Punjab

Moga

CC/16/149

M/s Kisan Gram Udyog Samiti - Complainant(s)

Versus

Sundram Finance Ltd - Opp.Party(s)

Sh. Anish Kant Sharma

15 Feb 2017

ORDER

THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MOGA.

 

 

                                                                                      CC No. 149 of 2016

                                                                                      Instituted on: 08.09.2016

                                                                                      Decided on: 15.02.2017

 

M/s Kisan Gram Udyog Samiti, Regd. Phoour Road, V.P.O. Mudki, Tehsil & District Ferozpur, through its Secretary Kulwant Rai Kataria son of Sh. Brij Lal resident of Ward no.4, Mudki, Tehsil & District Ferozpur.

                                                                                ……… Complainant

 

Versus

1.       Sundram Finance Ltd., Ground Floor, SCF no.28, Saheed Bhagat Singh Market, Opp. Bus Stand Moga, G.T. Road, Moga, through its Branch Manager.

 

2.       Sundram Finance Ltd., Registered Office at 21, Patulous Road, Chennai-600002, through its Managing Director/Secretary.

                                                                           ……….. Opposite Parties

 

 

Complaint U/s 12 of the Consumer Protection Act, 1986.

 

 

Quorum:    Sh. Ajit Aggarwal,  President

                   Smt. Vinod Bala, Member

                   Smt. Bhupinder Kaur, Member

 

Present:       Sh. Anish Kant Sharma, Advocate Cl. for complainant.

                   Sh. Vishal Jain, Advocate Cl. for opposite parties.

 

ORDER :

(Per Ajit Aggarwal,  President)

 

1.                Complainant has filed the instant complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the "Act") against Sundram Finance Ltd., Ground Floor, SCF no.28, Saheed Bhagat Singh Market, Opp. Bus Stand Moga, G.T. Road, Moga, through its Branch Manager and others (hereinafter referred to as the opposite parties) directing them to pay Rs.95,334/- alongwith interest @ 18% per annum from 19.02.2016 till 29.08.2016 and future interest @ 12% till its realization on account of excessive amount received by opposite parties on loan agreement/contact no.H012600392 and Customer Code- T0020980. Further opposite parties may be directed to pay Rs.2 lac on account of mental tension & harassment and deficiency in service and Rs.25,000/- as litigation expenses to the complainant or any other relief which this Forum may deem fit and proper be granted.

2.                Briefly stated the facts of the case are that the complainant is a association registered firm and running its business under the name and style of M/s Kisan Gram Udyog Samiti and Sh. Kulwant Rai Kataria is fully authorized to file the present complaint regarding which resolution dated 20.08.2016 has been passed. Opposite party no.2 is a limited company which can sue and be sued through its Managing Director or Secretary and opposite party no.1 i.e. Sundram Finance Limited is also running its branch office in Moga and same is running through its  Branch Manager. The complainant took a loan for JBC bearing temporary registration no.HR-99NC-2562 from opposite parties on 6^th February, 2013 and entered into a loan agreement no.H012600392. At that time total 35 EMIs were fixed by opposite parties and tenure to clear the loan amount was 36 months and original amount was Rs.16 lacs, Original Interest was 2,75,866/- total amount payable Rs.18,75,866/-. Neither the opposite parties read over and explain the contents of the alleged agreement to the complainant nor the copy of the same was supplied of till date despite of repeated requests  made by the complainant. Regarding this the request was also made in reply cum legal notice dated 15.04.2016 by the complainant. The opposite parties received an excessive amount of Rs.95,334/- from the complainant. Inspite of Rs.18,75,866/- opposite parties received fraudulently Rs.19,71,200/- in which 22 EMIs @ Rs.54,600/- each and 14 EMIs @ Rs.55,000/-. The opposite parties were not entitled to advance installments which should have been adjusted against the subsequent monthly installments. But the opposite parties illegally charged interest on the advance installments, same is deducted from loan account at the time of sanction the loan, which is against the principal of natural justice. The opposite parties received post dated cheques from complainant on which cost can be charged and are payable at par. Opposite parties wrongly and illegally charged Rs.250/- per cheque as collection charges which is against the RBI instructions. In the same way, opposite parties charged Rs.50/- per entry showing as cash handling charges which are also wrong and illegal. There is no law or rule and regulations to charge such type of illegal charges from the client. The opposite parties had received advance 20 multicity cheques of SBI of Rs.54,600/- each from the complainant at the time of the advancement of the above said loan. Opposite parties did not present intentionally and deliberately, the above said cheques within time and with malafide intention had been charging exorbitant only to cause wrongful loss to the complainant and wrongful gain to the opposite parties. Opposite parties cannot take the benefits of its own wrongs. The complainant never agreed to pay additional interest/charges @ 30%  in default of any installment, but they charged 30% sometimes arbitrarily and illegally and the same is against the principal of natural justice and against the guidelines issued by RBI. The opposite parties also issued an illegal notice dated 05.03.2016 and also demanded Rs.1,31,272/-. The complainant gave reply cum legal notice dated 15.04.2016 to the opposite parties. The opposite parties never ready to supply the proper account statement as there is fraud committed by the opposite parties. The opposite parties deducted the amount paid by the complainant in the shape of additional finance charge @ 30% and did not deduct the amount from the principal amount, which is illegal, null and void The complainant approached to opposite party' company many times for issuance of the above said amount, but opposite parties refused to do the same. Due to the act and conduct and deficiency in service, the complainant has suffered mental tension, physical harassment and financial loss. Hence this complaint.

