Telangana

Mahbubnagar

CC/08/55

Smt S. Yadamma W/o G. Thirupathi Reddy - Complainant(s)

Versus

The Manager, Mahindra and Mahindra Financial Services Ltd., - Opp.Party(s)

Sri T. Narsimulu

27 Nov 2008

ORDER

BEFORE THE DISTRICT CONSUMER FORUM AT MAHABUBNAGAR

Thursday, the 27^th day of November, 2008

 

                                                              Present:- Sri M.Rama Rao, B.A.,LL.B., President

     Sri P.Venkateshwara Rao, B.com., LL.B., Member

       Smt.B.Vijaya Kumari, M.Sc. B.Ed., C.C.P., Member

 

                                                                             C.C.NO. 55  Of   2008

Between:-

Smt. S. Yadamma  W/o G. Tirupathi Reddy, R/o Annasagar,  Bhoothpur Mandal, Mahabubnagar District.  

                                                                                              … Complainant.

And

The Manager, Mahindra and Mahindra Financial Services Ltd.,                          D.No.1-5-107/4/A, C/o Sree Rama Engineering Co., Mettugadda, Mahabubnagar.  

                                                                                         … Opposite Party

 

 This C.C. coming on before us for final hearing on 13-11-2008, in the presence of Sri T. Narsimulu, Advocate, Mahabubnagar for the complainant and of Sri B. Balagangadhar Reddy, Advocate, Mahabubnagar for the opposite party and having stoodover for consideration till this day, this Forum delivered the following:

 

O R D E R

(Sri P.Venkateshwara Rao, Member)

 

1.        This is a complaint filed on behalf of the complainant under section 12 of Consumer Protection Act, 1986 seeking a direction to the opposite party to return the Mahindra 475 DI Tractor with Engine No.RENO0189 and chasis No.RENO189 with Registration No.AP22V 2397 in favour of the complainant and receive the loan amount in instalments and if return of vehicle is not possible alternatively to pay the sum of Rs.2,54,500/- invested by the complainant to purchase the tractor along with title deed and to pay Rs.1,00,000/- towards compensation and also costs of the complaint.

 

