DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM

       Dated this the 24^th day of April  2024.                                                                                             

                           Filed on: 11/11/2016

PRESENT

Shri.D.B.Binu                                                                            President

Shri.V.Ramachandran                                                               Member Smt.Sreevidhia.T.N                                                                Member

C.C. No.633/2016

The Complainant

P.J Thomaskutty, S / 0 P.S John, aged 58 years, Pandakasalayll House, Vennala P.O, Ernakulam, Kochi-682028.

(By Adv.C.N.Sreekumar, M/s.Peter & Karunakar, Lawyers Alfa Towers, I.S.Press Road, Kochi-18)

Vs

Opposite parties

1.       Shriram Transport Finance Company Ltd., 1 floor B Wing, Shiv Chambers, Sector 11, C.B.D Belapur, Navi Mumbai 400 614, rep. by its Managing Director.

2.       The Manager, Shriram Transport Finance Company Ltd., Edapally Branch, 34/1845 A2, 2 ^ (nd) Floor, Saira Plaza, Opp. Modern Bread, High School Junction, Edapally, Ernakulam, Kochi - 682024.

(ops.1 and 2 rep. by Adv.Rekha Nair, Room No.13, Ground Floor, Empire Building, Opp. Central Police Station, Near High Court , Kochi-18)

.F I N A L   O R D E R

D.B. Binu, President.

1. A brief statement of facts of this complaint is as stated below:

            The complaint filed under Section 12 of the Consumer Protection Act, 1986, outlines a dispute involving a consumer (the complainant) and a finance company along with its branch manager (the opposite parties). The complainant, residing in Vennala, Ernakulam, had purchased a TATA goods vehicle using a vehicle loan from the company. According to the terms of the loan, the complainant was to make 48 monthly instalments totalling Rs. 6,05,773 to repay the borrowed amount of Rs. 4,40,403.

Initially, the complainant regularly paid the instalments collected by the company's agents, amounting to Rs. 3,31,920 by May 2012. However, collection ceased unexpectedly, and the complainant was informed that the original loan documents were misplaced. The finance company had the complainant sign new papers purportedly to recreate the lost documents but actually used them to initiate a new loan agreement without the complainant's consent, further complicating the repayment.

From May 2013 to October 2015, the complainant paid an additional Rs. 3,49,223. Despite multiple requests for an account statement, which were initially evaded, it was finally revealed in November 2015 that the payments made from 2009 to 2012 were not credited. The outstanding liability was incorrectly shown as Rs. 1,36,633.75. It was then discovered that the documents signed in 2013 were for a new loan, not the original.

The complainant protested the deceptive practices, claiming that the payments made had been excessive due to the undisclosed new agreement. The finance company's failure to provide a correct account and their refusal to acknowledge the overpayments led the complainant to issue a legal notice demanding the return of the overpaid amount and compensation for financial losses and emotional distress.

The complaint, filed within jurisdiction and timeframe, requests the Consumer Forum to enforce the closure of the loan account based on the original terms, refund the excess payments with interest, award compensation for incurred expenses and mental agony, and cover the costs of the proceedings.

2.  Notice

The commission sent a notice to the opposite parties, who subsequently appeared and submitted their versions.

3)THE VERSION OF THE OPPOSITE PARTIES

The opposite parties contend that the complaint is not maintainable before the commission and should be dismissed. They argue that the complainant does not meet the definition of a consumer under Section 2(1)(d) of the Consumer Protection Act because the dispute relates to the settlement of accounts rather than a deficiency in service or goods. They suggest that the proper remedy lies in civil court or through arbitration as specified in their contract.

The opposite party asserts that the complainant, who availed a vehicle loan, does not qualify as a consumer because he has not purchased goods for personal use but has instead entered into a service agreement which involves financial transactions and loan repayments. The response highlights that the hypothecation agreement between the complainant and the opposite party includes a clause that mandates arbitration in Ernakulam for any disputes, as per the Arbitration and Conciliation Act, 1996.

The opposite party provides details of the financial transactions, stating that the original loan was for Rs. 4,11,475 with a total repayment amount of Rs. 6,07,083, which includes interest. They also mention additional loans taken by the complainant for tires and insurance, totaling Rs. 2,70,004. They argue that against a total demand of Rs. 8,77,087, the complainant only paid Rs. 5,22,920 until a specific date and later requested a re-agreement for the balance.

The opposite party accuses the complainant of producing forged documents and misleading the Commission by not presenting actual statements of accounts. They suggest that the complainant is trying to evade payment and unnecessarily drag the opposite party into legal proceedings. They assert that there is no deficiency in service on their part as defined under the Consumer Protection Act and therefore, the complaint does not meet the legal requirements for a consumer dispute concerning service deficiency.

The opposite party concludes by requesting the dismissal of the complaint due to the absence of jurisdiction under the Consumer Protection Act, highlighting that the complainant's issue pertains to financial settlements rather than consumer rights violations.

