State Consumer Disputes Redressal Commission
Mr.P.Mohan,Natham,Dindigul Dist. vs M/S. Shriram Transport Finance Company ... on 6 June, 2024
1
Date of Complaint filed:10.08.2016
Date of Disposal:06.06.2024
IN THE CIRCUIT BENCH OF THE TAMILNADU STATE CONSUMER
DISPUTES REDRESSAL COMMISSION, MADURAI.
Present: -THIRU.S. KARUPPIAH, PRESIDING JUDICIAL MEMBER
C.C.No.14/2016
THURSDAY, THE 06th DAY OF JUNE 2024.
P. Mohan,
S/o.Perumal,
Old No.3/24B1, New No.3/88,
Samutrapathy,
Natham, Dindigal-624 402.
......Complainant.
-Vs-
1. M/s.Shriram Finance Ltd.,
Rep. by its Authorized Signatory,
Administrative office at Mookambika Complex,
3rd Floor, No.4 Lady Dhesika road,
Mylapore, Chennai-600 004.
2. M/s. Shriram Finance Limited,
Rep. by its Authorized Signatory,
Branch office at D.No.829, Anna Nagar,
Indian Bank Upstairs,
Dindigul Main Road, Natham-624 401.
.....Opposite parties
Counsel for Complainant : M/s.S.Palanivelayutham, Advocate.
Counsel for Opposite parties : M/s.Ananth C.Rajesh, Advocate.
2
This complaint came before me for final hearing on 30.05.2024 and upon
perusing the material records this Commission made the following:-
ORDER
THIRU.S.KARUPPIAH,PRESIDING JUDICIAL MEMBER.
(Dictated in open court)
1. The Facts:
The complainant one Mohan availed a loan from the opposite parties by Hypothecating his vehicle TN 45 W 2997. The loan amount sanctioned on 09.02.2012 for Rs.2,40,000/-, for a monthly installment at Rs.10,000/-, period of repayment is 36 months. At the time of availing loan from the finance company complainant took an insurance policy by adding premium amount of Rs.16,760/-
and the insurance was taken from Shriram General Insurance company. The period of coverage is from 21.10.2012 to 20.10.2013. The complainant paid monthly instalments in time. Suddenly on 17.02.2013 his vehicle was stolen by somebody and the matter was reported to the Police. Since the police personnel did not take any steps, he filed a Writ Petition before High Court and there after the police registered a case and issued a Non-Traceable certificate on 26.04.2015. When the matter was already informed to the opposite party, they informed the complainant that they will deduct the loan due from the insurance amount payable to the complainant. But without doing so, they repeatedly requested the complainant to repay the loan amount, the penal interest which also increased day by day, thereby they committed deficiency in rendering service. The complaint was filed claiming Rs.25,20,000/- under various heads.
3
2. The opposite parties in the written version admitted that the opposite party sanctioned a loan to the complainant. It is their contention that the complainant failed to pay Rs.95,107/- balance, due amount towards loan and even failed to pay loan due regularly, hence notices were sent demanding him to repay the amount with penal interest. Further the complainant availed the loan for commercial purpose and there was an Arbitration Clause as such the complaint is itself is not maintainable.
3. Both sides filed proof affidavits and marked documents Ex.A1 to A9 and B1 to B8 and both sides filed written arguments too.
