This complaint coming up before us for hearing on 09-04-12 in the presence of Sri.Y.V.Ramesh Babu, advocate for  complainant and of Sri S.A.Khadar, advocate for opposite party upon perusing the material on record, after hearing both sides and having stood over till this day for consideration, this Forum made the following:

O R D E R

Per Sri M.V.L.Radha Krishna Murthy, Member:

This complaint is filed u/s 12 of Consumer Protection Act praying to direct the opposite party to refund the value of the vehicle of Rs.10,16,494/- along with interest @18% p.a. from 20^th May 2009 till realization, to refund the amount of insurance Rs.50,000/-, to pay compensation for mental agony and physical suffering @Rs.50,000/-, and to pay the Rs.10,000/- towards cost of the proceedings i.e., in all Rs.11,26,494/-

1. The averments of the complaint in brief are as follows:

The complainant was hiring a bus to R.T.C. to eke out for her lively hood.  She will run a bus under R.T.C. and R.T.C. will pay hire charges to the complainant as per the agreed terms and conditions since many years.  As her bus became old the R.T.C. authorities has given an opportunity to replace the old bus with a new one and agreed to pay tariff as per the agreement dated 01-10-2007 entered by complainant with A.P.S.R.T.C. As complainant was unable to raise the entire amount on her own, she approached opposite party for vehicle loan for which opposite party agreed to provide finance.  The opposite party obtained signatures of complainant on some printed and empty papers and did not provide any copies to the complainant.  The complainant has availed finance facility from opposite party vide agreement dated 15-06-2007.  The complainant purchased the chassis for an amount of Rs.9,25,000/- and spent an amount of Rs.7,50,000/- for body building and other expenses and paid insurance amount of Rs.50,000/- totaling an amount of Rs.17,25,000/-.  Out of which the opposite party disbursed an amount of Rs.11,50,000/- as per agreed terms of contract and same has to be repaid by the complainant in 60 EMI’s @Rs.38,000/- for 20 months, @Rs.30,000/- for next 20 months and Rs.16,000/- per month for the next 20 months i.e. in all Rs.16,80,000/- .  The complainant availed the loan and purchased the bus and registered the same with R.T.A., Narasaraopet as No. AP07Y 1926 and insured the vehicle with Bajaj Allianze Insurance Company.  Complainant paid monthly installments as noted below :

3.     On 18-05-2009 the vehicle of complainant met with an accident at Kondrupadu Village while running under R.T.C.  Complainant got the vehicle repaired and kept it at Chilakaluripet Bus Station for further transportation.  While so, the agents of the opposite party came to the bus station on the midnight of 19-05-2009 and took the vehicle without prior intimation even though there are no pending arrears, inspite of the resistance of the cleaner and the cleaner was beaten by the agents of opposite party.   On the next day the complainant and her husband along with some elders went to the office of opposite party and stated that the complainant is ready to pay the outstanding amounts if any and asked the opposite party to disclose the amounts to be paid if any and demanded for release of the vehicle at once.  But the opposite party refused to release the vehicle and refused to show the account or to say about the pending installments if any.  The complainant requested opposite party to release the vehicle immediately as it is under agreement with R.T.C. and there is possibility of cancellation of agreement by R.T.C.  But opposite party refused to inform about the pending amounts and to give statement of accounts.  Complainant received a telegram on 21-05-2009 sent by opposite party stating that they have seized the vehicle for non payment of pending amount of Rs.88,120/- as on 20-05-2009.  Complainant and her husband and elders went to the office of opposite party and requested to receive the said amount and to release the vehicle.  But for the reasons best known to it the opposite party neither received the amount nor released the vehicle.  The opposite party did not give any prior notice before seizure of the vehicle which is mandatory as per the settled law.  The complainant came to know that opposite party has sold the vehicle without any intimation.   The opposite party disbursed the loan amount on 15-06-2007 and complainant started to repay the installments from August 2007.  The opposite party seized the vehicle on 19-05-2009.  By that time the complainant has to pay 22 monthly installments i.e, Rs.8,20,000/-(Rs.38,000/- @20 EMI’s, Rs,7,60,000/- and Rs.30,000/- for 2EMI’s i.e. Rs.60,000/-) as on May 2009.  The complainant has paid an amount of Rs.8,39,920/- as on March, 2009 itself.  Thus it is clear there are no pending installments as on the date of seizure of the vehicle, but infact excess amount was paid by complainant. But opposite party without furnishing the account copy and by not showing the amounts paid by the complainant charging excess rate of interest etc. Hence the opposite party committed deficiency of service.  The complainant entered agreement with R.T.C. for a period of 6 years.  But due to the illegal seizer of opposite party she lost her lively hood for the remaining period of contract and complainant was put to loss by opposite party as noted below :