3.                Upon notice, opposite parties appeared through counsel and filed their written reply taking preliminary objections that the present complaint has been filed by the complainant only to injure the reputation of answering opposite parties. Even otherwise the present complaint is false, vexatious; that intricate questions of law and facts are involved in the present complaint which require voluminous documents and evidence for determination which is not possible in summary procedure under Consumer Protection Act and appropriate remedy, if any, lies in the civil court; that the present complaint is liable to be dismissed at the outset the answering opposite parties deny each and every statement, averment, allegation or contention made by inconsistent with or contradictory to whatever is stated here-in-below and no statement, allegation, contention not specifically denied by the answering opposite parties shall be deemed to have admitted, merely for want of traverse; that neither there is any deficiency on the part of answering opposite parties nor any such deficiency in service has been alleged in the complaint. Moreover, the fact regarding receiving of any advance installment is not denied. Infact, the first installment is due on 03.03.2013 which was paid by complainant through cheque on 02.03.2013, so there is not an advance payment or advance deduction as alleged by the complainant; that the complainant made allegations of cheating and forgery in his complaint against the opposite parties, so this Forum has no jurisdiction to try and decide the complaint of cheating; that present complaint is liable to be dismissed on the ground that the allegations made in the complaint is only regarding the calculation of amount and for the recovery of excess amount as mentioned in the complaint which is not triable by this Forum, as the only suit for recovery and rendition of account lies before the civil court. The complainant has not filed his bank statement to prove that sufficient money was available on due dates and non presentation of the cheques were intentional. The complainant has made a concocted story to implicate the answering opposite parties in a false and frivolous complaint; that the complainant has not approached the Forum with clean hands; that no cause of action has ever been arisen to the complainant against the answering opposite parties; that the complainant has failed to prove any deficiency in service on the part of opposite parties; that there is an arbitration agreement in between the parties, so as per arbitration agreement this Forum has no jurisdiction to try and decide the present complaint under Consumer Protection Act. So, the complaint may please be advised to came before the arbitrator to solve the matter in question as per the terms and conditions of the arbitration agreement; that the complainant admittedly is not an individual and is an association. There is no averment in the complaint that the vehicle in question has been purchased for his livelihood, so the vehicle used is for the commercial purpose and not come under the exceptions of the Consumer Protection Act. So, on this ground also the present complaint is liable to be dismissed. On merits, Sh.S.Muthukrishnan Branch Manager opposite party no.1 is well conversant with the facts of the case and is duly authorized to sign and verity the power of attorney, written statement and sworn the affidavit by way of evidence in this regard in the present complaint being a Branch Manager. It is admitted correct to the extent that the complainant took a loan for JBC from the opposite parties in the month of February 2013 and also entered into a loan agreement no.H012600392 and the total loan period was 36 months and the EMI was 35, to the tune of Rs.16 lac and the interest amount Rs.2,75,866/-. The agreement in question has already been supplied to the complainant alongwith its terms and conditions of the agreement at the time of giving loan by the opposite parties. If the complainant had not received the agreement in question alongwith its terms and conditions then why they have not demanded the same from the last three years, which clearly shows, the complainant ignorance about the terms and conditions of the agreement. The true facts are that during the loan period 11 times the cheque was dishonoured which was given by the complainant to the opposite parties as EMI and also a number of times the amount of EMI was delayed on the part of complainant, upon which, as per the agreement the annual financial charges were levied by the opposite parties and some time the opposite parties also levied the cash handling charges to the complainant. So, as per record of the opposite parties, they have received only Rs.17,56,367/- out of the total loan amount i.e. Rs.18,75,866/- and Rs.1,05,533/- has been received by the opposite parties as annual financial charges and the same are not liable to be included in the loan amount as per agreement and still an amount of Rs.1,19,383/- alongwith AFC is due against the complainant which is liable to be recovered by the opposite parties. The charges levied by the opposite parties regarding the bouncing of the cheque are as per the RBI guidelines and agreement executed between the parties and the opposite parties never violated any rules and regulations. The AFC has been charged by the opposite parties as per terms and conditions of the agreement which was duly signed by the complainant at the time of taking loan from the opposite parties and the terms and conditions were read over by the complainant and also explained by the officials of the opposite parties. The opposite parties also issued legal notice dated 05.03.2016 about the due amount against the complainant. The opposite parties prepared a regular account of the complainant firm which was supplied to the complainant. The opposite parties are liable to recover the amount due against complainant alongwith interest and other charges. All other allegations made in the complaint have been denied and a prayer for dismissal of the complaint with costs has been made.

