Karnataka

Chamrajnagar

CC/206/2010

P.Sangasena - Complainant(s)

Versus

Sriram Transport Finance Company Ltd. - Opp.Party(s)

Mr.D.M.S.

23 Sep 2011

ORDER

ORDER

1. The complainant has filed the complaint against the O.Ps. alleging deficiency of service by them.
2. The complainant’s case in brief are that he purchased new vehicle for Rs.4,53,000/- from Prerana Motors Pvt. Ltd. on 25/07/2006 for the purpose of earning his livelihood. Out of the said amount, the O.Ps. granted loan of Rs.3,80,000/-. The complainant had paid remaining amount. The O.Ps. at the time of disbursing loan obtained number of signature to the blank papers, blank stamp paper and took six blank cheques drawn from Catholic Syrian Bank, Mysore branch from the complainant.

 

1. After obtaining loan the complainant has regularly paid insalments with bank charges. Even the agreement period was not completed  on 09/06/2007 the O.P.no.2 came with rowdy elements and took the vehicle illegally without issuing  prior notice to the complainant. At that time, the complainant requested  not to take the vehicle but without hearing the complainant’s request seized the vehicle.

 

1. The complainant requested O.P.2 & 3 to release vehicle and they told him to pay Rs.1,50,000/- to release the vehicle, the complainant borrowed Rs.1,50,000/- from other person and paid the same. The O.P.2 & 3 even after receiving Rs.1,50,000/-  have not released the vehicle which clearly establishes the intention of the O.Ps.

 

1. The complainant has requested the O.Ps. to release the vehicle and they postponed by giving one or another reason.

 

1. In the 1^st week of February 2010 the complainant has learnt from the reliable sources that O.Ps. trying to get Fresh Registration  Certificate from complainant’s name. He contacted O.P.2 & 3  to release the vehicle  and at that time they told him  to pay Rs.60,000/- to release the vehicle. On 10/02/2010 the complainant paid Rs.60,000/- and requested them to release the vehicle  but they have not done so.

 

1. The complainant came to know that the FRC has been transferred  and after obtaining the B-extract from the R.T.O  office he came to know about the transfer of vehicle on 06/02/2010 itself without any notice to him.

 

1. The O.Ps. have illegally seized the vehicle without prior notice  and there is deficiency of service by the O.Ps. to the complainant. The value of the vehicle was about Rs.4,00,000/-. The complainant had only one vehicle  earning Rs.1,000/- to Rs.1,500/- from the vehicle and the complainant has lost his income  and is very  difficult to lead his life.

 

1. The complainant issued legal notice to the O.Ps. calling upon them to hand over the vehicle and also give the statement of receipts of loan account. After receipt of legal notice the O.Ps. have not given details of the payment made by the complainant.

 

1. The O.Ps. have also sold the vehicle  without notice to the complainant  to Siddaramu, Managing Partner of Swastik Contract Products, Nagawala village. There is deficiency of service by the O.Ps. to complainant.

 

1. The O.Ps. have admitted, about lending of loan to the complainant but they have denied other allegations made against them by the complainant.

 

1. The O.Ps. have stated that they have lent Rs.3,80,000/- to the complainant for purchase of vehicle by executing loan cum hypothecation agreement, DPN and other related documents. The complainant is the borrower and hence the complaint under C.P. Act is not maintainable.

 

1. The vehicle has been purchased for a commercial purpose and therefore the complaint is not maintainable.

 

1. There is arbitration clause under  the agreement and the complainant has to resolve all its disputes through arbitration and therefore the complaint is not maintainable.

 

1. The O.Ps. have stated that Rs.3,80,000/- was financed to the complainant and  he was to repay the same along with interest at 7.99%. The total amount payable as per agreement was Rs.5,21,448/-. The complainant was not regular in payment of instalments. The complainant has not responded to the notice dt. 27/11/2006, 03/01/2007 ,16/04/2007, 08/05/2007 and 28/05/2007. The O.Ps. have no other option to repossess the vehicle on 21/07/2007. After repossessing the vehicle notice on 07/08/2007 was issued by the O.Ps. to the correct address of the complainant and he has not deliberately claimed the same.

 

1. The O.Ps. were constrained to get the valuation of the vehicle on 10/12/2009 by the surveyor   who assessed market value of the vehicle for Rs.1,35,000/-. The quotations were collected from the intending purchasers  on 13/12/2009, 14/12/2009 and 15/12/2009 and N.Puttaswamy  of Srirangapattana has offered  highest bid of  Rs.1,49,000/- and O.P.3 has sold the vehicle  to best price available in the market by establishing the due procedures. After  appropriation of the sale amount the complainant  is  still due of Rs.6,36,866/-. After hearing objections  of the complainant  the R.T.O. has issued Fresh Registration Certificate.

 

1. Seizure and sale of vehicle by the O.P. is in accordance with contract between the parties.  The obligation arising out of the agreement  cannot be questioned by the complainant before the Forum.

