The Manager Sundram Finance Ltd., Chennai. V/S Bhaskar Sharma S/o. Mahesh Sharma - Consumer Court Case

Karnataka

Raichur

DCFR 22/07

Bhaskar Sharma S/o. Mahesh Sharma - Complainant(s)

Versus

The Manager Sundram Finance Ltd., Chennai. - Opp.Party(s)

Sri. H. Narasappa

30 Nov 2007

ORDER

DIST. CONSUMER DISPUTES REDRESSAL FORUM
DIST. CONSUMER DISPUTES REDRESSAL FORUM,DC Office Compound, Sath Kacheri
consumer case(CC) No. DCFR 22/07

Bhaskar Sharma S/o. Mahesh Sharma						...........Appellant(s)
Vs.
The Asst. Manager, Sundaram Finance Ltd.,Raichur. The Manager Sundram Finance Ltd., Chennai.						...........Respondent(s)

BEFORE:

Complainant(s)/Appellant(s):

OppositeParty/Respondent(s):

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ORDER

This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant Bhaskar Sharma against the Respondents- (1) Manager Sundram Finance Ltd., Head Office Chennai, and (2) Assistant Manager Sundram Finance Ltd., Branch Office, Raichur for their deficiency of service. The Respondents 1 & 2 have denied the same by their written version. 2. During the course of enquiry the complainant has filed his sworn-affidavit by way of examination-in-chief and got marked as many as (25) documents at Ex.P-1 to Ex.P-25. In rebuttal the Respondents have filed sworn-affidavit of Respondent No-2 by way of examination-in-chief and got marked (3) documents at Ex.R-1 to Ex.R-3. 3. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination: 1.Whether the complainant proves deficiency in service, as alleged.? 2.Whether the complainant is entitled for the reliefs sought for? 4. Our finding on the above points are as under:- 1.In the negative. 2. As per final order for the following. REASONS POINT NO.1:- 5. The case of the complainant in brief is that:- The complainant being interested in transport business had borrowed and availed loan from the Respondents to purchase a lorry. By availing the loan of Rs. 5,75,000/- he purchased a lorry bearing No. KA-35/B-6399 as per Agreement dt. 07-06-06 and accordingly he executed Hire Purchase Agreement. He being a new person in lorry transport business and due to un-season and in-experience he failed to get profit as expected and failed to pay the agreed loan installments. Due to failure in payment of loan installments, the Respondent No-2 seized his vehicle on 23-08-06 and taken to his custody. Thereafter on 26-08-06 he paid dues amount of Rs. 19,713/- towards first installment. The second and third installments totaling to Rs. 39,426/- also were paid by him on 07-09-06 with penalty of Rs.3,000/-. Even after the receipt of upto date installments with penalty amount. Respondent No-2 refused to release the seized vehicle to his custody. This complainant had repurchased another vehicle bearing No. KA-36/5166 from one Smt. Sumangala W/o. Srinivas of Raichur ( who is the D/o of A.Papareddy the sitting M.L.A. of Raichur) who was also having hire purchase loan account with the Respondents. At that time the due amount of installments of the above said vehicle was Rs. 1,40,000/-. As per agreement the complainant has to pay Rs. 70,000/- and Smt. Sumangala, hire purchaser, has to pay Rs. 70,000/- to the Respondents. Under the agreement and with consultation of Respondents the complainant got delivery of the vehicle from Smt. Sumangala in the month of November-2005 and regularized the installments upto date. But knowingly the Respondent has also seized this vehicle bearing No. 36/5166 on 23-08-06 on the ground of non-payment of earlier installments by Smt. Sumangala. It is the duty of the Respondents to recover the installments amount due from original hire purchaser at initial stage but the Respondents had failed to do so. There is no any intention of this complainant for non-payment of regularized installment but due to un-season, in-experience and frequent repairs to vehicles he could not pay installments. The complainant is unaware as to why the Respondents have not seized the vehicle No. KA-36/5166 even after default in payment of several installments by the original hire purchaser. However this complainant has repurchased the said vehicle after the assurance by the Respondents for not seizing the vehicle. The Respondents instructed him to pay the regular installments. But the Respondents have knowingly the same very well have intentionally created unnecessary & unreasonable problems without any cause or reason. The seizer of both the vehicles by the Respondents are purely un-warranted. Even though the complainant has regularized the installments but the Respondents have seized both the vehicles without giving reasonable opportunities at least not released any single vehicle even after regularized the installments. In-spite of several requests the Respondent No-2 failed to release the vehicles but he demanded surety of a Government Servant along with blank cheque of surety as per instructions of his Head Office-Respondent No-1. Even though such demand was illegal & against the terms & conditions of the agreement however the complainant furnished surety of one Mr. Mahesh Sharma a Central Government employee who gave his blank cheque and even the surety/guarantor executed agreement on non-judicial stamp paper of Rs. 50/- and handed over blank cheque as desired by Respondents. Even then the Respondents failed to release the seized vehicle to the custody of the complainant. On several requests made by him, Respondent No-2 again insisted the complainant to close the entire loan A/c. and to get the release of the vehicles. Accordingly the complainant approached and consulted for loan with another finance institutions namely Sri Ram Transport Finance Company Ltd., Adoni, who assured to finance and gave a letter to the Respondents that they agreed to sanction loan to the complainant vide letter dt. 15-09-06. The complainant handed over the said letter to Respondent No-2 but the Respondents did not release the vehicle. Later on Sri Ram Transport