DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: BHADRAK
Dated the 21st day of August, 2019
C.D Case No. 04 of 2017
Present 1. Shri Raghunath Kar, President
2. Shri Basanta Kumar Mallick, Member
3. Afsara Begum, Member
Arun Kumar Das
S/O Late Binod Kumar Das,
Vill: Sahapur,
Po/Ps/Dist: Bhadrak (T)
……………………. Complainant
(Versus)
1. The Branch-In-Charge,
Shriram Transport Finance Co. Ltd., Bhadrak Branch,
At: Jena Complex, 2nd Floor, Chapulia, By-pass (In front of Vishal Mega Mart), Po/Ps/Dist: Bhadrak (T)
2. Shriram Transport Finance Co. Ltd.
Admn. Office:- 101-105, 1st Floor, B-wing, Shiv Chambers, Sector- 11, C.B.D
Belapur, Navi Mumbai- 400614
…………………………..Opp. Parties
Counsel For Complainant: Sri D. Nayak & Others, Adv
Counsel For the O.Ps: Sri A.K. Swain & Others, Adv
Date of hearing: 01.08.2018
Date of order: 21.08.2019
BASANTA KUMAR MALLICK, MEMBER
This dispute arose out of a complaint filed by the complainant alleging deficiency of service and unfair trade practice against O.Ps.
The facts of the complaint are that the complainant, to earn his livelihood, thought of acquiring a transport vehicle with the credit support of finance provider for operation and generation of income which shall meet the family requirements etc. Accordingly he approached OP No. 1 to provide credit support for the mentioned purpose which was accepted by the said OP and sanctioned a sum of Rs 2,50,000/- as credit support in favour of the complainant. After execution of hypothecation and loan agreement and other required documents prescribed by the O.Ps the loan so sanctioned was released for acquisition of vehicle. But the O.Ps did not make over a copy of loan agreement and sanction letter to the complainant which is mandatory as per guide line issued by Reserve Bank of India to the Non Banking Financial companies. Secondly the complainant has persistently requested the O.Ps to supply the copies of the aforementioned documents along with loan account statement to which the O.Ps did not prefer to respond. That apart, the loan so sanctioned was repayable in 35 Equal Monthly installments together with the interest cost. Accordingly the complainant went on repaying the loan installments as per repayment schedule but failed to repay in time and adequately as the truck did not generate so much income due to closer of mines where the truck was engaged for transportation. But to the ill luck of the complainant, the O.Ps forcibly repossessed the vehicle bearing No. OR-09D-5187 on 31.10.2012 without prior intimation to the complainant which is no doubt an act of contravening the provisions of guide line issued by R.B.I. Since the date of repossession, the complainant has very frequently requested O.Ps to release the vehicle on payment of Rs 80,000/- which was accepted by the O.Ps and the complainant was asked to come after few days for an amicable settlement as O.Ps were preoccupied and busy in other important business works. But the clandestine motive of the O.Ps could not be understood by the complainant what was proved at the later stage when the O.Ps sold the repossessed vehicle without any intimation to the complainant violating the settled position of law. Such action of the O.Ps discloses their unfair trade practice and not providing the required papers despite sincere and persistent request amounts to deficiency of service. Being aggrieved by the activities of the O.Ps, the complainant preferred this dispute in this Forum for proper adjudication with a prayer to issue direction to the O.Ps to augment the loss sustained by the complainant together with compensation for harassment and cost for conducting the case.
O.Ps objected the allegations of the complaint, vehemently resisted the claim and contested the case. At the outset, the O.Ps questioned maintainability of this case on the grounds of it being an accounts dispute and relationship between the complainant and O.Ps is ‘debtor’ and ‘creditor’ and also substantiated their objections with the decisions of Odisha State C.D.R Commission and the decisions of Hon’ble Apex Court of India. That apart the O.Ps have also repeated the question of maintainability on the point of arbitration which is grossly violated by the complainant. In addition to that the O.Ps have also challenged the status of the complainant as a consumer on the ground that the vehicle so acquired with the credit support of the O.Ps has been utilized for commercial purpose and the complainant has failed to repay the loan installments as per repayment schedule in 35 monthly installments commencing from 5th July 2009 to liquidate the loan account together with interest cost etc. But the complainant did not perform his part of responsibility in accordance with the terms and conditions stipulated in hypothecation and loan agreement and also failed to repay the loan installments on due dates fixed. Under such compelling situation the O.Ps repossessed the vehicle on proper intimation and put to auction following due procedure and the sale proceeds were adjusted to the loan account of complainant. Submitting as above, the O.Ps claimed that the present dispute is bereft of merit and liable to be dismissed with exemplary cost.
