Sri Shyamal Gupta, Member
Appeal Nos. A/222/2016 and A/530/2016 arise out of the order dated 15-02-2016 passed by the Ld. District Forum, Paschim Medinipur in CC/113/2015, whereof the complaint has been allowed. Since the facts and circumstances of both these Appeals are identical, the same are decided through this common order.
In short, case of the Complainant is that, he purchased a car with the financial assistance of the OPs. In terms of the loan agreement, Complainant was supposed to pay Rs. 4,93,240/- to the OPs in 47 EMIs. The Complainant further agreed to pay another sum of Rs. 45,000/- being the insurance premium for the 2nd to 4th year in respect of the subject car. Incidentally, Complainant paid the 1st year insurance premium from his own pocket. The subject car met an accident on 07-05-2011. In spite of that, the Complainant paid the amount of 14th instalments. As the Insurance Company neglected to settle the insurance claim, Complainant filed a complaint before the Ld. District Forum being no. CC/116/2013. During pendency of the said complaint case, the OPs appeared before the Ld. District Forum to defend its interest in the matter. Although at that time the damaged car was kept in the garage for repairing purpose, all on a sudden, the OPs took custody of the same through local Police Station without giving any notice to the Complainant. Allegedly, the OPs even did not intimate the matter to the Ld. District Forum. Thereafter, the Ld. District Forum vide its order dated 28-02-2014 directed the Insurance Company to settle the claim by paying Rs. 2,24,300/- through the OP Bank for appropriating the outstanding due. Subsequently, the Insurance Company remitted the decretal amount to the OPs on 28-05-2014 without due intimation to the Complainant. It is alleged that although the OPs were entitled to a sum of Rs. 3,00,040/- as on 28-05-2014, they not only appropriated Rs. 3,84,600/-; but also refrained from releasing the subject vehicle. Therefore, the complaint was lodged.
The OPs, in their defence submitted that the instant case does not fall under the Consumer Protection Act as they have not rendered any service to the Complainant. In terms of the hire purchase agreement, the OPs were entitled to repossess the subject vehicle on account of default of EMIs. The Complainant failed and/or neglected to pay contractual amount in accordance with the terms and conditions of the agreement. Consequently, delay payment charges were levied on the overdue amount. They denied any deficiency in service on their part.
Decision with reasons
We have heard the Ld. Advocates of the parties and gone through the documents on record.
First things first. Since the OPs challenged the very maintainability of the complaint case, let us concentrate on this aspect first.
It is argued by the Ld. Advocate appearing on behalf of the OPs that the Hire Purchase Agreement contained a clause whereupon all disputes between the parties needed to be referred to an Arbitrator. However, instead of acting in accordance with the terms and conditions of the policy, the Complainant filed the complaint case. In the opinion of the Ld. Advocate, thus, the present case is not maintainable.
In this regard, it is worth noting that the Hon’ble Supreme Court dealt with this issue in several cases and the position of law in the matter as laid down by the Hon’ble Court is appended below.
In Skypay Couriers Limited v. Tata Chemicals Limited, (2000) 5 SCC 294 the Hon’ble Court observed:
"Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force."
In Trans Mediterranean Airways v. Universal Exports, (2011) 10 SCC 316 it was observed:
"In our view, the protection provided under the CP Act to consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy."
In the case of M/s National Seeds Corporation Ltd. vs. M. Madhusudhan Reddy, 2013 (4) CPR 345 (SC), Hon'ble Supreme Court has observed thus :-
"29. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, filed complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In Fair Air Engineers (P) Ltd. v. N.K. Modi, AIR 1997 SC 533, the 2 - Judge Bench interpreted that section and held as under :-
"the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri Suri, that the words "in derogation of the provisions of any other law for the time being in force" would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.
It would, therefore, be clear that the legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer in automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act."
Now, let us see, whether the Complainant can be termed as a ‘consumer’ u/s 2(1)(d) of the Consumer Protection Act, 1986, or not.
Our view in the matter is that whenever one purchase goods with the financial assistance of the bank or for that matter, any other financial institution, one essentially hires the services of the bank/financial institution for which one pays service charge to the financier in the form of interest. Let us appreciate that, had there been no rendering of service, there would hardly be any question of payment of service charge (interest). Differently put, the OPs, which belongs to the service sector, rendered services to the Complainant by according financial assistance in lieu of stipulated service charge in the form of interest. The, present dispute, accordingly, is very much maintainable under the 1986 Act.
The OPs further argued that since an award had already been passed by the Ld. Arbitrator, the instant case was not maintainable on this score also. We, however, feel that since the concerned Arbitration proceedings was drawn up post filing of the complaint case, it was no bar to adjudicate the dispute under the Consumer Protection Act.