Finance Company Ltd., issued on line (Core line banking system) A/c. payee cheque in favour of the Respondents for sum of Rs. 10,22,600/- on 19-09-06. After the receipt of the said cheque also the Respondents did not release the vehicle. The Respondents have sanctioned finance of Rs. 5,75,000/- to the complainant in-respect of vehicle No. KA-35/B-6399 but they have actually paid Rs. 3,96,552/- to the complainant stating that the balance of Rs. 1,75,448/- was deducted to adjust the loan A/c. of Smt. Sumangala on 07-06-06. The said deduction was illegal and without notice or acceptance by this complainant even then the complainant co-operated with the Respondents. But due to heavy deduction of installments amount he has not paid the future installments in time but has paid the same with penalty even then Respondents intentionally have not released the vehicle. Further, the cheque amount of Rs. 10,22,600/- dt. 19-09-06 issued by Sri Ram Transport Finance Company Ltd., Adoni includes Rs. 5,42,600/- for closing the account of vehicle No. KA-35/B-6399 and Rs. 4,80,000/- for closing the loan account of vehicle. Even after the receipt of this cheque from Sri Ram Finance Transport Company the Respondents have not released both the vehicles intentionally with the ill-advise of mis-chief mongers and the persons who are having a enimical terms with the complainant with an intention to cause loss to him. After several requests finally the Respondents released both the vehicles on 20-09-06. During the period of seizure of vehicle from 23-08-06 to 20-09-06 the complainant had sustained heavy loss due to illegal detention of the vehicle and activities and lapses of Respondents. The Respondents have failed to issue No Due Certificate after the receipt of the cheque and intentionally delayed in issuing the said certificate till 05-10-06. The Respondents charged and levied excess amount towards extra charges documentation charges, legal fees and additional finance charges & heavy rate of interest by violating the terms and conditions and they have failed to keep up the terms and conditions of hypothecation agreement. There is no any terms under clauses of agreement about the settlement of account by paying lumpsum amount to close the account. The complainant approached the Respondents several times and financier at Adoni and private parties for closing the loan account with the Respondents. Therefore due to unfair & illegal activities he suffered loss of Rs. 4,90,600/-(as detailed in para-10 & 11 of his complaint). So the Respondents are liable to pay damages to the complainant and in this regard the complainant got issued legal notice to the Respondents on 20-11-06 but they are silent till today which goes to show that the Respondents have no intention to pay the damages. Hence for all these reasons he has filed the present complaint and has sought for direction to the Respondents to pay damages at Rs. 4,90,600/- as detailed supra along with cost of litigation of Rs. 50,000/- together with interest at 24% p.a. till realization or grant any such other relief as deemed fit. 6. The Respondent No-1 & 2 in their written version have contended that the transaction entered into by the complainant with these Respondents is a hire purchase transaction and not a loan transaction. The Respondent had extended hire purchase finance facility to the complainant in-respect of vehicle No. KA-35/B-6399 and financed a sum of Rs. 5,75,000/- together with finance charges of Rs. 1,33,688/- totaling to Rs. 7,08,688/- to the complainant. The total hire purchase amount of Rs. 7,08,688/- was repayable in (36) monthly installments commencing from 03-07-06. As per clause 2 (a) of Hire Purchase Agreement the complainant has undertaken to pay the installments under the contract on the due dates mentioned in the second schedule to the said H.P.Agreement whether previously demanded or not by this Respondent. As per clause 10 of H.P.Agreement the complainant has agreed to pay additional finance charges @ 30% p.a. on the amount from time to time in arrears only payment there off. Further as per clause 4 of the H.P.Agreement in case the complainant during the continuation of agreement failed to pay any hiring installments within the stipulated time whether demanded or not, this Respondent shall there upon be entitled to repossess the vehicle and sue for all the installments due and for damages for breach of agreement and for all the costs of retaking possession said vehicles and all costs occasioned by the complainants default. The complainant after execution of the Hire Purchase Agreement committed default in paying the very first installment which had fallen due on 03-07-06 and also subsequent installments under the contract. The complainant who is doing transport business and running his vehicles in mining areas at Bellary and getting his payment on daily basis but has failed to pay the monthly installments due to this Respondent. Despite several demands the complainant failed to pay the installments under the contract in the circumstances this Respondent was constrained to reposes the vehicle KA-35/B-6399 on 23-08-06. Thereafter on 26-08-06 the complainant paid the first installment due and small portion towards the second installments but failed to pay the second installment under the contract. Thereafter on 07-09-07 the complainant paid the balance portion of the second installment and the third installment in-full and requested to release the vehicle. As the complainant had committed default from the very first installment and all the three installments were paid with huge delay this Respondent declined to consider the request of the complainant for release of the vehicle. The complainant has himself admitted that he is operator of vehicle NO. KA-36/5166 in-respect of Contact No. WB 4363 entered into by one Mrs. A. Sumangala Raichur. But this Respondent received installments upto June 2006 and thereafter committed default