4.                In order to prove the case, complainant's firm tendered in evidence duly sworn affidavit of Sh. Kulwant Rai Kataria, as Secretary of their firm Ex.C-1 alongwith copies of documents Ex.C-2 to Ex.C-17 and closed the evidence. 

5.                On the other hand, opposite parties tendered in evidence duly sworn affidavit of Sh. V.MuthuKrishnan, Branch Manager M/s Sundram Finance Ltd. Moga Ex.OP's-1, 2/1 alongwith copies of documents Ex.OP's-1, 2/2 to Ex.OP's-1, 2/4 and closed the evidence.

6.                We have heard ld. counsel for the parties and have very carefully gone through record placed on file.

7.                Ld. counsel for the complainant argued that the complainant is an association registered firm and running its business under the name and style of M/s Kisan Gram Udyog Samiti and Sh. Kulwant Rai Kataria is fully authorized to file the present complaint regarding which a resolution dated 20.08.2016 has been passed. The complainant took a loan for JBC bearing temporary registration no.HR-99NC-2562 from opposite parties on 6^th February, 2013 and entered into a loan agreement no.H012600392. At that time total 35 EMIs were fixed by opposite parties and tenure to clear the loan amount was 36 months and original amount was Rs.16 lac, Original Interest was Rs.2,75,866/- total amount payable was Rs.18,75,866/-. Neither the opposite parties read over and explain the contents of the alleged agreement to the complainant nor the copy of the same was supplied of by them despite repeated requests of the complainant. Regarding this the request was also made in reply cum legal notice dated 15.04.2016 by the complainant, but all in vain. The opposite parties received an excessive amount of Rs.95,334/- from the complainant. Inspite of Rs.18,75,866/- opposite parties received fraudulently Rs.19,71,200/- in which 22 EMIs @ Rs.54,600/- each and 14 EMIs @ Rs.55,000/-. The opposite parties illegally charged interest on the advance installments and the same was deducted from loan account at the time of sanction of loan. The opposite parties also received post dated cheques from complainant on which cost can be charged and are payable at par. Further opposite parties charged Rs.250/- per cheque as collection charges which is against the RBI instructions. In the same way, opposite parties charged Rs.50/- per entry as cash handling charges which are also wrong and illegal. The opposite parties had received advance 20 multicity cheques of SBI of Rs.54,600/- each from the complainant at the time of the advancement of the loan and they did not present the above said cheque within time and with malafide intention to charge exorbitant charges. Opposite parties cannot take the benefits of its own wrongs. The opposite parties also deducted the amount paid by the complainant in the shape of additional finance charges @ 30% and did not deduct the amount from the principal amount, which is illegal, null and void. The opposite parties issued an illegal notice dated 05.03.2016 demanding Rs.1,31,272/- through their counsel. The complainant gave reply cum legal notice dated 15.04.2016 to the notice of opposite parties. The opposite parties never supplied proper account statement to the complainant. The complainant approached to opposite party' company many times for the settlement of his loan account, but opposite parties refused to do the same. So, the present complaint may accepted and opposite parties may be directed to refund the excessive amount received by them to the complainant with interest alongwith compensation and litigation costs.

