BEFORE THE DISTRICT CONSUMER

       DISPUTES REDRESSAL FORUM, BAGALKOT.

COMPLAINT NO.85/2013
 

Date: 30^th day of November, 2016

   P r e  s e n t: 

01) Smt.Sharada.K.                                                    President…

     B.A.LL.B. (Spl) 

02) Smt. Sumangala.C.Hadli.                         Lady   Member…

                            B.A (Music)

03) Shri.Shravanakumar.D.Kadi                               Member…

                        M.Com.LL.B.  (Spl)

                V/s

JUDGEMENT DELIVERED BY SMT.SHARADA.K.PRESIDENT

The complainant has filed this Complaint u/s 12 of Consumer Protection Act, 1986 against the Opposite Parties (herein after referred in short as OPs) seeking direction to OPs to release the seized vehicle after received the loan amount by the complainant, Rs.1,91,000/- towards compensation for causing loss by under valuing the vehicle, Rs.1,00,000/- towards mental agony, harassment and financial loss along with interest @ 24% p.a. from the date of seizing the vehicle till realization, Rs.10,000/- towards cost of litigation and issue direction to Ops to supply the entire loan statement of account and loan agreement of the complainant and other relief as the Forum deems fit under the circumstances of the case.

2.    The brief fact of the case are as follows:

The complainant has raised the vehicle loan from the Ops in a sum of Rs.3,50,000/- on hire purchase agreement and purchased a new vehicle bearing No.KA-11/A7885 in the year 2010. The complainant stated that regularly paid the installments amount approximately Rs.2,00,000/-. But due to some financial crisis the complainant did not paid some installments to the Ops. Due to this, OP No.2 had seized the vehicle of the complainant on 17.04.2012 at Ilakal in Hungund Taluk without giving an opportunity to the complainant to deposit the due amount of installments an retained the vehicle unauthorized even the complainant has agreed to pay the due installment amount. The complainant has requested several times to OP No.2 for released the vehicle of the complainant after paid the installments. But, the OP No.2 has kept quiet request of the complainant. The complainant after visited the OP No.2 for full and final settlement and ready to pay the entire due installment amount, but Ops have sold the vehicle without any prior knowledge and intimated the complainant which was worth more than Rs.4,01,000/- as per insurance declared valued by the sister concern company of the Ops, by name Shriram General Insurance Company Ltd.

3.      Thereafter, complainant has requested to provide the detailed Statement of Account of the sale vehicle, but the Ops are not given any account of the sold vehicle. The Ops have sold the vehicle for Rs.2,10,000/- which the vehicle price was Rs.4,01,000/-. Hence, even though this sold amount is adjusted towards the balance loan amount of Rs.1,91,164/- which was not paid by the complainant. This act of Ops amounts to unfair trade practice and also deficiency in service on the part of the Ops. Due to this, complainant has heavy financially loss and got mental agony. Hence, the complainant has filed the present Complaint seeking direction to OPs to release the seized vehicle after received the loan amount by the complainant, Rs.1,91,000/- towards compensation for causing loss by under valuing the vehicle, Rs.1,00,000/- towards mental agony, harassment and financial loss along with interest @ 24% p.a. from the date of seizing the vehicle till realization, Rs.10,000/- towards cost of litigation and issue direction to Ops to supply the entire loan statement of account and loan agreement of the complainant and other relief as the Forum deems fit under the circumstances of the case.

4.      After receipt of notice, OPs appeared through their counsel and filed Objection denied the entire contents of the Complaint are all false, frivolous and vexatious and the same is not tenable in law. The Ops have also submits that the non banking Public Limited Financial Institutions and they are engaged in the commercial vehicle finance business. The complainant has borrowed a loan from the OP No.2 purchase a vehicle bearing registration No.KA-22/A7885 by executing a loan cum hypothecation agreement. In view of availment of loan from OP No.2, the complainant is a Borrower of the OP. Therefore, Borrower is not a consumer u/s 2 (1) (d) of the C.P. Act.

