FA.No.866/2011 against C.C.No.119/2009 District Forum, Nizamabad

Between

The Branch Manager

M/s Shriram Transport Finance Company

Limited, rep. by Sri Y.Ramakrishnudu

S/o.Sri Y.Narayana aged 30 years,

Occ:Branch Manager R/o.D.No.5-6-573/1B

Pragathinagar, Nizamabad.                                           ..Appellant/

                                                                                   Opp.party

        And

Sri Rathod Babu Rao S/o.Kishan, aged

37 years, Occ:Lorry Driver cum Owner,

R/o.Sainagar, Rd No.3, Nizamabad.                                        Respondent/

                                                                                Complainant  

Counsel for the Appellant               :  Mr.M.V.R.Suresh & Associates

Counsel for the Respondent           : Notice on respondent held sufficient

QUORUM: THE HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT

SMT.M.SHREESHA, HON’BLE MEMBER,

          AND

SRI S.BHUJANGA RAO, HON’BLE MEMBER.

WEDNESDAY, THE FOURTEENTH DAY OF NOVEMBER,

TWO THOUSAND TWELVE

Order (Per Smt.M.Shreesha, Hon’ble Member)

***

Aggrieved by the order in C.C.No.119/2009 on the file of District

Forum, Nizamabad, opposite party preferred this appeal.

The brief facts as set out in the complaint are that the complainant is a driver and owner of lorry No.MP-14-1273 which was financed by the opposite party.  The complainant submitted that the Ashok Leyland  make 2002 lorry was purchased in June, 2006 and he invested Rs.5,00,000/- and the opposite party financed Rs.5,00,000/- which has to be paid in 60 instalments as per Hire purchase agreement.  The complainant submitted that he paid the entire amount along with interest which comes to Rs.6,50,000/- and the personnel of the opposite party received the amounts but for some of the instalments they did not issue receipts.  He submitted that he was paying the loan regularly and paid Rs.6,50,000/- and most of the payments were received by opposite party and they did not pass any receipt on the pretext of issuance of receipt later and at the time of seizure of vehicle also, the opposite party received Rs.80,000/- but did not pass any receipt.  The complainant submitted that though payments were received by opposite party, it adjusted the same towards penal interest, over due charges which were not mentioned in the agreement or informed to the complainant at the time of loan.  The complainant approached the accountant of OP and enquired about the due and he replied that the loan account was rescheduled long back for adjusting the interest and penal charges and refused to issue the account statement. The complainant submitted taking advantage of his illiteracy, the opposite party misused the account and cheated him.  The complainant submitted that he again approached the opposite party company and demanded for clearance but it illegally demanded the complainant to pay further amounts as the earlier amount was adjusted towards penal interest.  The complainant submitted that on 18-12-2009 without issuance of any notice, opposite party seized the lorry and demanded the complainant to pay Rs.5,00,000/-.  It is the case of the complainant that the opposite party misused the signed papers and is not furnishing the account and though the complainant cleared the dues, the opposite party is refusing to issue clearance certificate.  Hence the complaint for a direction to the opposite party to issue loan clearance certificate and to re-endorse the vehicle and pay Rs.80,000/- towards damages and Rs.10,000/- towards costs.

Opposite party filed counter denying the allegations made in the complaint and contended that the complainant did not bring the actual facts before the Forum.  It submitted that the complainant approached the opposite party in the month of June 2006 for a loan of Rs.5,00,000/- and it was duly sanctioned on 25-6-2007 vide hypothecation agreement and he was liable to pay interest of Rs.2,63,000/-, insurance deposit of Rs.18,0000/- and thus the total agreement value was Rs.7,81,000/- which was to be paid in 45 monthly instalments @ Rs.17,445/- per month from 1^st to 36^th instalment and thereafter at Rs.16,958/- per month from 37^th to 45^th instalment starting from July, 2006 to April, 2010.  The complainant was very irregular in repaying monthly instalments and as per the agreement, opposite party was entitled to levy ODC and 36% per month for delayed payments.  The complainant paid Rs.4,18,995/- upto December, 2008 and thereafter failed to pay instalments.  In the month of January, 2009, the complainant approached for re-finance and accordingly an amount of Rs.55,747/- was given as rebate and the entire due amount was re-financed through new hypothecation agreement dated 29-1-2009.  An amount of Rs.3,37,000/- was obtained by the complainant as personal loan on 11-12-2007 which is supplementary to the hypothecation loan and on 5-9-2008 an amount of Rs.18,000/- was obtained by the complainant  as tyre loan for purchase of all tyres and said loans were sanctioned. Opposite party submitted that the complainant fell due to tyre loan, personal loan, insurance amount paid and was due in a sum of Rs.5,35,000/- and on execution of new agreement, endorsement was made in R.C. of the vehicle with RTO, Nizamabad and cannot take a plea that he had executed blank documents.  The opposite party submitted that the complainant is due a sum of Rs.1,65,120/- over due arrears and also due of 34 future instalments which comes to Rs.6,46,758/- totalling to Rs.8,11,878/- and inspite of repeated demands, he did not pay the amounts and on the other hand tried to dispose of the vehicle as scrap and the whereabouts of the body of the lorry is not known till date and submitted that he filed the vexatious complaint and prayed to dismiss the same with costs.