4. The learned counsel for the complainant would submit that he availed a loan from the opposite parties 1 & 2 and at the time of taking loan they included insurance premium amount of Rs.16,760/- and added the same with loan amount. To prove the same, the other letter was marked as Ex.B3. The opposite party admitted having received Rs.95,107/- from the complainant. The learned counsel further submitted that the policy was taken by the complainant with the franchise company and marked the same as Ex.A2. So, it is their duty when the vehicle was lost claiming the insurance amount and give credit into the loan account. But without doing so, they requested the complainant to repay the entire loan amount and they have increased the loan amount and charged penal interest day by day. This fact was evidenced from Ex.A4, A8 and A9. Further demanding loan amount than agreed amount and demanding higher rate of interest without deducting insurance amount from the Franchise company are all amounted to deficiency in service as such he requested this commission to allow the complaint. 4
5. On the otherhand the learned counsel for the opposite parties would submit that the complaint itself is not maintainable as the vehicle was purchased for commercial purpose. Moreover there was an arbitration clause in the Hypothecation agreement which is marked as Ex.B2 without availing the above course, preferring the complaint was not maintainable. Further it is not their duty to claim insurance from Sri Ram insurance Company which is a separate entity and it was not added as a party to the proceedings. So, there is no deficiency on their part and requested this commission to dismiss the complaint.
6. Now the Point for Consideration is,
1. Whether the opposite parties have committed deficiency in service and the complaint is maintainable or not?
7. Discussion on the Point:
Admittedly the complainant availed a loan from the opposite parties 1 & 2. At the time of sanctioning loan, the opposite parties obtained an insurance policy by adding premium amount of Rs.16,760/-. The opposite parties in the written version and Para.7 of Proof affidavit clearly admitted as follows " Since the above amount was given as loan for the purchase of the above said vehicle and it is the duty of our company to protect the above security free from any damages. Hence the complainant was instructed to protect the same by taking an insurance and as per his request, the said vehicle was insured with Shriram General Insurance Company Ltd., by paying Rs.16,260/- on 18.10.2012 which is also repaid in 8 months equated monthly installment of Rs.2,144/-" From the above admission the 5 role of the finance company and the object of taking insurance policy is clearly established.
8. The opposite parties not only acted as an agent for the complainant in taking the insurance policy but they also acted as an agent for the above said insurance company. Of course the above said insurance company was not at all added as a party to the proceedings. The question remained is Whether it is the duty of complainant to claim the insured amount from the insurance company or whether it is the duty of the finance company to claim the insurance amount. In Ex.B5 Para.2,3 and 5 it is evidenced that the opposite parties took steps to realise the insurance amount which is only beneficial to them and the above realization of the insurance amount is to safeguard the financial interests in the hypothecated goods. The finance company alone under take the service of payment of premium and collection of insurance amount on behalf of the complainant. So, it is the duty of the opposite party to realise the insurance amount from the insurance company. But they failed in their duty in not claiming the insurance amount for the loan due. Then it amounts to deficiency in service on their part,
9. The finance company did not produce any document to prove that they have taken any steps to recover the above loan arrears amount. No arbitration proceedings or other legal proceedings to realize the amount was made. This complaint is pending before this commission for more than 8 years. Now the loan become barred by limitation. The loan cannot be realized legally. At this juncture this commission presumed that the opposite party may realize the insurance 6 amount from the insurance company so that they allowed their debt to become time barred. When the loan become time barred, any number of letters demanding loan amount cannot extended the period of limitation and for a time barred debt sending notices with higher interest amount also amounted to deficiency in service.
10. The learned counsel at the time of argument raised that the complainant is not a consumer and he availed the loan for commercial purpose. However the complainant clearly mentioned that he purchased the vehicle to earn his livelihood. There is no proof filed that he had many vehicles and plying those vehicle for earning profit or plying those vehicle by engaging drivers. So, the above objection is over ruled.
11. Similarly the opposite party raised that there was an arbitration clause as such the proceedings are liable to be dismissed. The Supreme Court and The National Commission already held presence of arbitration clause is not a bar to maintain a consumer complaint by referring section 3 of consumer protection act 1986. Particularly in M. Lakshman Bhakta vs Vodafone Idea Ltd. on 16 February, 2022 The Supreme Court of India has held as follows, In the present case, the existence of an arbitral remedy will not, therefore, oust the jurisdiction of the consumer forum. It would be open to a consumer to opt for the remedy of arbitration, but there is no compulsion in law to do so and it would be open to a consumer to seek recourse to the remedies which are provided under the Act of 1986, now replaced by the Act of 2019.
