State Consumer Disputes Redressal Commission
Tata Motors Finance Ltd. vs Yash Paul on 25 September, 2017
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
First Appeal No. 693 of 2016
Date of Institution : 14.09.2016
Date of Reserve : 13.09.2017
Date of Decision : 25.09.2017
1. Tata Motors Finance Ltd., Patiala Branch 20-FF, City Centre,
Patiala, Near 22 No. Phatak, Patiala through its Branch Manager.
2. Tata Motors Finance Ltd., Think Techno Campur Building A,
2nd Floor, Off Pakhran Road 2, Thane, West 400601
....Appellants/Ops
Versus
Yash Paul son of Mool Chand R/o Kakra Road, W. No. 2,
Bhawanigarh, District Sangrur.
....Respondent/Complainant
First Appeal against the order dated
26.07.2016 of the District Consumer
Disputes Redressal Forum, Patiala.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the appellants : Sh. Sandeep Suri, Advocate
For the respondent : Sh. G.S. Sandhu, Advocate
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
First Appeal No. 693 of 2016 2 The appellants/opposite parties (hereinafter referred as Ops) have filed the present appeal against the order dated 26.07.2016 passed in consumer complaint No. 219 dated 14.8.2014 by the District Consumer Disputes Redressal Forum, Patiala (hereinafter referred as the District Forum) vide which the complaint filed by the complainant was partly allowed and Ops were directed not to charge the interest on loan amount from 22.12.2014 when the truck was repossessed. The complainant was further given a liberty to pay outstanding amount to take the possession of the truck. It was further held that complainant is entitled to compensation on account of mental agony amounting to Rs. 15,000/- alongwith litigation cost amounting to Rs. 5,000/-.
2. Complaint was filed by the complainant under the Consumer Protection Act, 1986 (in short 'the Act') against Ops on the averments that he is owner of truck bearing registration No. PB-13-AF-9297, the same was financed by the Ops. The complainant had paid one and half installment. At the time of financing, Op No. 1 had orally assured that they will pay the expenses to be incurred on fabrication of the body, which came to Rs. 5 Lacs but after receiving one and half installment, they flatly refused to pay those expenses. The complainant is self driving the truck and earns his livelihood from this truck and no other source of income. On 22.12.2014, the truck of the complainant was repossessed by the Ops near Haidergarh, U.P. through their musclemen and is in the custody of the Ops. Complainant is ready to settle the accounts with Ops. Ops have refused to reinstate the First Appeal No. 693 of 2016 3 truck to the complainant. The complainant is suffering a loss as the material loaded in the truck amounting to Rs. 10 lacs belonging to 3rd party, has spoiled due to the negligence of the Ops. The Ops are liable to pay the damages caused to the paddy and this fact is to be considered while settling the installments of the loan. The Ops are also liable to pay the loss of the income to the complainant due to non-use of the truck @ Rs. 25,000/- per month. Ops had threatened to dispose of the vehicle for which they have got no right. Alleging unfair trade practice and deficiency in service on the part of Ops, this complaint was filed by the complainant against the Ops with a direction to Ops to deliver the possession of the truck alongwith material loaded and to pay a sum of Rs. 10 Lacs on account of damage caused to the material, not to charge interest for the period from 22.12.2014 to date as the truck is in their illegal custody. Ops be further directed to pay damages caused to the complainant @ Rs. 25,000/- per month and a sum of Rs. 2 Lac on account of devaluation of the truck due to illegal custody.
