BEFORE THE  DIST. CONSUMERS DISPUTES REDRESSAL FORUM;  DHARWAD.

DATE:  29^th January 2016      

PRESENT:

1) Shri B.H.Shreeharsha       : President

2) Smt.M.Vijayalaxmi             : Member 

Complaint No.: 292/2015    

Complainant/s:                       Deepak S/o. Narayan Punde,

Age: 34 years, R/o.Madihal Main Road, Dharwad, Tq. Dharwad. Dist. Dharwad.

(By Sri.S.S.Patil, Adv.)

v/s

Respondent/s:         1)             Shriram Equipment Finance Co. Ltd., No.29/A, II Floor, East Wing, Above Butterfly Show Room, K.H.Road, Bangalore 27 R/by its Authorised Signatory/General/ Divisional Manager.

2)             Shriram Equipment Finance Co. Ltd., Eureka Junction, II Floor, Travelers Bungalow Road, Hubballi 29. R/by its Branch Manager.

3)             Shriram Equipment Finance Co. Ltd., Having its registered Office at No.303-306, Sabari Samriddhi Building, V.N.Purav Marg, Next to Chembur S.T.Stand, Chembur, Mumbai 400071. R/by its Authorised Signatory / Managing Director.

(By Sri.S.B.Muttalli, Adv.)

O R D E R

By: Shri. B.H.Shreeharsha : President.

1.     The complainant has filed this complaint claiming for a direction to the respondents to refund Rs.12 lakhs with 12% interest P.A as compensation, to pay Rs.50,000/- for mental agony, to pay Rs.4 lakhs towards financial loss, to pay Rs.5,000/- towards cost of the proceedings and to grant such other reliefs.

Brief facts of the case are as under:

2.     The case of the complainant is that, the complainant in order to eak out for his livelihood he was searching for a suitable vehicle for his business. During that time respondent’s agent contacted the complainant & offered hidden loan schemes and induced the complainant to enter into loan agreement keeping the complainant under the shadow. In fact the complainant was not ready to enter into the loan agreement. The respondent induced the complainant to enter into loan agreement & made the complainant to purchase the vehicle under loan benefits under fraud and influence of various false factors such as lower interest, no hiding charges, no harassment, transparency in transactions, easy installments etc. Though the complainant was not interested at the instance of respondent after false inducement purchased the vehicle/ equipment asset no.CNHBHL 770 Back hoe loader model 2011 (earthmover) by executing loan agreement bearing no.DOHUBO 110310003 in the year 2011 against his will. Since the complainant was in the hope of settle in his life signed all the blank documents. During sanction of the loan the respondent by using the innocence of the complainant misused the same. As per the agreement the complainant raised loan of Rs.15 lakhs with a term to repay at 35 installments. The complainant thereafter came on doing the repayment timely in accordance with the loan agreement. Despite it, the respondent being in a dominant position not given proper deductions for the repayments & entered defaulter instead of recording regular installments. When it was about 30^th installment the respondent without consent and notice repossessed the equipment though the complainant was not a defaulter which amounts to deficiency in service amounting to unfair trade practice. Further the respondent though the impuned vehicle was sold for higher price intentionally shown it was sold for lower price. The respondent did not produced any details with regard to the auction, auction amount and credit of the same to the loan account, actual loan amount and also not refunded the remained excess proceeds of the sale. Due to untimingly seizure and auction of the vehicle the complainant subjected to sustain daily loss of Rs.5,000/- towards his income derived out of the vehicle. Even to the day complainant is continued to be sustaining the loss due to no other source of income. Inspite of application under RTI Act by furnishing necessary postal order to furnish details of the account the respondent did not supplied the details till today. Even for the notice dt.25.06.2015 the respondent 3 replied rudely. The complainant had repaid almost all the amount to the date of repossession of the vehicle, hardly about 5 installments were due for payment. Even then the respondent taken law on their hands illegally acted and made the complainant to suffer lot both financially and physically. Apart from acting illegally the respondents have charged exhorbitant interest on the loan amount without the knowledge of the complainant by misutilizing the innocence of the complainant. Inspite of several requisitions and humble prayers the respondent did not obliged and disposed the vehicle for meagre amount though the equipment assets was valid more and made the complainant to suffer lot. The very act of the respondent amounts to deficiency in service amounting to unfair trade practice. Hence the complainant filed the instant complaint praying for the relief as sought.

