DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: BHADRAK

Dated the 24th day of July, 2018

                                                                                                                              Present 1. Shri Raghunath Kar, President

                                                                                                                                          2. Shri Basanta Kumar Mallick, Member

                                                                                                                                          3. Afsara Begum, Member

C.D Case No. 62 of 2015

Sk. Faruque Hussain

S/o Late Shamser Alli

Vill: Kuansh Samil Kantabnia

Po: Bhadrak                                                                                                          

Ps: Bhadrak (T)

Dist: Bhadrak

                                                        ……………………. Complainant

            (Versus)

 1. Branch-in-Charge

 Shreeram Transport Finance Co. Ltd.

 Bhadrak Branch

 At: By-Pass (In front of Vishal Megamart)

 Po/Ps/Dist: Bhadrak

                                                    …………………………..Opp. Parties

Council for Complainant: Mr. R.K. Nayak Advoacte & Associates

Council for OP: Mr. P.K. Mishra Advocate & Mr. S. Tarasia Advoacte

Date of hearing: 16.10.2017

Date of order: 24.07.2018

SRI BASANTA KUMAR MALLICK, MEMBER

This dispute arises out of a petition/complaint filed by the complainant alleging deficiency of service and unfair trade practice.

The background facts as narrated in the complaint are to the effect that the complainant was unemployed person earning his livelihood by operating a truck bearing Regd. No. OR-04-6511 and maintaining his family with the income from the said truck. When the said vehicle required additional fitting, the complainant approached the OP to advance a sum of Rs 1,20,000/- to augment the financial short fall to get the vehicle to good condition. OP after making a through pre sanction verification, sanctioned a sum of Rs 1,20,000/- in favour of the complainant which was repayable in 33 equal monthly installments @ Rs 5,490/- per month commencing from 20th day of August, 2012 to 20th day of April, 2015. It was fixed for the OP to pay the EMIs on or before 20th day of every month and in the event of default the complainant would be liable for late payment charges. Accordingly after execution of all relevant documents and submission of some undated signed blank cheques on demand of OP, he could be able to draw the loan. When the said vehicle was put to operation and generated income, the complainant started repayment of loan as per repayment schedule and continued as such till the entire amount of loan together with interest was fully paid to OP by the complainant. It was the painful state of affairs for the complainant, as a borrower, the OP did not, intentionally and deliberately, provides copy of the sanction letter, loan-cum-hypothecation agreement and repayment schedule as per the settled provisions and guide line issued by the RBI to all the Non-Banking financial companies including SREERAM TRANSPORT FINANCE Company Ltd. violating the above noted provision and Para- 2 A (ii) of master circular issued by Reserve Bank of India. OP has also violated the Fair Practice Code of RBI for NBFCs by not providing the above mentioned documents for personal knowledge and reference of borrower. Such arbitrary action of the OP amounts to deficiency of service and keeping the borrower in darkness about the terms and conditions of the loan agreement. It is also alleged by the complainant that O.Ps have charged insurance premium of the vehicle for the year 2012-13, which was insured under National Insurance Co. Ltd.  The payment of Rs 16,200/- was paid to N.I.C Ltd. by the complainant but not the OP. Further the OP at its own accord insured the financed vehicle with SHRIRAM SURAKSHA, a sister concern (insurance company) of the O.Ps company against the will of the complainant and the Insured Declared value remained same continuously for 3 years without effecting depreciation in the subsequent years at the approved rate which is unfair and unlawful and such action of the OP amounts to unfair trade practice. Apart from above, the complainant had availed a loan of Rs 1,20,000/- and was liable to pay Rs 1,81,170/- in 33 EMIs within 20.04.2015 as against which he had already deposited Rs 1,86,325/- within 1st fortnight of July, 2015. Therefore the complainant has defaulted for three months and liable to pay overdue charges for three months only which would not be more than five thousands and therefore the complainant has paid Rs 5,000/- in excess over and above the total due towards overdue charges and late payment charges. In spite of making full payment,  OP has not yet issued the No Due Certificate in favour of the complainant, rather has demanded more of Rs 1,32,477.62/- for payment by the complainant which contrivances the provision of Fare Practice Code issued by RBI to N.B.F.Cs in the country Circular No. 340/03.10.042/2013 on dt. 14th July, 2013. Despite repeated requests to OP by the complainant, when failed to yield any result filed this case in the D.C.D.R.F, Bhadrak praying for direction to OP to issue No Due Certificate together with cost and compensation for mental agony and harassment.

OP objected the allegations of complainant and contested the case in filing written version through advocate wherein he has raised the point of maintainability as the status of the complainant is not a consumer. In explaining the above statement, the answering OP stated that the relation between the complainant and OP is that of ‘borrower’ and ‘lender’ and as such no consumer dispute arise for which the complaint is not maintainable under the CP Act. It is further added by the OP that according to the terms of loan-cum-hypothecation agreement executed, all the disputes, differences claims can be settled in the ‘Arbitration’ but not in any other Court of law or Forums. OP has also questioned the issue of maintainability of the present case on the ground of territorial jurisdiction in view of terms and conditions of loan agreement and about the status of the complainant as a consumer and has also cited the decision of Hon’ble Supreme Court in civil appeal No. 6347 of 2012. Opposite party has denied the passing of debit entry in the loan account matching the amount of premium paid by the complainant to National Insurance Company Ltd. for the period from 27.06.2012 to 26.06.2013 leaving the burden of proof on the complainant for his said allegation. The OP has also raised that the Hon’ble State Commission of Odisha in Consumer complaint No. 43 of 2010  wherin the Hon’ble Commission has held that “Neither any Dist. Forum nor the State Commission have jurisdiction to decide the accounts disputes”. Finally the OP, in summing up, stated that there being no deficiency of service on the part of OP, this case is liable to be dismissed with cost.