The value of the vehicle excluding insurance   :       Rs.16,75,000/-

Vehicle used for 22 months

and the Depreciation for

1^st 12 months @5%     :       Rs.    83,750/-

Depreciation for the

next 10 months           :       Rs.     66,301/-

Total                         :       Rs.  1,50,051/-

Less the depreciation                                   :       Rs.  1,50,151/- 

Total value of the vehicle                             :       Rs.15,24,949/-

As per the above calculation the value of the vehicle as on date of seizure is Rs.15,24,949/-

The amount issued by the opposite party       :       Rs.11,50,000/-

Interest @ 9% from 15.06.2007

Upto the date of seizure 19.05.2009              :       Rs.  1,98,375/-

Total                                                 :        Rs.13,48,375/-

  Apart from Rs.50,000/-paid towards insurance of the vehicle.

Hence complainant prays the refund of the above amount including compensation etc., as opposite party committed deficiency of service and did unfair trade practice.

Opposite party filed its version and the brief averments thereof are follows : 

4.     The material allegations made by complainant are not true, valid and binding on the opposite party and complainant is put to strict proof of the same.  The complaint is not maintainable either on facts or according to Law.  This Forum has no jurisdiction to entertain the complaint.  Because as per the terms and conditions of agreement executed by complainant, if any dispute arise between the parties the same shall be settled by Arbitration in accordance with the provisions of Arbitration and Conciliation Act and award given by Arbitrator shall be final and binding on all parties concerned.  But complainant without following the terms and conditions of agreement, approached this Forum. The complainant is not a consumer as she is doing transport business with a profit motive and admittedly gave bus for hire to A.P.S.R.T.C. by obtaining loan from this opposite party.  The complainant availed loan from this opposite party for commercial purpose.  The relationship between the complainant and opposite party is debtor and creditor to the said loan transaction and she is not a consumer.  The complainant paid an amount of Rs.7,69,920/- as on 19-03-2009 and failed to repay the loan installment amount as per the terms and conditions of hypothecation agreement.  As per the terms and conditions of the agreement, if the complainant failed to repay the loan installment the opposite party can repossess the vehicle without any prior notice.  The bus of complainant met with an accident and complainant failed to inform the same to this opposite party and failed to pay the monthly installments and committed default and never paid monthly installments regularly and the same was informed to the complainant regarding the payment of defaulted monthly installments for which she assured the opposite party that the loan amount will be paid regularly.  This opposite party waited all these months and as complainant became habitual defaulter this opposite party as per terms and conditions of agreement repossessed the vehicle by giving intimation to the complainant, and the complainant gave letter dated 18-05-2009 to take possession of her bus and put it for sale as per market price and credit the amount in her loan account stating that she has to pay Rs.1,00,000/- to the opposite party and as she is having some family problems, she could not pay the same and also under-taken to pay the remaining amount within 6 months. Hence this complaint is not maintainable.  When the complainant has given a consent letter to this opposite party, the question of filing this complaint before this Forum to pay an amount of Rs.11,26,494/-  does not arise and complaint is liable to be dismissed.  As per clause No.6 (3) of loan hypothecation agreement, the opposite party can repossess the vehicle without any prior notice to complainant when there is default in payment of monthly installments.  This opposite party has taken possession of the vehicle on 19-05-2010  and no objection certificate was obtained from R.T.A., Narasaraopet and has given sufficient time to complainant to settle the loan amount and reminded several times but the complainant did not clear the loan.  As per the agreement this opposite party intimated the complainant regarding the auction of the bus and the complainant did not appear and kept quite.  This opposite party conducted sale of vehicle in open auction on            03-09-2010 and received an amount of Rs.4,80,000/- and complainant is still due an amount of Rs.4,42,080/- (without interest and ODC charges).  This opposite party filed claim petition before the Sole Arbitrator and the Arbitrator issued notice to the complainant and her guarantors for repayment of the amount, the said summons were returned intentionally unserved even though they are residing at the same address and the Arbitrator was pleased to issue publication to the complainant and her guarantors and the Arbitrator passed orders dated 05-08-2011 directing the complainant and guarantors to pay an amount of Rs.4,42,080/- with interest and costs.  By suppressing all these facts the complainant filed this complaint with false allegations stating that opposite party has to pay an amount of Rs.11,26,494/- without any basis.  Hence the complaint may be dismissed with costs.