Based on the evidence adduced i.e. Exs.A1 to A8 and B1 to B14 and the pleadings put forward,  the District Forum allowed the complaint awarding Rs.80,000/- to the complainant and directing opposite party to adjust the same towards the amount due by the complainant to it so also Rs.1,000/- towards costs of the complaint.  Further opposite party was directed to re-draw the account of the complainant pertaining to loan connected to this case so also connected personal loans, if any, and ascertain the principal amount due from the date of complaint (as the date of taking the engine is not mentioned) together with agreed rate of interest and @ 3% per month delayed payment charges over and above the agreed rate of interest and deduct Rs.80,000/- compensation aforesaid, Rs.1,000/- costs inform the actual amount due by the complainant to it by registered post acknowledgement under notice to the Forum giving one month time for paying the same and in the event of not paying the said amount, opposite party is at liberty to recover the said amount together with agreed interest and delayed payment charges described supra under due process of law and also by selling the engine of the vehicle  which is with him following the prescribed procedure so also by seizing the body of the vehicle and selling it duly.  If the complainant pays the said amount to it, it has to re-deliver the engine of the vehicle in running condition to the complainant under intimation and in case no intimation is found due from the complainant after such re-drawal of the account, opposite party shall handover the retained engine to him in running condition immediately.  In case the complainant pays the actual due amount, after such re-drawal of the amount, opposite party shall issue clearance/no objection certificate and also get the vehicle re-endorsed by discharging the finance.

Aggrieved by the said order, opposite party preferred this appeal.

        The appellant filed written arguments and has also filed citation reported in II(2012) CPJ 4 SC.   It is the case of the appellant/OP that the complainant has obtained finance from them for purchase of lorry  for a total contract value of Rs.7,81,000/- which includes loan of Rs.5,00,000/- plus interest of Rs.2,63,000/- plus insurance deposit of Rs.18,000/-.  The said amount was to be repaid at Rs.17,445/- per month till the 36^th instalment and at Rs.16,958/- from 37^th to 45^th instalment and an amount of Rs.4,18,995/- was paid towards EMI’s till the month of December, 2008.  Ex.B2 is the hypothecation for purchasing the said lorry.  A rebate of Rs.55,747/- was given in the month of January, 2009 as the loan was refinanced vide Ex.B1. The complainant filed only receipts Exs.A2 to A7 which show that the complainant is a defaulter for which the opposite party has charged over-due charges but Exs.B1 and B2 loan agreements  do not state that the opposite party is entitled to charge such overdue charges  Therefore, the opposite party is liable to charge the agreed 3% per month interest towards delayed payments, therefore we see no reason to interfere with the order of the District Forum with respect to directing the opposite party to refurnish the account of the complainant pertaining to the loan account taking into consideration the observation made by the District Forum.

        It is also not in dispute that the complainant has taken Rs.2,37,000/- as personal loan on 11-12-2007, a tyre loan for Rs.18,000/- on 5-9-2008 and it is the opposite party’s case that the complainant is liable to pay an amount of Rs.5,35,000/- as on July, 2010.  It is not in dispute that the opposite party had seized the vehicle and on directions from the Forum in IA.No. 252/2009, the learned counsel for the appellant also submits that complying the orders of the Forum in IA, the engine was handed over to the complainant by receiving Rs.10,000/- from the complainant.  It is the opposite party’s case that the engine was retained by them because the complainant was trying to sell the engine.   The contention of the appellant/opposite party that the lorry was purchased for commercial purpose and therefore does not invoke the jurisdiction of Consumer forum is unsustainable as it is clear from the record that the complainant has taken loan under hypothecation agreement payable under EMIs and he is also owner and driver of the said lorry which establishes that the complainant is not carrying on any large scale business but is driving the lorry for his own self-employment and therefore falls within the definition of consumer and this Commission has jurisdiction to entertain the complaint.   The opposite party has relied on the decision of the apex court reported in II(2012) CPJ 4 SC in which the apex court held that ‘taking possession of the vehicle on the ground of non-payment of instalment is a legal right of the financier and the court below has committed error in granting compensation to the petitioner.’  In the instant case also the complainant is also a defaulter the only difference is that the complainant is charged overdue charges, the rates   which were not reflected in the loan agreement.  However, granting of Rs.80,000/- towards compensation is excessive and we are of the considered view that the same can be reduced to a reasonable amount of Rs.50,000/- as the District forum has observed that inspite of directions from the District Forum, the opposite party has not delivered the engine to the complainant for which act, the complainant was entitled to reasonable compensation.  However, we see no reason to interfere with the other aspects of the order of the District Forum.

        In the result this appeal is allowed in part and the order of the District Forum is modified by reducing the compensation from Rs.80,000/- to Rs.50,000/- while confirming the other aspects of the order of the District Forum. Time for compliance four weeks.                  

Sd/-PRESIDENT.

Sd/-MEMBER.

Sd/-MEMBER.

JM                                                                                                       Dt. 14 -11-2012