5.      Ops are also submits that, the complainant has borrowed a loan from OP No.2 to purchase the vehicle for the purpose of his transportation business. The loan availed by the complainant is a commercial vehicle loan. Therefore, the commercial user of the vehicle is also not a consumer under the said Act. The complainant has sought direction against the OP No.1 and 2 to release the seized vehicle. The said relief sought by the complainant is in the form of a mandatory injunction. Therefore, this Forum has no jurisdiction to grant relief in the form of an injunction. As per the terms of the Agreement, Ops have already sold the vehicle much prior to the filing the Complaint. Hence, relief sought by the complainant in the present Complaint has become in fructuous and same is not at all maintainable.

6.      That the contents of Para No.2 to 7 are all false. The total loan availed by the complainant and finance charges agreed to be paid under the loan cum hypothecation agreement is Rs.3,50,000/- including 36 months interest at Rs.1,58,411/- total in Rs.5,08,411/-. According to Terms of Loan Agreement executed by the complainant in favour of No.2, the essence of the agreement is prompt, punctual and regular payment of monthly installments according to Schedule III of the Agreement commencing from 05.10.2010 to 05.09.2013. According to the terms of Agreement, the complainant has agreed and under taken to pay delayed payment charges in favour of OP No.2 at the rate set out it he Agreement. The complainant has not paid the every month installments regularly. According to Clause 6 (b) of the Agreement, in the event of borrower/complainant committing default, the OP No.2 entitled to take possession of the hypothecated vehicle without further any notice from the complainant.

7.      After repossession of the vehicle, the OP No.2 being a financier and owner of the vehicle, they obtained FRC in their favour from RTO Bagalkot with due intimation to the complainant. Moreover, the OP No.2 has sold the vehicle on 23.03.2013 in a open auction conducted by it at Hubli. The said vehicle sold at a best and highest market price of Rs.2,10,000/- After sale of vehicle, the said sale amount is appropriated to the account of the complainant. After appropriation of the sale amount to the complainant, his account is not fully settled and dues payable by him to OP No.2 a per Statement of loan account is Rs.2,69,732/-.

8.      Ops further submits that after collecting statement of account, the complainant himself voluntarily approached for negotiations to the OP No.2 and got settled his loan account for Rs.2,40,000/-. After get settling the matter with OP No.2, the complainant has issued a cheque bearing No.734541 dated: 28.09.2013 drawn on Syndicate Bank for Rs.2,40,000/-. Upon presentation of said cheque for its collection through its Regional Office, Hubli, it is dishonored for want of sufficient funds in the complainant’s account. After dishonor of the cheque, OP No.2 filed against the complainant before the Principal Civil Judge and JMFC Hubli in CC No.206/2014 for offence punishable u/s 138 of the N.I. Act. The said case filed by the OP is pending for consideration. Therefore, in view of pendency of criminal case, the present Complaint filed by the complainant before this Forum is untenable. Further, in accordance with the Arbitration Clause in the agreement, the OP No.2 has filed Arbitration case No.2297/2013 against the present complainant before the Arbitral Tribunal for the recovery of Rs.2,69,732/-. The Hon’ble Arbitral Tribunal, after hearing passed an award dated; 31.03.2014 directing the complainant and his guarantor to ay Rs.2,69,732/- with feature interest @ 18% p.a. till realization of the amount. Therefore, after passing of an award by the Arbitral Tribunal, the Complaint filed by the complainant before Consumer Forum is not maintainable.   

9.      Ops further submit that the complainant to pay the dues and get cleared his account. Instead of clearing the dues of OP No.2, the complainant has chosen to file the present false Complaint. There is no cause of action to the complainant to file the present Complaint. The complainant has filed false Complaint, contrary to the terms of Loan cum Hypothecation Agreement. It is submitted that obligation arising out of the agreement cannot be questioned by the complainant before this Forum. Moreover the rights and obligations which are conferred by the terms of the agreement cannot be construed as deficiency in service within the meaning of Section 2 (1) (c) of C.P. Act. Hence Ops pray that this Complaint has to be dismissed with compensatory cost.

10.    To prove the case of the complainant, the complainant himself examined as PW-1 and he got marked the documents as per Ex-P1 to Ex-P4 and closed their side evidence. The respondents himself examined as RW-1 and has got marked documents as per Ex-R1 to Ex-R14 and closed their side of evidence.