2.     The complaint averments are as follows:- The opposite party is engaged in the business of providing vehicle loans to the consumers.   The complainant purchased Mahindra 475 DI Tractor with Engine No.RENO0189 and chasis No.RENO189 from Sri Jaya Rama Automotives Pvt. Ltd., Mahabubnagar with Registrration No. AP22V 2397 under Hire Purchase with the opposite party.  As such the complainant is a consumer of the opposite party.   On 2.4.2007 the complainant paid a sum of Rs.1,00,000/-, Rs.55,000/- on 3.5.2007, Rs.50,000/- on 21.6.2007.  The complainant also paid a sum of Rs.15,000/- on 30.7.2007 and also paid another sum of Rs.34,500/- on 9.4.2008 to the authorised signatory of Sri Jayarama Automotives Pvt. Ltd., making a total of Rs.2,54,500/-.   The total cost of the tractor was Rs.5,34,352/- and the opposite party provided auto finance to the tune of Rs.3,00,000/- to the complainant and the hire purchase period being 3.5.2007 to 2.8.2010.  The opposite party fixed six instalments @ Rs.71,000/- each.   The first instalment will commence from 3.8.2007.   The complainant purchased the tractor worth of Rs.5,34,352/- by paying a sum of Rs.2,54,500/- in all by 9.4.2008 to the dealer Sri Jayarama Engineering company and used the tractor for about three months period only.   Before first instalment due date i.e., 3.8.2007 itself the opposite party illegally seized the tractor of the complainant when it was parked in front of the house of the complainant without any prior intimation and without any notice or default which is illegal, arbitrary and against the principles of natural justice.   After such seizure the opposite party sold away the tractor to third parties for Rs.3,15,000/- without the knowledge and consent of the complainant.  The vehicle which was worth of Rs.5,34,352/- and used just for three months was forcibly, illegally seized by the opposite party and was sold for a meager sum of Rs.3,15,000/- only, it means that the cost of usage of vehicle for three months is of Rs.2,19,352/- [Rs.5,34,352/- - 3,15,000/-], which is abnormal and unimaginary.  Seizure of vehicle when the payment schedule itself is not commenced is an irregular and incorrect act on the part of the opposite party.  Apart from seizing the vehicle, the opposite party sold the vehicle at cheap rate in the open market due to which the complainant is put to much loss and injury.    The opposite party besides seizure of vehicle retained the blank cheques obtained from the complainant and also retained the title deeds books of the complainant pertaining to her land illegally.   As such the complainant got issued a legal notice on 8.5.2008 to the opposite party and asked to return the vehicle to the complainant within 15 days and expressed her willingness to pay the instalments regularly.  In the said notice it was demanded to settle the account once for all so as to enable the complainant to get free the vehicle from the hands of opposite party by settling the account besides a demand for return of the title deeds.  The same is served on the opposite party to which the opposite party gave an evasive reply.  All these acts of opposite party amount to deficiency in service.  Hence the complaint.                                                                                                                                                                                                          
3.     The opposite party filed counter with the following averments:- The opposite party is engaged in providing loans for purchase of vehicles.  The opposite party has provided financial assistance to the complainant to purchase the Tractor of Mahindra 475 DI which was registered with No.AP 22/W-2397.  The complainant has purchased the vehicle through M/s Jaya Rama Automotives Pvt. Ltd., Mahabubnagar.  The amounts paid by the complainant are only to the dealer but not to the opposite party as such this OP is no way concerned with the payments made by the complainant to the dealer.  The total cost of the vehicle financed was Rs.5,34,352/-.  Out of which the complainant was provided financial assistance of Rs.3,00,000/-.  On availing the loan facility of Rs.3,00,000/- the complainant has executed loan agreement in favour of OP agreeing to repay the total hire purchase value of Rs.4,26,600/- repayable in (6) half yearly instalments at Rs.71,000/- starting from        03-08-2007 with a moratorium period of 92 days.   The complainant has not paid even the first instalment amount.  As such the opposite party has issued notice on 06-10-2007 to the complainant calling upon to pay the due instalment, but she did not respond to the said notice, as such on 15-11-2007 a telegram was also issued to the complainant to settle the account immediately or else the opposite party will take suitalbe action.  Even for the said telegram also the complainant did not respond as such as per the clause 12(i) (ii) (iii) of terms and conditions of the loan agreement the opposite party has proceeded with its seizure and sold it in public auction. 

 

The opposite party has seized the tractor legally with notice and intimation of such seizure to the complainant.  After seizure of the tractor, under due procedure its value was assessed through licensed Surveyor and sold in public auction to the highest bidder at Rs.3,15,000/-.  There is no deficiency of service.  It is specifically denied that the seizure of vehicle even before the commencement of payment schedule and sold at cheaper rate in the open market is utterly false.  The opposite party got issued reply notice on 23-05-2008 to the notice of the complainant and informed her that all the documents obtained from her for security purpose will be handed over only after clearing the remaining balance of loan amount.  There is no cause of action for the complainant to file the complaint.  There is no deficiency of service and there is no obligation on the part of OP to deliver the tractor and also not liable to pay any damages.  Hence the complaint is liable to be dismissed in limini. 