Coming to the issue of filing of complaint case being no. CC/116/2013 before the Ld. District Forum by the Complainant, it bears mentioning that the same was primarily filed against the Insurance Company over non-settlement of insurance claim. As against this, CC/113/2015 is filed against the OP Financier over alleged deficiency in service on their part. The nature and character of both the cases being altogether different, the same does not suffer from the principles of waiver, estoppels and acquiescence, as alleged.
In view of this, we find no merit in the contention of the OPs regarding maintainability of the complaint case.
As for the merit of the Appeals, on one hand, by submitting an abstract of the Statement of Account, it is contended by the Complainant that as on 28-02-2014, he owed a sum of Rs. 1,37,400/- to the OPs; however, despite receipt of Rs. 2,24,300/- from the Insurance Company, the OPs did not return a single penny to him; nor did they handover the subject vehicle. On the other hand, it is claimed by the OPs that even after adjustment of the sum of Rs. 2,24,300/- that they received from the Insurance Company, another sum of Rs. 1,24,228/- was recoverable from the Complainant.
On a reference to the Statement of Account of the OPs, we come across certain discrepancies to which we have not received any satisfactory explanation from the side of the OPs.
First, in their Statement of Account, the OPs have taken into consideration the amount of all the 47 EMIs besides other charges. Since they received due payment from the Insurance Company on 28-05-2014 itself, when all the EMIs did not fall due, they ought to prepare the Statement of Account showing the outstanding as on 28-05-2014.
Second, the OPs arbitrarily charged Legal Arbitration fees and Prof. fees against the CC/116/2013 which cannot be allowed.
Third, they charged Rs. 45,000/- on account of insurance premium in respect of the subject vehicle. However, no tangible proof is forthcoming before us regarding renewal of the insurance policy for the 2nd to 4th year.
Similarly, the Statement of Account prepared by the Complainant also cannot be relied upon since the same was not prepared taking into consideration the penalty charges that he ought to pay to the OPs over default in making timely payments.
On due consideration of the afore-mentioned anomalies in the statement of account, it seems to us that after adjustment of the outstanding amount that the Complainant owed to the OPs as on 28-05-2014, balance amount ought to be returned to the Complainant, but they did not do so which manifests gross deficiency in service on the part of the OPs.
We have also noticed that the OPs repossessed the subject vehicle from the Complainant through police help without serving any prior notice to the Complainant. Although the OPs suo motu participated in the complaint case being no. CC/116/2013, they did not bother to give prior intimation even to the Ld. District Forum before repossessing the subject vehicle. Propriety demands that when a matter is pending before a competent Court of Law, it would be duly taken into confidence before taking any sort of coercive action against the other side.
It is alleged by the Complainant that since the subject vehicle was repossessed from the garage of the service centre and kept in the police station carelessly, the subject vehicle suffered severe damage and several the parts of the vehicle also got stolen. The RBI has laid down necessary guideline as to how a bank should proceed before repossessing the hypothecated vehicle. Unfortunately, the OPs honoured such directive in its breaches. Nobody denies the right of a bank to take necessary measures to realize its due from the defaulter. However, that certainly does not empower the financier to do anything that it wants. The financier is duty bound to follow the rule of law.
It’s a long time since the vehicle has been repossessed by the Police at the insistence of the OPs. Since proper care was not taken to keep the vehicle safely, there is every reason to apprehend that as of now the same is no more in roadworthy condition. In fact, it is alleged by the Complainant that ever since the vehicle was seized by the police, the same was kept in front of the police station and as on date the car is in complete breakdown state as most of the parts, battery and machines have developed rust and cannot be used any more. Since the imprudent and hasty act of the OPs is solely responsible for the present pathetic condition of the vehicle in question, we hold them entirely responsible to make good the loss suffered by the Complainant.
In the given situation, the impugned order, whereby OPs have been directed to refund the entire amount spent by the Complainant in respect of the subject vehicle, appears fully justified. However, the compensation amount as ordered by the Ld. District Forum appears to be inadequate when seen against the tremendous harassment, mental stress and agony that the Complainant was subjected to only because of the indifferent attitude of the OPs. Thus, we are inclined to enhance the same.
The Appeals are disposed of accordingly.
Hence,
O R D E R E D
Appeal Nos. A/222/2016 and A/530/2016 be and the same are dismissed and allowed, respectively. The impugned order is modified to the extent that the OPs shall pay Rs. 1,25,000/- as compensation to the Complainant. Otherwise, the impugned order shall remain unaltered.
