State Consumer Disputes Redressal Commission
Laxmi V. Khote vs Sundaram Finance Limited on 21 October, 2015
1
BEFORE THE GOA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
PANAJI - GOA
FA No. 67/2015
Smt. Laxmi V. Khote,
wife of Shri. Vinayak G. Khote,
aged 62 years, housemaker,
Resident of H. No. 68,
Laxmi Kunj, Borda, Margao, Goa. .....Appellant
V/s.
Sundaram Finance Limited,
Represented through its
Authorized Officer/Signatory,
Having its branch Office at
103/104, Durga Chambers,
18th June Road, Panaji, Goa. .......Respondent
Appellant is represented by Adv. Shri. A.S. Arsekar.
Respondent is represented by Adv. Shri. N.K. Dubey.
Dated: 21/10/2015
ORDER
[Per Justice Shri. N. A. Britto, President] This is a complainant's appeal and is filed against the final order dated 30/04/15 of the Lr. South Goa District Forum by which the consumer complaint filed by the complainant has been dismissed with no order as to costs, with liberty to the complainant to file a civil suit in cases he chooses to file the same.
2. The admitted facts are that the OP sanctioned a loan to the complainant in the sum of Rs. 3,66,000/- to enable the complainant to purchase a Maruti Swift car from Sai Service Station at Verna against execution of a loan agreement and irrevocable power of attorney by 2 the complainant and a deed of guarantee by her son Shri. Anil Khote, guaranteeing the repayment of the said loan. The loan amount alongwith interest was repayable in 54 monthly instalments of Rs. 9,700/- each. There was no dispute between the complainant and the OP until the payment of 39 monthly instalments (see para 32 at page
92) or untill the complainant received two notices, both dated 6/10/10. By one notice the complainant was told that the total sum due and payable by the complainant as on 30/09/10 was Rs. 36,240/- and that as the vehicle in question was hypothecated to the OP, the OP was entitled to take custody of the said vehicle in the event of delay/non-payment of their instalments. By the other notice, the complainant was informed that the sum of Rs. 38,940/- was payable by the complainant and the complainant was asked to treat the notice as a formal notice of initiating action against the complainant without further notice to the complainant.
3. Thereafter, the complainant's son and guarantor, the said Anil by letter dated 19/10/10 requested the OP to provide to them certified copies of the loan agreement and other papers followed by letter dated 9/11/10 and after receipt of documents a legal notice was sent to OP on 22/1/2011. The same was replied to by reply dated 17/2/11 and thereafter the consumer complaint came to be filed on 3/6/11 raising three main issues namely, that no amount towards bouncing of cheques could be charged; that total interest charged of Rs. 1,57,801/- at the rate of 17.54% was exhorbitant; and that the payment of charging interest should be re-scheduled by charging interest at the rate of 10% p.a. on reduced balances on Rs. 3,55,300/-. Appropriate reliefs were sought in terms of issues raised. Shri. Arsekar has submitted that interest at the rate of 10% on Rs. 3,66,000/- would work out to Rs. 86,234/- as against Rs. 1,57,801/- paid by the 3 complainant. Amendment, belatedly filed on 29/1/15 to recover the excess amounts charged has been rejected by the impugned order.
4. The case of the complainant can be considered from two angles. One legal; the other factual. For a change, we will deal with the legal aspect first.
5. The loan agreement dated 20/7/07 had an arbitration clause, namely, clause 22(a) which required that all disputes, differences, etc. would be settled by arbitration and would be referred to the sole arbitration of an arbitrator nominated by the Managing Director of the OP and the award given by such a arbitrator would be final and would be binding on the complainant as borrower. This clause was binding on the guarantor, by virtue of clause 12 of the guarantee agreement.