3. The complaint was contested by the Ops, who filed their written reply taking preliminary objections that the complaint is not maintainable before the Hon'ble Forum as civil case on the same facts has been dismissed by the Court of Sh. Ravneet Singh, Civil Judge (Jr. Division), Patiala vide its order dated 11.9.2015. There is an arbitration clause in the agreement and accordingly, the matter was referred to the Arbitrator and the Arbitrator Mr. P.C. Phalgunan, after following the due procedure First Appeal No. 693 of 2016 4 has passed the award dated 16.2.2015, therefore, the complaint is hit by the principal of res judicata; the complaint is bad for non- joinder of Op co-borrower Jatinder Pal and Guarantor Jangir Singh; as per the agreement, an arbitration clause is there, which says that all dispute arises between the parties under the terms of the agreement shall be referred to an arbitrator. In brief facts of the case, the complainant approached the Ops to avail finance facility of Rs. 19.90 lacs to purchase the commercial vehicle LPT-3118- TC bearing chassis No. MAT466420D5N11003, engine No. 31K84133127, registration No. PB13-AF-9257. It was represented to the Ops that he was financially sound and would be in a position to honor the commitments under the arrangement. Accordingly, loan-cum-hypothecation-cum-guarantee agreement dated 8.1.2014 was entered into between the parties. Loan account No. 5001475240 was opened. The contract value of the loan was Rs. 26,10,864/-, which included principal amount and the finance charges to be repaid in 48 equated monthly installments of Rs. 54,393/- to be repaid on 11th of every month. Under that agreement merely right to use was transferred to the complainant, subject to the complainant punctually paying all the installments but the complainant failed to maintain the financial discipline and committed default in repayment. Upto 23.9.2015, the complainant committed the default of Rs. 13,15,364.86p i.e. Rs. 10,23,760/- on account of non-payment of monthly installments and accrued ODC/penal charges of Rs. 2,91,604.86p. The matter was settled First Appeal No. 693 of 2016 5 by the Arbitrator, who in his award dated 16.2.2015 decided as under:-
"(a) The respondents (in the case in hand is complainant) shall jointly and severally pay to the claimants (in the case in hand is opposite parties) a sum of Rs. 22,68,522.63p together with further interest thereon at the rate of 18% per annum from 07 November 2014 till payment and / or realization.
(b) It is declared that the amount mentioned in clause (a) above is secured by a valid and subsisting hypothecation of vehicle being TATA LPT 3118TC, Engine No. 31K84133127 and chassis No. MAT466420D5N11003 and registration no.
PB-13AF-9257, in favour of the claimants and the claimants are entitled to enforce and realize the amounts due and payable by the respondents by recovering / taking possession of the said vehicle and sell the same by public auction or private treaty and appropriate the net sale proceeds thereof towards the outstanding amounts due and payable by the respondents.
(c) In case the claimants have repossessed the vehicle and sold in pursuance of the interim order dated 15.11.2014 and 20.12.2014, the claimants shall adjust/appropriate the sale proceeds and give credit for the same towards the amount awarded in clause (a) above. In case the claimants recovers excess amount, the same shall be refunded to the respondents.
First Appeal No. 693 of 2016 6
(d) The respondents shall pay a sum of Rs. 5,000/- towards cost of arbitration and arbitrator fees." The matter relates rendition of accounts, hence, the Forum had got no jurisdiction to entertain the complaint. On merits, it was submitted that on the application of the complainant, loan was granted for truck No. PB-13-AF-9297, who after grant of the loan, paid only one and half installment and after that he did not pay any amount. The truck was repossessed on 22.12.2014. There was arbitration clause and the matter was referred to the Arbitrator, who decided the matter as referred above in the brief facts. Further a civil suit on the same cause of action was passed in the Court of Sh. Ravneet Singh, Civil Judge (Jr. Division), Patiala. Therefore, consumer complaint was not maintainable. There was no deficiency in service on the part of Ops. Complaint is without merit, it be dismissed.
4. Before the District Forum, the parties were allowed to lead their respective evidence.
5. In support of his allegations, the complainant had tendered into evidence his affidavit Ex. C-A. On the other hand, Ops had tendered into evidence affidavit of Harsimran Singh, Collection Manager as Ex. Op-A and documents Exs. Op-1 to Op-
17.