5) . Evidence

The complainant had filed a proof affidavit and 5 documents that were marked as Exhibits-A-1 to A-5.  

• Exhibit A1: A true copy of the repayment schedule issued by the 1st opposite party at the time of availing the loan.
• Exhibit A2 series (13 in number): True copies of receipts issued by the opposite parties on various dates:
  • TR.NO.AA 2810878 dated 03.11.2010
  • TR.NO.AA 3246574 dated 18.01.2011
  • TR.NO.AA 3246593 dated 18.02.2011
  • TR.NO.AA 3594524 dated 07.03.2011
  • TR.NO.AA 3879627 dated 04.05.2011
  • TR.NO.AA 3879636 dated 10.05.2011
  • TR.NO.AA 4712475 dated 02.11.2011
  • TR.NO.AA 4712500 dated 05.12.2011
  • TR.NO.AA 5348194 dated 12.01.2012
  • TR.NO.AA 5628624 dated 13.02.2012
  • TR.NO.AA 5628649 dated 14.03.2012
  • TR.NO.AA 6288247 dated 15.05.2012
  • TR.NO.AA 6288246 dated 15.05.2012
• Exhibit A3 series (21 in number): True copies of receipts issued by the opposite parties on various dates:
  • ERNA 11510300007 dated 30.10.2015
  • ERNA 1509300008 dated 30.09.2015
  • ERNA 11508310004 dated 31.08.2015
  • ERNA 11507300003 dated 30.07.2015
  • ERNA 11506300004 dated 30.06.2015
  • ERNA 11505300013 dated 30.05.2015
  • ERNA 11504300008 dated 30.04.2015
  • ERNA11503300007 dated 30.03.2015
  • ERNA 11502280036 dated 28.02.2015
  • ERNA11501290005 dated 29.01.2015
  • ERNA 11412310057 dated 31.12.2014
  • ERNA11411290009 dated 29.11.2014
  • ERNA11410300006 dated 30.10.2014
  • ERNA11409300016 dated 30.09.2014
  • ERNA11408290005 dated 29.08.2014
  • Two receipts both dated 30.07.2014 with number ERNA11407300021
  • ERNA11406300011 dated 30.06.2014
  • ERNA11405290007 dated 29.05.2014
  • ERNA11404290009 dated 29.04.2014
  • ERNA11403260014 dated 26.03.2014
• Exhibit A4: The office copy of the lawyer's notice to the opposite parties dated 12.05.2016.
• Exhibit A5: The original reply to the lawyer notice dated 06.06.2016.

The opposite parties had filed one document that was marked as Exhibit B-1.   

6) The main points to be analyzed in this case are as follows:

i)        Whether the complaint is maintainable or not?

ii)       Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant?

iii)      If so, whether the complainant is entitled to get any relief from the side of the opposite party?

iv)      Costs of the proceedings if any?

7)       The issues mentioned above are considered together and are        answered as follows:

            In the present case in hand, as per Section 2 (1) (d) of the Consumer Protection Act,1986, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment.  The True copies of receipts issued by the opposite parties on various dates (Exhibit A2 series). Hence, the complainant is a consumer as defined under the Consumer Protection Act, 1986 (Point No. i) goes against the opposite parties.

                 We have carefully heard the submission made at length by the learned Counsel representing both parties and have also considered the entire evidence on record.

A. Issue of Maintainability: The complainant has entered into a contractual relationship with the opposite parties for a vehicle loan which inherently constitutes a service as per Section 2(1)(d) of the Consumer Protection Act, 1986. Despite the opposite parties' assertion that this matter falls outside the jurisdiction of this commission and should be handled via arbitration or civil proceedings, the nature of the complaint involves allegations of deceptive practices and unfair trade practices, which fall squarely within the remit of this commission. Therefore, the complaint is indeed maintainable here.

B. Deficiency in Service and Unfair Trade Practice: The evidence provided, including a series of payment receipts and the misleading use of contractual documents by the opposite parties, supports the claim of deficiency in service and unfair trade practice. The opposite parties' act of losing the original loan documents and subsequently misleading the complainant to sign papers that unbeknownst to them constituted a new loan agreement, represents a grave service deficiency and deceptive practice.

C. Liability of the Opposite Parties: The opposite parties have breached their duty of care owed to the complainant by mismanaging their loan documents and misleading them into signing a new loan agreement. The responsibility to maintain accurate records and transparent dealings rests solely with the finance company and its representatives. The failure to provide a correct account statement despite multiple requests further affirms this deficiency in service.

The Commission notes with concern the pattern of behaviour exhibited by the financial institution in this case, which aligns with prior instances where such entities were held accountable for deceptive practices and mismanagement of documents. It underscores a fundamental expectation that consumers should have towards fairness, transparency, and diligence from their financial service providers.