Admittedly the complainant has availed a credit support of Rs 2,50,000/- which was repayable in 35 monthly installments together with interest cost and other charges commencing from 05.07.2009 and in the event of failure to repay the loan according to prefixed installments, the complainant shall liable to pay the late payment charges. Apart from above all other allegations have been disputed due to resistance of O.Ps.
Gone through the pleadings of the complainant, written version filed by the O.Ps, heard the parties in course of hearing, perused materials on record and observed as detailed below.
1. The O.Ps raised the question of maintainability on different grounds and also challenged the status of the complainant as a consumer in stating that the credit so availed for acquisition/renovation of truck was engaged in transport business which is commercial in nature what debars the complainant to be a consumer and since this case has been filed by a non consumer is not maintainable in the consumer Forum. Secondly the entire dispute is revolving around a loan account and the relation between the complainant and the O.Ps is ‘borrower’ and ‘lender’ respectively that prevent the present Forum to entertain and admit the case for adjudication. In addition to that according to terms of the agreement executed between the complainant and O.Ps, this matter is required to be referred to arbitrator for arbitration and therefore this case is not maintainable here.
On the contrary the complainant vehemently opposed the contentions of the O.Ps and condemned in stating that at the time of documentation, he has paid the required amount of service charges to the O.Ps and the vehicle so acquired out of the credit support of the O.Ps is engaged in transport operation operated by himself and in case of exigency by some other persons as a stop gap arrangement does not affect the status of the complainant as a consumer. As he has paid service charges to the O.Ps he is entitled to enjoy the service support from the O.Ps as and when necessary. Secondly in objecting the question of filing present dispute in this Forum after arbitration proceeding is filed by the O.Ps is absolutely false and imaginary as the O.Ps have not substantiated with the relevant documents in support of their objection and whatever document/evidence adduced by the O.Ps on this point is nothing but fabricated document submitted before this Forum with an intention to mislead the adjudicators. As regards objection raised by the O.Ps in the matter of relation between the complainant and the O.Ps is that of debtor and creditor and a matter relating to accounts, it does not have any merit to be maintainable in this Forum which is not true and correct. According to the provisions of CP Act, any borrower having availed credit support from any financial institution, irrespective of private or public sector, is no doubt a consumer and coming within the ambit of said Act. Hence this dispute is maintainable in the consumer Forum. On perusal of materials on record it is seen that the O.Ps have submitted a document marked as Annexure- C is a notice issued by the sole arbitrator of Hon’ble Sole Arbitration Tribunal at Bhubaneswar seems to be fabricated and manufactured by the O.Ps as it does not bear any Court seal and signature of the arbitrator with seal. Further the date of admission of case by the Court of arbitrator is not available on the said manufactured notice as a result of which it is difficult to ascertain the exact date of filing of the said arbitration proceeding but on the other hand the present case was filed on dt. 17.01.2017 and therefore this leads to believe that the present case was filed before the arbitration proceeding was initiated.
2. The O.Ps claimed to have advanced loan a sum of Rs 2,50,000/- in the month of May 2009 which was realizable in 35 monthly installments together with interest cost of Rs 1,01,929/- total of which comes to Rs 3,51,929/-. Further the interest cost of Rs 2029/- and Rs 2266/- is also charged against the working capital loan of Rs 12,167/- and Rs 21,786/- respectively availed by the complainant. As such the total amount repayable to the O.Ps including all interest costs arrives at Rs 3,91,177/- other than ancillary expenses as against which the complainant has totally paid a sum of Rs 3,37,400/-. The residual amount of loan and interest cost other than the ancillary charges, late payment charges and cost incurred for making delay in repayment of loan on due dates. In this manner the present due outstanding against the complainant is Rs 10,09,799/- which need to be repaid at a go. On the other hand complainant vehemently opposed the amount payable by him to the O.Ps as imposing of different charges is illegal and unlawful. Complainant claims to have paid a sum of RS 3,37,400/- as against the total loan and interest due excluding interest charges on overdue loan. As such the residual amount of loan including interest charges of Rs 53717/- is payable by the complainant and in addition to that, he is also liable to pay whatever interest has been accrued on overdue loan. But the complainant has objected the percentage of interest charged on the overdue loan @ 35% P.A, as revealed from the statement of accounts, which is absolutely unethical, illegal and beyond imagination. It is further added that the complainant has not availed any working capital loan which is demanded by the O.Ps and the account statement furnished by O.Ps does not reveal the date of advancement of such loan. Hence demanding of working capital loans and interest charges thereon is absolutely illegal and unlawful.