 

1. The additional revision statement  has been filed on 18/03/2011 by the O.P. by stating that fabricated, false and forged receipts dt.19/03/2008 and 10/02/2008 have been filed before the Forum  by forging seal and signature of the respondent no.2 & 3 financial institutions. The PCR 35/2011 has been filed before the Prl. Civil Judge(Jr.Dvn) & JMFC, Chamarajanagar against the complainant U/s 192, 406, 420, 463 and 468 of I.P.C.

 

1. The following points arises for consideration.
   1. Whether the complaint as brought by the complainant is not maintainable under law?
   2. Whether the complainant shows the  deficiency of service by the O.Ps.?
   3. To what order the parties are entitled?

 

1.  The finding on the above points are that follows

        1.Point No.1: Affirmative.

        2.Point No.2: Affirmative in part

        3.Point No.3: As per order.

                                                                    REASONS

1. POINT NO.1: The complainant has filed the complaint alleging deficiency of service by O.Ps. The O.Ps. have raised objections regarding the maintainability of the complaint by alleging that the vehicle  was purchased for commercial purpose and therefore the complaint is not maintainable. It has also been stated by the O.Ps. that there is relationship between the borrower and the creditor and therefore the complaint is not maintainable before the Forum under law. The other grounds on which the maintainability has been questioned is that there is an arbitration  clause and therefore the complaint is not maintainable before this Forum.

 

1. Sri P.K. Mujumdhar in his Law of Consumer Protection in India, 5^th edition at page 216 has stated as follows:

Goods for re-sale or to use in profit-making activity:- The plain dictionary meaning of the word “used” in the definition section, the intention of parliament must be understood to be to exclude from the scope of the expression “Consumer” any person who buys goods for the purpose of their being used in any activity engaged on a large scale for the purpose of making profit. Since re-sale of the goods has been separately and specifically mentioned in the earlier portion of the definition clause, the words “for any commercial purpose”  must be understood as covering cases other than those of re-sale of the goods. Therefore, the parliament wanted to exclude from the scope of the definition not merely persons who obtain goods for re-sale, but also those who  also purchase goods with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit. On this  interpretion of the definition clause, persons buying goods for resale or for use in large scale profit making activity would not be “consumer” entitled to protection under the Act.

The parliament intended to restrict the benefits of the  Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing or processing activity carried on  for profit. In  order that the  exclusion clause should apply it was, however, necessary that there would be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit.

 

1. The same   learned author at page 223  has further stated that

   in cases of purchase of goods by a person for use in some small venture-such as for self-employment etc. which he might embark upon in order to make a living, as distinct from a large scale manufacturing, processing or trading activity carried on for profit. Thus, cases of persons who purchase goods or even  machinery for self-employment purpose without engaging in any trading or manufacturing business on a large scale for purpose of profit making, will not fall within the scope of the exclusion caluse in the statutory  definition in section 2(1)(d)(i) of the Act and hence such persons are “consumer” entitled to protection under the Act.

 

1.   It becomes clear from the above any person who purchased goods with an intention to earn livelihood  does not becomes a consumer within the meaning of the section 2(d) of the Consumer Protection Act. In the present case the complainant has purchased the vehicle for the purpose of his livelihood and not for making large scale profits which can be considered as commercial activity. This shows that the complainant has purchased the vehicle with intention to earn his livelihood and therefore is a consumer within the meaning of section 2(d) of Act and hence the complaint is maintainable under law.

 

1.  The other ground on which the learned counsel for the O.P. has stated that there is an arbitration clause and hence   the remedy of the complaint is before the arbitration and not before this Forum.

 

1. The learned author P.K.Mujumdhar in Law of Consumer Protection in India  5^th edition, page 562 has stated as follows:

Agreement containing arbitration clause: It was not necessary for the complainant to seek redress through  arbitration by the collector. It cannot be contended  by appellant that water was being supplied for a commercial purpose.

 

1.  The same author has stated that even though there is arbitration clause, the proceedings before the Consumer Forum  need not be stayed under section 34 of the Arbitration Act. He has further  stated that the existence of remedy by way of arbitration even  assuming for the purpose of discussion with section 7(b) of the Arbitration Act covers this case  which is extremely doubtful does not preclude  an aggrieved consumer from seeking redressal before the Forums constituted under Consumer Protection Act which is a special statute enacted by parliament  for the specific purpose of providing a speedy, cheap and efficacious remedy to consumers before the special Forums created for that purpose.

 

1. The next arguments of the learned counsel for the O.P. is that since the criminal case is pending the complaint is not maintainable under law. In support of his arguments he relied upon the decisions reported in IX(1995)(3) CPR 116 Dr.G.L.Goswamy V/o M/s Mandovi Motors.