from 25th installment onwards which had fallen due on 03-07-06. Despite several demands Smt. Sumangala as well as the complainant who is operator of the said vehicle failed to comply with the demand. So as per article 2.9 of the Loan Agreement in-respect of the contract of this vehicle the borrower has to pay the installments on the due dates mentioned in the agreement whether previously demanded or not and also as per the agreement in case of default this Respondent can repossess the vehicle. Hence after affording enough opportunities to the borrower and the complainant this Respondent repossessed the vehicle KA-36/5166 on 23-08-06 in view of continued default in payment of 25th & 26th installments which had fallen due on 03-07-06 and 03-08-06. The complainant had paid only a portion of amount towards 25th installment and requested to release the vehicle No. KA-36/5166 which was declined by this Respondent in-view of huge due amount under the contract. This Respondent deny the allegations that it is the duty of Respondent to recover the installments amount due from the original H.P. Agreement at the initial stage. It is strange that the complainant claim at one stage that his borrower of the vehicle who runs and maintains the vehicle and at a later stage dis-owns his liability when the contract runs into the default. This Respondent has never demanded surety of Government Servant along with blank cheques as alleged. However this Respondent has received a letter from Sri Ram Transport Company Ltd., to the cheque for Rs. 10,22,600/- on 19-09-06 and the complainant requested to release the vehicle and accordingly this Respondent has released the vehicle on 20-09-07. This Respondent had repossessed both the vehicles- KA-35/B-6399 and KA-36/5166 in-view of default in payment of installments from 03-07-06 and the repossessing of the vehicles are according to the terms & conditions of the agreement. The payment made by the complainant were only towards portion of arrears of installments but he failed to pay the installments in-view of his in-ability of the complainant to pay the installments he approached the Sri Ram Transport Finance Company Ltd., Adoni and paid the dues under the contract on 19-09-06. As authorized by the complainant this Respondent deducted and adjusted the amount of Rs. 1,78,448/- in-respect of the loan A/c. of Smt. Sumangala on 07-06-06 pertaining to the vehicle KA-36/5166 for Contact No. WB 4363 where the complainant is the operator. Further as authorized by the complainant out of the sum of Rs. 10,22,600/- this Respondent appropriated a sum of Rs. 5,42,000/- towards the vehicle purchase by the complainant bearing No. KA-35/B 6399 for Contact No. BB-4289 and a sum of Rs. 4,80,660/- towards vehicle No. KA-36/5166 of Contact No. WB-4363 where the complainant is the operator. Hence the said deduction and appropriation made towards settlement of the contact were done by this Respondent with the consent of the complainant. The non-release of vehicles from 23-08-06 to 20-09-06 is within the right of this Respondent in-view of continued default by the complainant and payment of portion of the arrears of the installments as stated earlier. Hence repossession of the vehicle was done by this Respondent in-view of default committed by the parties and as per the agreement and as per law. This Respondent did not levy any excess amount towards extra charges, documentation charges, legal fees and additional finance charges and heavy rate of interest and the amount charged were reasonable. The additional finance charges not excessive and it was charged as per the terms of the H.P. Agreement and in-view of default committed by the complainant in payment of installments under the contract. This Respondent has not failed to keep up the terms and conditions of the hypothecation agreement. The agreement entered into by the complainant with this Respondent in a H.P. Agreement and the complainant only has violated the terms and conditions of the agreement by committing default in paying the installments. Hence there is no negligence or deficiency of service by this Respondent. The notice contains false allegations and vexitious claim so this Respondent had not replied to the notice. Hence for all these reasons the Respondents have sought for dismissal of the complaint with cost. 7. From the pleadings of both sides it shows that there is no dispute that the complainant purchased the vehicle No. KA-35/B-6399 under Hire Purchase Agreement on 07-06-06 for Rs. 5,75,000/-. It is not in dispute that in the month of November-2005 this complainant repurchased another vehicle No. KA-36/5166 from one Smt. Sumangala who had purchased the said vehicle from the Respondent under H.P. Agreement and the complainant agreed to pay the further installments in-respect of this vehicle to the Respondents as per H.P.Agreement in respect of this vehicle. 8. It is the case of the complainant that he being a new person in Lorry Transport Business and due to un-season and in-experience he failed to get profit as accepted by him and failed to pay the agreed installments consequently the Respondent No-2 seized his two vehicles on 23-08-06 after the seizure and after adjustment he paid due amount of Rs. 19,713/- towards first installment of his vehicle (first vehicle) on 26-08-06, the second and the third installments of Rs. 39,426/- were paid by him on 07-09-06 with penalty of Rs. 3,000/-. In-respect of his repurchased vehicle No. KA-36/5166 as per the agreement he regularized the installments upto date. The earlier installments were to be paid by Smt. Sumangala but knowing this fact the Respondent No-2 has seized this vehicle also on 23-08-06. It is a duty of Respondents to recover earlier installments due from the original hire purchaser but the Respondents failed to do so. It is also his case that after the payment of three installments in-respect of the first vehicle with penalty of Rs. 3,000/- the Respondents