Even after seizure of the vehicle the opposite party has given another chance of discharging the loan amount to the opposite party and got issued a notice on 17-12-2007 calling upon her and her guarantors to settle the payments.  Though they have received the notices the complainant has shown no response as such the vehicle was got assessed through the licensed Surveyor and sold in public auction on    08-02-2008 for best highest price of Rs.3,15,000/- available in the market.  The complainant was given reasonable opportunities to pay the instalments to avoid the seizure and sale of the vehicle but she did not avail the same.  The complainant failed to perform her part of contractual publication.  The relationship between the complainant and the opposite party is borrower and lender and transaction between them is purely loan, as such there is no service on payment of charges and the complainant is not a consumer as defined under C.P. Act.  As such this Forum is not having any jurisdiction to entertain the complaint.  As per the agreement the documents deposited by the complainant with the opposite party will be returned back to the complainant only after clearing off the shortfall of amount due towards the loan transaction.  There is no deficiency of service by the opposite party.  Without paying the first instalment itself the complainant cannot ask for any remedy against the opposite party.  As per the clause 26 & 27 of loan agreement it is agreed that if any dispute arises between the borrower i.e., complainant and the lender i.e., OP the matter has to be referred to Arbitrator at Mumbai.  As such this Hon’ble Forum has no jurisdiction to entertain the complaint.  The alleged cause of damage of Rs.1,00,000/- to the complainant is false and not tenable.  The complainant having utilized the vehicle for more than 6 months from the date of purchase without paying a single instalment the cause of loss due to its seizure is bogus, false and not tenable.  Therefore there is no deficiency in service and no unfair attitude and practice on the part of OP.  the complaint is unwarranted against the opposite party and OP is not liable to pay any amount of compensation or damages etc. as claimed by the complainant.  Hence the complaint is liable to be dismissed with exemplary costs.

 

4.  The complainant filed her affidavit and got marked Exs.A-1 to A-11.

 

5. The opposite party filed affidavit and got marked Exs.B-1 to B-15 on his behalf. 

 

6. The complainant and the opposite party filed their respective written arguments and heard at length. 

 

7.  The points which fall for consideration are:

 

1.  Whether the complainant is a consumer?
2.  Whether this Forum is having jurisdiction to try the complaint?
3.  Whether the clause of Arbitration in the Agreement oust the  

         jurisdiction of this Forum?   

4. Whether the OP’s action is arbitrary and amounts to 

        deficiency in service?

 

5.  Whether the complainant is entitled to the reliefs as prayed for?

 

8.       Point No.1:- The contention of the opposite party is that in the instant case the relationship between the complainant and OP is borrower and lender and the transaction between them is purely loan and no consideration is paid for service by the complainant, as such the complainant will not fall within the meaning of the ‘Consumer’ as defined in the C.P. Act.   Thus the complaint is not maintainable.  Admittedly OP had undertaken to perform the services as financier by providing facilities in connection with financing.  The complainant approached the opposite party for hiring its services for a consideration in the nature of interest.  The opposite party agreed to provide the same by way of financial assistance.  Therefore no doubt that the complainant who hired the services of the opposite party in connection with financing for consideration is a consumer within the meaning of the C.P. Act.   In this regard we are relying on the decision of the Hon’ble A.P. State Commission in the case of S.B.H.  Vs. Sri Bairi Lingam reported in 1991 (1) CPJ P.362.  In view of the above facts and circumstances of the case and the principles of the case law cited supra, we hold that the complainant is a consumer and the complaint is maintainable in this Forum.

 

9.    Point No.2:-  The opposite party further contended that as per clause 27 of the Loan Agreement i.e., Ex.B-1, it was mutually agreed that only Mumbai Courts shall have exclusive jurisdiction to try and legal proceedings in respect of any matter claim or dispute arising out of or in any way relating to the agreement and therefore this Forum has no jurisdiction to entertain the complaint filed by the complainant under the provisions of the C.P. Act.   Clause 27 of the Loan Agreement (Ex.B-1) reads as follows:  

 

 27)  Jurisdiction:

 

     “It is agreed by and between the parties hereto that the Courts at Mumbai alone shall have exclusive jurisdiction in respect of any matter, claims or dispute arising out of or in any way relating to these presents or to anything to be done under and pursuant to these presents or of any clause or provision thereof, notwithstanding that the whole or substantial part of the cause of action may not have arisen at Mumbai”. 

 

     The territorial jurisdiction of the District Forum cannot be ousted by any agreement between the parties.  They are governed by the provisions of the C.P. Act relating to jurisdiction.  Section 11 of the C.P. Act deals with the jurisdiction of the District Forum.  It is the cause of action rule which helps much to determine the jurisdiction.  As such the clause No.27 of the loan agreement is void as the jurisdiction of the District Forum is determined as per Section 11 of the C.P. Act.

