State Consumer Disputes Redressal Commission
Gurjit Singh Son Of S. Natha Singh, ... vs M/S Cholamandlam Investment & Finance ... on 25 September, 2012
PUNJAB STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No.1421 of 2007
Date of institution: 24.10.2007
Date of decision : 25.09.2012
Gurjit Singh son of S. Natha Singh, resident of 162, Panch Sheel
Enclave, P.O. Thrike, Ferozepur Road, Ludhiana.
.....Appellant/Complainant
Versus
M/s Cholamandlam Investment & Finance Co Ltd, SCO 147, 6th Floor,
ICICI Building, Feroze Gandhi Market, Ludhiana-141001, (Having
their Head Office at Dare House, No. 2 NSC Bose Road, Parrya,
Chennai-600001).
.....Respondents/Opposite Parties
First Appeal against the order dated
18.07.2007 passed by the District Consumer
Disputes Redressal Forum, Ludhiana.
Before:-
Sardar Jagroop Singh Mahal,
Presiding Judicial Member
Sardar Jasbir Singh Gill, Member Argued by:-
For the appellant : None
For the respondents : Sh. D.K. Singal, Advocate
JAGROOP SINGH MAHAL, PRESIDING JUDICIAL MEMBER This is complainant's appeal under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) against the order dated 18.7.2007 passed by the learned District Consumer Disputes Redressal Forum, Ludhiana (in short the District Forum) vide which the complaint was dismissed.
2. Brief facts of the case are that in April 2003 for the purpose of employment the complainant approached M/s Dada Bhai Motors Limited, for the purchase of a Tata Truck. In that connection, Sh. Vivek Sharma, representative of the O.P visited his house in the last week of April 2003 and discussed about his First Appeal No.1421 of 2007 2 eligibility to get loan. It was agreed that a sum of 3.44 lacs will be granted as loan repayable alongwith interest in 47 monthly instalments of Rs. 9222/-. The complainant went to the office of the O.Ps and delivered 16 pre-dated cheques each for a sum of Rs. 9222/-. He paid Rs. 1000/- in cash. The loan was advanced by the O.Ps and the truck was purchased which was registered vide registration No. PB-10-BA-2801. The complainant had been paying instalments to the O.Ps and total sum of Rs. 1,84,440/- had been paid. It was alleged that the O.Ps have over charged the interest to the tune of Rs. 19,467/- and is liable to pay Rs. 2185 for the month of February 2005 alongwith interest thereon amounting to Rs. 287/-. The complainant wanted to repay the amount which according to the O.Ps was Rs. 2,17,087/- They demanded foreclosure charges @ 4% p.a. which was objected to by the complainant. He therefore, filed the present complaint for the refund of Rs. 18,564/- and also the return of the cheques issued by him to the complainant.
3. The complaint was opposed by the O.Ps admitting that loan was advanced to the complainant which was to be repaid in instalments. According to them they are entitled to foreclosure charges @ 4% p.a. of the outstanding amount but the complainant had not paid the same. It was denied if they have over charged interest to the extent of 19,467/- or he is entitled to Rs. 2185/- as interest and Rs. 287 as interest thereon. They prayed for the dismissal of the complaint.
First Appeal No.1421 of 2007 3
4. Both the parties were given opportunity to adduce evidence in support of their contentions.
5. After hearing the arguments of the learned counsel for the parties and perusing the record, the learned District Forum vide impugned order dated 18.7.2007 dismissed the complaint on the ground that it was the hire purchase agreement and the matter relates to accounts and therefore they have no jurisdiction to try the complaint. The complainant has challenged the same through the present appeal.
6. Gurjeet Singh, appellant last appeared in this appeal on 19.2.2009 Thereafter the case was adjourned to 3.3.2009, 21.4.2009, 15.2.2010, 25.10.2010, 17.5.2011, 16.9.2011, 20.1.2012, 18.5.2012, 27.8.2012, 4.9.2012, 17.9.2012 and 18.09.2012 but none appeared for the appellant. Since the case was pending since 2007 it was not considered advisable to adjourn the appeal further when the appellant is not taking any interest to pursue the same.