refused to release the said vehicle to his custody. On several requests Respondent No-2 demanded surety of Government Servant along with blank cheque of surety accordingly the complainant furnished surety of one Mahesh Sharma a Central Government employee who offered surety and gave blank cheque by executing agreement on Non-Judicial Stamp Paper of Rs. 50/- even then the Respondent No-2 failed to release the said vehicle. But strongly insisted the complainant to close the entire loan amount and get release the vehicle accordingly he approached Sri Ram Transport Finance Company Ltd., Adoni who agreed to sanction finance assistance to him vide letter dt. 15-09-06 which was handed over to Respondent No-2 even then the Respondent No-2 failed to release the vehicle. Later on Sri Ram Transport Finance Company Ltd., issued on line A/c. payee cheque for Rs. 10,22,600/- on 19-09-06 in favour of the Respondents and even after Respondent of the said cheque also Respondents did not release the vehicle but however they released the both vehicles on 20-09-06. It is further case of the complainant that during the period of seizure of vehicle from 23-08-06 to 20-09-06 he sustained heavy loss and calculated at Rs. 4,90,600/- as detailed in para-10 of his complaint which reads as under: 1) Loss of earning from 23-08-06 to 20-09-06 Rs. 1,12,000=00 (28 days each vehicle per day Rs. 2,000/-) 2) Documentation charges of Rs. 7,000 each Rs. 14.000=00 vehicle with Sriram Finance to create loan) 3) Excess rate of interest @ 6.5% on both loans. Rs. 1,00,000=00 4) Parking charges of both vehicles Rs. 5,600=00 5) Payment made to the drivers without work Rs. 6,000=00 6) Clearance payment without work Rs. 4,000=00 7) Taxes paid to the RTO for 3 months Rs. 9,000=00 8) Mental torture and agony Rs. 2,00,000=00 9) Expenses and costs incurred to create fresh loan. Rs. 40,000=00 --------------------- Total Rs. 4,90,600=00 --------------------- Hence he has sought for awarding damages of Rs. 4,90,600/- along with cost of litigation at Rs. 50,000/- together with interest for deficiency in service. 9. The Respondents have denied their liability contending that for the default of payment of installment as per the clause- 4 and 10 of Hire Purchase Agreement the two vehicles were seized and when the complainant committed default payment of from the very first installment and all the three installments were paid with huge delay, so the Respondents declined to consider the request of release of the vehicles. Thereafter the Respondents received letter from Sri Ram Finance Transport Company Ltd., with a cheque in their favour for Rs. 10,22,600/- on 19-09-06 so they released the vehicle to the complainant on 20-09-06. 10. The Respondents have produced H.P.Agreement at Ex.R-1. A cursory look at clause-4 of the Agreement stipulates that in case of default of any of the installments due, in such case the rights of Hirer shall forth-with be determined without any notice and installments previously paid shall be forfeited to the owner who shall there-upon be entitled to seize and retake the possession of the vehicle for breach of the Agreement. It is the case of the complainant that he has purchased the vehicle under H.P. Agreement i.e, Ex.R-1 and he admits the default in payment of installments due. If this so, how can it be said that the acts of the Respondents is illegal. Of course the complainant might have paid the installments due subsequently with penalty but that itself cannot be said that he has not committed breach of the agreement and that itself cannot create any right for the release of the seized vehicle by the Respondents especially when the complainant has committed default from the very first installment to the third installments as admitted by him and accordingly the Respondents have asked the complainant to get the release of the vehicles after due payment of entire the Loan A/c. and accordingly the Respondents released the vehicle on 20-09-06 after the complainant closed the loan A/c. by handing over a cheque for Rs. 10,22,600/- on 19-09-06 financed by Sri Ram Finance Transport Company Ltd., for closing the loan A/c. of the first vehicle No. KA-35/B-6399 for Rs. 5,72,600/- and the second vehicle No. KA-36/5166 for Rs. 4,80,000/-. So the seizure of the vehicles was due to default of payment of starting three installments as admitted by him and in-accordance with the clause-4 of H.P. Agreement and having regard to default committed by him in the initial installments itself, then they asked the complainant to clear the loan A/c. of the two vehicles and after closing of the loan A/c. by way of payment of cheque on 19-09-06 they released the two vehicles on 20-09-06. When the two vehicles were seized for non-payment of loan installments as admitted by complainant and were released on 20-09-06, after (28) days on the complainant handing over the cheque for Rs. 10,22,600/- on 19-09-06, then how can it be said that there is a deficiency of service by the Respondents and that the complainant is entitled for the loss/damages totaling to Rs. 4,90,600/- as claimed by him. Hence viewed from any angle we do not find deficiency in service as alleged. Hence we do not find even any iota of deficiency of service by the Respondents. So we hold that the complainant has failed to prove deficiency in service. So Point No-1 is answered in the negative. POINT NO.2:- 11. In view of our discussion and finding on Point No-1, we hold that the complainant is not entitled for reliefs sought for. In the result we pass the following order: ORDER The complaint of the complainant being devoid of merits is hereby dismissed. No order as to cost. Office to furnish certified copy of this order to both the parties forth with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 30-11-07) Sd/- Sd/- Sd/- Smt.Pratibha Rani Hiremath, Sri. Gururaj Sri. N.H. Savalagi, Member. Member. President, Dist.Forum-Raichur. Dist-Forum-Raichur Dist-Forum-Raichur.

