BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD.
C.C.No.87 of 2012
Between
Machineni Mohan Rao, S/o.Siddaiah
Naidu, agriculturist, aged 35 years,
R/o.5-438, Ankammanagar,
Railway, Kodur 516 101
YSR Kadapa District. ..Complainant
And
- Telco Constructions Equipment Company Limited,
24-11-144, warwick House, Shanthinagar, Nellore-524 003
Represented by its Branch Manager.
- M/s. Tata Capital Limited, represented by its Manager,
Having its office at Auto Plaza, Plot Nos.3,4,5 and 6,
Road No.3, Opp:Times of India, Banjara Hills,
Hyderabad-500 034.
- M/s. Tata Capital Limited, represented by its Manager,
Having its registered office at one Forbes, Dr.V.B.Gandhi
Marg, Fort, Mumbai-400001. ..Opposite parties.
Counsel for the complainant : Mr. P.Venkateswar Rao
Counsel for the opposite parties : O.Ps.1 & 3 set exparte
M/s Lotus Law Associates -O.P 2
QUORUM: SRI R.LAKSHMI NARASIMHA RAO, HON’BLE Incharge President
AND
SRI T.ASHOK KUMAR, HON’BLE MEMBER.
MONDAY, THE TWENTY FIFTH DAY OF NOVEMBER,
TWO THOUSAND THIRTEEN
Order (Per Sri T.Ashok Kumar, Hon’ble Member)
01. The case of the complainant in brief is that he is an unemployee and in order to eke out his livelihood purchased Tata Hitachi model Ex 200 hydraulic excavator from the opposite parties. Opposite party No.1 informed that they will deliver the vehicle at their showroom at Nellore and the cost of the vehicle including taxes and charges is Rs.44,14,781.28 ps and that they provide financial assistance through opposite parties 2 and 3. Opposite party No.2 promised to provide Rs.35,30,000/- as a loan to be repaid in 35 monthly instalments and asked the complainant to make balance payment as initial payment to opposite party no.1 and informed that they will not charge any interest or additional charges on the loan and hence the complainant entered into hire purchase agreement and availed loan of Rs.35,30,000/- from opposite party No.2 and paid Rs.8,84,781/- to opposite party No.1 as initial payment and opposite party No.2 sent cheque for Rs.35,30,000/- to opposite party No.1 and accordingly opposite party No.1 received the entire cost of the vehicle. In spite of delivery of the vehicle within one month as promised OP.1 demanded the complainant to pay Rs.17,160/- as commission for early delivery and Rs.36,000/- towards transportation charges from Dharwad of Karnataka to YSR Kadapa District and under unavoidable circumstances, the complainant was compelled to pay the said amounts to opposite party No.1 and got delivery of the vehicle on 15-10-2008. According to the Hire Purchase Agreement, the first instalment will commence from 03-12-2008 and end by 03-10-2011 and the complainant was regular in paying the instalments and paid Rs.13,43,300/0- in 11 instalments. In November, 2009 due to ill health, he was bed ridden and could not pay the instalment and informed the said fact to opposite party No.2 over telephone and opposite party No.2 advised him to pay the said instalment with late fee but contrarily repossessed the vehicle on 24-1-2010 forcibly without prior notice during the period of 14th instalment and that also charged extra amount than agreed upon. The complainant immediately on 25-1-2010 rushed to opposite party No.2 and requested to release the vehicle and opposite party No.2 informed that they will release the vehicle to the complainant within one month as they have to get permission from opposite party No.3. According to the statement, the amount fallen due is only Rs.17,09,300/- and charged Rs.1,15,304/- as over draft charges (late fee). It is evident that the opposite party added an amount of Rs.7,41,300/- as finance charges on different heads to the loan amount of Rs.35,30,000/- and the total figure is shown as Rs.42,71,300/- as total contract value and this amount is divided into 35 instalments