Gone through the complaint, written version of OP, perused materials on record, heard the contending parties in course of hearing of the case and arrived at the conclusion as detailed below.

1. On the question of maintainability, OP has contended that according to the terms of loan agreement any dispute between the parties would be settled in arbitration but the complainant violating the terms of agreement has raised the matter in this Forum for which the present dispute is not maintainable on the ground of jurisdiction. Secondly as the matter revolves around the loan accounts matter, it is not maintainable in consumer Forums as per decision of Hon’ble State Commission in consumer complaint No. 43 of 2010. That apart the OP contended in stating that the OP is not a consumer within the meaning of CP Act as the relationship between the complainant and the OP is that of “Borrower” and “Lender”. As such no consumer dispute arises. Finally the OP has stated that the complainant has not come to the Forum in clean hands as he has falsely alleged that the OP has debited the 1st year insurance premium to the loan account without having any base.

On the contrary complainant submitted that he is a consumer within the meaning of CP Act as he has paid a sum of Rs 2,000/- to the OP on dt. 23.07.2012 as one time service charge to enjoy the services of the OP. Accordingly the OP did not perform his legitimate duties in supplying sanction letter, loan agreement and repayment schedule in spite of repeated verbal requests which amounted to deficiency of service. Secondly non-supply of loan agreement to the complainant by the OP that kept the complainant in darkness about the terms and conditions stipulated therein for which the contention of OP about jurisdiction should not be accepted.

Heard both the parties and perused materials on record and observed that the complainant has paid service charges to the OP prior to release of the loan and as such the complainant is entitled to enjoy the required and proper service of the OP. Therefore the complainant is a consumer within the meaning of CP Act. It is also observed that the OP has, intentionally and deliberately, not provided the documents to the complainant as per circular and guideline issued by R.B.I for the NBFCs. Therefore it is held that the complainant is a consumer within the meaning of CP Act and the dispute filed by him is maintainable in this consumer Forum.

2. The counsel for the complainant raised that the vehicle was purchased in the year 2012and the said vehicle was insured under National Insurance Co. Ltd. covering the period from 27.06.2012 to 26.06.2013 on payment of Rs 18,966/- which was paid by the complainant but the OP has debited matching amount to his loan account. But the OP vehemently opposed the allegation/submission of the complainant and furnished the loan account statement in the Forum at the time of hearing which does not reveal the OP has done so as alleged by the complainant. Hence the allegation of the complainant about debiting of 1st year insurance premium to the loan account of complainant proved to be fake and false.

3. It is alleged by the complainant that he had availed a loan/credit support of Rs 1,20,000/- repayable in 33 equal monthly installments and the total amount including interest of Rs 1,81,170/- as against which the complainant has deposited/paid Rs 1,86,325/- which includes late payment charges within stipulated time. Despite full and final payment of all dues, the OP did not issue NOC which also amounts to deficiency of service, rather the OP claimed repayment of Rs 1,32,477.62/- towards arrear as on 13.02.2015 which is unrealistic. On the other hand OP submitted that the complainant has not paid a single installment timely as per repayment schedule and therefore he is liable to pay overdue interest or late payment charges together with cheque bouncing cost which are calculated adopting due accounting procidure and debited to the loan account as a result of which there is loan outstanding of Rs 1,32,477.62/- in the loan account as on 13.02.2015 maintained with the OP Bank.

Heard the complainant and OP and perused materials on record. It is observed from the accounts statement that the complainant has availed a loan of Rs 1,20,000/- which was to be repaid by 20.04.2015 in equal 33 monthly installments. But in reality the complainant has defaulted in payment of EMI on schedule dates in respect of some installments except maximum installments have been paid in time. We are in darkness about the rate of penal interest to be charged on the overdue amount in the event of default in payment as the OP has not produced the sanction order in the Forum nor has supplied the same to the complainant/borrower violating the directives/guidelines/circulars issued by R.B.I. In the above backdrop we hold the amount claimed by the OP is not genuine and not realizable.

In view of the discussions made in foregoing paragraphs we find the OP is negligent in providing proper service to the complainant according to his need and violated the settled principles as fixed by R.B.I for the NBFSc. Hence the O.Ps is responsible for resorting to unfair trade practice. Hence it is ordered;              

ORDER

     In the result, the present complaint be and the same is allowed in favour of complainant on contest. The OP is directed to recalculate @ 2% penal interest per annum on the overdue amount only from the date of default till 25.06.2015 and the excess payment over and above Rs 1,81,170/- made by the complainant be adjusted to the penal interest. If the excess amount paid by the borrower is not adequate to cover the overdue interest accrued on the overdue portion of the loan, complainant is liable to pay the said amount to OP. Further OP is directed to exempt all other charges imposed on the complainant and issue No due certificate to the complainant and return the post dated cheques to the complainant within 30 days from the date of receipt of this order failing which OP will be liable to pay @ Rs50/- per day to the complainant from the date of order till the date of issue of No due certificate.

This order is pronounced in the open Forum on this day of 24th July, 2018 under my hand and seal of the Forum.