D.o.F.31/10/11
D.o.O:7/5/12
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
CC.No.289/2011
Dated this, the 07thth day of May 2012
PRESENT
SRI.K.T.SIDHIQ : PRESIDENT
SMT.RAMADEVI.P : MEMBER
SMT.BEENA.K.G : MEMBER
T.K.Mehmood, S/o Abdul Khader.T.K,
Indian Inhabitant, R/at T.K.Manzil
Eriyapaddy, Kasaragod. : Complainant
(Adv.Shajid Kammadam,Kasaragod)
1.Manager, M/s IndusInd Bank Ltd,
Madan’s Arcade, Kanhangad.
Hosdurg, Kasaragod Dt,
2.Manager, M/s IndusInd Bank Ltd,
Vehicle Finance division, ruby Tower,
Rly Station Road,Kannur : Opposite parties
(Adv. A.Manikandan, Kasaragod)
O R D E R
SRI.K.T.SIDHIQ, PRESIDENT
The averments of the complainant is as follows:
Complainant availed a loan of Rs.630,000/- by executing an agreement on 25/10/07 with opposite party for purchasing a sports utility vehicle bearing Reg.No.KL-14/G 6886. As per the agreement the said amount with 7.9% flat rate interest ought to have been repaid in 48 equated monthly instalments (EMI’s). The opposite party has fixed the agreement value to Rs.8.59,080/- including Rs.30,000/- towards insurance premium for one year. The complainant was very regular in repayment and after remitting Rs.8,28,580/- as on 5/9/11 he expressed his willingness to settle the account by paying the actual balance amount and demanded . No dues certificate. But opposite party demanded exorbitant amount and declined to issue no objection certificate in contravention of the circular of Reserve Bank of India No.RBI/2006-2007/377, DBOD No.Dir BC 93/13.3.00/2006-2007 dtd 7/5/07. The complainant received a registered notice dtd.2/9/11 demanding exorbitant amount @ 36% overdue interest. The act of opposite party amounts to deficiency in service. Hence the complaint.
2. According to opposite parties complainant obtained vehicle loan after executing loan agreement. As per the agreement complainant has to repay the loan amount Rs. 630,000/- with interest charges Rs.1,99,080/- and insurance charges Rs.30,000/- totaling Rs.859080/-. The agreement further stipulated that the complainant is bound to pay the EMI’s on or before 21st of every month. As per the terms of agreement the complainant is liable to pay additional interest charges @36% for every no remittance/delayed remittance. As on 13/2/2012 a sum of Rs.18913.24 is still outstanding in the stock on hire and Rs.8039.60 is pending in the account of additional interest and in total he is liable to pay Rs.26952.84. Contrary to what has been agreed by the complainant under the agreement, the remittance of most of the EMI’s has been delayed. Due to the said delay in remittance additional interest has accrued. Hence there is no deficiency in the service.
3. On the side of complainant the brother of the complainant Abdulla kunhi as P.A holder filed affidavit and Exts.A1 to A4 marked PW1 faced cross examination by the learned counsel for opposite party. No evidence adduced on the side of opposite party. Both sides heard and documents perused.
4. The points to be settled in this complaint are:
1. Whether the opposite party is entitled to get the amount claimed by them
2. Whether there is any deficiency in service on the part of opposite party
3. What is the order as to costs?
5. For the sake of brevity points 1&2 are discussed together.
Ext.A3 is the statement of account dtd.18/8/11 issued by opposite party to T.K.Mehmood. As per that the overdue amount is shown as Rs.36563.24 future due as Rs.17180/- and the total in Rs.53743.24. It is further seen from Ext.A3 that opposite party has not followed the law of appropriation of interest while computing the additional interest. According to opposite party they are entitled to get 36% additional interest on every non-remittance/delayed remittance of EMI’s. Had it been so as per the law of appropriation of interest they ought to have collected additional interest as and when every delayed remittance is made by the complainant. As per law of appropriation of interest a payment upon an interest bearing debt will be applied a to the interest in preference to the principal and where the law allows interest on interest a payment should be applied first to discharge over due interest on interest and second to discharge interest and third to discharge principal.
6. In this case as per Ext.A3 statement of account pertaining to the EMI remittance shows that the opposite party has not followed the said law. Ignoring additional interest had they collecting subsequent monthly EMI only the presumption is that they have abandoned or waived the additional interest. But keeping silence on additional interest till the remittance of last monthly instalment and then demanding the said additional interest for the whole period is illegal and definitely amounts to deficiency in service.
7. Relief & costs:
According to opposite party as on 13/2/2012 an amount of Rs.18913.24 is outstanding in the stock in hire and Rs.8039.60 is pending on account of additional interest. Complainant has no case that he has remitted the entire hire amount. Therefore the complainant is liable to pay Rs.18913.24 which is outstanding in his account. But opposite party is not entitled for the additional interest Rs.8039.60.
In the result complaint is allowed and complainant is directed to remit Rs.18913.24 (rounded to Rs.19000/-) to the opposite party within one month from the date of receipt of copy of the order and on receipt of the said amount opposite party shall issue No objection certificate pertaining to the vehicle bearing Reg. No. KL-14/G 6886. If the opposite party is not issuing No objection Certificate even after receipt of the amount then on application by the complainant with evidence of payment of Rs.19000/- to the opposite party necessary directions will be issued to the concerned RTO to cancel the HP endorsement from the RC of vehicle bearing Reg.No.KL-14/G6886.
However in the circumstances there is no order as to costs.
Exts:
A1-Deed of power of attorney
A2-series- instalment receipts
A3-Statement of Account
A4-Notice issued by the OP
A5-circular issued by RB!
PW!-Abdullakunhi.K.A- power of attorney of complainant
MEMBER MEMBER PRESIDENT
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