3.     In response to the notice issued from this Forum the respondents appeared and filed the written version in detail denying and disputing the complaint averments & by contending the very complaint is not maintainable either in law or on facts and also taken contention that the complainant is not a consumer, complaint as brought is not a consumer complaint, the Forum has no jurisdiction to adjudicate the same as the matter involves is a commercial one and further contended that there is no cause of action for the present complaint as the respondents have not committed any deficiency in service and prays for dismissal of the complaint. Further the respondent admits approach of the complainant & entering into the loan agreement, avialment of the loan and purchase of the equipment asset under the loan agreement. While denied the respondents have induced the complainant to avail the loan assuring false benefits under the loan scheme and appeased the complainant to avail loan and to execute the agreement. Further respondent contended that though the complainant had agreed to do repayment on equated monthly installment of Rs.53,031/- with 35 installments commencing from 05.12.2011 to 05.10.2014 the complainant had become chronic defaulter. Despite several communications, notices, reminders, demands and follow ups, for the best known reasons to the complainant, complainant did not come forward and paid outstanding amount as per the terms and conditions of the loan agreement. Infact at para.4 of the complaint the complainant himself admits he was in difficulty to run his business and accordingly he was not in a position to pay the timely installments as per the repayment schedule of the loan agreement. In fact under the above circumstances only the complainant in order to avoid further complications and to diminish further loss or damages had come forward and surrendered the vehicle to the respondent requesting to take the vehicle back and dispose it off and adjust the sale proceeds into the loan account of the complainant. As such the complainant on 04.09.2014 surrendered the vehicle to the respondent. Even then the respondent issued pre sale notice to the complainant on 11.09.2014 and to his guarantor demanding them to come forward to pay the over due amount and get the vehicle to be released and to close the loan account. But the complainant did not utilized the opportunity. Hence the respondent on 30.09.2014 put the vehicle for valuation. On 01.10.2014 the valuation report was obtained valuating the vehicle for Rs.6.40 lakhs, then only the vehicle was put for auction. The respondent had received 3 quotations from the different persons who are interested in purchasing the vehicle in the auction. Out of them quotation dt.10.12.2014 was received for Rs.5,15,000/- and another quotation dt.16.12.2014 received for Rs.5,25,000/- and another on 17.12.2014 for Rs.5,60,000/- one Mr.Srinivas S.Hebbar who quoted highest bid amount of Rs.5,60,000/- as per the valuation report dt.01.10.2014. Accordingly it was finalized for Rs.5,60,000/-  so as to diminish further loss to the vehicle as it was the highest bid amount and the same was confirmed and bid amount was adjusted to the loan account of the complainant and vehicle was released to the successful bidder. Even then the respondent sustained loss on sale to the tune of Rs.1,95,367/- receivable from the complainant as on to 22.09.2015. The respondents by exhausting all remedies then only disposed the vehicle in the public auction by following and adopting all the measures. Hence the respondents have not committed any deficiency in service as alleged in the complaint. Even then and also even though the complainant had agreed any disputes arised with regard to the loan between complainant and respondent to be adjudicated under arbitration approached and filed the present complaint as such this Forum has no jurisdiction to adjudicate the same. Lastly prayed as the respondents have not committed any deficiency in service or have committed any unfair trade practice prays for dismissal of the complaint with exemplary cost.

4.     On the said pleadings the following points have arisen for consideration:

1. Whether complainant has proved that there was deficiency in service on the part of respondents ?
2. Whether complainant is entitled to the relief as claimed ?
3. To what relief the complainant is entitled ?

Both have admits sworn to evidence affidavit, relied on documents. Apart from argument both have filed notes of arguments and have relied on citations. Heard. Perused the records.

Complainant relied on

1. RP 412/11- DLF Ltd., vs. Mridul Estate Pvt. Ltd., NC.
2. Indus-Ind Bank Ltd., & Anr. vs. Vishwambhar @Dattarao Bastewad – RP 8/53 Maharashtra SCDRC
3. CC 51/07 –NCDRC- Awaz Punita Society Ambewadi & Ors., vs. Reserve Bank India.
4. 2012 SCC 506 National Seeds Corp. Vs. M.Madhusudan Reddi & Ors.

Respondent relied on:

1. RP 914/14 – Canara Bank vs. R.S.Vasan –NC
2. RP 3882/11 – Sriram Transport Finance Corp. Ltd. & Ors Vs. S.Mahadevayya (NC)
3. SLP (Civil) 5268/13 – SC – S.Mahadevayya Vs. Sriram Transport Finance Corp. Ltd.
4. S.Balwantsingh vs. Kanpur Development Authority (NC)
5. RP 4260/10 – M/s.JCB India Ltd. Vs. Mr.Mallappa Sangappa Mantri & Anr. (NC)
6. 2012 (3) CPJ 4 (SC) – Suryapal Singh Vs. Siddavinayak Motors & Anr.

