not a surety or joint borrower. Even though, the Complainant has paid the entire loan amount he can challenge the excess amount collected if any by filing a complaint, because he is a Consumer of the Opposite party. When according to the Opposite party, they filed the case before the Arbitrator stating that the Complainant is still due of some amount, it goes to say that the loan transaction between the Complainant and the Opposite party has not been terminated and hence, the Complainant continuous to be a Consumer of the Opposite party. Therefore, we answer the point no.1 against the Opposite party and in favour of the Complainant.<br /> 10. POINT NO.2:- According to the Complainant, though he has cleared the loan due and the Opposite party has returned the security cheque and also taken unpresented cheques, the Opposite party has issued a demand notice dated 02.12.2008 and when he approached the 2nd Opposite party and apprised about the clearance of the loan, the 2nd Opposite party behaved very harshly and directed to pay the amount demanded in the demand notice or other wise to face the legal consequences and thereafter, the Opposite party has filed case before the Sole Arbitrator in Arbitration Case No.2328/2008 and the Complainant was made to fight the case for none of his fault by engaging an advocate by paying Rs.5,000/- as his legal fee and he is spent for attending the case at Bangalore on several times and he was put to mental agony and further, the Opposite party has issued demand notice to the brother of the Complainant though he is no way concerned with the loan transaction. The Opposite party has admitted issue of demand notice Ex.C.1 and C.2 and the return of the cheques Ex.C.7 and C.8 and also another cheque Ex.C.9. This cheque is not filled up at all and bears the signature of the Complainant only and the seal of the Opposite party Company in the place “pay”. In fact, on the reverse of the cheque it is written as “security cheque”. So, it can be clearly accepted that the Opposite party had collected this empty cheque Ex.C.9 for security and has returned the same to the Complainant after the clearance of the loan. If the loan has not been cleared, there is no question of returning this empty cheque to the Complainant. The Opposite party has admitted that by mistake and oversight demand notice Ex.C.2 has been issued to the brother of the Complainant and he is not concerned with the loan transaction of the Complainant. According to the Opposite party, Opposite party has not committed deficiency in service and mere filing of Arbitration case will not constitute deficiency in service. It is further contended that if Complainant had furnished the documents after receipt of the notice to show the discharge of the loan as mentioned in the notice the Opposite party would not have filed a case before the Arbitrator. Of course, in Ex.C.1 the demand notice, the Opposite party has stated that “However, if you have made payments immediately prior to receiving this notice please furnish the proof of payment to avoid further action”. According to the Complainant, he met the 2nd Opposite party and apprised of the discharge of the loan, but 2nd Opposite party behaved harshly and directed to pay the amount demanded in the notice. The Complainant has produced the bank account extract Ex.C.10. The Opposite party has not at all produced the loan account of the Complainant at all to verify whether the payments made by the Complainant in cash and the amount released by presenting the cheques are shown in the loan account. Even, the Complainant was not furnished with the loan account extract. On what basis, the Opposite party issued demand notice claiming the balance is not forthcoming at all. As observed above, if there was still due in the loan account of the Complainant, the Opposite party would not have returned the empty cheque issued by the Complainant for the security of the loan. Admittedly two cheques were dis-honoured and the Complainant has paid the amount with penalty and two cheques amount were paid in cash on due date and Opposite party has returned the said cheques as per Ex.C.7 and C.8. In spite of all these without furnishing any account extract, the Opposite party has issued demand notice claiming amount and later filed the Arbitration case making the Complainant to spend the amount to engage the counsel and filed objections and Complainant was made to move Bangalore to attend the case and naturally he would be put to mental agony. Added to this, Opposite party had gone to the extent of issuing demand notice to the brother of the Complainant negligently, though according to the Opposite party, it is by oversight. Admittedly, the brother of the Complainant is not a surety or joint borrower of the loan. In spite of it, demand notice was issued to him. Naturally, the brother of the Complainant would take the Complainant to task for having received the notice and this cause mental tension to the Complainant. Further, admittedly the Opposite party has withdrawn the Arbitration case and Ex.C.3 is the copy of the order sheet. Perusal of this order sheet reveals that after the Complainant filed the documents in the Arbitration case on the same day, the Opposite party filed a memo stating that the account has been settled before filing the petition. Therefore, the petition was advanced and dismissed as withdrawn. It is not the case of the Opposite party that after production of the documents about the payment of loan by the Complainant, the Opposite party verified the same and later withdrawn the case. According to the Opposite party, the account has been settled before filing the petition. If that was the case what made the Opposite party to file the case against the Complainant before the Arbitrator is not at all forthcoming. Admittedly, the case was filed before the Arbitrator stating that the Complainant is due of some amount, though actually the account has been settled before filing the petition as per the admission of the Opposite party. Therefore, without any basis at its whims and femsy the Opposite party has filed case before the Arbitrator making the Complainant to spend the amount for engaging the counsel to attend the case at Bangalore putting him to mental tension apart from spending of the amount. Therefore, the Opposite party has committed deficiency in service.<br /> 11. The Complainant has sought for compensation of Rs.1,00,000/-. The Opposite party has contended that since the Complainant is not a Consumer and the Opposite party has not committed any deficiency in service, it is not liable to pay the compensation. In the decision reported in Bombay Brazzerie –Vs- Mulchand Agarwal 2003(1) CPJ (NC), it is held “Deficiency in service – Consumer factor – Consumer component – Consumer surplus – deficiency in service has two aspects – (1) claim for the amount of actual loss and (2) damages for inconvenience, harassment and mental tension – this second aspect is called Consumer factor or Consumer component or Consumer surplus”. So, in the present case, though the Complainant has not claimed any amount of actual loss i.e., excess collection of loan or interest, but the complainant has claimed compensation for inconvenience, harassment and mental tension. As observed under points no.1 & 2, the Complainant is a Consumer and the Opposite party has put the Complainant to inconvenience, harassment and mental tension by issuing demand notice to him and also his brother without any basis and further filed a case before the Arbitrator and later withdrawn the same stating that account has been closed prior to filing of the petition. Therefore, considering the circumstances of the case, it is just and proper to award compensation of Rs.5,000/- to the Complainant. <br /> 12. In the result, we proceed to pass the following order;<br /> ORDER<br /> The complaint is partly allowed, directing the Opposite parties to pay compensation of Rs.5,000/- with cost of Rs.500/- to the Complainant within six weeks.<br /> <br /> (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 20th day of October 2009).<br /> <br /> (PRESIDENT) (MEMBER) (MEMBER)