6. The OP initiated arbitration proceedings in terms of clause 22 (a) of the said loan agreement. The complainant has not produced copy of the notice received from the arbitrator Shri. SanthanaKrishnan, retired District Judge, appointed by the OP. Complainant did not even object to the said proceedings, which could have been done even by writing a letter, but on the contrary on receipt of the said notice the complainant paid the entire amount due to the OP towards the said loan inclusive of interest at the rate of 17.54%, whereupon the OP filed a memo before the sole arbitrator on 18/4/12 stating that the matter was settled and there was no necessity to continue the proceedings and thereafter the sole arbitrator proceeded to terminate the arbitration proceedings by Order dated 18/4/12 (copy at page 44). The complainant has not disclosed on which day, he cleared the amount due to the OP, or how much he paid. The OP has now brought on record that the complainant paid Rs. 1,25,000/- by cash on 22/03/2012 after the complainant was given a rebate of Rs. 54,807/-.
47. What are the legal implications of the complainant admitting her liability, paying the amount due, inclusive of interest, and then inducing the OP to withdraw/terminate the said arbitration proceedings?
8. Shri. Arsekar, the lr. advocate of the complainant, would submit that the complainant cleared the loan by paying interest at the rate of 17.54% against her wish and under protest. Lr. advocate further submits that the arbitration proceedings were filed at Chennai with a view to harass the complainant and the complainant did not wish to go to Chennai to pursue the said proceedings. Lr. advocate also submits that this complaint was filed prior to initiation of arbitration proceedings by the OP, and, therefore the award of the arbitrator, if any, could not come in the way of deciding the complaint on merits. Lr. advocate has placed reliance on M/s. Magma Financial Corporation Ltd., vs. Pandit Ishwar Dev Thakur, 2012(2) CPR 280. Lr. advocate when asked to point out any document on record to show that the complainant had cleared the loan under protest, lr. advocate concedes that such a plea was taken by the complainant for the first time in the written submissions filed before the Lr. District Forum on or about 22/7/14.
9. We are unable to accept the submissions of Lr. Adv. Shri. Arsekar. Arbitration proceedings were initiated by the OP at Chennai in the year 2012 as per clause 22(a) of the agreement signed by both the parties and after final notice dated 6/10/2010 was issued to the complainant. The complainant did not object the proceedings. The submission that they were filed at Chennai to harass the complainant cannot be accepted. On receipt of the notice, the complainant admitted his liability without any murmur or demur and paid the entire amount due to the OP, i.e. Rs. 1,25,000/- on 22/3/12 with 5 rebate of Rs. 54,807/-whereupon the OP withdrew the arbitration proceedings by filing a memo on 18/4/12. The submission in the written submissions dated 22/7/14 that the complainant was forced and compelled against her wish to pay the amount due is clearly by way of an afterthought and therefore cannot be accepted. There is no contemporaneous record produced by the complainant to say that she was clearing her liability towards the loan against her will or under protest. The complainant having admitted her liability, and willingly paid the amount due towards the loan, thereby inducing the OP to withdraw the arbitration proceedings, is now estopped from contending that any sum is still due and payable to her, either by way of excess interest charged or charges towards bouncing of cheques. The complainant by her conduct has induced the OP to withdraw/terminate the arbitration proceeding. In view of her conduct she is precluded from claiming that she paid interest on higher side or charges towards bouncing of cheques when not due. The principle of estoppel, underlying section 115 of the Evidence Act, is clearly attracted to the facts of the case. The object of estoppel is to secure justice between the parties by promotion of honesty and good faith; and if the entire amount due to the OP has been paid by the complainant, where is the question of rescheduling the payment @ 10% per annum? or recovering the same from the OP? The prayers of the complainant, in either way, have become infructuous. Payment of the amount without any protest would always debar the complainant either from filing the complaint or continuing with the same. The decision in Magma Financial Corporation Ltd., (supra) is clearly inapplicable to the facts of this case. In the case of Magma Financial Corporation Ltd., the complainant had filed the consumer complaint in the year 2004 while Magma Financial Corporation Ltd., had initiated arbitration proceedings on 10/01/06 and the sole 6 arbitrator had given his award on 8/11/06 and all that was held in the said decision is that since the complaint was filed prior in time, the award made on 8/11/06 would not render the complaint infructuous. The question of conflict, if any, which might have arisen in the decisions of the Arbitrator, and the Forum in deciding the complaint, does not appear to have been considered by the Lr. National Commission. Suffice to say, that the ratio of the said decision cannot be made applicable to the facts of this case for the simple reason that the complainant in this case has admitted his liability towards the loan taken and cleared the same and then induced the OP to withdraw the arbitration proceedings. A fact here or a fact there can make miles of a difference and decisions cannot be blindly followed as precedents. A decision is only an authority for what it actually decides. What is the essence of a decision is its ratio and not every observation found therein nor what logically follows from various observations made in it (see AIR 2007 SC 3166).