6. After going through the allegations in the complaint, written version filed by the Ops, evidence and documents brought on the record, the complaint was partly allowed as referred above. First Appeal No. 693 of 2016 7
7. Aggrieved with the order passed by the learned District Forum, the appellants/Ops have filed the present appeal.
8. We have heard the learned counsel for the parties and have carefully gone through the record of the case.
9. Counsel for the appellants/Ops argued that admitted case of the complainant is that the vehicle was financed by Ops. Complainant failed to pay the installments as agreed and the truck was repossessed and on 22.12.2014 as per the order of the Arbitrator. Complaint was not maintainable as the civil suit on the same cause of action was pending before the Court of Ravneet Singh, Civil Judge (Jr. Division), Patiala.
10. We have gone through the copy of the order dated 11.9.2015 of the Civil Judge. It was a case of mandatory injunction seeking direction to the defendant to hand over the possession of vehicle No. PB-13-AF-9297 and permanent injunction for selling or dispossessing of the abovesaid vehicle but that civil suit was withdrawn by the complainant on 11.9.2015, whereas the present complaint was filed by the complainant on 14.8.2014 whereas the civil suit was filed on 17.1.2015. In case the complaint is prior to the filing of the civil suit, which was lateron withdrawn and was on different cause of action as it was a civil suit for mandatory injunction and permanent injunction whereas in the present complaint, he has sought for delivery of the truck, which was taken forcibly by the Ops and that he is not liable to pay interest after 22.12.2014, the date the truck was repossessed by the Ops. Therefore, firstly, the civil suit was filed after filing of the complaint, First Appeal No. 693 of 2016 8 which was withdrawn and was not decided on merits and the relief sought for in the complaint and civil suit are distinct, therefore, we do not agree with the plea raised by the counsel for the Ops that the consumer complaint filed by the complainant is not maintainable in view of the civil suit filed by the complainant against the Ops.
11. It was further argued by the counsel for the Ops that there was arbitration clause and under the arbitration clause, the matter was referred to the Arbitrator and as per the orders of the Arbitrator, the possession was taken and no appeal has been filed against the Arbitration award, which has become final, therefore, again this complaint is not maintainable. There is no dispute that there was Arbitration Clause in the agreement but under Section 3 of the CP Act, additional remedy has been provided to the Consumer Fora to entertain the complaint despite the fact that there is arbitration clause. The larger Bench of the Hon'ble National Commission in Consumer Case No. 701 of 2015 "Aftab Singh versus EMAAR MGF Land Limited & Anr.", pronounced on 13.07.2017 and in other similarly situated cases, after discussing various judgments of the Hon'ble Supreme Court and the amendments made in the Parliament under Section 8(1) of the Act of the Arbitration and Conciliation Act, 1996 observed that the amendment does not affect in any manner the powers of the Consumer Fora to entertain the complaints under Section 3 of the Act.
First Appeal No. 693 of 2016 9
12. The arbitration award on the record is 16.2.2015 Ex. Op-5 whereby the following directions have been given:-
"(a) The respondents shall jointly and severally, pay to the claimants a sum of Rs. 22,68,522.63p together with further interest thereon at the rate of 18% per annum from 07 November 2014 till payment and / or realization.
(b) It is declared that the amount mentioned in clause (a) above is secured by a valid and subsisting Hypothecation of vehicle being TATA LPT 3118TC, Engine No. 31K84133127 and chassis No. MAT466420D5N11003 and registration no.
PB-13AF-9257, in favour of the claimants and the claimants are entitled to enforce and realize the amounts due and payable by the respondents by recovering / taking possession of the said vehicle and sell the same by public auction or private treaty and appropriate the net sale proceeds thereof towards the outstanding amounts due and payable by the Respondents.
(c) In case the claimants have repossessed the vehicle and sold in pursuance of the Interim Order dated 15th day of November, 2014 and 20-Dec.-14, the claimants shall adjust/appropriate the sale proceeds and give credit for the same towards the amount awarded in clause (a) above. In case the Claimants recovers excess amount, the same shall be refunded to the Respondents.