Finding on points is as under.

1. Negative 
2. Negative  
3.  As per order

R E A S O N S

P O I N T S 1 & 2

5.     On going through the pleadings & evidence coupled with documents of both the parties it is evident that there is no dispute with regard to the fact, that the complainant by availing loan under equipment assets loan agreement purchased the earthmover by hypothecating the same.

6.     Now the question to be determined is, whether the complainant done repayment without committing default as undertaken under the loan agreement and repossession of the hypothecated equipment asset by the respondent and disposal of the same in public auction and realized the loan amount and crediting the same to the loan account amounts to a deficiency in service, if so, for what relief the complainant is entitled.

7.     Since the facts have been revealed in detail which requires no repetition.

8.     After going through the pleadings of the respondent among the main issues raised supra the respondent also has raised dispute, the present complaint as brought is not maintainable as the transaction involved is commercial one and this Forum has no jurisdiction to adjudicate the same. Hence this fact has been taken for disposal at its first instance before proceeding to other facts in dispute on merits.

9.     Both the parties have relied on citations cited supra in support of their respective contentions i.e with regard to jurisdiction of the Forum to adjudicate the matter, with regard to charging of interest on the borrowed amount, commercial activity, dispute to be referred to the arbitration and with regard to initiation of recovery proceedings in the event of non payment and non observation of terms and conditions of loan agreement. Since the facts in the instant case is not in dispute and it do not involves any complicated question of law and facts as the matter involved is decided fact of law and facts, relied citations are not separately discussed with a comparative study with the facts  which have been discussed in this case. However gist of the case laws relied are taken into consideration while deciding this complaint in order to avoid lengthier judgment and for the purpose of condensing the same.

10.   As rightly admitted the complainant approached the respondent and availed the loan and has purchased the earthmover and hypothecated the same in the name of the respondent towards the security for repayment of the loan amount. On latent if it is viewed as brought purchase of the earthmover costing worth Rs.19 lakhs and usage of the same in the business as admitted by the complainant & deriving daily income of Rs.5,000/- is nothing but a commercial in nature. Despite of this fact the complainant in his pleadings pleaded the vehicle has been purchased to earn for his livelihood. As per the decisions of the apex courts and observation made in the judgments passed by the apex courts any transaction by investing heavy amount lakhs together will not amounts to earn for livelihood and in other way it amounts to a business which is of commercial in nature. In order to earn for livelihood the investor / consumer shall himself be employed in carrying out the business of his of own but whereas in the instant case the complainant admits he was utilizing hypothecated vehicle purchased on the loan amount was employed in a business and he was earning Rs.5,000/- per day. The complainant has not produced any documents to show that he himself was engaged in plying the same or he has engaged someone else for handling the same. The complainant has not produced any DL before this Forum to show, he himself engaged in handling the said vehicle. If it was handled or driven or operated by someone else by paying salary or any remuneration it will not amounts to self employment or earning for livelihood, then also it amounts to a commercial in nature. However in the absence of appulsive and cogent evidence though it is considered as commercial transaction for the reason the complainant since he has specifically pleaded to earn for livelihood for the instance and for the purpose of the present complaint we will consider it is not a commercial transaction as contended by the respondent.

11.   As discussed supra and also as per the pleadings and evidence of both the parties there is no dispute with regard to the fact that the complainant had entered into an agreement of loan and availed loan undertaking to repay the same with monthly installment of Rs.53,031/- with 35 installments commencing from 05.12.2011 to 05.10.2014. In this regard there is no dispute at all.  The very grievance of the complainant is that despite of payment of all the installments as undertaken by him under loan agreement at the time of 30^th installment the respondent without intimation and without prior notice have repossessed the vehicle in question and not provided the opportunity to do repayment & released the vehicle. Instead disposed the same in the auction without prior notice for higher rate by showing the vehicle was disposed in auction for paltry amount. In reply to this contention of the complainant, the LC for respondent vehemently submits his reply rebutting the contention of the complainant by drawing the attention of this Forum to the loan cum hypothecation agreement Ex.R2 of its repayment installment schedule. Whereas in the said schedule it is specifically mentioned the EMIs shall due on 5^th of every month of the loan period commencing from 05.12.2011 ending to 05.10.2014. Further referred the attention of this Forum to the contents of this repayment schedule of Ex.R2 to loan statement account Ex.R11. On perusal of the Ex.R11 as contended by the complainant, complainant has not repaid the EMIs as undertaken by him, instead he went on doing repayment at his whims and fancy with several defaulted EMIs giving raise to impose cost on late payment and additional interest on defaulted EMIs and cause reason for outstanding of overdue on EMIs.

