Under a hire purchase transaction, the financier does not render any service within the meaning of the Consumer Protection Act, and adjustments of loan amounts may not constitute deficiency in service.

ORDER

Ashok Bhan, President - Complainant, Petitioner herein purchased a Maruti Car bearing No. CH-03-A-1399 in March, 2000 after obtaining a loan from the Respondent. The repayment was to be made in 5 years in equated instalment of Rs. 3,417 and 59 post-dated cheques drawn in favour of the Respondent were issued. Instalments were paid till February, 2005 though some penalty was shown due towards the Complainant on account of dis-honouring of certain post-dated cheques. Petitioner asked for second loan of Rs. 1,10,000 on the same vehicle which was to be repaid in 36 instalments of Rs. 3,700 per month. As per agreement executed between the Petitioner and the Respondent, an advance receipt and 36 post-dated cheques of Rs. 3,700 each for February, 2005 to January, 2008 were issued by the Petitioner in favour of the Respondent. A letter was received by the Petitioner with regard to approval of his loan application but the amount of loan was not mentioned though the account No. CEC-462-1010056 was mentioned. On 5.3.2005, a draft of Rs. 75,854 was received by the Petitioner but he was aggrieved that instead of sanctioning of loan of Rs. 1,10,000, amount of Rs. 75,854 only was disbursed to him. In response to his inquiries, he was handed over a slip in which it was mentioned that the approved loan amount was Rs. 98,500 out of which Rs. 12,745 had been deducted on account old loan. Petitioner filed the complaint with the averment that a sum of Rs. 34,145 was illegally withheld by the Respondent and he had been charged excess amount. A direction was sought against the Respondent to issue a copy of loan agreement and payment of Rs. 24,081.87 with interest @ 24% from the date of approval. Rs. 10 lakh were claimed as compensation and Rs. 50,000 as costs of litigation.

2. Respondent, on being served, entered appearance. Factum of availing of loan by the Petitioner vide loan agreement dated 2.3.2002 was admitted. It was submitted that the Petitioner had been informed that the second loan would be sanctioned only on clearing the outstanding loan amount in the previous account bearing No. DEA-462-0363421. That the Petitioner vide his letter dated 14.2.2005 had agreed to adjust his previous loan amount in the subsequent one. It was submitted that loan of Rs. 95,758 and not Rs. 1,10,000 as alleged by the Petitioner, was sanctioned. It was stated that as per assessment of the vehicle, the value of the car was estimated at Rs. 1,15,000 as given in the valuation report and accordingly, a loan of 83.27% of the evaluated amount, i.e., Rs. 95,758 was sanctioned out of which Rs. 19,903.06 lying outstanding in the previous loan account were adjusted and thus a sum of Rs. 75,854.94 was disbursed to the Petitioner on 3.3.2005. Copies of the statement of account and loan agreement dated 18.2.2005 were brought on record. It was submitted that cheque for the month of February, 2005 had been encashed by the OP No. 6 for which OP Nos. 1 to 5 were not liable. It was submitted that loan was to be repaid by monthly instalments of Rs. 3,417 spanning over a period of 59 months. In spite of the fact that certain cheques issued by the Petitioner were dishonoured, Respondent did not recall the loan facility. It was stated that amount of Rs. 19,903 was lying outstanding in the previous loan account and the Petitioner himself requested the Respondent that the outstanding amount in the previous loan account be adjusted in the subsequent one as the loan was being advanced against the same vehicle.

3. After going through the pleadings and the evidence led by the parties, District Forum dismissed the complaint on the ground that under a hire purchase transaction, the financier does not render any service within the meaning of Consumer Protection Act, 1986 and the Petitioner was, thus, not a consumer as defined in Section 2(1)(d) of the Act. District Forum relied upon the judgment of this Commission in RP. No. 827 of 2006 titled Ram Deshlahara v. Magma Leasing Ltd., (2006) 3 C