5.      In support of their versions complainant and opposite party filed their respective affidavits.

6.     On behalf of complainant Exs.A-1 to A-41 were marked.  On behalf of opposite party Exs.B1 to B12 were marked.

7.      NOW THE POINTS THAT ARISE FOR CONSIDERATION ARE:

1. Whether the complainant is a consumer with in the meaning of Consumer Protection Act?

1. Whether the complaint is maintainable before this Forum in view of the Arbitration Clause mentioned in the Hypothecation agreement?

1. Whether there is a deficiency of service on the part of opposite party?

1. To what relief the complainant is entitled to?

8.      The case of the complainant is that she purchased a bus with the financial aid of opposite party and hired it to APSRTC , that on 18-05-2009 the vehicle met with an accident at Kondrupadu Village and that the complainant got it repaired and kept it at Chilakaluripet Bus station for transportation, at that venture on the midnight of 19-05-2009 opposite party took position of the vehicle without prior intimation to the complainant by force inspite of the resistance of its cleaner by beating him, that subsequently opposite party sold the bus for a low amount in the auction and caused loss to the complainant.

9.     The case of opposite party is that as the complainant failed to pay the installments regularly, that on 18-05-2009 complainant gave consent letter to seize the bus and put it for auction as she is unable to pay the installments due to her family problems and that on 19-05-2009 they have seized the bus in accordance with the consent of the complainant and they gave telegram to complainant on 21-05-2009 informing that they have seized the bus on 19-05-2009 and requested the complainant to take steps to avoid further necessary steps and that they have sold the bus in public auction on 03-09-2010 and received an amount of Rs.4,80,000/-, and adjusted the amount towards the loan and that the complainant is still due an amount of Rs.4,42,080/- and that there is no deficiency of service on their part.

10.    POINT NO. 1  :    Admittedly complainant purchased the bus with the finance of opposite party under Ex.B-1 loan cum hypothecation agreement dated 11-07-2008. The complainant has given the said bus for hire to APSRTC under Ex.A-2 hypothecation agreement dated 01-10-2007.  The plea of the complainant is that that she hired her bus to APSRTC to eke out her lively hood.  The version of opposite party is that complainant is not a consumer since she is doing transport business by giving her bus on hire to APSRTC with a profit motive.  Therefore complainant is not a consumer with in the meaning of Consumer Protection Act.  A perusal of terms and conditions of Ex.A-2 loan cum hypothecation agreement clearly discloses that the complainant is doing business with APSRTC by giving her bus on hire for getting profits.  Therefore the plea of the complainant that she was hiring her bus to APSRTC to eke out her livelihood cannot be accepted.  Therefore we are of the opinion that complainant is not a consumer with in the meaning of Consumer Protection Act.  Accordingly this point is answered.