 

      In this case the opposite party seized the vehicle at Annasagar village of Mahabubnagar Dist. which fall under the territorial jurisdiction of this Forum.  As such cause of action arose in Mahabubnagar Dist.  We conclude that the complaint filed by the complainant in this Forum is maintainable and this Forum has territorial jurisdiction to entertain the complaint and decide the case relating to the consumer transaction between the complainant and the opposite party.   This point is decided against to the opposite party.  

 

10. Point No.3:-   According to OP, the complainant executed the Loan Agreement i.e., Ex.B-1.   It was contended on behalf of OP that as per the clause No.26 of the Agreement any dispute arising between the parties shall be referred to Arbitrator at Mumbai and in view of the Arbitration Clause, the complainant cannot invoke the jurisdiction of this Forum as the parties are governed and bound by the agreement.   Clause 26 of the Loan Agreement (Ex.B-1) reads as follows:

 

    26)  Arbitration:

  “All disputes, differences and/or claim arising out of these presents or in any way touching or concerning the same or as to constructions, meaning or effect hereof or as to the right and liabilities of the parties hereunder shall be settled by arbitration to be held in accordance with the provision of the Arbitration and Conciliation Act, 1996 or any statutory amendments thereof and shall be referred to the sole arbitrator to be nominated by the Lender.   In the event of death, refusal, neglect, inability or incapability of a person so appointed to act as an arbitrator, the Lender may appoint a new arbitrator.  The arbitrator shall not be required to give any reasons for the award and the award of the arbitrator shall be final and binding on all parties concerned.   The arbitration proceeding shall be held in Mumbai”. 

 

         It is settled law that even if there is an arbitration clause for   settlement that would not prevent the Consumer Forum to judge the deficiency in service by the service provider.  The remedy provided under the C.P. Act is in addition to and not in derogation of the provisions of      any other law for the time being in force.  The Hon’ble National Commission held the said opinion in its latest decision reported in CPJ   2008 (1) P.214 in Cholamandalam DBS Finance Ltd., Vs. Kishore Jain   case.   In view of this decision and due to occurrence of    cause of action    in Mahabubnagar Dist., we conclude that mere existence   of Arbitration clause i.e., Clause 26 in Loan Agreement  (Ex.B-1) does not oust the  jurisdiction of this Forum and that the complaint filed by the   complainant under the provisions of the C.P. Act is maintainable.  Hence   this point is decided against the opposite party.

 

11. Point No.4:-   Now coming to the merits of the case, the facts which are not in dispute are that the complainant executed Loan Agreement on 3.5.2007 and obtained financial assistance of Rs.3,00,000/- on 3.5.2007 from OPs to purchase Mahindra 475 DI Model Tractor for agriculture purpose.  The price of the tractor was Rs.5,34,352/-.   The complainant paid Rs.2,47,352/- towards down payment/margin money to the dealers.  The complainant purchased the said tractor on 3.5.2007 and got registered with bearing No. AP22 W-2397.   As per the Hire Purchase Agreement the loan amount of Rs.3,00,000/- is payable in 36 months and OPs charged Rs.1,26,000/- i.e., Rs.3,500/- per month towards interest i.e., @ 42% p.a. on the said amount for 36 months from 3.5.2007 to 2.8.2010.    OPs fixed six half yearly instalments to repay the loan together with interest with a moratorium period of 92 days to each instalment.   The complainant has to pay Rs.71,000/- under each instalment.  The instalments will be commenced from 3.8.2007 and will end by 3.2.2010.  The complainant has to pay the penal interest @ 36% p.a. on principle outstanding in case of delay in paying the instalments.    The OP seized the tractor and sold away on the reason of default in payment of first instalment.   
12. The brief case of the complainant is that the opposite party seized the tractor well before the first instalment due date without any prior notice and not deposited the post dated cheque before the banker though the opposite party is possessing the same with him.  The OP arbitrarily acted in seizing the tractor and sold it away well before the due date of first instalment itself  without following law and principles of natural justice and acted illegally.   The subject tractor is brand new and used for only 4 months.   But sold it at unjustifiably low price of Rs.3,15,000/-.  Thus the acts of OP are arbitrary, illegal and tantamount to deficiency in service.  