11.    On the basis of the above pleadings the following points that arise for our consideration are:-

1. Whether the said complaint filed by the complainant is maintainable?

2. What order?

12.         Heard the arguments of counsel and perused the records.

    13.          Our findings on the above points are as under:

          Point No.1:-         In the Negative

          Point No.2:-         As per the final order for following.

-: R E A S O N S :-

          14.    POINT NO.1 AND 2 :- As there two points are inter connected with each.

          15.    On perused of the pleadings, evidence coupled with the documents of respective points on record is case of the complainant alleging deficiency in service in selling the vehicle at lesser price and caused heavy loss to the complainant. There is no dispute that the complainant has availed a loan for the purchase of the vehicle bearing No.KA 11/A7885 in the year 2010. There is also not dispute that the vehicle was hypothecated and was seized by the opponents and the said hypothecated agreement is produced by the opponent with respect to Ex.R-1.

16.    To prove the case of the complainant, the PW-1 has reiterated the complaint averment in lies examination in Chief and in support of his case has produced the documents pertains to the vehicle there is R C Book of vehicle and Insurance policy of the vehicle which is marked as Ex-P-1 and Ex-P2. On perused of Ex-P1 and Ex-P2 it is crystal clear that the complainant is the owner of the vehicle. Further it is also admitted that the loan agreement was entered between the complainant and the opponent and the amount of Rs.3,50,000/- was taken as loan. He has further alleged that the O.P. had seized the vehicle and the marked value of the said vehicle at the time of seizure was not less than Rs.4,01,000/- as per the insurance declared valued by the sister Soneen Company of the opponents.

          17.    Further with respect to point No.1, the RW-1 who is the O.P, he has deposed as per this specific defence set up in their Written Version that he has contended that once the arbitrator has passed the award i.e. Ex. R-12. It because enforceable under Sec.36 of the Arbitration Act. It is not disputed that there is an arbitration award on 31/3/2014 in the Arbitration case No. 2297/13 and it is also not disputed that there is a criminal case against the complainant U/s. 138 of N. I. Act before the Hon’ble J.M.F.C. at Hon’’ble in CC NO.206/2014 as per the Ex. R-11.

18.    So far as the opponents is counsel he has already proceed an award of arbitration dated: 31/03/2014 and the disputes stands adjudicated by the arbitrator and Consumer Forum cannot pre determine the issue because Consumer Forum don’t have jurisdiction to sit in Judgement over award of Arbitrators. The remedy which was open to the complainant was by way of challenging the award as per provisions of Arbitration and Conciliation Act.

19.    It is submitted that there would be a conflict jurisdiction in relation to the proceedings instituted by the complainant under the provisions of the Consumer Protection Act and the proceedings under the Arbitration act instituted by the opponents.

20.    The Hon’ble National Commission in Installment Supply Ltd. V/s. Kanga Ex serviceman Transport Co. and another I (2007) CPJ 34 (NC) had there once an award is passed by the arbitrator in respect of the same subject matter that of the complaint pending before the Consumer Forum, the Consumer Forum would not entertain the complaint. The Hon’ble National Commission concludes that after an award by the Arbitrator the Consumer Forum cannot decide the complaint.

21.    We reiterate that when two three authorities are available to any person to file judicial proceedings for the redressal of his grievances proper demands that he has to choose one and peruse the remedy to the hilt to the logical end, but be cannot be permitted to file the for the same relief to file Consumer complaint in this Forum.  When he has the knowledge already that an Arbitration award is already given existing but a blatate misuse of provisions of Consumer Protection Act 1986 and the code of Civil procedure. We have already mentioned above that jurisdiction of the Consumer Forum is in addition to the jurisdiction of other authorities particularly Civil court functioning all over India. But one party chooses to approach Civil Court for the same relief, he cannot be permitted to file Consumer complaint pending Civil Suit. It is for this reason the complaint is not maintainable.

22.    The Hon’ble Supreme Court in National Seeds Corporation Ltd., V/s. M. Madhusudhan Reddy reported in I (2012) CPJ 1 (SC) = (2012) SLT 51 = (2012) 2 SCC 506, wherein their lordship’s held.