11.    POINT NO. 2  :  According to the opposite party this Forum has no jurisdiction to entertain the complaint and adjudicate the matter because, as per the terms and conditions of the agreement executed by the complainant, if any dispute/differences arise between the parties the same shall be settled by Arbitration in accordance with the provisions of Arbitration and Conciliation Act 1996 and the award given by the Arbitrator shall be final and binding on all the parties concerned, but the complainant without following the said clause in the terms and conditions of the agreement approached this Forum and that therefore complaint is not maintainable.  Further the case of opposite party is that they filed claim petition before sold Arbitrator  in AOP 7/2011, that the Arbitrator issued notices to the complainant and her guarantors for repayment of the amount and the said summons were being returned intentionally unserved even though they are residing at the same address and that the Arbitrator issued publication to complainant and her guarantors and passed orders dated 05-08-2011 in the said AOP directing the complainant and her guarantors to pay an amount of Rs.4,42,080/- with interest and costs.  Complainant suppressed all these facts and filed this complaint before this Forum without any basis.  opposite party filed Ex.B-10 award passed by the Arbitrator dated 05-08-2011 wherein the complainant and her guarantors who were shown an respondents in the said Arbitration proceedings are directed to pay a sum of Rs.4,73,025/- to the Petitioner with future interest of 12% p.a. from 03-09-2010 till realization and also to pay costs of Rs.3,484/-.

12.   In a decision reported in 2008 (2) CPR page 26       , The National Consumer Disputes Redressal Commission, New Delhi in the case between Cholamandalam BBS Finance Limited and Sri.Kishore Jain it was held-

        “ Arbitration clause in hire purchase agreement could not exclude or bar jurisdiction of Consumer Forum to entertain complaint for deficiency in service”

        In view of the above said citation, Even though there is Arbitration clause in the hire purchase agreement it could not exclude or bar jurisdiction of Consumer Fora to entertain the complaint for deficiency of service.  Therefore, this Fora has got jurisdiction to entertain the complaint.  Accordingly this point is answered.

13.    POINT NO. 3  :  It is not in dispute that the complainant purchased a bus with the financial aid of opposite party under Ex.B-1 loan cum hypothecation agreement under Exs.B-1 and B-3. In clause 6 (b) of Ex.B-1 the rights of opposite party in case of default for repossession of the Asset is stipulated.  As per the said clause, in case of default in payments by the barrower the opposite party or its Officers or Authorized Representatives can take possession of Asset without notice to the barrower.  Likewise clause 6 (iii) of Ex.B-3 also envisages the right of a lender in case of default by the barrower.   According to the said clause the lender (opposite party ) or its authorized representatives or employees/ agents can at any time without notice to the barrower enter upon any premises and take possession of the vehicle under hypothecation.

14.   The allegation of the complainant is that even though she was paying the installments regularly the opposite party without giving any notice to her seized the bus in question by force on 19-05-2009 from the Chilakaluripet Bus station inspite of the resistance of the cleaner of  bus by beating him, and created Ex.B-4 the letter of consent of the complainant, in order to defend their illegal action.  Complainant admitted the signature in Ex.B-4 but disputed the contents therein stating that it was created by the opposite party in order to defend their seizure of the bus.  The contention of complainant is that the opposite party obtained signatures of complainant on an empty paper earlier at the time of disbursing the loan and subsequently created Ex.B-4.  During the course of arguments the learn counsel for the complainant filed Ex.A-34 letter and argued that Ex.A-34 is in the hand writing of complainant and requested to compare Ex.A-34 with Ex.B-4 stating that Ex.B-4 was created by the opposite party.  But the earlier version of the complainant is that the opposite party created Ex.B-4 contents while admitting the signature of the complainant therein.  The last sentence of Ex.B-4 is that “   idi na sammathina vrayinchi icchina vinnapamu” the said last sentence denotes that it was got written by somebody by the complainant.  Therefore the question of comparing the hand writing of the complainant relating to the contents of Ex.B-4 with Ex.A-34 does not arise.  Further the argument of the learn counsel for the complainant is that Ex.B-4 is a fabricated document.  Whether the document Ex.B-4 is a fabricated one or not can not be decided by this Forum.