This case serves as a pertinent reminder of the critical need for financial institutions to adhere to the highest standards of honesty and transparency in all their dealings. Such standards are not merely aspirational but are essential to ensuring trust and integrity in financial transactions.

Furthermore, consumers are advised to exercise vigilance by meticulously maintaining records of their financial transactions. This diligent record-keeping facilitates the timely identification of any discrepancies and supports consumers in seeking appropriate redressal effectively and swiftly. The importance of these practices cannot be overstated, especially in safeguarding consumer rights and interests in financial engagements.

                 We determine that issue numbers (I) to (IV) are resolved in the complainant's favour due to the significant service deficiency and the unfair trade practices on the part of the opposite parties. Consequently, the complainant has endured considerable inconvenience, mental distress, hardships, and financial losses as a result of the negligence of the opposite parties.

In view of the above facts and circumstances of the case, we are of the opinion that the opposite parties are liable to compensate the complainant.

Hence the prayer is partly allowed as follows:

I.   The Opposite Parties shall close the original loan account of the complainant based on the terms of the original loan agreement executed on 30th September 2009.

II.  The Opposite Parties shall refund all excess payments made by the complainant, calculated from the date of the first excess payment to the date of this order, compounded with an interest rate of 12% per annum.

III. The Opposite Parties shall pay compensation of ₹25,000 (Rupees twenty-five thousand only) to the complainant for service deficiency, unfair trade practices, inconvenience, and the consequent mental and financial distress and hardship suffered by the complainant.

IV. The Opposite Parties shall pay the complainant ₹15,000 (Rupees fifteen thousand only) to cover the legal and other procedural costs incurred during these proceedings.

The Opposite Parties are jointly and severally liable for the fulfilment of the above orders, which must be executed within 30 days from the date of receipt of this order. Should there be a failure to comply within the stipulated period, interest at an annual rate of 9% will be applied to the total unpaid amounts specified in Point III. This interest will accrue from the expiration of the 30 days until the full payment is realized. The interest calculation starts from the date the case was filed, i.e., 11^th  November 2016.

Pronounced in the Open Commission on this 24^th day of April 2024.

Sd/-                  

D.B.Binu, President

                                                                     Sd/-                  

                                                V.Ramachandran, Member

                                                   Sd/-                                                   Sreevidhia.T.N, Member

Forwarded by Order

Assistant Registrar

/by

Appendix

• Exhibit A1: A true copy of the repayment schedule issued by the 1st opposite party at the time of availing the loan.
• Exhibit A2 series (13 in number): True copies of receipts issued by the opposite parties on various dates:
  • TR.NO.AA 2810878 dated 03.11.2010
  • TR.NO.AA 3246574 dated 18.01.2011
  • TR.NO.AA 3246593 dated 18.02.2011
  • TR.NO.AA 3594524 dated 07.03.2011
  • TR.NO.AA 3879627 dated 04.05.2011
  • TR.NO.AA 3879636 dated 10.05.2011
  • TR.NO.AA 4712475 dated 02.11.2011
  • TR.NO.AA 4712500 dated 05.12.2011
  • TR.NO.AA 5348194 dated 12.01.2012
  • TR.NO.AA 5628624 dated 13.02.2012
  • TR.NO.AA 5628649 dated 14.03.2012
  • TR.NO.AA 6288247 dated 15.05.2012
  • TR.NO.AA 6288246 dated 15.05.2012
• Exhibit A3 series (21 in number): True copies of receipts issued by the opposite parties on various dates:
  • ERNA 11510300007 dated 30.10.2015
  • ERNA 1509300008 dated 30.09.2015
  • ERNA 11508310004 dated 31.08.2015
  • ERNA 11507300003 dated 30.07.2015
  • ERNA 11506300004 dated 30.06.2015
  • ERNA 11505300013 dated 30.05.2015
  • ERNA 11504300008 dated 30.04.2015
  • ERNA11503300007 dated 30.03.2015
  • ERNA 11502280036 dated 28.02.2015
  • ERNA11501290005 dated 29.01.2015
  • ERNA 11412310057 dated 31.12.2014
  • ERNA11411290009 dated 29.11.2014
  • ERNA11410300006 dated 30.10.2014
  • ERNA11409300016 dated 30.09.2014
  • ERNA11408290005 dated 29.08.2014
  • Two receipts both dated 30.07.2014 with number ERNA11407300021
  • ERNA11406300011 dated 30.06.2014
  • ERNA11405290007 dated 29.05.2014
  • ERNA11404290009 dated 29.04.2014
  • ERNA11403260014 dated 26.03.2014
• Exhibit A4: The office copy of the lawyer's notice to the opposite parties dated 12.05.2016.
• Exhibit A5: The original reply to the lawyer notice dated 06.06.2016.

Opposite parties exhibits

Exbt.B1       : copy of power of attorney

Date of despatch   :: By Hand             By Post

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