to pay Rs.1,23,300/- in first instalment and Rs.1,22,000/- each in remaining 34 installments and from this it is clear that the opposite parties charged huge amounts to a tune of Rs.7,41,300/- against to the agreement and collected Rs.2,32,980/- under 11 instalments. The opposite party No.2 neither released the vehicle nor sent any letter even after regular persuasions and on 24-3-2012, opposite party No.2 sent a reply notice to the legal notice dated 14-3-2012 of the complainant stating that they have sold away the vehicle on 26-3-2010 under auction for an amount of Rs.28,75,000/- and that there is an outstanding loan amount of Rs.29,78,678/-. The vehicle was sold during 16th instalment and the reply notice also shows that Rs.3,64,083/- towards VAT and no notice was also issued prior to sale and it is not known how they arrived at Rs.29,78,678/- when according to their own loan statement there was a due of Rs.17,09,300/-. The vehicle is just 14 months old and was in very good condition and never undergone any repairs and was sold for a meager amount of Rs.28,75,000/- without any basis and has auctioned the vehicle without following the due procedure of law and according to law 10% p.a. depreciation is permissible and hence the value of the vehicle as on the date of sale is Rs.38,26,143/- (after deduction of 10% depreciation on Rs.44,14,781/- for 16 months period). The opposite party No.1 charged Rs.53,160/- excess amount than the cost of the vehicle and also charged Rs.7,41,300- towards authorized heads and opposite party No.2 without any prior notices repossessed and sold the vehicle for a lesser amount of Rs.9,51,144/- than the actual value of the vehicle. Opposite party No.2 has not followed the due procedure of law in repossessing the vehicle and assessing its value and in conducting the auction and has not paid the excess sale proceeds of Rs.19,01,539/- and also an amount of Rs.2,32,980/- collected in 11 instalments towards finance charges. The complainant sustained income loss for two months i.e. from the date of repossession and sale of vehicle. The acts of Ops amount to deficiency in service and unfair trade practice. Hence the complaint for a direction to the opposite party No.1 to refund Rs.53,160/- together with interest at 24% p.a. from 12-10-2008 till the date of payment and direct opposite party No.2 to refund the excess sale proceeds of Rs.19,01,539.0 and also an amount of Rs.2,32,980/- collected in 11 instalments towards finance charges, Rs.60,000/- towards loss of income together with interest at 24% p.a. from the date of sale i.e. 26-3-2010 till payment
OR
direct opposite parties 1 to 3 to refund an amount of Rs.53,160/- and Rs.8,84,781/- paid to opposite party No.1 and Rs.13,43,300/- paid under instalments to opposite party No.2 together with interest @ 24% p.a. from 26-3-2010 till payment after deducting the depreciation of the vehicle value of Rs.5,88,637/-
OR
direct the opposite parties to provide new TATA Hitachi vehicle to the complainant by receiving Rs.5,88,638/- of depreciation value and Rs.19,24,604/- totaling Rs.25,13,242/- in 35 equal instalments and pay Rs.25,000/- towards costs and compensation of Rs.50,000/-.
02. Opposite parties 1 and 3 set were exparte vide order dated 10-9-2012. On 01-11-2012 it was noted that M/s Kini and Co. filed vakalath after call work in section for opposite parties 2 and 3 and since opposite party No.3 was set exparte on 10-9-2012, case was adjourned to 15-11-2012 for written version of O.P.2 only. Time was extended for filing written version of O.P.2 from 27-11-2012 to 30-11-2012 on payment of costs of Rs.500/-. However on 30-11-2012 costs were paid but written version of O.P.2 was not filed and hence further time was refused and the matter was posted for affidavit evidence of the complainant.