10. As regards the factual angle, the burden would be on the complainant to prove her case i.e. to prove every fact necessary to fasten legal liability on the OP, or, in other words the complainant had the task of convincing the Forum that her version of the facts was a correct one.
11. To cut long story short, the complainant says that she wanted to take a loan from HDFC Bank at Margao but on meeting Mr. Sarfaraj Mulla, the Sales Executive of Sai Service, she was told that she would get the car within four or five days in case she took the loan from the OP, whereupon the said Mr. Mulla and the representative of the OP
- she does not name him - came to her residence and informed that the car was ready for delivery and that the loan of Rs. 3,66,000/- was ready and the interest chargeable would be on the lower side at 10%.
7The complainant claims that on 17/7/07 the car was delivered to the complainant by telling her that the representative of the OP would come to the residence on some other day to obtain her signature on different papers as it was a mere formality. Complainant claims that she has studied only up to 4th Std. in Marathi and does not know to read and write English and she signed the papers keeping full trust in the representative of the OP. The complainant says that the representative of the OP had obtained blank cheques as security towards the monthly instalments but the OP did not maintain any particular day for depositing the cheques in the account of the complainant. The complainant says that on receipt of documents from the OP - the date is not mentioned - she came to know that someone had imitated her signature on letter dated 13/9/07. Complainant says that after receiving the notices dated 6/10/10 she came to know that the instalments were calculated by OP with interest on higher side and the bank charges on returned cheques were also exorbitant and she found that there were glaring discrepancies which she observed on receiving the statement of transaction, in that the interest calculated was Rs. 1,57,801/- and all the payments made by the complainant were not shown in the said statement of account.
12. The complainant filed her own affidavit and that of her son and her guarantor the said Anil Khote.
13. On the other hand, the Branch Manager of the OP Shri. Rajesh Kumar filed his affidavit stating that it is the complainant alongwith her son who had approached the OP for obtaining the loan to buy a Maruti Swift car which was sanctioned in the sum of Rs. 3,66,000/- and out of the sanctioned amount a sum of Rs. 3,55,300/- was directly paid to Sai Service Station after deducting Rs. 9,700/- towards the first 8 instalment of the loan and Rs. 300/- as documentation charges. Shri. Rajesh Kumar has stated that while signing the documents and the cheques the complainant was accompanied by her son the said Shri. Anil Khote and the contents of the documents were well understood by the complainant and her son who signed as a guarantor. He says that no blank cheques were obtained from the complainant and that initially the complainant gave 11 cheques duly filled in towards the payment of monthly instalments of Rs. 9,700/- each for the period from 17/09/07 to 17/7/08 and once the said cheques were exhausted, the complainant issued another seven cheques for the period form 17/8/08 to 17/2/09 which cheques were non MICR and as such the complainant was requested to issue MICR compliant cheques and the other cheques were immediately handed over to the complainant and the complainant replaced the old cheques with MICR compliant cheques. Shri. Rajesh Kumar says that it is surprising to note that the complainant who enjoys the luxury of Maruti Swift car takes the plea of ignorance that she does not know to read and write English while her son Shri. Anil was all the while with the complainant while signing the loan transaction documents and he himself signed as a guarantor. He has stated that the complainant was well aware and was informed, that the cheques would be deposited on the 17th of every month for collection and accordingly the OP has been presenting the said cheques on 17th of every month but there were occasions when the cheques got dishonoured and the complainant being informed, the complainant would request the cheques to be represented and sometimes such cheques were also dishonoured for insufficient funds. He says that as per normal banking practice every cheque dishonoured would result in imposition of charges by the bank concerned and therefore the incidental expenses and additional interest are all of the complainant's own making and cannot be 9 attributed to the OP. He says that as on 6/10/10 the complainant was liable to pay a sum in excess of Rs. 36,000/-. He also says that as soon as the complainant entered into the contract, the OP supplied to the complainant a copy of the agreement under covering letter of the OP dated 13/9/07 and as a gesture of goodwill when complainant's son Mr. Anil who is a guarantor requested for a copy of the agreement, the same was furnished to him but inadvertently few pages got left out but the complainant is taking advantage of the same and is attributing motives to the OP. He further says that in order to circumvent her liability, the complainant has embarked upon making wild and untenable allegations against the OP and that the supply or non-supply of documents had nothing to do with the payment of instalments.
