A financing concern that accepts a deposit for booking a car without processing the loan application is liable for breach of contract and can be held liable under the Consumer Protection Act, 1986.

S.S. Sandhawalia, President—This appeal is directed against the judgment of District Forum, Hissar, whereby the appellants have been directed to pay compensation to the tune of Rs. 5,000/- to the respondent.

2. At the appellate stage, the facts which would call for pointed notice, lie in a narrow compass. M/s. Haryana Credit and Leasing Limited claim to be a prestigious concern, dealing in the financing of cars, motor cycles, scooters and electronics etc. at Hissar. On the 6th December, 1989 they advertised in the local press for arranging the booking of the new Maruti 1000 car with M/s. Maruti Udyog limited against a deposit of Rs. 6,000/- only for each booking, and undertaking to loan the requisite balance of Rs. 19,000/- to the prospective customers. The offer was to be open for seven days and for 1000 bookings only.

3. The respondent - Shri Krishan Munjal of Hissar along with many others, was attracted by the offer, and in response thereto he duly deposited Rs. 6,150/- with the appellant-Company on the 11th December, 1989. Receipt No. 174 of even date (agreement No. 195) for the said amount, which included processing charges etc., was duly issued to him by the appellant-Company. The complainant-respondent’s specific allegation was that for the first time he received the appellant-Company’s letter dated 9th January, 1990 (though it purported to be the third reminder) informing him that because of some problems of the Multi-national Banks, including the City Bank, the Reserve Bank of India had directed to stop the booking of Maruti Cars immediately, and, consequently, his car could not be booked under the Company’s finance scheme. The said letter also mentioned that the appellant- Company had earlier written to him to collect his amount, but it was the firm stand of the respondent that he had not received any previous communication thereto. Thereafter, the respondent contacted the Manager of the appellant-Company, who attempted to explain that since the Company’s quota of booking was reduced from 1000 to 300 only, the respondent’s car could not be booked. Later, the appellant-Company on the 22nd January, 1990 sent a draft of Rs. 6,150/- after canceling his earlier receipt dated 11th December, 1989. On these facts, the complainant-respondent alleged misconduct and breach of faith against the appellants, whereby he had been deprived of booking the Maruti 1000 cars and put to a loss of nearly 1 lakh of rupees, if he were to purchase the said car in the open market.

4. In response to the notice issued by the District Forum, the appellant-Company admitted the issue of the advertisement in the press and also the receipt of Rs. 6,150/- from the complainant-respondent on the relevant date. However, their plea was that in all such cases for booking, the concerned individual was required to comply with terms and conditions for advancing the loan of Rs. 19,000/-, so as to complete the amount of Rs. 25,000/- to book the car with Maruti Udyog. This had to be done only when the applicant proved his creditworthiness for the balance amount. It was alleged that the complainant- respondent did not execute the required documents for the advance of Rs. 19,000/- and the booking was closed on 13th December, 1989 and a letter was sent to him on that date, informing him that his proposal had been rejected. Subsequently, letters dated 24th December, 1989 and 9th January, 1990 were despatched, asking him, inter alia, to collect his amount, and on his failure to do so, a bank draft dated 22nd January, 1990 was sent to him. The complaint was, consequently, alleged to be frivolous and vexatious, which merited dismissal.

5. On the aforesaid pleadings and the materials brought on record on behalf of the parties, the District Forum rightly highlighted that therein they were required to examine the conduct of the parties for three days only, i.e., with effect from 11th December, 1989, when the deposit was made to 13th December, 1989, when the booking was