This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant Bhaskar Sharma against the Respondents- (1) Manager Sundram Finance Ltd., Head Office Chennai, and (2) Assistant Manager Sundram Finance Ltd., Branch Office, Raichur for their deficiency of service. The Respondents 1 & 2 have denied the same by their written version. 2. During the course of enquiry the complainant has filed his sworn-affidavit by way of examination-in-chief and got marked as many as (25) documents at Ex.P-1 to Ex.P-25. In rebuttal the Respondents have filed sworn-affidavit of Respondent No-2 by way of examination-in-chief and got marked (3) documents at Ex.R-1 to Ex.R-3. 3. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination: 1.Whether the complainant proves deficiency in service, as alleged.? 2.Whether the complainant is entitled for the reliefs sought for? 4. Our finding on the above points are as under:- 1.In the negative. 2. As per final order for the following. REASONS POINT NO.1:- 5. The case of the complainant in brief is that:- The complainant being interested in transport business had borrowed and availed loan from the Respondents to purchase a lorry. By availing the loan of Rs. 5,75,000/- he purchased a lorry bearing No. KA-35/B-6399 as per Agreement dt. 07-06-06 and accordingly he executed Hire Purchase Agreement. He being a new person in lorry transport business and due to un-season and in-experience he failed to get profit as expected and failed to pay the agreed loan installments. Due to failure in payment of loan installments, the Respondent No-2 seized his vehicle on 23-08-06 and taken to his custody. Thereafter on 26-08-06 he paid dues amount of Rs. 19,713/- towards first installment. The second and third installments totaling to Rs. 39,426/- also were paid by him on 07-09-06 with penalty of Rs.3,000/-. Even after the receipt of upto date installments with penalty amount. Respondent No-2 refused to release the seized vehicle to his custody. This complainant had repurchased another vehicle bearing No. KA-36/5166 from one Smt. Sumangala W/o. Srinivas of Raichur ( who is the D/o of A.Papareddy the sitting M.L.A. of Raichur) who was also having hire purchase loan account with the Respondents. At that time the due amount of installments of the above said vehicle was Rs. 1,40,000/-. As per agreement the complainant has to pay Rs. 70,000/- and Smt. Sumangala, hire purchaser, has to pay Rs. 70,000/- to the Respondents. Under the agreement and with consultation of Respondents the complainant got delivery of the vehicle from Smt. Sumangala in the month of November-2005 and regularized the installments upto date. But knowingly the Respondent has also seized this vehicle bearing No. 36/5166 on 23-08-06 on the ground of non-payment of earlier installments by Smt. Sumangala. It is the duty of the Respondents to recover the installments amount due from original hire purchaser at initial stage but the Respondents had failed to do so. There is no any intention of this complainant for non-payment of regularized installment but due to un-season, in-experience and frequent repairs to vehicles he could not pay installments. The complainant is unaware as to why the Respondents have not seized the vehicle No. KA-36/5166 even after default in payment of several installments by the original hire purchaser. However this complainant has repurchased the said vehicle after the assurance by the Respondents for not seizing the vehicle. The Respondents instructed him to pay the regular installments. But the Respondents have knowingly the same very well have intentionally created unnecessary & unreasonable problems without any cause or reason. The seizer of both the vehicles by the Respondents are purely un-warranted. Even though the complainant has regularized the installments but the Respondents have seized both the vehicles without giving reasonable opportunities at least not released any single vehicle even after regularized the installments. In-spite of several requests the Respondent No-2 failed to release the vehicles but he demanded surety of a Government Servant along with blank cheque of surety as per instructions of his Head Office-Respondent No-1. Even though such demand was illegal & against the terms & conditions of the agreement however the complainant furnished surety of one Mr. Mahesh Sharma a Central Government employee who gave his blank cheque and even the surety/guarantor executed agreement on non-judicial stamp paper of Rs. 50/- and handed over blank cheque as desired by Respondents. Even then the Respondents failed to release the seized vehicle to the custody of the complainant. On several requests made by him, Respondent No-2 again insisted the complainant to close the entire loan A/c. and to get the release of the vehicles. Accordingly the complainant approached and consulted for loan with another finance institutions namely Sri Ram Transport Finance Company Ltd., Adoni, who assured to finance and gave a letter to the Respondents that they agreed to sanction loan to the complainant vide letter dt. 15-09-06. The complainant handed over the said letter to Respondent No-2 but the Respondents did not release the vehicle. Later on Sri Ram Transport Finance Company Ltd., issued on line (Core line banking system) A/c. payee cheque in favour of the Respondents for sum of Rs. 10,22,600/- on 19-09-06. After the receipt of the said cheque also the Respondents did not release the vehicle. The Respondents have sanctioned finance of Rs. 5,75,000/- to the complainant in-respect of vehicle No. KA-35/B-6399 but they have actually paid Rs. 3,96,552/- to the complainant stating that the balance of Rs. 1,75,448/- was deducted to adjust the loan A/c. of Smt. Sumangala on 07-06-06. The said deduction was illegal and