14. Are we to believe the self-serving statements made by the complainant and/or her son without any corroboration? Are we to believe that Sai Service Station delivered the car to the complainant on 17/7/07 without making any payment, or are we to believe that the OP paid to the Sai Service Station Rs. 3,55,300/- prior to the delivery of the car on 17/7/07 without any document being executed by the complainant and/or her son, as the documents produced by the complainant show that they were executed on 20/7/07? Complainant has not examined the said Sarfaraj Mulla nor has produced purchase receipt from Sai Service Station. The OP says that they have no knowledge about the said Mulla. Complainant's story on this score appears to be highly improbable and incredible. Adverse inference needs to be drawn against the complainant for non-examination of the said Mr. Mulla and non-production of purchase receipt or delivery challan from Sai Service Station.
1015. The complainant has produced the incomplete loan agreement, alleging that the same was given to her son Anil Khote at page 13 onwards and so also the complete loan agreement at page 43 onwards, containing all pages 1 to 9. The complainant has not explained, that in case the complainant and/or her son was given copy of the incomplete loan agreement, as to when the complainant got a complete copy of the loan agreement which has been produced at page 43 onwards, in 9 pages including the 1st and 2nd schedules?
16. The complainant signed the said loan agreement dated 20/07/07 stating that she had read the entire agreement containing pages 1 to 8 and details given in the schedule and that she would be bound by all the conditions of the agreement. The complainant also signed the said agreement stating that the agreement and other documents have been explained to her in the language understood by her and she had understood the entire meaning of all the clauses. The complainant now says that she had studied upto 4th Std. in Marathi. Complainant's son has not stated as to what he has studied, nor, he claims that he is an illiterate person, and the OP had stated that both were together and the contents of the documents were well understood by them and her son had signed as a guarantor. The complainant cannot be allowed to wriggle out from the said agreement and/or schedules to the same, by merely stating that it was signed in blank or that she had studied upto 4th Std. in Marathi. Complainant alongwith her son had gone to OP's office to obtain a loan and both are persons of age and understating and ought to have known that they would be required to sign certain documents in relation to the loan they were taking, and that too after discussing the rate of interest, number of instalments to be paid, etc. The plea taken by the complainant is a usual plea, taken many a times by dishonest borrowers, when unable to repay the loan taken or avoid repaying the same. The Lr. District Forum has rightly 11 relied on this State Commission order dated 25/7/13 in FA No. 6/08 in the case of M/s. Sanatan Financers and Real Estate Pvt. Ltd., inter alia, to say that when a person signs a document which contains certain contractual terms, such person is bound by such terms and it is for such a person to show that there was exception, if any, not to be bound by such terms. Para 27 of the said order dated 25/7/14 reads as follows:-
"27. It is now well settled that the Indian Contract Act applies to all including consumers under C.P. Act, 1986 as held by the Apex Court in Marine Container Services South Pvt. Ltd., vs. Go go Garments , AIR 1999 SC 80. It is also well settled that when a person signs a document which contains certain contractual terms such person is bound by the said terms and it is for such a person to show that there was exception, if any, not to be bound by such terms (see Bharati Knitting Company, AIR 1996 SC 2508). It is also well settled that when terms of a transaction are reduced in writing no amount of evidence can be led, and if led can be accepted, either to contradict the terms or to vary or to add to its terms (see M/s. Bhandari Construction vs. Gopal Upadhya, AIR 2007 SC 1441)."