 

    On the other hand, it is the case of OP that, the OP is having right to seize the vehicle even for default of single instalment as per clause 12 (i) (ii) (iii) of the agreement.  The OP issued notices severally and given reasonable opportunity to the complainant to pay the first instalment amount but she did not respond.   As such the tractor was sold away for the true value as assessed by the independent surveyor.  The complainant never issued any post dated cheques to OP.  Therefore the complainant is a willful defaulter and the OP has acted legally in terms of agreement and followed the due procedure laid under agreement in seizing and selling the tractor.   Thus there is no deficiency in service on the part of OP.

 

13.  Now coming to the point of issuance of notice for seizure of vehicle, according to the complainant the tractor was seized well before due date of the first instalment itself forcibly without any notice.  The opposite party denies it.  According to OP, due to non-payment of the first instalment amount by the due date i.e., 3-08-2007,  the opposite party issued notice on 06-10-2007 vide Ex.B-2 and telegram on 15-11-2007 vide Ex.B-10 and another notice on 17-12-2007 vide Ex.B-5 and asked the complainant to pay the instalment amount due.  But she did not respond.  As such as per the clause 12 of Ex.B-1, the opposite party has seized and sold the tractor.

 

Now it has to be seen whether the opposite party followed the procedure required under law for seizure and sale of the tractor.  Before going into the discussion on this point, we feel it is proper to refer and reproduce the Clause No.12 (i) (ii) (iii) of Ex.B-1 on which OP relied and the relevant provisions of the H.P. Act, 1972 to decide the rights of the owners to terminate the H.P. Agreement and to recover the hire amount.  

 

Clause No.12 (i) (ii) (iii) of Ex.B-1:

12)   Consequences upon event of default:

 

12.1 “Upon the occurrence of any event of default and any time thereafter, the   Lenders shall without prejudice to its rights in law, be entitled to        declare all sums due and to become due hereunder for the full term of   the agreement as immediately due and payable including that the  Borrower shall be liable to pay to the Lender foreclosure charges     calculated as the percentage (as per Schedule 1) of the balance   principal outstanding along with other dues including unpaid installments, service taxes, late charges etc., due as on date of such declaration and upon the Borrower failing to make the said payment in     full within 7 days thereof, the Lender may, at its sole discretion, do any    one or more of the following:

 

1.  Upon notice to the Borrower terminate this agreement;

 

2.  Demand that the Borrower should return the Product to the Lenders at the risk of expense of the borrower, in the same condition it was delivered to him (Ordinary wear and Tear Excepted) at such Location as the lender may designate and upon failure of the borrower to do so within the period of demand the lender/agents/allies as agent and constituted attorney of the Borrower can enter upon premises where the product is located and take immediate possession of and remove the same without liability to the lenders or their agents of such entry or for damage to property or otherwise.  Upon such return of the product or upon the lender taking possession of the product as herein before stated the loan agreement can be foreclosed or terminated by the lender at its discretion and provided however the remedies available to the lender as herein given shall survive such foreclosure and termination of loan and the lender shall be entitled and authorized to exercise its rights herein including in connection with the product to recover its dues under this Agreement.

 

3.  Of such terms and conditions and for such consideration as the Lender may deem fit with or without any notice to the Borrower sell the Product at a public or private sale, otherwise dispose of upon such return of the Product or use, or operate, lease to others or keep idle such Product, all free and clear of any rights to the Borrower and without any duty to account to the Borrower for such action or inaction or for any proceeds in respect thereof.”

****

The Hire Purchase Act, 1972: 

 

Section18:- “Rights of owner to terminate hire purchase agreement  

for default in payment of hire or unauthorised act or breach of  

express conditions:-

 

1.  Where a hirer makes more than one default in the payment of hire as provided in the hire purchase agreement then, subject to the provisions of section 21 and after giving the hirer notice in writing of not less than—
   1. one week, in a case where the hire is payable at weekly or lesser intervals;
   2. two weeks, in any other case,

        the owner shall be entitled to terminate the agreement by giving the hirer notice of termination in writing.