03. The complainant filed affidavit evidence in support of his case and marked Ex. A1 to A11. Since opposite party was given to the second opposite party he filed affidavit evidence and marked Ex. B1 to B19. The gist of the said evidence of the OP.2 is as under :
04. Opposite party No.2 and 3 are a Non-Banking Finance Company and admitted that opposite party no.1 is the manufacturer of vehicles but denied that opposite party no.3 is having control over opposite party No.1. Pursuant to the scheme of arrangement under the provisions of Sections 391-394 of the Companies Act, 1956 duly sanctioned by Hon’ble Bombay High Court vide orders dated 24-2-2012 and 12-3-2012 certain financial services activities of Tata Capital Ltd., have been transferred to Tata Capital Financial Services Ltd., and consequently the rights and obligations under the facilities availed by the borrowers from TCL were transferred to TCFSL. The complainant approached for vehicle loan for purchase of a commercial vehicle and after considering and obtaining necessary signatures on relevant documents, it sanctioned loan vide contract No.7000042010 dated 30-10-2008 for an amount was Rs.35,30,000/- and finance charges are Rs.7,41,300/- and total value of the contract is Rs.42,71,300/- and the complainant hypothecated the said vehicle to the finance company and Mr.P.Eswar Reddy stood as guarantor for the said loan. The complainant agreed to repay the contract value in 35 instalments @ Rs.1,23,300/- as first instalment and Rs.1,22,000/- in next 34 instalments and the instalments are payable from 03-12-2008 to 03-10-2011 with interest and other charges. The complainant was not regular in paying the EMIs., and that opposite parties 2 and 3 issued many notices, reminders and made personal visits demanding the complainant to pay the pending amount but the complainant failed to do so. It is incorrect to say that the complainant did not pay instalments due to ill health and that it seized the vehicle without prior notices. They have got issued legal notices dated 17-9-2009, 14-10-2009, 27-11-2009, 22-12-2009 and 15-1-2009 stating that if the complainant fails to pay the amount, they will refer the matter to Arbitrator and take possession of the asset but the complainant failed to pay the amount and that they have issued telegram to the concerned Police Station before and after seizure of the vehicle. When the officials of the company visited the customer’s place for inspection of the vehicle but the same was not available and hence they issued notice dated 17-9-2009 demanding the complainant to produce the vehicle for inspection and to pay the amounts as per the agreement and clearly informed that if he failed to do so they will repossess the vehicle but the complainant failed to pay the amount, hence they got issued legal notice dated 27-11-2009 and another notice dated 22-12-2009 but the complainant has not complied with the demand and therefore they finally got issued legal notice dated 15-1-2010 and recalled the entire loan amount and demanded the complainant to surrender the vehicle but the complainant has not complied with the demand and hence they repossessed the vehicle on 22-1-2010 and sold the same on 26-3-2010.Despite knowing the fact that the asset was repossessed on 22-1-2010 the complainant has not turned up till 26-3-2010 for getting the asset back by repaying the due amount and hence the vehicle was sold in private auction for an amount of Rs.28,75,000/- and even after adjusting the sale proceeds, there is an outstanding amount of Rs.4,67,761/-. The complainant has availed the loan by hypothecating the vehicle and entering into an agreement and clause 17 describes event of default and according to clause 18 of the agreement, opposite party has the right to repossess the asset. The complainant was given sufficient time to regularize the account but he failed to do so and hence they repossessed the vehicle and sold it for highest bid and the complainant has not filed any single evidence to prove that the asset is sold for lesser price and the value of the vehicle depends on many things like depreciation, condition of the vehicle, market value and denied the allegations made by the complainant and stated that the complainant ought to have arranged purchasers or could have repaid the entire loan amount as demanded and take delivery of the vehicle which he did not do so. The complainant approached them and offered to pay the due amount and requested to release the vehicle and that there is no deficiency in service. The complainant availed