17. Admittedly, the complainant paid 39 monthly instalments of Rs. 9,700/- each without any murmur or demur. Are we to believe that the complainant and/or her son did not know what interest the complainant would be charged and how the said monthly instalment were arrived at? The said Rajesh Kumar, Branch Manager in his evidence has also stated that soon after the complainant entered into contract (agreement) the OP supplied a copy of the agreement under covering letter dated 13/9/07. The complainant has not specifically denied having received the said letter dated 13/9/07. Therefore, we are inclined to believe that the copy of complete loan agreement alongwith schedules, produced by the complainant at page 43 12 onwards, is the copy sent to the complainant alongwith letter dated 13/9/07 as the said copy also carries OP's stamp of the same date and the incomplete loan agreement, at page 13 onwards are only some of the copies of the said copy of the agreement at page 43 onwards produced by the complainant and therefore assuming for a moment and, I repeat the word assuming, the complainant did not know the terms of the agreement, at the time of its execution, the complainant ought to have known, on the basis of copies received by her on or about 13/9/07 that the signature on the first and second schedules was hers and that she was required to pay the loan amount alongwith interest in 54 monthly instalments of Rs. 9,700/- each starting from 20/7/07 and that the total interest was calculated at 17.54% p.a. and the due date for other instalments would be from 17/8/07 to 17/12/11 as reflected in the said second schedule. The complainant, if at all found that her signature was imitated by someone, which she must certainly come to know around 13/9/07, the complainant ought to have raised the issue with the OP regarding the imitation of her signature and not waited to raise the issue for the first time in legal notice dated 22/1/11 sent to the OP. We wonder why anybody should imitate complainant's signature on the first and second schedules when admittedly, nobody has imitated her signature on the loan agreement wherein she confirms that she had read the entire agreement and details given in the schedule. Complainant's case is entirely fabricated.
18. There are some more submissions made by Lr. Adv. Shri. Arsekar, the lr. advocate of the complainant. Referring to reply dated 17/2/11 of the OP, Lr. advocate submits that the OP has admitted that interest has been charged at 9.58% flat p.a. and not 10% and therefore total interest payable would work out to Rs. 82,399/- only. This submission cannot be accepted. Firstly, it is not the case of the complainant that she was told that interest would be charged at 13 9.58%. It is her case that she was told that interest would be charged at the rate of 10% which according to the complainant would work out to Rs. 86,234/- . Secondly, the OP has now explained that the rate of 9.58% mentioned in the reply was flat rate of interest and when the same is converted in reducing rate, the same is 17%. The other submissions made as regards the statement of account (copy at page
25) have been explained by the OP vide memo dated 14/10/15. We do not propose to deal with the same because of the overall view of the dispute, we have taken. We find that the complainant's version has ring of falsity around it, invented by the complainant with a view to wriggle out from paying about Rs. 1,36,029/- due by the complainant towards the outstanding principal amount. That the said amount was paid with interest subsequently after rebate was given, on initiation of arbitration proceedings, is another story which we have already dealt with.
19. In view of the above discussion we find there is no merit in this appeal and therefore the same is hereby dismissed with costs of Rs. 5000/-.
[Justice Shri. N. A. Britto] President sp/-