Orissa

Rayagada

CC/355/2016

K.Murali Prasad Rao Patnaik - Complainant(s)

Versus

The Manager, Chola Mandalam Company Limited - Opp.Party(s)

Self

29 Oct 2018

ORDER

DISTRICT   CONSUMER  DISPUTES REDRESSAL    FORUM, RAYAGADA,

STATE:  ODISHA.

C.C. Case  No.355 / 2016.                                            Date.     29   .     10  . 2018

P R E S E N T .

Dr. Aswini  Kumar Mohapatra,                       President.

Sri  GadadharaSahu,                                             Member.

Smt. Padmalaya  Mishra,                                     Member.

 

Sri   K.Murali Prasad Rao Patnaik, S/O: Late Sankar Rao Patnaik, Pitla  Street,    Po/Dist:Rayagada  (Odisha)                                                        …. Complainant.

Versus.

1.The Branch    Manager, M/S. Cholamandalam Investment Finance Company Ltd.,New Colony, Po/Dist: Rayagada-765 001.

2.The    Manager, M/S. Cholamandalam Investment Finance Company Ltd., Regd. Office, at “Dara House”, No.2, NSC bose road, Parrys Chennai- 600 001.

3.The Manager, ICICI Bank, Rayagada.

4.The Manager, ICICI Bank, Cash Management services, (EAST) Mumbai.

.                                                                                                           .…..Opp.Parties

Counsel for the parties:                         

For the complainant: - Self..

For the O.Ps 1  & 2:- Sri Ram Prasad Patra, Advocate, Rayagada.

For the O.Ps 3 & 4:-Set exparte.

JUDGEMENT

The  curx of the case is that  the above named complainant alleging deficiency in service  against  afore mentioned O.Ps    for  not to pass any Arbitration  decree against the complainant inter alia refund the E.M.I amount  paid  by the complainant  to the O.Ps. towards  vehicle  vide Regd. No. OR-18-B-7359  Mahindra Pick up for which  the complainant  sought for redressal of the grievances raised by the complainant.

Upon  Notice, the O.Ps No.1 & 2 put in their appearance and filed joint written version through their learned counsel in which  they refuting allegation made against them.  The O.P No.1 & 2 taking one and another pleas in the written version   sought to dismiss the complaint as it is not maintainable  under the C.P. Act, 1986. The facts which are not specifically admitted may be treated  as denial of the O.P  No. 1 & 2. Hence the O.P No.  1 & 2 prays the forum to dismiss the case against  them  to meet the ends of justice.

Upon  Notice, the O.Ps 3 & 4 neither entering in to appear before the forum nor filed their  written version inspite of more than  18 adjournments has been given  to them. Complainant consequently filed his memo and prayer to set exparte of the O.Ps 3 & 4.  Observing lapses of around 2 years  for which the objectives  of the legislature of the C.P. Act going to be destroyed to the prejudice of the interest of the complainant.  Hence after hearing  the  counsel for the complainant set the case  exparte against the O.Ps 3 & 4. The action of the O.Ps 3  & 4 are against the principles of  natural justice as envisaged  under section  13(2) (b)(ii) of the Act. Hence the O.P 3 & 4. set exparte  as the statutory period  for filing of  written version was over to close the case with in the time frame permitted by the C.P. Act.

Heard arguments from the learned counsel for the    O.P  No. 1 & 2 and from the learned counsel for the  complainant.    Perused the record, documents, written version  filed by the parties. 

This forum  examined the entire material on record  and given  a thoughtful consideration  to the  arguments  advanced  before us by  the  parties touching the points both on the facts  as well as on  law.

                                                               

 

                                                                                    FINDINGS.

