Date of Filing: 14-07-2014
Date of Disposal: 08-12-2014
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ANANTHAPURAMU
PRESENT: - Kum.Y.H.Prameela Reddy, M.A., LL.B., President
Sri S.Niranjan Babu, B.A., B.L., Male Member
Smt.M.Sreelatha, B.A., B.L., Lady Member
Monday, the 8th day of December, 2014
C.C.NO.82/2014
Between:
K.Chiranjeevi Reddy
S/o K.Konda Reddy
D.No.1-16C,
St.Marks Educational Institution,
Bellary Road,
Ananthapuramu. … Complainant
Vs.
The Chief Manager,
Canara Bank, Main Road
Subash Road, New Old Town
Iron Bridge,
Ananthapuramu. …. Opposite party
This case coming on this day for final hearing before us in the presence of Sri J.Narayana Swamy, Advocates for the complainant and Sri A.N.Guru Prasad, Advocate for the opposite party and after perusing the material papers on record and after hearing the arguments on both sides, the Forum delivered the following:
O R D E R
Sri S.Niranjan Babu, Male Member : - This complaint has been filed by the complainant under section 12 of Consumer Protection Act, 1986 against the opposite party to issue No Due Certificate along with Form-35 of M.V. Act for the vehicle bearing No.AP-02-AB-0007 and also to award compensation of Rs.50,000/- towards mental agony and grant such other relief or reliefs.
2. The brief facts of the complaint are that: - The complainant is a permanent resident of Ananthapuramu. The complainant approached the opposite party for obtaining vehicle loan for the purchase of “ Ford Endeavour .” Accepting the proposal of the complainant, the opposite party has sanctioned the loan of Rs.15,11,000/- and instructed the complainant to deposit 15% of the cost of the vehicle. Subsequently, the complainant was regularly paying the installments amount and cleared the entire loan of the opposite party on 20-01-2014. The total amount was cleared by the complainant and then the complainant requested the opposite party to issue a No Due Certificate with regard to the complainant’s account No.0659603007822, but the opposite party was continuously postponing the same and did not issue No Due Certificate to the complainant. The opposite party also collected excess amount from the complainant. The opposite party was adopting unfair trade practice and did not issue No Due Certificate and Form-35 of M.V. Act to the complainant even though the loan amount was cleared by the complainant. Hence, there is gross negligence on the part of the opposite party and the non- issue of No Due Certificate has caused mental agony to the complainant, who is Ex-Serviceman. Hence, there is deficiency of service on the part of the opposite party and liable to pay compensation to the complainant.
3. At last the complainant got issued a legal notice to the opposite party on 24-06-2014 by registered post acknowment Due, which was duly served to the opposite party. But the opposite party denied the complainant’s legal notice contents and issued a reply notice on 30-06-2014. As per reply notice, the opposite party will have every right to withhold the issue of No Due Certificate till repayment of other loans. Further stated that they have a lien over the vehicle due to non-payment of remaining loan dues and the vehicle being kept as one of the security. The complainant hypothecated the vehicle to the vehicle loan transaction account, but not to other loan accounts. The said vehicle loan was sanctioned under the scheme of” Canara Vehicle “ and the vehicle invoice pledged to the vehicle loan transaction account only, but not to other loan transaction as stated in the reply notice of the opposite party. So this shows clearly that the opposite party has adopted unfair trade practice and caused mental agony to the complainant. Further the complainant stated that as the complete loan amount of the vehicle has been cleared , the opposite party has to issue No Due Certificate along with Form-35 of M.V.Act pertaining to the vehicle loan transaction. Hence prayed this Forum to issue orders against the opposite party directing them to issue Form-35 of M.V. Act along with No Due Certificate and also award compensation of Rs.50,000/- towards mental agony.
4. Counter filed by the opposite party stating that it is true that the complainant has availed vehicle loan and the opposite party sanctioned an amount of Rs.15,11,000/- to the complainant and the complainant has deposited 15% out of the sanctioned amount and the complainant has repaid the entire amount towards the vehicle loan. The complainant is a guarantor towards loan Account Nos.(1) 0659773007996 (2) 0659773008101 (3) 0659773008095 (4) 0659773008105 and (5) 0659741007766 and total sanctioned amount is Rs.1,340.00 lakhs and balance due is Rs.1961.51 lakhs plus interest. The complainant also executed “ CAN MOBILE “ Agreement dt.06-10-2008 and as per the said agreement, the opposite party will have every right to withhold till the repayment of other loans as the said vehicle is also lien to the remaining loans being one of the securities.