23.    The remedy of arbitration is not only the remedy available to a grower rather, it is an optional remedy. He can either sec. reference to an arbitrate or file a grower complaint under the Consumer Act. If the growers opts for remedy of arbitration, then it may be possible to say that be cannot subsequently file complaint under the consumer Act, however if he chooses to file complaint in the first instance before the competent Consumer Forum by relief by involving Sec. 8 of the Arbitration and conciliation Act 1996. Moreover, the plain language of Sec. 3 of the Consumer Act makes it’s clear that the remedy available in that act is in addition to and complainant in derogation of the provisions of only other for the like being inforce.

          24.    In the light of decision of Hon’ble Supreme Court where it was held that once the complainant opts for remedy of arbitration it may be possible to say that he cannot subsequently file a complaint under the Consumer Protection Act.

25.    Looking at the documents filed by the both the parties, it appears that the vehicle in question was purchased by the complainant after obtaining financial assistance from the O.P. One loan cum Hypothecated agreement was executed between the complainant and opponents in the year 2010 and it is also established that the complainant had defaulted in making payment of regular installments. Therefore the O.P. is entitled to reposes and sale the vehicle.

26.    Looking to the law discussed by the Hon’ble Supreme Court in M/s. National Seeds Corporation Ltd., V/s. V.M. Madhusudhan Reddy (Supra) it appear that remedy of arbitration is not only the remedy available to the parties, it is an optional remedy. Either one of the parties of the hire purchase agreements can either seek reference to arbitration or to file a complaint under Consumer Protection Act. If one of the parties Opt for the remedy of Arbitration, then it may not be possible to say that he cannot subsequently file complaint under the Consumer Protection Act 1986. If he chooses for Arbitration proceedings in the first instance, then he cannot file a complaint before the Consumer Forum.

          27.    In Installment Supply Ltd. V/s. Kanga Ex serviceman Transport and Company Ltd. and others (Supra) Hon’ble National Commission observed that if the Arbitration award was already passed all disputes between the complainant and O.P., it is stated by Arbitration in accordance with Arbitration agreement award passed before filing of the complaint. Therefore will govern dispute between the parties and decision of the Arbitration is binding upon the parties.

28.    In the instance case of O.P. referred the matter to Arbitrate and the opponents issued notices to the complainant on 13/8/2013 and stated the procedure for the Arbitration.  Accordingly after the due procedure and to the arbitral award it appears that the complainant was having knowledge regarding the arbitration proceedings and after commencement of arbitration proceedings the complainant has filed this complaint on 19/9/2013 and the award is passed on 31/03/2014.

29.    If once the award is passed by the arbitrate then only remedy is available to an aggrieved party is to file an application under Sec. 34 of the Arbitration and Reconciliation Act, 1996 for settling aside the award.  Looking to the documents and pleadings it appears that the complainant did not opt to file an application under Sec. 34 of the Arbitration and Reconciliation Act 1996 before the Competent District Judge and Instead of filing application under Section 34 of Arbitration and Conciliation Act, the complainant continued in prosecuting the matter before this Forum.

          30.    Looking to the facts and circumstances of the case, we are of the view that once the matter is refused to the Arbitrator and award is passed by the arbitrator, then the complainant before this Forum under Consumer Protection Act 1986 is not maintainable. Therefore the complainant filed by the complaint is devoid of any merit deserved to be and is hereby dismissed.

31.    On the contrary as per the oral evidence coupled with the documentary evidence, the complainant has failed to prove the maintainability of the complaint, and the said fact has been clearly disclosed in the Ex R-12. Ex. R-1 which is the loan agreement and the arbitration award which have been already discussed supra. Hence, in the light of above observation the complainant failed to prove the maintainability of the complaint. Hence in the light of above observation we constrained to held points No.1 in the Negative.

          32.    POINT NO.2 :-    In view of the above discussion and finding we proceed to pass the following;

:: ORDER ::

1. The complaint filed by the complainant is hereby dismissed.
2. No order as to cost.

    3) Send a copy of this Order to both parties free of cost.  

(Dictated to the Stenographer, transcribed by him, corrected and then pronounced by me in the Open Court 30^th day of November, 2016)