From the records it reveals that, there is no dispute that the  complainant had  availed loan  bearing loan agreement No. XSHURAY00001100173 for purchase of  commercial  vehicle  Mahindra Pick up bearing Regd.  No. OR-18-B-7359   from the   O.Ps  a sum of Rs.3,00,000/- during the month of  December,2013 (copies of the statement issued by the O.P. which is in the file marked as Annexure-I).  The  complainant  had  agreed to pay  the finance charges a sum of Rs.75,000/- thus in all a sum of Rs.3,75,000/- was payable by the complainant to the O.Ps. in  35 E.M.I  @ Rs.11,800/- each instalment for the period from 01.01.2014 to 1.11.2016  as stated in the agreement.  The complainant was depositing  the E.M.I. till June, 2015. Thereafter non deposit of the E.M.I. the O.P No.1   had sent letters to the complainant vide letter Dt.1.7.2015 and Dt.1.8.2015  mentioning  that your account is still in arrears wherein  you have not taken any action  to repay the  outstanding till date i.e. on 1.8.2015 is Rs.1,15,221/-(copies of the letters are is in the file  which is marked as Annexure-2 & 3) .   Thereafter  non payment  of the E.M.Is. by the complainant  the O.Ps had taken the above finance vehicle on Dt.30.12.2015 from the complainant (copies of the surrender letter and seizure Inventory  of the vehicle  is in the file marked as Annexure-4).  and sold it at throw away price in the market. 

Before selling the above vehicle  the O.P No.1 & 2 had  not  sent  pre sale letter to the customer. The efforts of the complainant  became futile and the  O.Ps failed to follow the procedure in seizing and selling the vehicle. The complainant sustained huge loss and mental agony.     Aggrieved the above action  of the O.Ps No.1 & 2  the  complainant has filed this C.C. case before the forum  and prays the forum direct the O.Ps not to pass any arbitration decree against the complainant inter alia  to refund the deposited  E.M.I. deposited by him. Hence this C.C. case.

The O.Ps in their written version  contended that  the  complainant is irregular in repayment  and admittedly he is a defaulter of E.M.Is. Since the complainant has failed to pay the instalments and he knows  that consequential action by  the O.Ps for  recovery of the loan dues  is inevitable. The O.Ps had addressed letters and sent notices to the complainant but of no avail.  After seizure of the vehicle, the complainant was  informed  about the balance payable by him and as the complainant did not pay the amount, the O.Ps sold the vehicle to the third party. The O.Ps had followed the procedure laid by the terms  and conditions of agreement of hypothecation and other formalities as per the existing  laws. No deficiency in service or negligence or irregularities can be  attributed to the O.Ps.

On perusal of the record this forum found due to personal problems of the complainant  inter alia  O.Ps failed to furnish the detailed account copy  to the  complainant, he    could not paid the instalments. There after the  O.Ps 1 & 2   had  seized the vehicle and sold it to a  third party.  

The O.P. No.1 & 2  contended that  the complainant failed to pay the installments as per schedule,  the O.Ps. addressed   letters  and gave notice but the  complainant did not turn up to pay the instalments and the O.P had  seized the vehicle and sold. The  O.Ps 1 & 2  had issued demand notice  for payment of the loan amount after sold the vehicle. As the complainant did not pay the loan amount, the  O.P. No. 1 & 2  initiated arbitration proceedings. Sri B.B.Agrawal, Chennai, the Sole Arbitrator had passed award on Dt.  28.08.2016.

 

                The O.Ps No.1 & 2  contended  in their written version that  this forum is not maintainable  in view  of the fact that there is an “Arbitration” clause executed in the agreement.

            In the present case in hand the complainant had  availed   loan from the O.Ps No.1  & 2   on payment of  interest as consideration. This is    clear from the case  of  Ravindra Kumar Das Vrs. M.D., OSFC  Ltd   reported in  C.P.R. 1991 (1) page No. 392  where in the Hon’ble State C.D.R.Commission, Cuttack  observed “ Financial assistance is a service rendered for which a borrower pays interest. Thus  within the board meaning of Consumer and Services, such services  is for hire. Any deficiency in service comes within the scope of the Consumer Protection Act, 1986.