5. It is further submitted that as per the Guarantee Agreement executed by the complainant that though as between the borrower and guarantor, the guarantor is surety and the guarantor i.e. complainant in all the loans mentioned above agrees that as between the opposite party and the complainant. The complainant, who is the guarantor is the principal debtor jointly with the borrower. Accordingly, the guarantor waives all of the rights conferred on him as per sections 130, 133, 134, 135, 139 and 141 of any relevant provisions of the Contract Act.
6. It is submitted that the Bankers, Attorneys of a High Court and policy brokers may in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods failed to them but no other persons have a right to retain as a security for such balance. Therefore, the opposite party has every right to retain the relevant documents of the complainant and therefore the question of issuing No Due Certificate to the complainant does not arise as per sections 170 & 171 of Contract Act. The opposite party submits that as per the guarantee agreement dt.01-02-2011 executed by the complainant in favour of the opposite party discloses the clauses that “Whereas the guarantor has requested the opposite party-Bank to grant financial assistance to the borrower by way of facilities including guarantees subject to the specific condition that the guarantor shall unconditionally and irrevocably guarantee the repayment of all amounts advanced and all the liabilities guarantees which may be issued by the Bank from the date of execution of Guarantee Agreement. “
7. Further the opposite party submits that they will have every right to withhold till the repayment of other loans as the said vehicle loan is also lien to the remaining loan being one of the securities. Hence, there is no deficiency of service on the part of the opposite party and the question of asking amount of Rs.50,000/- towards mental agony does not arise.
8. It is also submitted that the guarantor is hereby agree that the Bank i.e. opposite party may assign debt of the borrowers and such agreement shall not absolve the liability of the guarantor and shall be binding on the guarantor as if the assignee is the principal debtor . Therefore, all the allegations mentioned in the complaint filed by the complainant is bad in law and not maintainable either in law or on facts. Hence, the complaint is liable to be dismissed.
9. Basing on the above pleadings, the points that arise for consideration are:-
1. Whether there is deficiency of service on the part of the opposite party ?
2. To what relief?
10. In order to prove the case of the complainant, the complainant has filed evidence on affidavit on his behalf and marked Ex.A1 to A5 documents. On behalf of the opposite party, evidence on affidavit of the opposite party has been field and marked Ex.B1 to B5 documents.
11. POINT NO.1:- - The counsel for the complainant submitted that the complainant approached the opposite party for obtaining loan for purchasing a vehicle and the opposite party accepted the complainant’s proposal for purchasing the vehicle “ Ford Endeavour “ and sanctioned the amount of Rs.15,11,000/-. At the time of sanction of loan, the opposite party instructed the complainant to deposit 15% of the loan amount sanctioned and the complainant as per their instructions deposited 15% amount with the opposite party. The complainant purchased the vehicle and regularly paying the installments and as on 20-01-2014 the complainant paid total installments and the loan was cleared by the complainant. Then the complainant requested the opposite party to give a No Due Certificate with regard to loan account No.0659603007822, but the opposite party was continuously postponing the same for issuing No Due Certificate to the complainant. Further the opposite party also collected excess amount from the complainant.
12. The counsel for the complainant submitted that inspite of the complainant paid the entire loan amount, the opposite party did not issue No Due Certificate and Form-35 of M.V. Act to the complainant. The counsel for the complainant argued that as the complainant has discharged the entire loan amount, it is the duty of the opposite party to issue No Due Certificate for the loan account and also issue Form-35 of M.V. Act when requested by the complainant. But as the opposite party failed to issue No Due Certificate and Form-35 of M.V.Act and thereby caused mental agony to the complainant. Further the counsel for the complainant argued that the complainant was an Ex-serviceman and even after clearing the loan installments, the opposite party failed to issue No Due Certificate along-with Form-35 of M.V. Act and thereby caused deficiency of service by practicing unfair trade practice.