15.   Even assuming that the complainant has not given her consent for seizure of the vehicle, the opposite party is at liberty to seize the vehicle without giving any notice to the complainant when there is default in payment of installments as per Article 6 (iii) of Ex.B-3.  The plea of the complainant that it was seized by force even though the seizure of the vehicle was resisted by the cleaner of the bus is not proved by the complainant.  The opposite party subsequent to the seizure of the bus and issued a telegram under Ex.A-17 informing the complainant that the bus in question was seized on 19-05-2009 at Chilakaluripet Bus Stand due to non payment of Monthly installments amount of Rs.88,120/- as on 20-05-2009 and requested the complainant to take necessary steps to settle the matter and avoid further necessary steps to be taken by opposite party.  But inspite of issuance of Ex.A17 telegram by the complainant, as the complainant has not settled the matter by paying the due amount, the opposite party auctioned the bus in public auction on 03-09-2010 and received an amount of Rs.4,80,000/-.  Further the opposite party filed a claim petition before the Arbitrator in AOP 07/2011 and the Arbitrator passed orders dated 05-08-2011 under Ex.B-10 directing the complainant herein and her guarantors who are respondents in the said Arbitrating Proceedings to pay a sum of Rs.4,73,025/- to the complainant with future interest @12%p.a from 03-09-2010 till realization and also to pay cost of the proceedings Rs.3,484/- .  Thus the proceedings of the Arbitrator discloses, that the complainant committed default in payment of the installments to the opposite party.

16.    The counsel for the complainant in support of the case of the complainant relied on the following decision reported in -

(1)    2009(2) CPR 238 of National Consumer Disputes Redressal Commission, New Delhi, in the case between TATA Motors Ltd., and Indrasen Choubey and others, wherein it was held –

1.     “It is impermissible for the money lender/financier/banker to take possession of the vehicle for which loan is advanced by use of force”

2.  2008(3) CPR page 45, the National Consumers Disputes Redressal Commission, New Delhi, between TATA Finance Limited and Francis Soeiro, wherein it was held –

        “To take position of vehicle by use of force is not justified”. 

3.  2009(4) CPR page 49 the A.P.State Consumer Disputes Redressal Commission, Hyderabad, in the case between K.Habeebunnisa and Shriram Transport Finance Company Limited, wherein it was held -

        “Where the vehicle is forcefully seized and sold by money lender/financer/banker it would be just and proper to award reasonable compensation to the complainant”

17.   As already stated above the complainant failed to prove that the opposite party has seized the bus by use of force even though it was pleaded by her that inspite of the resistance by the cleaner the bus was seized by force.  Therefore, the above citations relied upon by the complainant are not helpful to the case of the complainant.

18.   During the course of arguments the learn counsel for the opposite party argued that the complaint is not at all maintainable and the complainant does not come under the purview of consumer and the relationship with the complainant with this opposite party is debtor and creditor and that therefore the complaint is liable to be dismissed.

19.   In support of his argument the learn counsel of opposite party relied on the following decisions -

 (I) (2006)CPJ page 614 The Rajastan State Consumer Disputes Redressal Commission, Jaipur, in the case between Om Prakash Shashtri and Ashok Leyland Finance Limited and another, wherein it was held that -

“Dispute arising out of breach of hire purchase agreement is not a consumer dispute under the Consumer Protection Act, a remedy lies in a Civil Court”.