 

Since the O.Ps 1 & 2 had taken repossession of the vehicle on Dt.30.12.2015 much in advance of the  last agreement date and sold  without intimation  and the charges imposed on the complainant is found to be punitive and not a consumer friendly. The O.P. No.;1 & 2   had  never taken the  spirit on consumer service in their attitude and they have encouraged their business wings to a prohibited area. Though the agreement  shows  percentage of interest  @ Rs.9% per annum but they have charged  more than  @ Rs. 36 % per annum along  with  delayed payment  surcharge.   In total their excess amount claimed from the consumer is beyond  imagination of  an ordinary   person.   Hence the agreement  having a concealed agenda behind the consumer and hence in view of the operation  of the Odisha regulation 1968 the said activities are coming under the  punitive portion of the regulations. Hence  for causing  under hardship and mental agony  the complainant is not liable to pay  any finance  amount  to the O.P. at this stage. The counter  claim of the O.Ps No.1 & 2  are not maintainable before this forum and the O.Ps  1 & 2  have  violating the provisions of   Odisha Regulation- 1968 and Odisha Debt  relief  Act  1981. Further the O.Ps have entered into the scheduled   prohibited area and violated U/S- 23 of the Contract act. 

In the instant case the O.Ps. had  without  given any notice of demand took  away the vehicle on Dt. 30.12.2015  where as the last date of agreement expires on  01.11.2016.

Admittedly the complainant  had paid  13  monthly  installments  @ Rs.11,800/-    total sum of Rs.1,48,955/- against the said finance and the O.P. No.1 & 2   had repossessed  the vehicle on Dt.  30.12.2015 and sold without any notice served to the complainant..  When the said  contract/agreement void as per the section- 65 of the Contract  act and the O.Ps 1 & 2  will not entitled to enforce the said agreement against the complainant. The  complainant who  enjoyed  the contract with sufferings and paid the amount and  after repossession of the vehicle with such  void contract the O.P No.1 & 2  are not  entitled to claim any  money from the complainant.

In this connection  this forum relied  citation It is held and reported  in A.I.R. 1994 S.C. page No. 787  and  1994 (I) SCC 243 the Hon’ble Supreme Court  observed  importance of the Act lies in promoting welfare of the society by enabling the consumer to participate  directly in the market economy. It is clearly stated by the apex court that it attempts to remove the helplessness of a  consumer which he faces against powerful business, described a net work of rackets or a society in which producers have secured power to rob the  rest  and the might of public bodies which are degenerating  into store house of in action.

Again It is held and reported in OLR 2007(1) (SC) page No. 472 where in  the Hon’ble Supreme  Court  observed – Loan granted by  finance company- Default in payment- Recovery  of same- Procedure- Recovery of loans or  seizure of vehicles could be done  only through  legal means- The Finance company  cannot employ goondas to take  possession by force.

In the instant case repayment by the  complainant started  from  1.1.2014 and he had paid 13 Nos of   E.M.Is. The vehicle was  seized on 30..12.2015 and by  then  total installment  dues are  22 E.M.Is.  But  from the records and document  available  on record the O.Ps 1 & 2  had  never  issued any  default notice and repossession the same and  sold  the same on auction  without  any  prior notice to the complainant and giving any   opportunity to him to repay the outstanding dues.

The entire transaction of the O.P. No.1 & 2  with the complainant in the deal was with an ill intention and they have never followed the rules and regulations while granting  the finance and without giving any chance  to the consumers they have  forcibly  took the vehicle on Dt. 30.12.2015 as the  complainant is  a poor,  illiterate and  the above  vehicle was  utilized  by the complainant  for his     livelihood .

The  O.Ps 1 & 2  in their written version contended that they had issued demand notice  for payment of the loan amount after sold the vehicle. As the complainant did not pay the loan amount, the  O.P. No. 1 & 2  initiated arbitration proceedings. Sri B.B.Agrawal, Chennai, the Sole Arbitrator had passed award on Dt.  28.08.2016.  From this   it is clear that  the O.P.1 & 2  had obtained  ex-parte   order of the  hon’ble Arbitrator  without  intimating the complainant which  has been initiated. 