13. The counsel for the complainant submitted that vexed with the attitude of the opposite party, the complainant got issued a legal notice to the opposite party on 24-06-2014 by Regd. Post Ack.due , which was served to the opposite party. Further the counsel for the complainant submitted that in the reply notice of the opposite party, the opposite party denied the contents of the legal notice on 30-06-2014 and in reply notice the opposite party has stated that they have every right to with-hold the issue of No Due Certificate till the repayment of the other loans as the said vehicle is kept as lien to the remaining uncleared loans. The counsel for the complainant argued that the version of the opposite party is not correct and as the complainant has hypothecated the vehicle to vehicle loan transaction account, but not to other loan accounts. As the vehicle loan is completely repaid by the complainant, the opposite party cannot withhold saying that other loan amounts were due. Hence, they cannot issue No Due Certificate is nothing but unfair trade practice and thereby caused inconvenience and mental agony to the complainant for which they are liable. Further the counsel for the complainant argued that thereby the opposite party caused deficiency of service to the complainant for which the complainant has to suffer mentally and claiming a sum of Rs.50,000/- towards mental agony from the opposite party.
14. The counsel for the opposite party argued that it is true that the complainant has obtained the vehicle loan to purchase “ Ford Endeavour “ and it is further admitted that the entire loan amount with regard to the vehicle loan is cleared by the complainant. The counsel for the opposite party argued that the complainant has obtained 5 other loans vide Ex.B1 to B5 under different loan account Nos. (1) 0659773007996 (2) 0659773008101 (3) 0659773008095 (4) 065977300810 and (5) 0659741007766 and obtained loan of Rs.1340.00 lakhs and the balance due by the complainant is Rs.1961.51 lakhs plus interest. The counsel for the opposite party argued that the complainant has executed “ Can Mobile “ Agreement dt.06-10-2008, which is marked as Ex.B2. As per the said agreement, the opposite party will have every right to withhold till the repayment of other loans as the said vehicle is also lien to the remaining loans being one of the securities. Further the counsel for opposite party argued that as per Guarantee Agreement executed by the complainant that though as between borrower and guarantor the guarantee is surety and the guarantor i.e. complainant in all the loans mentioned above agrees that as between the opposite party-Bank and the complainant, the complainant, who is the principal debtor jointly with the borrower. Accordingly, the guarantor waives all of the rights conferred on him as per sections 130, 133, 134, 135, 139 and 141 of any relevant provisions of the Contract Act.
15. Further the counsel for the opposite party argued that the Bankers, attorney of High Court and policy brokers in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods failed to them, but no other persons have a right to retain as a security for such balance. Therefore, the opposite party –Bank has every right to retain the relevant documents of the complainant and the question of issuing No Due Certificate to the complainant does not arise as per sections 170 & 171 of Contract Act.
16. Further the counsel for the opposite party argued that as per the Guarantee Agreement dt.01-02-2011 executed by the complainant in favour of the opposite party-Bank discloses the clauses that “Whereas the guarantor has requested the opposite party-Bank to grant financial assistance to the borrower by way of facilities including guarantees subject to the specific condition that the guarantor shall unconditionally and irrevocably guarantee the repayment of all amounts advanced and all the liabilities guarantees which may be issued by the Bank from the date of execution of Guarantee Agreement.”
17. Further the counsel for the opposite party argued that the opposite party-Bank will have every right to withhold till the repayment of other loans as the said vehicle loan is also lien to the remaining loan being one of the securities. Hence, there is no deficiency of service on the part of the opposite party-Bank and the question of paying the amount of Rs.50,000/- towards mental agony does not arise.
18. Further the counsel for the opposite party argued that the guarantor has hereby agreed that the Bank i.e. opposite party may assign the debt of borrowers and such agreement shall not absolve the liability of the guarantors and shall be binding on the guarantor as if the assignee is the principal debtor. Therefore all the allegations made in the complaint filed by the complainant is bad in law and not maintainable either in law or on facts. Further the counsel for the opposite party argued that there is no deficiency of service on the part of the opposite party or unfair trade practice as argued by the complainant’s counsel.