without notice or acceptance by this complainant even then the complainant co-operated with the Respondents. But due to heavy deduction of installments amount he has not paid the future installments in time but has paid the same with penalty even then Respondents intentionally have not released the vehicle. Further, the cheque amount of Rs. 10,22,600/- dt. 19-09-06 issued by Sri Ram Transport Finance Company Ltd., Adoni includes Rs. 5,42,600/- for closing the account of vehicle No. KA-35/B-6399 and Rs. 4,80,000/- for closing the loan account of vehicle. Even after the receipt of this cheque from Sri Ram Finance Transport Company the Respondents have not released both the vehicles intentionally with the ill-advise of mis-chief mongers and the persons who are having a enimical terms with the complainant with an intention to cause loss to him. After several requests finally the Respondents released both the vehicles on 20-09-06. During the period of seizure of vehicle from 23-08-06 to 20-09-06 the complainant had sustained heavy loss due to illegal detention of the vehicle and activities and lapses of Respondents. The Respondents have failed to issue No Due Certificate after the receipt of the cheque and intentionally delayed in issuing the said certificate till 05-10-06. The Respondents charged and levied excess amount towards extra charges documentation charges, legal fees and additional finance charges & heavy rate of interest by violating the terms and conditions and they have failed to keep up the terms and conditions of hypothecation agreement. There is no any terms under clauses of agreement about the settlement of account by paying lumpsum amount to close the account. The complainant approached the Respondents several times and financier at Adoni and private parties for closing the loan account with the Respondents. Therefore due to unfair & illegal activities he suffered loss of Rs. 4,90,600/-(as detailed in para-10 & 11 of his complaint). So the Respondents are liable to pay damages to the complainant and in this regard the complainant got issued legal notice to the Respondents on 20-11-06 but they are silent till today which goes to show that the Respondents have no intention to pay the damages. Hence for all these reasons he has filed the present complaint and has sought for direction to the Respondents to pay damages at Rs. 4,90,600/- as detailed supra along with cost of litigation of Rs. 50,000/- together with interest at 24% p.a. till realization or grant any such other relief as deemed fit. 6. The Respondent No-1 & 2 in their written version have contended that the transaction entered into by the complainant with these Respondents is a hire purchase transaction and not a loan transaction. The Respondent had extended hire purchase finance facility to the complainant in-respect of vehicle No. KA-35/B-6399 and financed a sum of Rs. 5,75,000/- together with finance charges of Rs. 1,33,688/- totaling to Rs. 7,08,688/- to the complainant. The total hire purchase amount of Rs. 7,08,688/- was repayable in (36) monthly installments commencing from 03-07-06. As per clause 2 (a) of Hire Purchase Agreement the complainant has undertaken to pay the installments under the contract on the due dates mentioned in the second schedule to the said H.P.Agreement whether previously demanded or not by this Respondent. As per clause 10 of H.P.Agreement the complainant has agreed to pay additional finance charges @ 30% p.a. on the amount from time to time in arrears only payment there off. Further as per clause 4 of the H.P.Agreement in case the complainant during the continuation of agreement failed to pay any hiring installments within the stipulated time whether demanded or not, this Respondent shall there upon be entitled to repossess the vehicle and sue for all the installments due and for damages for breach of agreement and for all the costs of retaking possession said vehicles and all costs occasioned by the complainants default. The complainant after execution of the Hire Purchase Agreement committed default in paying the very first installment which had fallen due on 03-07-06 and also subsequent installments under the contract. The complainant who is doing transport business and running his vehicles in mining areas at Bellary and getting his payment on daily basis but has failed to pay the monthly installments due to this Respondent. Despite several demands the complainant failed to pay the installments under the contract in the circumstances this Respondent was constrained to reposes the vehicle KA-35/B-6399 on 23-08-06. Thereafter on 26-08-06 the complainant paid the first installment due and small portion towards the second installments but failed to pay the second installment under the contract. Thereafter on 07-09-07 the complainant paid the balance portion of the second installment and the third installment in-full and requested to release the vehicle. As the complainant had committed default from the very first installment and all the three installments were paid with huge delay this Respondent declined to consider the request of the complainant for release of the vehicle. The complainant has himself admitted that he is operator of vehicle NO. KA-36/5166 in-respect of Contact No. WB 4363 entered into by one Mrs. A. Sumangala Raichur. But this Respondent received installments upto June 2006 and thereafter committed default from 25th installment onwards which had fallen due on 03-07-06. Despite several demands Smt. Sumangala as well as the complainant who is operator of the said vehicle failed to comply with the demand. So as per article 2.9 of the Loan Agreement in-respect of the contract of this vehicle the borrower has to pay the installments on the due dates mentioned in the agreement whether