       Provided that if the hirer pays or tenders to the owner the hire in arrears together with such interest thereon as may be payable under the terms of the agreement before the expiry of the said period of one week or, as the case may be, two weeks, the owner shall not be entitled to terminate the agreement”.  

 

2. (a) xxx

    (b)  xxx

 

Section19:-  Rights of owner on termination:-

      

       Where a hire purchase agreement is terminated under this Act, then the owner shall be entitled—

1. to retain the hire which has already been paid and to recover the arrears of hire due:

 

       Provided that when such goods are seized by the owner, the retention of hire and recovery of the arrears of hire due shall be subject to the provisions of Section 17:

2. xxx
3. xxx
4. xxx
5. xxx

 

      According to the Section 18 & 19 of H.P. Act, the lender should give two weeks prior notice to terminate Hire purchase agreement for default in payment of more than one instalment in case where the instalment is payable more than one week intervals.  On termination of H.P. Agreement only owner is entitled to repossess the vehicle.   But whereas in Clause 12 (i) (ii) and (iii) of Ex.B-1, it is mentioned that if borrower failed to pay the amount within (7) days, lender will repossess the product and sell it in the public or private sale with or without any notice to the borrower.   It is clear that the provisions of Clause 12 (i) (ii) and (iii) are contrary to the law.  It is settled law that the conditions which are contrary or against to the law are void and not enforceable.   Therefore OPs cannot take the advantage of the said Clause.   

 

      There is no dispute that the tractor was repossessed and sold for default of payment of first instalment.  First of all as per Sec.18 of the H.P. Act, the opposite party has no right to proceed in the case where there is a default in payment of one instalment.  All the notices said to have been issued by the opposite party i.e., Exs.B-2, B-5 and B-10 will not speak about the termination of agreement and the notices were issued with a demand to pay the instalment due within 7 days.  Whereas the statutory requirement is of two weeks notice.  The opposite party is not entitled to terminate the agreement and repossess the vehicle without issuing proper notice as required under Sec. 18 of the H.P. Act. Simultaneously the opposite party cannot proceed when there is only single default in payment.   Without terminating the agreement the opposite party cannot proceed further with sale or otherwise under the provisions of Sec. 19 of H.P. Act.  Moreover even according to Ex.B-1 Schedule, the moratorium period was fixed as 92 days from the due date.  According to this relaxation the complainant can pay first instalment amount by 3.11.2007.  But the opposite party even not waited for that period for seizure.   Therefore, we hold that the OP without any proper notice seized the tractor illegally.  Thus their acts are hasty and arbitrary one.  

 

     There is no material before us that the opposite party has intimated the complainant about the date fixed for sale of the tractor.  The opposite party has not filed any proceedings drawn up relating to the auction of the tractor.  In view of the absence of such evidence, we safely conclude with a presumption that OP sold the tractor without following the procedure required under statute. 

 

14.  Further contention of the complainant is that the tractor is new one and used for four months period but OP arbitrarily sold it at unjustifiable low price of Rs.3,15,000/-.  The OP denied and argued that they are relied upon Ex.B-11 i.e., Surveyor report to assess the value as on the date of sale.   We have gone through Ex.B-11.  The report is silent about so many aspects.  The surveyor has not mentioned anything in his report that how he came to a conclusion that there is depreciation about 40% in the worth of the vehicle when it was used for four months.  The surveyor report is contrary to the principles laid in the decision of the Hon’ble National Commission in the case of ICICI Bank Ltd., Sandeep Kumar reported in CPJ 2007 (4) P.391.  In view of the principles laid under the above case law, in this instant case 5% depreciation is quite considerable because the subject tractor is used for four months.  After deduction of depreciation of 5% i.e., Rs.26,718/-  the actual value of the tractor was of Rs.5,07,634/-  as on the date of auction.  But, contrary to this value the opposite party sold the tractor just for Rs.3,15,000/-.   Therefore we hold that the OP sold the tractor at unjustifiable low price as contended by the complainant. 