(d) The Respondents shall pay a sum of Rs. 5,000/- towards cost of Arbitration and Arbitrator's Fees." First Appeal No. 693 of 2016 10 However, it was argued by the counsel for the complainant that this arbitration application was filed after filing of the consumer complaint. The Arbitration application was given on 15.11.2014 whereas the present consumer complaint was filed on 14.8.2014, it is prior to the filing of the arbitration application. No doubt amendment was sought after repossession of the vehicle, therefore, the amended complaint is after a reference to the Arbitrator. However, it is mentioned that in case complaint is pending and any amendment is sought and in case amendment is allowed, it will go back as to the institution of the complaint. The counsel for the Ops was unable to refer any judgment that in case any amendment has been allowed in the complaint, it will be allowed from the date of passing of the order and not from the date of institution of the complaint. In all these circumstances, the arbitration reference was made when the consumer complaint was already pending against the Ops. In case the Ops were to make any reference to the Arbitrator, it was incumbent upon them to move an application under Section 8 of the Arbitration and Conciliation Act before the Consumer Fora for referring the matter to the Arbitrator but no such application was moved. In case the arbitration application is after institution of the consumer complaint then the consumer complaint will be maintainable and any outcome given in the arbitration award will not be binding upon the complainant. The counsel for the Ops has referred to the judgment of the Hon'ble National Commission I (2007) CPJ 34 (NC) "Instalment Supply Ltd. vs. Kangra Ex.-Serviceman First Appeal No. 693 of 2016 11 Transport". In that case, award was passed before complaint was filed by respondent No. 1. It will thus govern the dispute between the parties and decision of the Arbitrator will be binding upon the parties. However, this judgment is not applicable to the facts of the case as consumer complaint was filed after passing of the arbitration award. In that situation, in case the parties have availed the remedy before one judicial forum then they have no right to take recourse to any judicial court. The consumer complaint was pending before making reference to the Arbitrator. No reference to the Arbitrator that any consumer complaint was pending. In case it was so, it was the duty of the Ops to move an application under Section 8 of the Arbitration and Conciliation Act and get an order from the Court for making a reference to the Arbitrator, therefore, reference to an Arbitrator without following the procedure as envisaged under Section 8 of the Arbitration and Conciliation Act when the Consumer Complaint was pending then the order passed by the Arbitrator has no force of law, therefore, the award passed by the Arbitrator cannot be made basis for rejecting the complaint of the complainant.
13. It was further argued that the District Forum wrongly allowed the complaint not to pay the interest after repossession of the vehicle. It is clear from the facts of the case that a sum of Rs. 19,90,000/- was advanced by the complainant for the purchase of the vehicle and some down payment must have been made by the complainant for the purchase of the vehicle, therefore, the cost of the vehicle was more than the loan amount sanctioned by the First Appeal No. 693 of 2016 12 Ops. In case for any reason, the complainant was not in a position to pay the EMIs for which the repossession of the vehicle has been made by the Ops, which has been upheld by the District Forum and it has not been challenged by the complainant but the question is whether on the repossession of the vehicle, the complainant is liable to pay the interest. In case the Ops have taken the possession of the vehicle, which is more than the value of the loan amount sanctioned by the Ops and that the complainant was not left with any source to earn his livelihood then how he will be able to pay the EMIs/interest to the Ops whereas the Ops are using the vehicle and by using the vehicle they can earn more than the amount of interest accrued on the EMIs, in these circumstances, the order passed by the District Forum restricting the Ops not to charge interest on the loan amount after 22.12.2014 i.e. date of repossession of the vehicle is justified.
14. No other point was argued.
15. Sequel to the above, we do not find any merit in the appeal and the same is dismissed with no order as to costs.
16. The appellant No. 1 had deposited an amount of Rs. 10,000/- with this Commission in the appeal. This amount along with interest accrued thereon, if any, shall be remitted by the registry to the concerned District Forum, after the expiry of 90 days, from the despatch of the certified copy of the order to the parties; subject to stay, if any, by the higher Fora/Court; for the First Appeal No. 693 of 2016 13 release of the above amount and the District Forum may pass the appropriate order in this regard.
17. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
18. Order be communicated to the parties as per rules.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER September 25, 2017.
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