8.                On the other hand, ld. counsel for opposite parties argued that it is correct to the extent that the complainant took a loan for JBC from the opposite parties in the month of February 2013 and also entered into a loan agreement no.H012600392 and the total loan period was for 36 months and the EMI was 35, to the tune of Rs.16 lac, the interest was Rs.2,75,866/-. The agreement in question was duly supplied to the complainant alongwith its terms and conditions to the complainant at the time of giving loan by the opposite parties. If the complainant had not received the agreement in question alongwith its terms and conditions, then why they have not demanded the same from the last three years. Further argued that during the loan period 11 times the cheques were dishonoured which were given by the complainant to the opposite parties as EMI and also a number of times, amount of EMI were delayed by the complainant, on which, annual financial charges were levied by the opposite parties as per the agreement. The opposite parties also levied cash handling charges to the complainant. As per record of opposite parties, they have received only Rs.17,56,367/- out of the total loan amount of Rs.18,75,866/- and Rs.1,05,533/- had been received by the opposite parties as annual financial charges and the same are not liable to be included in the loan amount as per agreement and now an amount of Rs.1,19,383/- alongwith AFC is due against the complainant which is liable to be recovered by the opposite parties. The charges levied by the opposite parties regarding bouncing of the cheques as per the RBI guidelines and as per the agreement executed between the parties. The opposite parties never violated any rules and regulations. The AFC has been charged by the opposite parties as per terms and conditions of the agreement which was duly signed by the complainant at the time of taking loan and the terms and conditions were read over by the complainant and also explained by the officials of the opposite parties at that time. The opposite parties prepared a regular account of the complainant firm which was supplied to him. The opposite parties are liable to recover the amount due against complainant alongwith interest and other charges. All other allegations made in the complaint have been denied and a prayer for dismissal of the complaint with costs has been made.

9.                The case of the complainant is that they took loan of Rs.16,00,000/- from opposite parties for the purchase of JBC which was to be repayable  in 36 installments. Original interest on this amount was calculated as Rs.2,75,866/- and total amount was payable Rs.18,75,866/-. An agreement was also executed between the parties. However, the opposite parties never read over and explained the conditions of the agreement to the complainant. Even they never supplied any statement of account regarding the loan account of the complainant. The opposite parties received Rs.19,71,200/- from the complainant in 36 EMIs instead of actual amount of Rs.18,75,866/-. As such, they received Rs.95,334/- in excess from the complainant. The complainant issued post dated cheques to opposite parties for EMIs. These cheques were multicity cheques and were encashable at par in every city, but the opposite parties charged cheque collection charges from the complainant, which is against the RBI instructions. Moreover, they charged cash handling charges for the EMIs paid by complainant in cash. There is no law, rule and regulation to charge such type of charges. The opposite parties unilaterally charged addition interest or additional finance charges i.e. 30% per annum on delayed instalments for which the complainant never agreed at the time of loan. The opposite parties already received Rs.95,334/- in excess from the agreed amount. Now, instead of refunding excess amount, they are demanding Rs.1,31,272/-, which is altogether illegal and amounts to deficiency in service and trade mal practice on their part. On the other hand, opposite parties admitted that the complainant took a loan of Rs.16 lacs from them in February 2013 and interest on this amount was calculated as Rs.2,75,866/-, which was to be repayable alongwith principal amount in 36 installments. An agreement regarding this was executed between the parties. They explained all the terms and conditions of the agreement to the complainant at the time of sanctioning the loan and also supplied the copy of loan agreement to him. It is wrong that the complainant paid all the installments of loan on time, rather he failed to make the payment of EMIs on time. The cheques issued by the complainant were dishonoured many times and also a number of times the EMIs were delayed on the part of the complainant, on which, as per the agreement additional finance charges were levied by the opposite parties and they also levied cash handling charges on EMIs paid by the complainant in cash as per agreement. It is wrong that the complainant paid an amount of Rs.19,71,200/- to opposite parties as repayment of his loan. The complainant paid Rs.18,62,000/- to opposite parties out of which Rs.17,56,367/- is adjusted in total loan amount i.e. Rs.18,75,866/- and Rs.1,05,533/- is adjusted towards annual financial charges levied on the loan amount of the complainant for delayed payment of installments as per agreement, which is not liable to be included in the loan amount and at present Rs.1,19,383/- is still due out of the loan amount alongwith AFC against the complainant and opposite parties are entitled to recover this amount. The opposite parties levied all the charges to the account of the complainant as per RBI guidelines and as per agreement between agreed between the parties. They never violated any rule and regulation and AFC has been charged as per agreement duly signed by the complainant. There is no deficiency in service and trade mal practice on the part of opposite parties. They are entitled to recover the amount due towards the complainant against total loan amount alongwith annual financial charges.