previously demanded or not and also as per the agreement in case of default this Respondent can repossess the vehicle. Hence after affording enough opportunities to the borrower and the complainant this Respondent repossessed the vehicle KA-36/5166 on 23-08-06 in view of continued default in payment of 25th & 26th installments which had fallen due on 03-07-06 and 03-08-06. The complainant had paid only a portion of amount towards 25th installment and requested to release the vehicle No. KA-36/5166 which was declined by this Respondent in-view of huge due amount under the contract. This Respondent deny the allegations that it is the duty of Respondent to recover the installments amount due from the original H.P. Agreement at the initial stage. It is strange that the complainant claim at one stage that his borrower of the vehicle who runs and maintains the vehicle and at a later stage dis-owns his liability when the contract runs into the default. This Respondent has never demanded surety of Government Servant along with blank cheques as alleged. However this Respondent has received a letter from Sri Ram Transport Company Ltd., to the cheque for Rs. 10,22,600/- on 19-09-06 and the complainant requested to release the vehicle and accordingly this Respondent has released the vehicle on 20-09-07. This Respondent had repossessed both the vehicles- KA-35/B-6399 and KA-36/5166 in-view of default in payment of installments from 03-07-06 and the repossessing of the vehicles are according to the terms & conditions of the agreement. The payment made by the complainant were only towards portion of arrears of installments but he failed to pay the installments in-view of his in-ability of the complainant to pay the installments he approached the Sri Ram Transport Finance Company Ltd., Adoni and paid the dues under the contract on 19-09-06. As authorized by the complainant this Respondent deducted and adjusted the amount of Rs. 1,78,448/- in-respect of the loan A/c. of Smt. Sumangala on 07-06-06 pertaining to the vehicle KA-36/5166 for Contact No. WB 4363 where the complainant is the operator. Further as authorized by the complainant out of the sum of Rs. 10,22,600/- this Respondent appropriated a sum of Rs. 5,42,000/- towards the vehicle purchase by the complainant bearing No. KA-35/B 6399 for Contact No. BB-4289 and a sum of Rs. 4,80,660/- towards vehicle No. KA-36/5166 of Contact No. WB-4363 where the complainant is the operator. Hence the said deduction and appropriation made towards settlement of the contact were done by this Respondent with the consent of the complainant. The non-release of vehicles from 23-08-06 to 20-09-06 is within the right of this Respondent in-view of continued default by the complainant and payment of portion of the arrears of the installments as stated earlier. Hence repossession of the vehicle was done by this Respondent in-view of default committed by the parties and as per the agreement and as per law. This Respondent did not levy any excess amount towards extra charges, documentation charges, legal fees and additional finance charges and heavy rate of interest and the amount charged were reasonable. The additional finance charges not excessive and it was charged as per the terms of the H.P. Agreement and in-view of default committed by the complainant in payment of installments under the contract. This Respondent has not failed to keep up the terms and conditions of the hypothecation agreement. The agreement entered into by the complainant with this Respondent in a H.P. Agreement and the complainant only has violated the terms and conditions of the agreement by committing default in paying the installments. Hence there is no negligence or deficiency of service by this Respondent. The notice contains false allegations and vexitious claim so this Respondent had not replied to the notice. Hence for all these reasons the Respondents have sought for dismissal of the complaint with cost. 7. From the pleadings of both sides it shows that there is no dispute that the complainant purchased the vehicle No. KA-35/B-6399 under Hire Purchase Agreement on 07-06-06 for Rs. 5,75,000/-. It is not in dispute that in the month of November-2005 this complainant repurchased another vehicle No. KA-36/5166 from one Smt. Sumangala who had purchased the said vehicle from the Respondent under H.P. Agreement and the complainant agreed to pay the further installments in-respect of this vehicle to the Respondents as per H.P.Agreement in respect of this vehicle. 8. It is the case of the complainant that he being a new person in Lorry Transport Business and due to un-season and in-experience he failed to get profit as accepted by him and failed to pay the agreed installments consequently the Respondent No-2 seized his two vehicles on 23-08-06 after the seizure and after adjustment he paid due amount of Rs. 19,713/- towards first installment of his vehicle (first vehicle) on 26-08-06, the second and the third installments of Rs. 39,426/- were paid by him on 07-09-06 with penalty of Rs. 3,000/-. In-respect of his repurchased vehicle No. KA-36/5166 as per the agreement he regularized the installments upto date. The earlier installments were to be paid by Smt. Sumangala but knowing this fact the Respondent No-2 has seized this vehicle also on 23-08-06. It is a duty of Respondents to recover earlier installments due from the original hire purchaser but the Respondents failed to do so. It is also his case that after the payment of three installments in-respect of the first vehicle with penalty of Rs. 3,000/- the Respondents refused to release the said vehicle to his custody. On several requests Respondent No-2 demanded surety of Government Servant along with blank cheque of surety accordingly the complainant