Heard both the parties, perused materials on record and referred the evidences adduced by the parties in course of hearing and observed that the account statement furnished by the O.Ps reveals that the complainant has availed vehicle loan of Rs 2,50,000/- on dt. 26.05.2009, subsequently Rs 12,167/- on 13.02.2010 and Rs 21,786/- on dt. 04.10.2011. This leads to doubt that why these advances are shown in the books of accounts of the O.Ps when the complainant was a defaulter in repayment of loan dues regularly. Because of denial of the complainant to have received working capital loan and due to lack of adequate evidence adduced by the O.Ps, we have no way other than to believe that the complainant has not availed these loans from the O.Ps and therefore need be exempted.
3. As observed from the statement of accounts, O.Ps have charged 35% interest P.A on the overdue portion of the loan which is very high and we believe none of the NBFCs including microfinance units have charged such huge rate of interest and therefore it is absolutely illegal and unethical and the O.Ps are allowed to charge additional interest to the extent of 2% more over and above the actual interest admissible on the capital loan amount. In this manner the O.Ps are proved to have resorted to unfair trade practice.
4. In the matter of the maintainability of this case, the O.Ps have cited cases adjudicated in the Hon’ble Odisha State C.D.R Commission vide CC No. 53 of 2004 and 43 of 2010 and a decision of Hon’ble Apex Court of India without furnishing the books nor have submitted hard copies of the decisions as a result of which this Forum is compelled to ignore the decisions as the books containing the decisions are not available with this Forum. In addition to that the O.Ps have cited the order of a similar case passed by this Forum in CD Case No. 23 of 2012 and accordingly demanded dismissal of this case. But after going through the entire order this Forum is of opinion that the previous order was passed under a different situation and the present case is completely different from previous one.
5. The complainant alleged and submitted during hearing that the O.Ps repossessed the vehicle forcibly from the complainant by a group of goons/gundas prior to which no intimation was issued to the complainant. After repossession of the said vehicle, the O.Ps put the seized vehicle on auction hurriedly without following the procedure of auction and did not feel it wise to intimate the complainant in the matter of auction. That apart the O.Ps have also not brought the valuation certificate either from the M.V.I of the Dist. or from qualified technical expert which is an act of gross violation of the provisions of auction rules. In order to substantiate his allegation the complainant has cited the decision of Hon’ble National Commission in the case of HDFC Bank Ltd. Vs. Balwinder Singh which is reported in CPJ volume 3 in the year 2009. The Hon’ble National Commission has observed that; “The Commission also referred to the State Commission’s order, which had observed that the alleged letter produced by the bank purporting to the complainant voluntarily handing over possession of the vehicle was unreliable and that no notice was given to the complainant at the stages of repossession and sale of vehicle. In dismissing the petition, the Commission relied upon its judgment in Citicrop Maruti Finance Ltd. Vs. S. Vijayalaxmi [III(207) CPJ 161 (NC)] where it had strongly deprecated such practices. The Commission dismissed the petition and awarded Rs 25,000/- as exemplary costs.” The said repossessed vehicle was sold in auction for Rs 1,90,000/- which is much less than the market value at the relevant point of time and therefore the O.Ps have not obtained the valuation report from the M.V.I or any other mechanical engineer having thorough knowledge in the field before putting the vehicle to auction nor have furnished the report before the Forum for reference. In opposing the contentions of the complainant O.ps stated that all required formalities have been observed and proper procedure of auction has been followed and the sale proceed of the vehicle has been credited to the loan account of the complainant but did not adduce any evidence in support of their argument.
Perused the materials on record and observed that the O.Ps have not furnished the valuation report obtained from technical expert nor have followed the proper procedure. Such action of O.Ps gives an indication about their ulterior motive and ill intention. Therefore, the O.Ps are liable to augment the loss sustained by the complainant.
In view of the analysis made as above and taking the evidences available on record into consideration, we are of the opinion that most of the allegations made by the complainant have been proved successfully and the objections raised by O.Ps are not substantiated with evidence. In the above premises it is concluded that the O.Ps have exorbitantly charged the interest and other charges at their sweet will which is illegal and the complainant is not liable to pay the same unless recalculation of interest @ 2% over and above the normal interest on the overdue portion of the loan only is made.
- ORDER
The complaint be and the same is allowed against the O.Ps on contest. The O.Ps are directed to recalculated the interest on the overdue portion of the loan charging more interest @ 2% over and above the applicable rate of the interest and communicate a demand notice to the complainant requesting him to pay the demanded amount within a period of 30 days from the date of communication. Further the O.Ps are directed to exempt the working capital loans as well as interest cost thereof as the O.Ps have failed to prove the advancement of such loan and also have to pay a sum of Rs 3,000/- as cost of litigation together with compensation of Rs 20,000/- for mental agony and harassment to the complainant and the O.Ps are also directed to exempt all other cost shown expended for repossession of vehicle etc. This order most be complied within a time frame of 30 days from the date of order.
This order is pronounced in the open Forum on this day of 21st August, 2019 under my hand and seal of the Forum.