 

1. In this case the Hon’ble State Commission  has held that  the party issued cheques and the cheques were presented. He has issued instructions to stop payment of the said cheques. The complainant’s grievance is that the opposite party colluded to defraud and cheated him in instructing the bankers to stop payment. The complainant there after filed a complaint before the Cubbon park Police against the opposite parties, the police on receipt of the said complaint registered a case under section 406,409 and 420 of IPC. In the present case the subject matter  the complaint filed by the O.Ps. before the court is two receipts have been forged by payment and here compensation have been claimed for wrongly seizing the  vehicle and selling  the same. As the subject matter in both the cases are different, it cannot be said that the complaint before the Consumer Forum is maintainable.

 

1. The next arguments of the learned counsel is that the relationship between the complainant and O.P. is of  creditor and borrower relationship and therefore the complaint is not maintainable under law. The above arguments of the learned counsel for O.P. cannot be accepted   in view of the decisions 2006 CTJ (209)(SC) (CP), 1992(1) CPR 456,1995(3) CPR 293, 2006(2) CPR 440, C.R.P.3199/96 and 2004(2) CPR 584 relied by the O.P. This shows the complaint against O.p. is maintainable before the Consumer Forum. In view of this the arguments of learned counsel for O.Ps. cannot be accepted.

 

1. In view of the above it can be said that the complaint as brought before this Forum is maintainable under law.

 

1. POINT NO.2:- The complainant has filed the complaint alleging various grounds and has sought  for compensation on the ground that deficiency of service by the O.Ps. The O.Ps. have denied all the allegations made against them and they have stated that there is no deficiency of service.

 

1. The District Consumer Forum has jurisdiction to dispose of the matter in summary way and in the summary jurisdiction complicated question of law and facts cannot be  gone into by  the District Consumer Forum. If the entire allegations made in the complaint by the complainant are taken only two grounds arise for consideration by the District Consumer Forum regarding  deficiency of service,  One  whether was forcible possession of the vehicle for non payment of instalments and the other one  sale of vehicle after repossessing of the vehicle from the complainant.

 

1. The complainant has to show that there is deficiency of service by O.P on the above said two aspects. The complainant has stated in his complaint that the vehicle has been forcibly taken possession by the O.P. with the help of rowdy elements without prior notice to him and same has been denied by the O.Ps. In the affidavit also the complainant has reiterated about the same. The O.P. has denied the same in his affidavit filed.  Except filing the affidavit the complainant has not placed sufficient materials to show that the vehicle has been seized by the O.P. by using force with the help of rowdy elements. The decision on which the complainant has relied upon in respect of the same does not help him as he is not been able to show the vehicle has been repossessed by them   with the help of rowdy elements.

 

1. The complainant has stated that the O.P. has not  issued prior notice and have illegally sold the schedule vehicle to Mr.Siddaramu, who is the Managing partner of Swastik Contract Products and have handed over the possession of schedule vehicle to the purchaser and there is deficiency of service and it has been denied by the O.P. and have stated that the vehicle has been  sold with notice and  they had issued notice to last known addresses it  has returned.

 

1. The O.Ps. have addressed a letter to the complainant but it has been returned. The address shown is different and there by it could be said that there was no notice prior to the sale. It has been  stated by the Hon’ble National Consumer Redressal Commission, New Delhi in Parameswari V/s VST Service Station reported in  II(2010)CPJ 45 (NC) that the vehicle could be  disposed to the 3^rd person without issuing notice to complainant. The rights of parties are governed by terms of hire purchase agreement, prejudice caused to complainant to be  proved.

 

1. In the present case the vehicle has been sold and no notice has been issued. The complainant has to show that by the said sale prejudice has been caused to him. The same could be made out either from the complainant material or from the O.Ps. materials placed before the Forum.

 

1. The O.Ps. have stated in their version as well as in the affidavit  filed that they had put up in the  notice board before sale of vehicle and quotations were taken from three persons. The vehicle was idle  for two years before sale and it was not sold immediately  after repossessing the vehicle  and there by the value of the vehicle had come down.

 

1. Mere publishing in the notice board  in the office  of the O.P. cannot be considered to be wide publicity for sale of the vehicle.  The wide publicity is  required to sale  vehicle or any property  in order to get best price, but it has not been done so in the same and there by there is deficiency of service.  The prejudice  has been caused to the complainant  as stated in the above decision on account deficiency of service in publishing  sale of vehicle.

 

1. POINT NO.3:- In view of holding point-2 in the affirmative the O.Ps. are directed to pay compensation of Rs.1,00,000/- to the complainant for deficiency of service in publicity and sale of vehicle and also cost of Rs.2,000/- being the cost of the proceedings.

 

1. In view of the above following

 

 

ORDER

The complaint is allowed in part .

The complainant is entitled for compensation of Rs.1,00,000/- from the O.Ps. along with interest at 6% p.a. from today till realization of full amount and also entitled for Rs.2,000/- being the cost of the complaint.