10.              Now, it is admitted case of the parties that the complainant took a loan of Rs.16 lacs from opposite parties in February, 2013, which was to be repayable in 36 monthly installments and original interest on this amount was calculated as Rs.2,75,866/-. As such, the complainant had to pay Rs.18,75,866/- in total in 36 EMIs. The complainant argued that they had paid all the installments on time and never defaulted payment of any installments and opposite parties wrongly and illegally charged cheque clearance charges, cash handling charges and annual finance charges from them @ 30% and they received Rs.19,71,200/- from them instead of agreed amount of Rs.18,75,866/-. As such, they received Rs.95,334/- in excess from them. On the other hand, opposite parties argued that complainant failed to repay the installments on time and delayed the payment of EMIs many times. Even the cheques issued by complainant were bounced and as per loan agreement they charged annual financial charges on the delayed installments @ 30% per annum. They also levied other charges as per agreement executed between the parties and as per RBI guidelines. Whereas, the complainant argued that they never agreed to pay 30% as annual finance charges on delayed payment. The opposite parties never explained the terms and conditions of the agreement at the time of giving loan. They even not supplied the copy of the agreement to them. The loan agreement was arbitrarily drafted by the opposite parties themselves and the complainant was only asked to sign it. They never read over the contents of the agreement to the complainant and they themselves levied annual finance charges on the delayed installments which are very excess than the market rate and RBI guidelines.

11.              We are of the considered opinion that this type of loan agreements are of printed form type of agreements/contracts which are drafted by the finance companies themselves for their own convenience and these agreements never read over and explained by the agents of the companies to the customers and this type of contracts protect the interests of only and only of the companies, who had upper hand on the customers at the time of granting loan to them and borrowers have only to sign on the dotted lines on instructions of finance companies and the terms & conditions and hidden charges never explained to the customers at the time of sanctioning of loan and later on they levied wrong fess and charges to the borrowers and also charged interest at very excessive rate then the agreed rate on the delayed payment unilaterally. So, we cannot rely upon this type of agreements which are unilaterally and illegally prepared by the finance companies themselves for their convenience.

12.              From the above discussion, the present complaint is hereby allowed. However, the complainant has claimed that he paid the amount of Rs.19,71,200/- to opposite parties out of loan amount, but he failed to prove the payment of amount to this extract and only succeeds to prove the payment of Rs.18,62,000/-. As such, opposite parties are directed to overhaul the loan account of the complainant and to withdraw the annual finance charges @ 30% as charged by them, cheque encashment charges and cash handling charges and to charge interest @ 12% per annum on the delayed installments only for the delayed period and to issue NOC and other required documents for cancellation of hypothecation on the vehicle purchased by the complainant with the help of loan taken by them from the opposite parties on receipt of balance payment, if any, after overhauling the loan account of the complainant. Compliance of the order be made within 30 days of receipt of the copy of this order, failing which, complainant shall be entitled to initiate proceedings under section 25 & 27 of the Consumer Protection Act. Copy of the order be sent to the parties, free of costs. File be consigned to record room.

Announced in Open Forum.

Dated: 15.02.2017.

 

                               (Bhupinder Kaur)                 (Vinod Bala)         (Ajit Aggarwal)

                                           Member                             Member                President