 

     In view of the above discussion it is clear that OP’s action with regard to not issuing proper notice and seizing the tractor without termination of H.P. Agreement and selling it at unjustifiably low price without any proper procedure is arbitrary and against to the law in force as such it amounts to deficiency in service.  In this regard we are relying upon the decisions (i) The Hon’ble Supreme Court in ICICI Bank Vs. Shanthi Devi Sharma and others case reported in CTJ 2008 (July) P.677 wherein their Lordships held that “Recovery of loans or seizure of vehicles be done only through legal means and financial institutions should follow the RBI guidelines in this regard.  (ii) The Hon’ble National Commission in TATA Finance Ltd., Vs.  Francis Soeiro case reported in CPJ 2008 (3) P.65    (iii) The Hon’ble A.P. State Commission in S. Kiran Kumar Vs. Centurion Bank of Punjab Ltd. case reported in CPJ 2008 (3) P.7, wherein their Lordships categorically held that seizure of vehicle without prior notice to the complainant and its auction and sale at unjustifiably low price tantamount to deficiency of service and the OP is liable for heavy costs and compensation.  Hence this point is decided in favour of the complainant and against to the OP.     

 

15. Point No.5:-   The complainant seeking direction to OP for returning his tractor after receiving the instalments amount or alternatively sought refund of amount paid by him to the dealer i.e., Rs.2,54,500/-.   It is evident from Exs.A-1 to A-5 that the complainant has paid Rs.2,54,500/- to the dealer.  Admittedly the tractor was already sold.   Hence OP may not be in a position to return the tractor.  The remedy left to the complainant is only to ask for refund of amount invested by him.  In terms of Ex.B-1 Agreement, the complainant cannot escape from his liability to clear off the loan together with interest from the date of loan i.e., 3.5.2007 till the sale of the tractor to OP.  According to OP the tractor was sold on 8.2.2008.    The Hon’ble National Commission in ABN AMRO Bank Vs. Sangeet Srivastava case reported in CPJ 2007 (2) P.269 held that the complainant is entitled for the amount paid by him towards margin money to the dealer in the cases where the financial institution rendered services in deficit by seizing and selling the tractor illegally and arbitrarily.   The said case law is quite applicable to the case on hand as such the complainant is entitled to get the amount of Rs.2,54,500/- which he paid to the dealers towards margin money while purchasing the tractor.   At the same time the OP is entitled to recover their loan amount by adjustment out of the amount of Rs.2,54,500/-.  As per the above discussion, the OP is liable to pay the amount to the complainant as calculated here under.   

 

I )                                                                                                 Rs.      Ps.

Principal amount                                                                3,00,000-00

Add: Interest @ Rs.3,500/- from 3.5.2007

to 8.2.2008  (9 months 5 days)                                               32,085-00

                                                                                           _______________

     Total amount with interest payable by the complainant

as on 8.2.2008 i.e., date of sale of tractor                              3,32,085-00

                                                                                        

     Less:     Amount realized under sale                                     3,15,000-00

                                                                                                  _____________

      Balance amount recoverable from the complainant                                   

      by OPs for full and final settlement of loan.                              17,085-00

                                                                                                  _____________

 

II )  Margin money paid by the complainant                              2,54,500-00

 

      Less: The amount payable by the complainant                                     

       towards full settlement of the loan.                                         17,085-00

                                                                                                _______________

      Amount payable by OPs to the complainant                       2,37,415-00

                                                                                                _______________

 

 

      The complainant has not claimed any interest on his invested amount.  Therefore we are not awarding any interest on the said sum.  However the complainant is entitled to receive his amount together with same rate of interest @ 42% p.a. as charged by the OP for his amount, if he failed to pay the ordered amount within 30 days of receipt of this order.