12. Under the above circumstances this commission clearly found that having received premium amount and forced the complainant to take insurance from the 7 franchise insurance company and under took to claiming insurance amount, but failed to prove such efforts and failed to deduct the insurance amount are all amounted to deficiency in service and unfair trade practice. No doubt the above demand made by the opposite party caused mental agony and hardship to the complainant. Hence this commission directed the opposite parties apart from issuing discharge certificate with regard to the loan and also further directed to pay Rs.2 lakhs compensation for the mental agony.
13. Before parting with this case this commission wants to make one observation as this commission was fedup with these kind of tactics undertaken by the corporate companies. Corporate companies usually while sanctioning finance always pressurised the parties to take insurance policies during subsistence of loan amount, which will cover the period of loan repayment The above insurance will benefit only the finance company from any loss due to damages of the vehicle insured. While being so this commission found always the finance company and insurance company though branches of one big corporate company they always contested the cases independently by blaming each other. Whatever be their difference, the actual sufferer being the consumer at last. So this commission did not took the issue of non-joiner of insurance company as a fatal one. As the finance company in this case clearly admitted the purpose of taking insurance and the efforts to realize the insurance amount. Then they alone held liable for deficiency in service and liable to compensate the complainant. So, the complaint is partly allowed and the opposite parties are directed to issue discharge receipt with regard to loan availed by the complainant and they are further directed to pay 8 Rs.2,00,000/- towards compensation for mental agony along with Rs 10,000/- as costs.
14. In the result,
1. The complaint is partly allowed.
2. The opposite parties 1 & 2 are directed to issue discharge receipts with regard to loan availed by the complainant.
3. The opposite parties are further directed to pay a sum of Rs.2,00,000/- (Rupees Two Lakhs only) towards deficiency in service and compensation for mental agony.
4. The above compensation amount should be paid within a month from the date of receipt of order failing which it carries 9% interest per annum.
5. Further directed to pay Rs.10,000/- towards costs to the complainant.
Dictated and pronounced in the open court to the Steno-typist transcribed and typed by him corrected by me on this the 06th day of June 2024.
-Sd/-xxx S.KARUPPIAH, PRESIDING JUDICIAL MEMBER.
ANNEXURE List of documents marked on the side of the Complainant Ex.A1 21.02.2012 Copy of the Registration certificate of the complainant's vehicle bearing Reg.No. TN 45 W 2997.
Ex.A2 21.02.2012 Copy of the insurance policy of the complainant's vehicle. Ex.A3 26.04.2015 Copy of the Non traceable certificate issued by the 9 Natham Police Station.
Ex.A4 13.07.2015 Copy of the legal notice issued by the opposite parties. Ex.A5 11.08.2015 Copy of the reply notice issued by the complainant's counsel with postal receipt and postal acknowledgement card.
Ex.A6 11.08.2015 Copy of the complainant given to the SP Dindigul District. Ex.A7 29.08.2015 Copy of the reply notice issued by the opposite parties. Ex.A8 05.03.2015 Copy of the legal notice issued by the opposite parties. Ex.A9 12.05.2016 Copy of the legal notice issued by the opposite parties. List of documents marked on the side of the Opposite parties Ex.B1 23.01.2012 Vehicle loan application form.
Ex.B2 09.02.2012 Loan cum hypothecation agreement. Ex.B3 13.07.2015 Demand notice.
Ex.B4 11.08.2015 Complainant's reply notice.
Ex.B5 29.08.2015 Rejoinder notice fo the opposite parties. Ex.B6 05.03.2015 Reminder notice.
Ex.B7 12.05.2016 Reminder notice.
Ex.B8 ---- Statement of accounts.
-Sd/-xxx
S.KARUPPIAH
PRESIDING JUDICIAL MEMBER.
10
11
12
13
14