loan amount and purchased a commercial vehicle by entering into loan agreement and also entered into an agreement of Arbitration and the complainant failed to pay the loan amount even after repeated requests and reminders and hence they vide letter dated 04-11-2009 referred the matter to Arbitrator as per clause 23 of the loan agreement and the Hon’ble Arbitrator issued notice dated 16-11-2009 to the complainant and guarantor but they failed to appear and hence the Arbitrator got issued another notice dated 29-12-2009 but the complainant failed to appear and hence the Hon’ble Arbitrator passed the ex-parte order on 31-3-2010 and direct the complainant herein and his guarantor to pay a sum of Rs.30,47,297.43 along with future interest @ 36% per annum from 31-3-2010 till payment and in the event of non payment, the claimant is entitled to repossess the vehicle and sell the vehicle and after sale adjust the sale proceeds towards the amount awarded. RESJUDICATA applies for the present proceedings and in view of the fact that the issued raised is already settled by Arbitration award The complainant cannot file a consumer case as the Hon’ble Commission does not have jurisdiction as the same is settled by Award of Hon’ble Arbitrator and the remedy available was to prefer Arbitration OP before the concerned District Judge. The instant case could not have been instituted at Hyderabad in view of existence of jurisdiction being clause 24 of the agreement which says that the courts at MUMBAI alone shall have jurisdiction and hence liable to be dismissed on that ground. The complainant purchased the vehicle for commercial purpose and using for commercial purpose by giving it on hire to others and as such the complainant is not a ‘consumer’ and their investigation also revealed that he is doing contract works and is a contractor and not an agriculturist or unemployed as stated by him. The present complaint is barred by limitation and stated that they seized the vehicle on 22-1-2010 and sold it on 26-3-2010 and hence the complaint ought to have been filed by 25-3-2012 whereas it was filed on 18th July, 2012 without filing any application to condone the delay and hence liable to be dismissed on that ground. There is no deficiency in service on their part and thus prayed to dismiss the complaint.
05. The complainant and OP 2 filed evidence affidavit reiterating their respective contentions. Ex. A1 to A11 and B1 to B19 are marked. Heard both side counsel with reference to their. Complainant filed written arguments which are made part of the record.
06. Points for consideration are,
(i) In view of Arbitrator’s Award dated 31.3.2010 whether this complaint is maintainable?
(ii) Whether the complaint is filed within limitation ?
(iii) Whether the transaction in between the complainant and the Ops is
Commercial in nature, if so, what would be the recourse ?
(iv) Whether the OPs rendered any deficient service to the complainant as
alleged?
(v ) Whether the complainant is entitled for any of the reliefs claimed?
07. Point No. I:
The case of the complainant is that he, being an un-employee in order to eke out his livelihood by way of self-employment, purchased TATA Hitachi Model EX 200 Hydraulic Excavator, which is hereinafter referred to as ’ the vehicle’, from OP. 1 for Rs.44,14,781.28 ps inclusive of taxes by obtaining financial assistance of Rs.35,300/- from Ops 2 and 3 repayable in 35 monthly instalments without any interest or additional charges and that he paid Rs.8,84,781/- to OP.1 as initial payment to OP. 1 and that Op. 2 had sent a cheque for Rs.35,30,000/- to OP.1 and that the vehicle was delivered to him at Nellore and that necessary documents were executed evidencing the said transactions and that the complainant paid Rs.13,43,300/- towards repayment of the loan in 11 installments and that since he fell ill in the month of November, 2009 and bed ridden he could not pay the instalments’ amount and that informed the same to the 2nd opposite party on phone but OP. 2 repossessed the vehicle on 24.1.2010 forcibly without giving prior notice with the help of their muscle men on the ground that he became defaulter and that in spite of his best efforts vehicle was not released in his favour and on the other hand it was sold away without following due procedure for a meagre amount of Rs.28,75,000/- though the value of the vehicle as on the date of the same was Rs.38,26,143/- after deduction of 10% depreciation on Rs.44,14,781.28 ps for 16 months period and that the said acts of opposite party amount to deficient service.