     Further the complainant is seeking direction to the opposite party for returning his documents, postdated cheques etc.  The opposite party will realize his entire loan amount by this order.   There is no evidence before us to show that the complainant has handed over the said cheques to OP and other particulars of the cheques.  Therefore we cannot direct the OP in this regard.  However the complainant can address a letter to his banker not to honour the cheques which are said to be handed over by him to OP.  Therefore the OP is not entitled to withhold the title deeds and all other documents which are in his custody after clearance of the loan.  Hence OP is liable to return the same to the complainant.    

 

16. The complainant is further claiming Rs.1,00,000/- towards compensation for all her sufferance.  No doubt Ex.A-7 speaks she has spent an amount of Rs.2,000/- towards documentary charges and Rs.3,000/- towards service charges and Rs.1600/- towards stamps charges to avail financial assistance from OP.  The complainant did not file any material to show that she is entitled for the remaining amount of Rs.93,400/-.  Therefore we hold that the complainant is entitled only to the amounts which she has spent actually.  Further we hold that the complainant is also entitled for Rs.1000/- towards cost of the proceedings as she spent the amount towards court fee and advocate fee.

 

17. In the result, the complaint is allowed.  The opposite party is directed to pay Rs.2,37,415/- towards margin money paid by the complainant and also an amount of Rs.6,600/-spent by the complainant while availing the loan and Rs.1,000/- towards costs of the proceedings.  The opposite party is further directed to return all the documents pertaining to the complainant such as title deeds and other documents received for sanction of loan.   The opposite party is further directed to comply with the order within 30 days from the date of receipt of this order, failing which there onwards the complainant is entitled to receive the amounts i.e., 2,37,415/- and Rs.6,600/- together with interest @ 42% p.a. till the payment from the opposite party. 

 

         Typed to dictation, corrected and pronounced by us in the open Forum on this the 27th day of November, 2008.           

 

        

 MEMBER                                MEMBER                              PRESIDENT 

        Appendix of evidence

       Witness examined

 

For complainant: Nil                                                 For opposite party:  Nil

Exhibits marked for Complainant:-

 

Ex.A-1:        Original Cash Receipts, dt.27.4.2007.

Ex.A-2:        Original Cash Receipts, dt.21.6.2007.

Ex.A-3:        Original Cash Receipts, dt.2.8.2007.

Ex.A-4:        Original Cash Receipts, dt.30.7.2007.

Ex.A-5:        Original Cash Receipts, dt.9.4.2008.

Ex.A-6:        Original estimation, dt.18.4.2007.

Ex.A-7:        Repayment Schedule, dt.4.8.2007.

Ex.A-8:        Copy of Legal Notice, dt.8.5.2008.

Ex.A-9:        Reply Notice by OP, dt.23.5.2008.

Ex.A-10:      Postal Receipt.

Ex.A-11:      Postal Acknowledgment.

 

Exhibits marked for OP:-   

 

Ex.B-1:        Copy of Loan Agreement.

Ex.B-2:        Copy of Demand Notice, dt.6.10.2007.

Ex.B-3:        Postal Receipt.

Ex.B-4:        Postal Acknowledgment.

Ex.B-5:        Copy of Notice issued by OP, dt.17.12.2007.

Ex.B-6:        Regd. Post Postal Receipts (3).

Ex.B-7:        Returned Registered Postal Cover.

Ex.B-8:        Returned Registered Postal Cover.

Ex.B-9:        Postal Acknowledgment.

Ex.B-10:      Copy of Telegram issued by OP.

Ex.B-11:      Report of Insurance Surveyor, dt.18.1.2008.

Ex.B-12:      Letter issued by OP, dt.3.3.2008.

Ex.B-13:      Form No.37 issued by RTO, dt.28.4.2008.

Ex.B-14:      Copy of Legal Notice, dt.8.5.2008.

Ex.B-15:      Reply Notice by OP, dt.23.5.2008.

 

By the Forum:

     - Nil-

                                                                                                                                                                                                                            PRESIDENT

Copy to:-

1. Sri T. Narsimulu, Advocate, Mahabubnagar for the complainant.
2. Sri B. Balagangadhar Reddy, Advocate, Mahabubnagar for OP.