            Since the said award had obtained by  concealing the truth and suppressed the correct facts of the dealing before the Arbitrator. Hence the O.P. No.1 & 2  are not entitled any finance dues demanded by them by taking advantage of the Arbitration award and the said demand is deemed to be an exaggerated  and false demand.

             The Consumer forums  findings  is  that the complainant is not liable to pay any money to the O.P. towards the said finance. After repossession and sold the said vehicle they have terminated the said contract which is a void contract  U/S-65 of the Contract Act  and they   may appropriate the  sale proceeds against the said finance  towards full and final satisfaction.   The complainant is no more liable to pay any money towards the said finance  to the O.Ps1 & 2  by taking the advantage  of the arbitration award.

It is held  and reported  in  CPJ – 1996 (3) page No. 1 in which  the hon’ble  Supreme  Court  observed  Section-34 of the Arbitration Act  does not confer an automatic embargo in the exercise of the powers by the judicial authority under the Act. It is a matter of discretion. Though the Dist. Consumer Forum, State  and National Commission are judicial  authorities for the purpose of Section-34 of the Arbitration Act, in view of the object  of the Act and by operation of Section-3 thereof,  we are of considered view that it would  be appropriate that these forums created under the Act are at liberty  to proceed with the matters in accordance with provisions of the Act rather than relegating the parties to an arbitration. The expression “Not in derogation” in Section-3 makes it clear that the provisions of C.P. Act do not in any way abrogate even partially the provisions of other laws in force and other laws are to be regarded as complementary to each other. Under the C.P. Act consumers are provided with an alternative, efficacious and speedy remedy.  When the consumer is entitled to seek remedy under  two different jurisdiction, he has option to choose one of them.

            Out of finance  amount a  sum of Rs. 3,75,000/- the  O.Ps  have received  Rs. 1,48,955/- from the  complainant  which is reflected  in the account statement issued by the O.P No. 1 & 2 (copies of the  same is  in the file   which marked as  Annexure-5).

            On perusal of the documents this forum found the O.Ps 1 & 2 clearly violated the guide lines given by the Act and as well as by the Hon’ble Supreme Court and R.B.I on the above subject and as such the repossession is an unfair trade practice and deficiency putting the poor consumer into financial  loss and mental agony. The O.Ps 1 & 2 without respecting the established law and guide lines of the R.B.I   have repossessed the same and sold without  intimation   to the  complainant.  The complainant   is a unemployed youth and for his livelihood  he doing this business so that the complainant to earn some money so that economically   he can improve in the society.  The intention of the legislature  is also clear. In order to mobilize  and improve the economic conditions   of the  remote areas the scheme is opened it is snot for the personal gain of the financing company.  Hence the action of the O.Ps No. 1 & 2   towards repossession and sold of the above vehicle   is a deficiency of service and unfair trade practice. 

            It is held and reported in CPR-2012(1) page No. 89  where in the Hon’ble State Commission, West Bengal observed “That the finance company can not be seized/repossessed without following due process of law”.

In view of the above discussion relating to the above case and  In Res-IPSA-Loquiture  as well as  in the light of the settled legal position  discussed  as above referring citations  there  exists deficiency in service on the part of the  O.Ps which is Aliane Juris. Hence  we allow the above complaint petition  in part. Hence to meet the ends of justice, the following order is passed.

                                                                ORDER.

In Resultant the complaint petition is allowed in part on contest   against the O.Ps 1 & 2 and dismissed against the O.Ps No.3 & 4 on exparte.

The O.Ps No.1 & 2  are ordered  to refund the  deposited amount  towards E.M.I. a sum of Rs. 1,40,000/- to the complainant interalia to pay Rs.1,000/- towards litigation expenses.

The O.Ps  are  ordered to comply the above directions within  60 days from the date of receipt of this order. Serve the copies of the above  order  to the parties concerned immediately free of charges.

Dictated and corrected by me.       Pronounced on this        29th. Day of  October,  2018.

Member.                                             Member.                              President