furnished surety of one Mahesh Sharma a Central Government employee who offered surety and gave blank cheque by executing agreement on Non-Judicial Stamp Paper of Rs. 50/- even then the Respondent No-2 failed to release the said vehicle. But strongly insisted the complainant to close the entire loan amount and get release the vehicle accordingly he approached Sri Ram Transport Finance Company Ltd., Adoni who agreed to sanction finance assistance to him vide letter dt. 15-09-06 which was handed over to Respondent No-2 even then the Respondent No-2 failed to release the vehicle. Later on Sri Ram Transport Finance Company Ltd., issued on line A/c. payee cheque for Rs. 10,22,600/- on 19-09-06 in favour of the Respondents and even after Respondent of the said cheque also Respondents did not release the vehicle but however they released the both vehicles on 20-09-06. It is further case of the complainant that during the period of seizure of vehicle from 23-08-06 to 20-09-06 he sustained heavy loss and calculated at Rs. 4,90,600/- as detailed in para-10 of his complaint which reads as under: 1) Loss of earning from 23-08-06 to 20-09-06 Rs. 1,12,000=00 (28 days each vehicle per day Rs. 2,000/-) 2) Documentation charges of Rs. 7,000 each Rs. 14.000=00 vehicle with Sriram Finance to create loan) 3) Excess rate of interest @ 6.5% on both loans. Rs. 1,00,000=00 4) Parking charges of both vehicles Rs. 5,600=00 5) Payment made to the drivers without work Rs. 6,000=00 6) Clearance payment without work Rs. 4,000=00 7) Taxes paid to the RTO for 3 months Rs. 9,000=00 8) Mental torture and agony Rs. 2,00,000=00 9) Expenses and costs incurred to create fresh loan. Rs. 40,000=00 --------------------- Total Rs. 4,90,600=00 --------------------- Hence he has sought for awarding damages of Rs. 4,90,600/- along with cost of litigation at Rs. 50,000/- together with interest for deficiency in service. 9. The Respondents have denied their liability contending that for the default of payment of installment as per the clause- 4 and 10 of Hire Purchase Agreement the two vehicles were seized and when the complainant committed default payment of from the very first installment and all the three installments were paid with huge delay, so the Respondents declined to consider the request of release of the vehicles. Thereafter the Respondents received letter from Sri Ram Finance Transport Company Ltd., with a cheque in their favour for Rs. 10,22,600/- on 19-09-06 so they released the vehicle to the complainant on 20-09-06. 10. The Respondents have produced H.P.Agreement at Ex.R-1. A cursory look at clause-4 of the Agreement stipulates that in case of default of any of the installments due, in such case the rights of Hirer shall forth-with be determined without any notice and installments previously paid shall be forfeited to the owner who shall there-upon be entitled to seize and retake the possession of the vehicle for breach of the Agreement. It is the case of the complainant that he has purchased the vehicle under H.P. Agreement i.e, Ex.R-1 and he admits the default in payment of installments due. If this so, how can it be said that the acts of the Respondents is illegal. Of course the complainant might have paid the installments due subsequently with penalty but that itself cannot be said that he has not committed breach of the agreement and that itself cannot create any right for the release of the seized vehicle by the Respondents especially when the complainant has committed default from the very first installment to the third installments as admitted by him and accordingly the Respondents have asked the complainant to get the release of the vehicles after due payment of entire the Loan A/c. and accordingly the Respondents released the vehicle on 20-09-06 after the complainant closed the loan A/c. by handing over a cheque for Rs. 10,22,600/- on 19-09-06 financed by Sri Ram Finance Transport Company Ltd., for closing the loan A/c. of the first vehicle No. KA-35/B-6399 for Rs. 5,72,600/- and the second vehicle No. KA-36/5166 for Rs. 4,80,000/-. So the seizure of the vehicles was due to default of payment of starting three installments as admitted by him and in-accordance with the clause-4 of H.P. Agreement and having regard to default committed by him in the initial installments itself, then they asked the complainant to clear the loan A/c. of the two vehicles and after closing of the loan A/c. by way of payment of cheque on 19-09-06 they released the two vehicles on 20-09-06. When the two vehicles were seized for non-payment of loan installments as admitted by complainant and were released on 20-09-06, after (28) days on the complainant handing over the cheque for Rs. 10,22,600/- on 19-09-06, then how can it be said that there is a deficiency of service by the Respondents and that the complainant is entitled for the loss/damages totaling to Rs. 4,90,600/- as claimed by him. Hence viewed from any angle we do not find deficiency in service as alleged. Hence we do not find even any iota of deficiency of service by the Respondents. So we hold that the complainant has failed to prove deficiency in service. So Point No-1 is answered in the negative. POINT NO.2:- 11. In view of our discussion and finding on Point No-1, we hold that the complainant is not entitled for reliefs sought for. In the result we pass the following order: ORDER The complaint of the complainant being devoid of merits is hereby dismissed. No order as to cost. Office to furnish certified copy of this order to both the parties forth with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 30-11-07) Sd/- Sd/- Sd/- Smt.Pratibha Rani Hiremath, Sri. Gururaj Sri. N.H. Savalagi, Member. Member. President, Dist.Forum-Raichur. Dist-Forum-Raichur Dist-Forum-Raichur.