19. After hearing the arguments of both sides and perusing the documents, there is no dispute with regard to the sanction of loan to the complainant for the purchase of “ Ford Endeavour “ vehicle and there is no dispute with regard to repayment of the loan amount pertaining to the loan account No.0659603007822, which is marked as Ex.B2. As seen from the documents submitted by the opposite party, Ex.B1 is loan document dt.26-08-2008 taken by the complainant’s institute for which the complainant stood as a guarantor and the subsequent loans taken by the institute under different loan agreements Ex.B3 is loan document dt.29-08-2009 – Loan Account No.0659773007996, Ex.B4 is loan document dt.12-03-2010 – Loan Account No.0659773008101 and Ex.B5 is loan document dt.01-01-2011 – Loan Account No.0659773008105. The argument of the complainant’s counsel is that as the entire loan amount pertaining to the vehicle loan, the complainant has completely repaid the loan amount, hence it is the bounden duty of the opposite party to issue No Due Certificate along-with Form-35 of M.V. Act when requested by the complainant. But the counsel for the opposite party argument is that as the complainant has stood as guarantor in the subsequent loans taken by the institute for which the complainant is a Secretary and his wife is the President of the institute, hence they have a lien over the vehicle as per loan agreement, which is marked as Ex.B2. Considering the arguments of the complainant, the complainant has taken the vehicle loan personally and has cleared the entire loan amount and there is no dispute with regard to this loan transaction. The subsequent loans taken by St.Marks Educational Institutions for which the complainant is the Secretary and he signed in the capacity of Secretary for the other loans i.e. Ex.B1, Ex.B3 to B5. Hence as the complainant has cleared the entire loan amount pertaining to Ex.B2 i.e. vehicle loan, he cannot be made liable to the other loans for which he has signed in the capacity of Secretary to the St.Marks Educational Institutions. Hence, the Bank cannot have a lien over the vehicle when the complainant has cleared the loan amount pertaining to vehicle loan and it is the duty of the opposite party to issue a “ No Due Certificate ” to the complainant along-with Form-35 of M.V. Act when requested by the complainant. But in the instant case, the opposite party has failed to issue “ No Due Certificate ” to the complainant along with Form-35 of M.V. Act. Hence, in the above circumstances, we have no hesitation to direct the opposite party to issue a “ No Due Certificate ” along with Form-35 of M.V.Act to the complainant.
20. POINT NO.2 - In the result the complaint is partly allowed by directing the opposite party to issue a “ No Due Certificate ” with regard to the vehicle loan account No.0659603007822 (Ex.B2) and further direct the opposite party to pay a sum of Rs.5,000/- towards mental agony within one month from the date of this order.
Dictated to Steno, transcribed by him, corrected and pronounced by us in open Forum this the 8th day of December, 2014.
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MALE MEMBER LADY MEMBER PRESIDENT
DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM
ANANTHAPURAMU ANANTHAPURAMU ANANTHAPURAMU
APPENDIX OF EVIDENCE
WITNESSES EVIDENCE ON CHIEF AFFIDAVITS
ON BEHALF OF THE COMPLAINANT: ON BEHALF OF THE OPPOISITE PARTY
PW1 – Sri K.Chiranjeevi Reddy,complainant RW1 - Sri G.Jayachandra, Chief Manager,
Canara Bank, Ananthapuramu.
EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT
Ex.A1 – Photo copy of Certificate of Registration relating to the complainant’s
Vehicle issued by R.T.A., Anantapuramu.
Ex.A2 – Statement of Account relating to payment of loan installments issued by the
Opposite party.
Ex.A3 – Photo copy of Insurance Policy relating to complainant’s vehicle.
Ex.A4 – Office copy of legal notice dt.24-06-2014 got issued by the complainant to the
Opposite party.
Ex.A5 – Reply notice dt.30-06-2014 got issued by the opposite party to the counsel for
the complainant.
EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY
Ex.B1 – Photo copy of Guarantee Agreement executed by the Secretary, St.Marks Educational
Institutions, Ananthapuramu in favour of the opposite party (Loan account
No.0659741007766) dt.26-08-2008
Ex.B2 – Photo copy of Guarantee Agreement executed by the complainant in favour of the
opposite party (Loan account No.0659603007822).
Ex.B3 – Photo copy of Guarantee Agreement executed by the Secretary, St.Marks Educational
Institutions, Ananthapuramu in favour of the opposite party (Loan account
No.0659773007996) dt.29-08-2009.
Ex.B4 – Photo copy of Guarantee Agreement executed by the Secretary, St.Marks Educational
Institutions, Ananthapuramu in favour of the opposite party (Loan account
No.0659773008101) dt.12-03-2010.
Ex.B5 – Photo copy of Guarantee Agreement executed by the Secretary, St.Marks Educational
Institutions, Ananthapuramu in favour of the opposite party (Loan account
No.0659773008105 dt.01-01-2011
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MALE MEMBER LADY MEMBER PRESIDENT
DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM
ANANTHAPURAMU ANANTHAPURAMU ANANTHAPURAMU
Typed by JPNN