II 2007 CPJ 92 National Consumer Disputes Redressal Commission, New Delhi, in the case between Sheela Kumari and TATA Engineering and Lokomotive Company and others, wherein the decision in Manager, St.Mary’s Hire purchase Vs M.A.Jose, III 1995 (CPJ) 58 (NC) was referred and followed, wherein it was held that -

        “Recovery of a vehicle under a hire purchase agreement for default in payment of installments cannot be construed as deficiency of service”

III. II(2010) CPJ 45 The National Consumer Disputes Redressal Commission, New Delhi in the case between Parameswari and V.S.T. Service Station and others it was held

“Hire purchase agreement-  vehicle financed – payment of installments defaulted – vehicle repossessed- disposed of to third person, without issuing notice to complainant -  rights of the parties governed strictly by terms of hire purchased agreement -  prejudice caused to complainant not proved – relief not entitled”

20.   Here in this case the complainant purchased bus with the by The weDownload Manager">financial aid of opposite party under a hypothecation agreement            Ex.B-1. There is no hire purchase agreement between the complainant and opposite party in this case.  Therefore the citations relied on by the counsel for opposite party are not relevant to the case on hand.  But the complainant herein also committed default in payment of installments.  Even as per the table given in the complaint the complainant committed default in payment of installments for the months of November 2007, May 2008, July and August 2008 and February 2009 and paid installment amounts at her convenience.  Therefore, the opposite party seized the bus in terms of the hypothecation agreement Ex.B-1 and after informing the seizer of the bus under Ex.A-17 telegram the opposite party sold the bus in public auction after intimating the date of auction to the complainant under Ex.B-5 and adjusted the same process to the loan of the complainant.

21.   Another allegation of the complainant is that the opposite party sold the bus at a lower price causing loss to the complainant.  Admittedly even as per the version of the complainant the vehicle in question was met with an accident at Kondrupadu Village on 18-05-2009 and later the bus was seized by the opposite party on 19-05-2009.  The complainant assessed the value of the bus @Rs.15,24,949/-.   The complainant according to her she purchased the bus during June 2007 and it was registered under Ex.A-3 (certificate of registration) during September 2007 and after using it for 22 months the said bus was met with an accident on 18-05-2009.  The bus was given for hire to APSRTC as per Ex.A-2 agreement.  The complainant has not filed any document showing the value of the bus as on the date of the seizure of the bus or the date of auction of the bus, to prove the allegation that the said bus was sold at a low price.  Even though the bus transported by the APSRTC for 22 months and met with an accident on 18-05-2009 the said bus was sold for an amount of Rs.4,80,000/- in public auction held by opposite party on 03-09-2010.  According to opposite party complainant did not appear and kept quite even though he was intimated about the auction by the opposite party under Ex.B-5. Subsequent to the sale of the vehicle it was informed to complainant by opposite party under Ex.B-6 that the vehicle in question was sold in public auction for an amount of Rs.4,80,000/- and even after adjusting the same to the loan, complainant has to pay an amount of Rs.4,42,080/- and requested the complainant to pay the balance amount with in 10 days.  The Arbitration proceedings Ex.B-10 disclose that the complainant is still to pay an amount of Rs.4,73,025/- with future interest to the opposite party.  Therefore, in view of the foregoing discussions we find no deficiency of service on the part of opposite party. Accordingly this point is answered.

22.    POINT  NO. 4     In view of the foregoing discussion on points 1&3  the complaint is liable to be dismissed.

23.   In the result, the complaint is dismissed. But in the circumstanced of the each party shall bear their own costs.

Typed to my dictation by Junior Stenographer, corrected by me and pronounced in the open Forum dated this the 18^th day of April, 2012.

MEMBER                                  MEMBER                           PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For  opposite party:

                                     PRESIDENT