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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Mr. Prem Narain, Presiding Member
SHRIRAM CITY UNION FINANCE LTD. - Appellant
Versus
KONDAPALLI RAMU - Respondent
Revision Petition No. 916 of 2015 (in Appeal No. 718 of 2013)
Decided on : 12-07-2017
Important Points
Subject
Consumer Law - Loan Agreement Disputes
Act Referred
Headnote
Loan Agreement - Consumer Dispute - [Consumer Protection Act, 1986, Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(d), Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(d), Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(d), Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(d), Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(d), Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(d)] - The court discussed the provisions of the Consumer Protection Act, 1986, including definitions of consumer, unfair trade practices, deficiency in service, and compensation. The court emphasized the duty of the opposite parties to take immediate steps for auctioning the seized vehicle to realize the amount due by the complainant and to pay any balance to him. The court also highlighted the requirement for the opposite parties to obtain permission for conducting an auction and the consequences of not doing so. The judgment reflects the application of key legal provisions to determine the deficiency in service and the compensation awarded to the complainant.
Fact of the Case:
The complainants entered into a loan agreement with the opposite parties for the purchase of a vehicle. The opposite parties failed to fulfill their obligations, resulting in financial losses to the complainants. The District Forum and the State Commission ruled in favor of the complainants, awarding compensation and directing the opposite parties to return the seized vehicle.
Finding of the Court:
The court found that the opposite parties did not honor the interim order to return the vehicle and failed to recover the remaining outstanding loan amount by selling the vehicle. It concluded that the complainant had suffered financial losses and upheld the compensation awarded by the lower forums.
Issues: The issues revolved around the failure of the opposite parties to fulfill their obligations under the loan agreement, the seizure of the vehicle, and the compensation owed to the complainants.
Ratio Decidendi: The court's decision was based on the failure of the opposite parties to take immediate steps for auctioning the seized vehicle, their refusal to honor the interim order to return the vehicle, and their failure to recover the remaining outstanding loan amount by selling the vehicle.
Final Decision: The Revision Petition was dismissed, and the compensation awarded by the lower forums was upheld.
Mrs. Radha Rao, Advocate, for the Petitioners; Mr. J. Bala Krishna Shastry, Advocate, for the Respondents
ORDER
Prem Narain, Presiding Member - This revision petition No. 916 of 2015 has been filed by Shriram City Union Finance Ltd., & Anr. against the order dated 21.10.2014 of the State Consumer Disputes Redressal Commission, Andhra Pradesh, (in short 'the State Commission') passed in FA No. 718 of 2013.
2. Brief facts of the case are that the 2nd complainant is wife of 1st complainant. The 2nd opposite party branch manager of 1st opposite party at Gudivada approached the 1st complainant and informed about the financial assistance they provide for purchase of vehicles and assured financial assistance through the opposite party company and after satisfying with the capability of the 1st complainant, the 2nd opposite party promised to recommend and arrange loan cum hypothecation facility. The 1st complainant entered into hypothecation agreement on 31.10.2009 for purchase of Innova Maxicab bearing registration No. AP 7 TT 7877 for loan of Rs. 3,20,000. At that time, the opposite parties had obtained 36 blank signed cheques drawn on Andhra Bank, Bhushangula from the 1st complainant. K. Venkata Gopi Krishna was the owner of the vehicle AP 7 TT 7877. He had purchased the vehicle for Rs. 5,20,000 by availing finance from Mahindra and Mahindra Finance. By the date of purchase of the vehicle by the complainant, it was under hypothecation for a sum of Rs. 2,87,193. The 1st opposite party issued two cheques dated 11.11.2009 in favour of Mahindra and Mahindra finance, one for Rs. 2,00,000 and the other for Rs. 87,193. The owner of the vehicle negotiated with his financer and the amount due was scaled down to Rs. 2,58,000. Then the 1st opposite party took back the cheque for Rs. 87,193 from Mahindra and Mahindra finance assuring issue of fresh cheque for Rs. 58,000. The opposite party company did not keep up their promise till March, 2010. The complainant then paid the amount of Rs. 58,000 to Mahindra and Mahindra Finance. The opposite parties deducted Rs. 13,869 towards 1st instalment and Rs. 16,783 towards insurance premium out of the outstanding agreed loan amount. The remaining price of the vehicle i.e. Rs. 2,62,000 was paid by the 1st complainant to the registered owner of the vehicle. As the loan from Mahindra and Mahindra was cleared, the 1st complainant asked the opposite parties to obtain the documents of the vehicle from Mahindra and Mahindra Finance Ltd. Accordingly the opposite parties collected the documents. The opposite parties presented two cheques for collection though the complainant's liability to pay monthly instalments would start only after the opposite party company paid full amount under hypothecation cum loan agreement. The 2nd opposite party told that he would initiate criminal proceedings against the complainants for dishonour of cheques. The 2nd opposite party demanded the 1st complainant to submit original registration certificate, original permit, original insurance certificate and fitness certificate to the 2nd opposite party to look after cancellation of permit standing in the name of prior registered owner. The 1st complainant paid requisite fee for necessary endorsement at RTO Office as demanded by the 2nd opposite party. The 2nd opposite party did not process the document. The opposite party company did not pay the remaining hypothecation amount of Rs. 89,611 to the 1st complainant.
3. Aggrieved by the aforesaid acts of the OP, the complainants filed a consumer complaint before the District Forum. The complaint was resisted by the opposite parties. However, the District forum allowed the complaint vide its order dated 18.3.2013 as under:
"The opposite parties are directed to pay a sum of Rs. 1,50,000 (Rupees one lakh and fifty thousand only) towards compensation and pay Rs, 2,000 (Rupees two thousand only) towards costs to the 1st complainant. The loan due to the opposite parties under the loan agreement dated 31.10.2009 shall stand set off completely against the value of the vehicle seized by the 2nd opposit