08. In nutshell, the defence is that the transaction pertaining to this case is purely commercial in nature, the complainant became defaulter and that in spite of the notice the complainant did not repay the amount due and stick on to the payment schedule on the pretext of ill health and that basing on clause 23 of loan agreement the dispute was referred to an Arbitrator vide letter dt. 4.11.2009 and that the said Arbitrator issued notices dt. 16.11.2009 and 20.12.2009 to the complainant and the guarantor but they failed to appear before the Arbitrator and that he passed an award dt. 31.3.2010 before filing of this complaint directing the complainant and his guarantor to pay Rs.30,47,297.43 ps along with future interest at the rate of 36% p.a. from 31st March, 2010 till realization further holding that in the event of non-payment of the said sum the complainant is entitled to repossess the vehicle and sell the same and after the same adjust the sale proceeds towards the amount awarded and that by following due procedure the vehicle was repossessed as per clause 18 of the loan agreement and sold the same for reasonable price and that the Ops did not render any deficient service and that the complaint is also barred by limitation and resjudicata and thus prayed to dismiss the complaint.
09. The contention of the OP. 2 that with regard to the subject dispute the matter was referred to an Arbitrator and that he passed an award dt. 31.3.2010 vide Ex. B-6 before filing of the present complainant has not been controverted by the complainant by filing rejoinder or in his evidence affidavit. Clause 23 of Ex B1 agreement to which the complainant is a party and signatory along with OP. 2 discloses in the event of any dispute with regard to subject loan the matter to be referred to an arbitrator for award. Ex. B-3 dt.29.12.2009 notice issued by the Arbitrator viz., Srinivasa Chary discloses that in pursuance of notice dt 16th November, 2009 Arbitration proceedings were conducted on 17th December, 2009 and on the said date the complainant herein did not attend the hearing relating to the arbitration vide agreement no. 70000 42010, the TCL / TMFL / TML ( Ex. B-1) and therefore to give second chance the said notice was issued directing the complainant to appear before the Arbitrator on 29.01.2010 between 9.30 AM to 4.30 PM. Ex. B-4 is the acknowledgement of the said notice by the complainant and his guarantor. Ex. B-5 copy of the letter addressed by the complainant to the Arbitrator discloses that the complainant requested the arbitrator to inform the status of the proceedings to his address and also to furnish copy of the award if passed. In view of the said letter and notice it is clear that the complainant was in the knowledge of arbitration proceedings with regard to the subject dispute. For the reasons best known to him he did not choose to contest the arbitrations proceedings and in such circumstances the arbitrator was constrained to pass Ex. B-6 award dt.31.3.2010 with regard to subject dispute exparte basing on the available material assigning reasons. The complainant did not agitate the said award in the competent court. Thus, it attained its finality. As seen from the record, the present complaint was submitted in this Commission on 18th July, 2012. Ie., certainly after passing of the Arbitrator’s award. In a decision between National Seeds Corporation Limited Vs. M. Madhusudhan Reddy reported (2012) 2 SCC 506, the Hon’ble Supreme Court of India held :
“ The remedy of arbitration is not 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, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before he 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 view of the said decision, once the party opts for remedy of arbitration it may be possible to say that subsequently Consumer Complaint is not maintainable. In another decision cited by OP.2, reported in I (2007) CPJ 34 (NC) in a case between Instalment Supply Limited Vs. Kangra Ex-servicemen Transport rendered on 5th October, 2006, the Hon’ble National Commission held that after an arbitration award is already passed the Consumer Complaint cannot be decided by the Consumer Fora. In view of the above discussion, point no. 1 is decided in favour of the OP. 2 and against the complainant holding that the present complaint is not maintainable and the said legal point can be agitated without filing written version and it is much more so when such a contention was specifically deposed in the affidavit evidence of OP.2.
10. POINT NO. II :
As seen from the record, OP. 2 seized the vehicle on 22.01.2010 and sold it on 26.03.2010. The arbitration award was passed on 31.3.2010. Admittedly, the complaint was submitted on 18th July, 2012. In view of the said dates, without any hesitation, it can be held that the complaint was filed beyond the period of two years from the date of cause of action. Admittedly, the complainant did not file any application to condone the delay in filing the complaint and thus in view of Section 24-A of Consumer Protection Act the complaint is barred by limitation and thus accordingly point no. 2 is decided against the complainant.