12.   The perusal of Ex.R3 the notice dt.04.12.2012 issued by the respondent to the complainant shows the complainant at its inception of commencement of the repayments has committed default in turn the respondents have sent notice calling upon the complainant to do repayment & keep the loan agreement in live otherwise suitable steps under law will be taken in recovering the same. This fact has been fortified by further reminder notices Ex.R4 & R5. On looking into these Ex.R3 to R5 and tallied those with the account statement Ex.R11 it is evident that the complainant is a chronic defaulter and has not repaid the amount as undertaken by him as per the agreement. The perusal of the Ex.R4 and R5 it is evident that after final notice as per Ex.R4 the complainant himself surrender the possession of the hypothecated vehicle to the respondents possession as per Ex.R5 .

13.   As contended by the respondent both in his pleadings and evidence even after the complainant himself surrendered the possession of the vehicle to the respondent as per Ex.R5 the respondent in compliance of due process of law sent notice to the complainant as per Ex.R6 showing the outstanding due amount and to make arrangements to do repayments and close the loan account otherwise the same will be disposed of in auction & realize the outstanding loan amount and the same has been served under registered post and the respondent has  produced the postal acknowledgements along with Ex.R6.

14.   The another grievance of the complainant is that though the vehicle was valued more than Rs.15 lakhs and even though it was disposed for higher amount the respondent shown lesser amount (only Rs.5,60,000/-) than the actual rate and committed deficiency in service. In reply to this, the respondent relied on Ex.R7 valuation report dt.01.10.2014 and also relied on Ex.R8, R9, and Ex.R10 the quotations placed by 3 different persons and credit of the auction realized amount to the loan account of the complainant as detailed and as per Ex.R11. By looking into the Ex.R5 the complainant himself has surrendered the vehicle to the respondent. Despite of it, the complainant while approaching this Forum had taken different contradictional contentions. In fact as pleaded by the complainant if the respondents have induced the complainant falsely by obtaining signatures on blank papers and have charged interest in contravention to the terms and conditions of the loan agreement Ex.R2 complainant would have initiate legal steps against the respondents, but till the date the respondent disposed the vehicle in auction and realized the amount the complainant kept silent and lastly approached this Forum by raising contradictory allegations questioning the procedural aspects adopted by the respondent while processing the loan, after sanction of the loan and while during the course of recovery proceedings. If the complainant is so honest and adhered to the terms and conditions of the loan agreement and if in the event the respondent had committed deficiency and have played fraud as alleged by the complainant the complainant would have approached this Forum or other courts of law or any other forums at least immediately after the respondent issued recovery notice Ex.R3 dt.04.12.2012. But not responded nor made arrangements to do repayments and keep the loan agreement alive till last 35^th installment. Under those circumstances the respondent ought to have initiated the recovery proceedings and disposed the vehicle and realized the amount and given credit to the outstanding due amount as per Ex.R11 loan account statement and still complainant is in due to the respondent. Except oral and bald allegations the complainant has not established his case of deficiency in service against the respondent and playing of unfair trade practice as alleged against the respondent. As discussed above all it is also not the case of the complainant that he has paid all installments as undertaken by him and he has not kept any amount in due. Under those circumstances there is no fault or deficiency in service on the part of the respondents in proceeding towards the recovery proceedings and disposal of the hypothecated vehicle in the auction and realized the loan amount. Hence, complainant is not entitled for any reliefs much less for the reliefs claimed.

15.  In view of the above discussions we have arrived and proceed to held issue.1 and 2 in negative.

16.   Point.3: In view of the finding on points 1 and 2 proceeded to pass the following 

O R D E R

        The complaint is dismissed. No order as to costs.

(Dictated to steno, transcribed by him and edited by us and pronounced in the open Forum on this day on 29^th day of January 2016)

(Smt.M.Vijayalaxmi)                                      (Sri.B.H.Shreeharsha)

Member                                                           President

Dist.Consumer Forum                                    Dist.Consumer Forum

MSR