6. We have heard the arguments of the learned counsel for the respondent and have perused the record.
7. At the outset Sh. D.K. Singal, Advocate, learned counsel for the respondent admitted that the authorities cited by the learned District Forum regarding the hire purchase agreement are not applicable. In the present case Gurjit Singh had purchased the vehicle in his own name after taking a loan from the O.P/respondent. It is not the case where the O.P was the First Appeal No.1421 of 2007 4 owner of the vehicle and had given the same on hire to the complainant to pay instalments and become the owner of the vehicle on paying full amount thereof. Otherwise also, the ownership of a motor vehicle can be transferred to the O.P in accordance with the provisions of section 50 of the Motor Vehicles Act. The mere execution of an agreement whereby the person advancing loan mentioned himself to be the owner of the vehicle and the actual owner of the vehicle receiving the loan mentioned as hirer, cannot change the ownership of the vehicle. It is not its case in which the O.P has purchased the vehicle, they did not apply to the Registering Authority to change its ownership, the complainant therefore cannot be divested of ownership of the truck on the basis of the loan agreement Ex. R-
2. The observations of the learned District Forum in this respect are therefore baseless and the authorities relating to hire purchase agreement cannot apply to the present case. When the complainant had received the loan from the O.P which is to be re-paid in instalments, the relationship of consumer and service provider is established between the parties. It therefore cannot be said if the District Forum had no jurisdiction to try the complaint.
8. As regards the observation of the learned District Forum that the matter relates to accounts and therefore should not be tried by it is also devoid of merit. As per the clause (o) of sub section (1) of section 2 of the Act "Banking" falls under the First Appeal No.1421 of 2007 5 definition of service. Necessarily banking involves accounts and if the intention of the Parliament had been to exclude accounts from the preview of the Consumer Fora, they would not have included banking as "service" under the Act. The approach of the learned District Forum is therefore perverse and bad in law. The complaint could not be dismissed on the ground that it involves accounts.
9. The contention of the complainant is that he had taken a loan from the O.P/respondents which was being repaid in instalments. He had already paid 20 instalments of Rs. 9222/-. In this manner had paid a sum of Rs. 1,84,440/-. It is admitted by the O.Ps that a sum of Rs. 1000/- was paid to it when the bank refused to give more than 20 cheques to the complainant. The contention of the complainant is that the O.Ps had recovered Rs. 20,467/- in excess of the amount due from him. The O.Ps did not produce their account books to prove if the said amount has not been recovered by them from the complainant. The accounts are being maintained by the O.P and it was therefore for the O.Ps to produce the same and their failure to do so requires an adverse inference to be drawn against them.
10. The next contention of the complainant is that when he wanted to repay the remaining amount in lumpsum, the O.Ps told him that a sum of Rs. 2,17,087/- was due from him. They demanded 4% foreclosure charges thereon. The complainant has paid the aforesaid amount of Rs. 2,17,087/- but refused to First Appeal No.1421 of 2007 6 pay the foreclosure charges @ 4% p.a. The O.Ps wrote the letter Ex. C-6 in which also the said demand was made. The question is whether there was an agreement between the parties to pay foreclosure charges @ 4% or not. Our answer to this question is in the negative. Annexure R-2 is loan agreement, in clause No. 26 of it, it is mentioned that in the event the borrower desires to foreclose the agreement then he shall do so by remitting the amount of principal outstanding at the date of foreclosure alongwith a fee of 2% of such principal outstanding. The learned counsel for the O.P was unable to point out any such provision in the agreement under which the foreclosure charges were fixed at 4% of the principle outstanding. Demanding the fee @ 4% instead of 2% of the principal amount is unfair trade practice adopted by the O.Ps due to which they caused harassment to the complainant and he had to file this complaint incurring expenditure and wasted his valuable time. We are therefore of the opinion that indulging in this unfair trade practice, the O.Ps should pay Rs. 25,000/- to the complainant as penalty.
11. Though the record has not been produced by the O.Ps yet admitting that a sum of Rs. 2,17,087/- was the principle outstanding due from the complainant, foreclosure charges @ 2% work out to Rs. 4,340/-. The O.P has already recovered from the complainant a sum of Rs. 20467/- in excess of the amount First Appeal No.1421 of 2007 7 due from him and in this manner the O.P/respondent is liable to refund the amount of Rs. 16,127/- to the complainant.
12. In view of the above discussion, we are of the opinion that the complaint was liable to succeed but has been wrongly dismissed by the learned District Forum. We accordingly accept the appeal and set-aside the impugned order dated 18.07.2007 and consequently we allow the complaint with cost. The O.P is directed to pay to the complainant Rs. 16,127/- + Rs. 25,000 = 41,127/- within 30 days from the date of the receipt of the copy of the order alongwith litigation cost of Rs. 5000/- before the District Forum and Rs. 5000/- before this Commission. If the entire amount is not paid within 30 days from the date of receipt of copy of the order, the respondent would be liable to pay the same alongwith penal interest @ 12% p.a. since the filing of the present appeal 24.10.2007 till the amount is paid to the complainant. The O.Ps are directed to immediately issue no due certificate and return the unused cheque to the complainant.
Copies of the order be supplied to the parties free of costs.
(JAGROOP SINGH MAHAL) PRESIDING JUDICIAL MEMBER (JASBIR SINGH GILL) MEMBER September 25, 2012.
Rupinder