11. Point No. III :
The contention of the complainant is that he purchased the vehicle as an unemployee to eke out his livelihood and therefore the commercial aspect does not come in the way of his complaint and he pleaded so in the complaint and evidence affidavit. In the cause title of the complaint, his avocation is shown as agriculture. The subject vehicle is no way useful for his agriculture as it is Hydraulic excavator. IT is not the case of the complainant that his income from agriculture is not sufficient to meet his expenses of livelihood so as to say that the said Hydraulic excavator was purchased to give it on hire for his livelihood and in such circumstances an inference is to be drawn that the said vehicle was purchased for commercial purpose. Since the complainant has the avocation of agriculture his contention that for his livelihood he purchased the said vehicle could not be appreciated and therefore in view of section provisions of Section 2 (1)(d) of C P Act the complaint cannot be considered as a ‘consumer’’ and in that view point also the complaint is not maintainable and accordingly point no. 3 is decided against the complainant.
12. In view of the findings in points I , II and III against the complainant there is no need to go into the merits of the case and record findings with regard to points IV and V as the said findings have gone to the root of the case.
13. In the result, the complaint is dismissed. NO order as to costs.
I/c PRESIDENT MEMBER
DATED : 25.11.2013.
APPENDIX OF EVIDENCE
Documents Marked
For the complainants
Ex. A1 Sales Invoice-cum-Dispatch Memo dated 10.10.2008
Ex. A2 Xerox copy of D.D towards payment of initial amount dated 29.09.2008
Ex. A3 Xerox copy of D.D towards payment of initial amount dated
26.09.2008
Ex. A4 Original receipt of transportation charges dated 11.10.2008.
Ex. A5 Repayment schedule dated 04.11.2008.
Ex. A6 Loan statement dated 25.01.2010.
Ex. A7 Counter Folio of payment of installment amount
dated 13.04.2009.
Ex. A8 Receipt issued by Opp.No.2 dated 15.04.2009.
Ex.A9 Letter issued by OP. No.2 dated 04.06.2010.
Ex.A10 Notice issued by complainant dated 14.03.2012.
Ex.A11 Reply issued by OP dated 24.03.2012.
Opposite party No.2:-
Ex.B1 Loan cum Hypothecation cum Guarantee Agreement dated 30.09.2008
Ex.B2 Field Investigation Report dated 26.09.2008.
Ex.B3 Arbitration Proceedings dated 29.12.2009.
Ex.B4 Postal acknowledgments dated 13.01.2010.
Ex.B5 Letter issued to Arbitrator by complainant
Ex.B6 Award passed by Arbitrator dated 31.03.2010.
Ex.B7 Postal – Returned cover
Ex.B8 Acknowledgement card
Ex.B9 Legal notice issued on behalf of opposite parties 2 and 3 dated 22.07.2009.
Ex.B10 Legal notice issued on behalf of opposite parties 2 and 3 dated 17.09.2009.
ExB11 Legal notice issued on behalf of opposite parties 2 and 3 dated 14.10.2009.
Ex.B12 Legal notice issued on behalf of opposite parties 2 and 3 dated 27.11.2009.
Ex.B13 Legal notice issued on behalf of opposite parties 2 and 3 dated 22.12.2009.
Ex.B14 Legal notice issued on behalf of opposite parties 2 and 3 dated 15.01.2010.
Ex.B15 Registered post – Postal Receipt dated 15.01.2010.
Ex.B16 Pre-Repossession – Telegram issued to concerned Police Station dated 22.01.2010.
Ex.B17 Pre-Repossession – Telegram issued to concerned Police Station dated 22.01.2010.
Ex.B18 Quotation received from Highest Bidder along with I.D.Proof. dated 06.03.2010.
Ex.B19 Statement of account
INCHARGE PRESENT MEMBER
DATED : 25.11.2013.
